Strategic Planning for Foundations: Get Clear, Get Real, and Get Better (Post #3)

In the November 2009 issue of the Harvard Business Review, an article entitled “Galvanizing Philanthropy” by Susan Wolf Ditkoff and Susan J. Colby asks all foundation leaders to get clear, get real, and get better at philanthropic investment. This is the LAST of three posts on the article.

Third:  How can we improve our results over time? (Getting better)

Improving results and getting better takes the development of a culture of continual improvement and strong leadership. To improve outcomes, foundations must get constant feedback from the field and measure their results, something that we often demand of our grantees but do precious little of ourselves.

Once again, the authors suggest two traps to avoid: First, failing to solicit outside perspectives. Genuine feedback mechanisms create a learning loop that foundations need to up their game. Second, underestimating the power of nonfinancial assets. Some examples of nonfinancial assets that funders can bring to the table are long-term commitments and help with strategic planning.

In summary: Devise an ambitions and realistic strategy for social change, put it front and center, and demand a stronger performance from ourselves.

Strategic Planning for Foundations: Get Clear, Get Real, and Get Better (Post #2)

In the November 2009 issue of the Harvard Business Review, an article entitled “Galvanizing Philanthropy” by Susan Wolf Ditkoff and Susan J. Colby asks all foundation leaders to get clear, get real, and get better at philanthropic investment. This is the SECOND of three posts on the article.

Second: What will it take to make change happen? (Getting real)

Conventional philanthropy, or the process of funding individual grantees to support great initiatives, may be just what a foundation should be doing. Or, grant making funds could be dedicated to helping a multi-pronged solution to a complex problem that the entire community is working to fix. Or, investment in innovative ideas may the answer for the foundation. Whatever the decision on how to give away philanthropic dollars, the authors of “Galvanizing Philanthropy” suggest collecting candid feedback from the community to help evaluate the chosen direction. Moving the needle on a complex social problem is not easy and requires a reality check from time to time.

Most foundations are not realistic about what it takes to make real change happen. The authors suggest two traps to avoid here: First, don’t be too optimistic about what limited resources can do, and second, don’t hire people and create processes that don’t fit your chosen strategy.

Strategic Planning for Foundations: Get Clear, Get Real, and Get Better (Post #1)

In the November 2009 issue of the Harvard Business Review, an article entitled “Galvanizing Philanthropy” by Susan Wolf Ditkoff and Susan J. Colby asks all foundation leaders to get clear, get real, and get better at philanthropic investment. This is the FIRST of three posts on the article.

What is the lasting effect of any philanthropic investment? Often it’s hard to tell. This is a stunning and discouraging fact, especially after years of experience with social investment and countless billions of philanthropic dollars spent nationally.  The authors of "Galvanizing Philanthropy" in this month's Harvard Business Review suggest an approach that could strengthen the foundation world’s impact.  They recommend an iterative process that gauges the impact of philanthropic investments.  It starts by asking three questions that help the organization get clear, get real, and get better.

First: How do we define success? (Getting clear)

Use your strategic planning process to define a few “strategic anchors,” namely, what are the people, problems, places, and philosophies that we care about as a foundation. Once the organization is clear on its strategic anchors, the programs, initiatives, and identity of the grantees naturally follow.

The article encourages taking a look at both hard evidence and data (what we know), and then applying the organization’s values to that data (what we care about).  Even at the foundation level, philanthropy is values-driven.

Some useful questions to ask in this process are provided in the article: “How do we believe change happens? What role to we want to play in tackling this issue? Do we prefer market-based approaches, policy-based approaches, or neither?  Do we favor a vibrant field of volunteer led organizations or a few larger, professionally managed ones?”

Needs data first.  Applied organizational values second.  And only then are decisions on grant making clearer. 

What's Wrong With Charitable Giving - And How to Fix It (Post #3)

In the November 9th issue of the Wall Street Journal, Pablo Eisenberg, a senior fellow in the Center for Public and Nonprofit Leadership at Georgetown Public Policy Institute in Washington, D.C., wrote an article entitled “What's Wrong With Charitable Giving—and How to Fix It.” This is the LAST post about that article.

Eisenberg’s final three recommended changes for donors and foundations in order to fix what’s wrong with charitable giving are:

7. Simplify Application and Reporting Procedures

Foundations need to use common grant applications and simplify both the grant application process and follow up financial reporting process.

8. Improve Public Accountability

Who holds the nonprofit sector accountable? Not government so much any more. Not independent investigative journalism which is disappearing. One idea: Eisenberg recommends converting failing or at-risk newspapers into nonprofits that could, among other things, perform this function.

9. Fund the Watchdogs

A dearth of funding for advocacy and watchdog organizations exists, and foundations are reluctant to subject themselves to criticism. Needless to say, this is probably the biggest challenge facing the sector.

In summary, Eisenberg is calling for a complete overhaul in the way foundations think about and do philanthropy. More funding, flexible capital, grassroots outreach, true understanding of critical community needs, public accountability. Less bureaucracy.

Sounds about right.

What's Wrong With Charitable Giving - And How To Fix It (Post #2)

In the November 9th issue of the Wall Street Journal, Pablo Eisenberg, a senior fellow in the Center for Public and Nonprofit Leadership at Georgetown Public Policy Institute in Washington, D.C., wrote an article entitled “What's Wrong With Charitable Giving—and How to Fix It.” This is the SECOND in a series of posts about that article.

Eisenberg’s next three suggestions for fixing charitable giving are as follows:

4. Adopt Rolling Grant Making

In other words, don’t make the nonprofits bend to fit the annual or biannual grants cycle of foundations. Rather, delegate ongoing grant making authority to a Board Level grants committee so nonprofits may apply for and receive necessary funding at any time during their fiscal year.

5. Allocate More Funds to the Truly Needy

Nationally, only 3% to 5% of foundation funding goes directly to nonprofits serving those in the greatest need. Rather, the overwhelming bulk of foundation funding goes to higher education and larger health and arts organizations. Eisenberg recommends a rebalancing of this.

6. Reach Out to Local Groups And Underserved Regions

Foundations should do more to stay in touch with local nonprofits who have their finger on the pulse of critical local needs. More local action, interpersonal contact, and understanding is in order.

What's Wrong With Charitable Giving - And How To Fix It (Post #1)

In the November 9th issue of the Wall Street Journal, Pablo Eisenberg, a senior fellow in the Center for Public and Nonprofit Leadership at Georgetown Public Policy Institute in Washington, D.C., wrote an article entitled “What's Wrong With Charitable Giving—And How To Fix It.” This is the FIRST in a series of posts about that article.

The foundation world is being asked to take a hard look at its grant making policies and practices. Are we giving nonprofits enough, and are we funding the most critical needs of the region? In this recent WSJ article, Eisenberg answers both questions with a resounding NO. Caught in the squeeze between reduced funding and increased demand for services, nonprofits are being forced to cut essential health and social services.

Eisenberg therefore lists 9 changes donors and foundations could do to fix this problem.  Here are the first three.

1. Increase the Distribution Percentage

Even when foundation endowments were increasingover the last 20 years, the minimum required payout rate for foundation net assets stayed at 5%. Eisenberg advocates an increase in the payout rate to 6%. He estimates that one additional percentage point would add approximately $10 billion to total annual nonprofit grant making.

2. Increase General Operating Support

Like Rick Cohen, Eisenberg advocates flexible capital for nonprofits, recommending that at least 50% of our grants be unrestricted. Give nonprofits the “lifeblood” they needs to hire and maintain staff so they can build internal capacity and improve community impact.

3. Increase Multiyear Funding

As any nonprofit executive will tell you, planning is virtually impossible without multiyear commitments from funders. Fund the best nonprofits out there, and let them achieve long term success that only multiyear funding can promote.

Philanthropy for the Future (Post #4)

This week I’ll be discussing an article that was published on “Dialogues on Civic Philanthropy”, http://www.civicphilanthropy.net/. Rick Cohen, the former Executive Director of the National Committee for Responsive Philanthropy, posted an opinion piece on that website entitled What Can and Should Philanthropy Do in the Future?  This is the LAST post in the series.

Foundations Should Provide Flexible Capital to Nonprofits

Rick Cohen frames this issue very clearly. He believes that foundations must increase grants for core operating support of nonprofits, and I couldn’t agree more. General operating grants provide the kind of funding that is critical for the effective functioning and survival of nonprofits. Period. It isn’t glamorous, cutting edge, or sexy. It’s just necessary, in the truest sense of that word.

The safety net nonprofits literally hold up the sky for our neediest neighbors. We can’t forsake them for the latest and greatest “social entrepreneurship” endeavor that comes along.  Community foundations are well positioned to support the existing, long standing, well managed safety net nonprofits.  Indeed, there probably isn't a better way to deploy the majority of available unrestricted grant dollars in 2010.

His message is clear:  Foundations need to refocus on critical community needs.  Fund the safety net nonprofits and provide them with general operating support whenever possible.

Philanthropy for the Future (Post #3)

This week I’ll be discussing an article that was published on “Dialogues on Civic Philanthropy”, http://www.civicphilanthropy.net/. Rick Cohen, the former Executive Director of the National Committee for Responsive Philanthropy, posted an opinion piece on that website entitled What Can and Should Philanthropy Do in the Future? This is the THIRD in a series of posts on Cohen’s article.

Foundations Should Listen to Those Most Affected by the Challenges of our Society and Let Them Weigh In on the Solutions.

What Cohen is really advocating is the democratization of foundation philanthropy. He is urging foundations to stay open, above all to listen, to the nonprofits at the forefront of the biggest societal problems in the service area. This can’t help but grow the foundation’s understanding of critical community needs and inform it’s grant making accordingly.

Funding grassroots organizations gives voice and power to our diverse community. Without community input on community problems, donors to foundations will have turned over responsibility for helping to meet community needs to what Cohen calls the “philanthropic philosopher kings and queens” of the foundation world.

In this segment of his opinion piece, Cohen is focusing on the question of who. Who is most knowledgeable of critical community needs? It is of course the people most challenged by them and the grassroots nonprofits that help address them.

Philanthropy for the Future (Post #2)

This week I’ll be discussing an article that was published on “Dialogues on Civic Philanthropy”, http://www.civicphilanthropy.net/.  Rick Cohen, the former Executive Director of the National Committee for Responsive Philanthropy, posted an opinion piece on that website entitled What Can and Should Philanthropy Do in the Future? This is the SECOND in a series of posts on Cohen’s article.

Foundations Should Focus Philanthropy on Grassroots Nonprofits.

Rick Cohen believes that fundamental survival issues surface at the grassroots level of a community. Foundations must therefore listen to and support the nonprofits working at the grassroots level. When foundation executives, Board members, and program officers substitute their own judgment for that of the community’s, a “top-down arrogance” takes hold of the grant making, which is always the wrong way to go.

Grassroots nonprofits are community based and constituency led. So it is a terrible idea for the funder to do the thinking for the community or to pretend to know the answers better than the community itself.

Humility is information. It is information about yourself. It’s knowledge about what you know and what you don’t know. Without ever using that word in his opinion piece, Cohen is recommending a healthy dose of humility in foundation philanthropy. He wants us to get out there, listen, learn, and only then, give.

Philanthropy for the Future (Post #1)

This week I’ll be discussing an article that was published on “Dialogues on Civic Philanthropy”, www.civicphilanthropy.net. Rick Cohen, the former Executive Director of the National Committee for Responsive Philanthropy, posted an opinion piece on that website entitled What Can and Should Philanthropy Do in the Future?  This is the FIRST in a series of posts on Cohen’s article.

Foundations Should Focus Philanthropy on the Most Critical Community Needs.

Rick Cohen states, first and foremost, that foundation philanthropy should be focused on the most critical needs of the service area. The core of any foundation’s work, therefore, is to deeply understand these needs and then consistently focus the foundation’s unrestricted philanthropy on them.

As a strategic framework for foundation grant making, priority attention given to priority issues seems obvious enough. But it takes considerable time, effort, focus, relationships, curiosity, and data to truly understand the most critical needs of a community. While some needs are visible and therefore obvious, others may only be uncovered with the kind of hard research that a community indicators project reveals.

In 2008, the Community Foundation for Northern Virginia undertook just such a research study. We commissioned the Northern Virginia Health Systems Agency to do a Child and Youth Needs Assessment across our entire service area. We later partnered with Voices for Virginia’s Children on the assessment, which will be published before the end of calendar 2009. What I like most about our project is that we did it for the primary purpose of informing our own unrestricted grant making in the areas of children and youth, education, and family health.

Cohen directly ties the responsibility that comes with foundation philanthropy to the public trust. Whether or not our grant making meets critical community needs is therefore a litmus test of our relevance. We must always check in with our selves – our Board of Directors and grant making staff – and consciously understand at all times exactly what we are doing and why we are doing it.

"Catalytic Philanthropy" by Mark Kramer (Post #3)

This week I’ll be reviewing an article from the Fall 2009 issue of the Stanford Social Innovation Review by Mark R. Kramer entitled “Catalytic Philanthropy.” It is an inspiring look at donor commitment to a cause and the difference this can make. This is the THIRD in a series of posts.

Kramer draws some very bright and useful lines between conventional philanthropy, venture philanthropy, and catalytic philanthropy. Whereas conventional and venture philanthropy both invest in nonprofits and leave the problem solving to them, catalytic philanthropy is taken on by the funder, who assumes ultimate responsibility for the outcome.

As Kramer defines it, catalytic philanthropy is really social campaigning for a desired outcome. It includes funding to grease the skids of change, but that funding does not always go to traditional nonprofits and is therefore not “philanthropy” in any common understanding of the word. Rather, the funding for “catalytic philanthropy” fuels the campaign, keeps it going, motivates participants and attracts new ones, all towards the goal of addressing a societal problem.

Kramer provides a very thought provoking look at the process of mobilizing and sustaining a campaign for social change. It takes building coalitions, reaching out to all stakeholders and securing their participation, and funding unconventional methods and techniques to keep the whole thing moving. In summary, it takes patience, persistence and passion. It takes someone who is, or can grow to become, a true champion for a cause.

Margaret Mead once said: “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it’s the only thing that ever has.” Catalytic philanthropy is a new spin on this not so new piece of wisdom.

And it all starts by asking “What do I care about, and who else in the room cares about that too?”

"Catalytic Philanthropy" by Mark Kramer (Post #2)

This week I’ll be reviewing an article from the Fall 2009 issue of the Stanford Social Innovation Review by Mark R. Kramer entitled “Catalytic Philanthropy.” It is an inspiring look at donor commitment to a cause and the difference this can make. This is the SECOND in a series of posts.

Mark Kramer urges the funders themselves to get into the game of problem solving. They must personally become deeply engaged, identify the real issue, analyze its root cause, expand the toolkit to approach the issue in new and innovative ways, and form coalitions of like minded people across all sectors to collaborate and brainstorm with them. And only then will some real answers emerge.

What can catalytic funders do that nonprofits can’t? Among other things, they can leverage professional and personal relationships, build coalitions, start public-private partnerships, influence government. In summary, they can coordinate and engage stakeholders like a single nonprofit can not do.

What makes such funders “exceptional” is not their generosity, as many donors are generous. Rather, it is their willingness to take on responsibility themselves for improving social conditions, and not leave it solely with the nonprofits they fund. Because of this, catalytic philanthropy goes many steps beyond conventional philanthropy, and even beyond the current model for venture philanthropy.

"Catalytic Philanthropy" by Mark Kramer (Post #1)

This week I’ll be reviewing an article from the Fall 2009 issue of the Stanford Social Innovation Review by Mark R. Kramer entitled “Catalytic Philanthropy.” It is an inspiring look at donor commitment to a cause and the difference this can make. This is the FIRST in a series of posts.

All philanthropists want their giving to have real impact. But according to Mark Kramer, it takes more than simply making a donation, however substantial, to a nonprofit. A lot more.

A recent article entitled “Catalytic Philanthropy” by Mark Kramer in the Fall 2009 issue of the Stanford Social Innovation Review provides an optimum model for engineering social change with donor engagement, persistence and philanthropy.

Kramer believes that most philanthropists only achieve “modest and often indiscernible results, whether individually or collectively.” While acknowledging social conditions would be worse without philanthropy, he argues that today’s conventional philanthropy rarely delivers true social impact and systemic change. Most donors give only money, delegating the work, service provision, and ultimate problem solving to the nonprofit. Kramer states, however, that there is little reason to assume that the nonprofits have the internal skill set and bandwidth to solve such huge societal problems.

Tony Roberts once said, “If you do what you’ve always done, you’ll get what you’ve always got.” To make a real impact, something in philanthropy has to change. And that, according to Kramer, is the actual behavior of donors. Picking great nonprofits to financially support is just not enough, because that leaves the entire responsibility for improving conditions solely with the nonprofits.

What Kramer is really pushing on is this: Who takes responsibility for the issue?