Monthly Archives: June 2007

Private Foundation Public Relations

June 20, 2007 – 8:46 am

BusinessWeek has an article out about the importance of public relations as a tool for private foundations:

In the veiled world of private philanthropy, the practice of public relations is eschewed by many foundation leaders. Some believe that proactive media outreach is tantamount to inviting the Internal Revenue Service in for an audit, while others feel that publicity in some way diminishes the altruistic nature of giving. Yet over the last few years, a shift has begun to take place and foundations are seeing how external communications can complement and even strengthen their giving.

PR can be an invaluable tool for foundations of all sizes. It shines the spotlight on grantee successes; inspires action among constituencies; creates an environment for collaboration among multiple stakeholders; advances key issues; and perhaps most importantly, it highlights the foundation’s role as a good community citizen that is leading by example.

The article mentions the Philanthropy Awareness Initiative, which was behind the Demonstrating Impact session that generated so much interest at the Council on Foundations conference.

Tactical Philanthropy reader Bruce Trachtenberg left a comment on the BusinessWeek website arguing that foundations have a long history of external communications, but they need to change the focus of their message:

I don’t think there has been any lack of willingness among foundations to have active, sometimes aggressive communication programs… Instead, I think what the PAI report and other research has shown is that foundation communication activities have overemphasized money and process, and not enough effort has been spent talking about outcomes, or even before that, what our grantmaking is meant to achieve.

Bruce’s Op-Ed in the Chronicle of Philanthropy last summer had a similar thrust.

We call this time in history “The Information Age”. Philanthropy as an industry has not embraced “information technology”, but we are seeing some early ventures in this area like NetSquared and Packard’s Nitrogen project. I can sense the interest is rising. A lot of the foundation employees who read this blog work in the communications department. They understand information and they understand the power of information tools to enhance the impact of philanthropy.

The Council on Foundations is going to replicate the Morphing Media session from their annual conference at their Community Foundation conference this fall. They’ve invited me to be one of the speakers. Personally, I think that understanding how humans process information and how to tell your story in a way that sticks is the big competitive advantage right now. Think about the story that Apple tells, or Starbucks or Nike. I think that philanthropy as a whole, and foundations in particular, need to begin to tell the public a story. A story that excites and inspires, that invites the listener into an exhilarating world where our most honorable actions are celebrated and where we have the ability to co-create the world we want (hat tip to Peter Karoff).

I’m not a communications expert. If you want to read someone who really understands how to tell stories that change the world, check out Seth Godin’s blog. It’s on my daily read.

Inside Philanthropy

June 19, 2007 – 9:37 am

I’ve been readings a blog called Inside Philanthropy recently. The author is Todd Cohen, editor of Philanthropy Journal, an online newspaper published by the A.J. Fletcher Foundation.

Todd’s been talking about a lot of topics relevant to the discussion here.

Measuring Impact:

By engaging their entire organization in a culture of measurement, using simple and practical tools to track progress, and sharing results within the organization and with constituents, partners, funders and the public, nonprofits can better equip themselves to advance their mission, secure the resources they need, and improve the way they operate and serve clients.

Giving Circles:

Giving circles represent important new charitable options for women, African Americans, Latinos, Native Americans, young people and others whose giving traditionally has been outside that of mainstream philanthropy…

(But) Giving circles also can too focused on donors, creating challenges for charities to figure out quickly how to work with a mix of personalities and deal with donors who want to take a hands-on approach to their giving.

To add value where they most want and need it, giving-circle donors and charities must better engage and understand one another.

Overhead Expenses:

Overworked, underpaid and under constant pressure to raise money, operate effectively and make a difference, nonprofits need more funds to pay for expenses like rent, administrative salaries, technology and training.

Foundations need to loosen their purse strings, paying out more of their assets in grants and allocating more of those grants and grant dollars for operations.

And nonprofits need to do a better job showing their need for overhead funding and pushing foundations to provide it.

Philanthropic Capital Markets:

Creating a marketplace that connects donors and nonprofits, community foundations are enjoying the most rapid growth in organized philanthropy…

If they can operate effectively and openly, and engage nonprofits and donors in an inclusive and responsive marketplace for the exchange of philanthropic resources, community foundations can serve as a hub for civic engagement and charitable giving to address critical local needs.

Foundation Feedback

June 18, 2007 – 8:00 am

Inside Foundations, the anonymous blog by an employee at one of the country’s largest foundations, wrote on Friday about the best way to decline a nonprofit’s request for funding. She ties it into the recent debate here and asks for feedback.

Don, an anonymous foundation employee leaves a comment on the subject here:

Our foundation has a policy of calling applicants who have been declined funding roughly a week after the decline letter is sent.

During those calls, the lead reviewer takes the time to discuss in detail the reasons why their proposal was not funded. We see it as a valuable way to build relationships as well as improving transparency with respect to our review process.

The calls can be uncomfortable (applicants sometimes try to get us to reconsider their application on the phone), but it helps both parties understand the other better.

So does Mark Peterson, the head of Bridgeway Foundation and author of the blog Open Hands:

Yesterday I spent 1.5 hrs with a NPO leader giving them the straight goods on why their org did not qualify for our support. I don’t put it in writing, but I invite them to call me for feedback if they wish it. When they do, they will get my honest evaluation.

At the same time, I am convinced that the messenger needs to deliver the ‘bad news’ with tact and grace.

From my perspective of someone running a growing business, I think it is invaluable to get feedback. We actively solicit feedback from our clients and other people in the field and when all they give is positive comments, we ask them specifically about ways we could improve.

Holden Karnofsky also recently wrote about the importance of feedback to people who want to be the best they can.

Philanthropy Debate Questionnaire

June 14, 2007 – 7:59 am

I’ve tallied the answers to my questionnaire from yesterday and here’s the results.

Do you believe that nonprofits that provide free services to other nonprofits should decline to provide those services to nonprofits that are bad at what they do (poor at achieving their mission)?

This came back 50% saying yes, 30% saying no and 20% saying it needed to be decided on a case by case basis. In for-profit investing (my area of expertise), money flows to companies with the best future prospects. When you buy publicly traded stock, your money does not go to the company and therefore does not change their future prospects. Philanthropic donations do affect a nonprofit’s future prospects, so the funders ability to help a nonprofit improve is an important part of the equation. Nonetheless, I think this difference in mindset is a critical dividing element of this debate.

Do you believe that philanthropic funders should focus their resources on the highest performing nonprofits (the ones that have the best record or prospects for mission achievement)?

This one came back 70% yes, 10% no and 20% saying it depends. One person pointed out that small start up nonprofits should not be excluded due to lack of track record. Frankly, I was a little lazy in composing the question. Historical success is not the only measure of future performance. Startups should clearly receive funding, so I should have used language that pointed to predicted future performance.

Do you think that earned income strategies are preferable to philanthropic funding strategies?

Only one person answered yes to this question; a nonprofit employee. While Dave Chakrabarti is correct that many NetSquared judges did seem to prefer earned income strategies, the participants in this discussion don’t seem to hold that view.

Do you think it is inappropriate, at a nonprofit competition for philanthropic resources, for a moderator to say, “Some nonprofits just suck”?

80% of people said no. Dave Chakrabarti, who was on the receiving end of Mike Brown’s comment and Daniel Ben-Horin, founder of CompuMentor/TechSoup and a fellow board member of Mike Brown, both thought the comment was inappropriate. Appropriate or not, I’m amazed at the massive response that the comment sparked. Would we all be debating this topic if Mike had said “Some nonprofit just don’t do a good job”? Mike admitted in an early comment that he was engaging in hyperbole. It sure was effective.

Will you keep participating in these types of cross-disciplinary conversations as new issues develop on this blog?

Everyone answered yes to this question. In my mind, the most groundbreaking aspect of blog technology is the ease with which it allows two-way communication between the “speaker” and the “audience”. Because this blog has attracted readers with very diverse backgrounds, I think we have an opportunity break through the silo effect that grips much of philanthropy.

Mike’s use of the impolite term “suck” may have been more important than you might think. It may have even been a vital factor in facilitating communication as Susan Herr suggested recently while writing about a Stanford Social Innovation Review article that was critical of microfinance:

This sort of article, which debunks the silver bullet of the year, does far more than question a social change strategy achieving massive investment on both the profit and for-profit side. It also elevates the concept of philanthropic strategy, and the recognition made by discerning donors, that some dollars are spent more effectively than others. I’m not saying great philanthropists always bet on the right horse, but I’d like to believe the very best engage naysayers and rabble-rousers who can help them think outside the box. Unfortunately, that’s really hard to do in the all-too-polite club of American philanthropy.

Philanthropy Debate Conclusion

June 13, 2007 – 7:38 am

OK, the debate on this blog has been raging for two weeks. It has drawn over 50 comments, been referenced across a range of blogs, and yesterday was featured by the Chronicle of Philanthropy. I hope we have a lot more discussions like these. But now it is time to wrap this one up.

In the comments section, it has been pointed out that there is probably far more agreement on the issues than most people realize. Some of the points of contention are in fact not contended by anyone. Have you ever had an argument with a significant other where a whole set of issues came up that weren’t even part of the initial dispute? By the end, you sometimes wonder what you’re even fighting about and how it all seems to have gone off course.

So let’s do this. Below, I’m going to distill each point of contention down to a short question. I’d like everyone who have been actively participating and/or reading along, to answer each question with a simple “yes” or “no” in the comment section. That way we can get to the root of this debate and see whether the real issue is fundamental disagreement or a lack of shared vocabulary.

  1. Do you believe that nonprofits that provide free services to other nonprofits should decline to provide those services to nonprofits that are bad at what they do (poor at achieving their mission)?
  2. Do you believe that philanthropic funders should focus their resources on the highest performing nonprofits (the ones that have the best record or prospects for mission achievement)?
  3. Do you think that earned income strategies are preferable to philanthropic funding strategies?
  4. Do you think it is inappropriate, at a nonprofit competition for philanthropic resources, for a moderator to say, “Some nonprofits just suck”?
  5. Will you keep participating in these types of cross-disciplinary conversations as new issues develop on this blog?

Feedback for Fundraisers

June 13, 2007 – 7:32 am

Inside Foundations is a blog authored by an anonymous program associate at one of the country’s largest foundation. Writing under the name “M”, she drew on her background as both a grantmaker and a grantseeker and offered an illuminating perspective on the current debate:

About the warm fuzzy nonprofit lexicon – the foundation that employs me is starting the practice of actually telling applicants why we declined their application (which flabbergasted the local fundraisers whom I broached the subject with – as apparently no foundation has ever been that straightforward with them – they were ecstatic!) They wanted the feedback.

As I am just the lowly Program Associate I had the responsibility of proofreading the little blurbs that the Program Officers wrote for each decline. I ran into something that really irked me. There was a phrase that was repeated in many of the declines. The Program Officer wrote something to the effect that the case for support "was not very strong." Then they gave 3 or 4 really good reasons why the proposal was uncompetitive, a bad fit or just plain wrong. Instead of saying "not very strong" why didn’t they just write "weak?" Why use 3 words when one will suffice? "Oh, weak just sounds too harsh" they told me.

Some of the Program Staff were so worried about offending the applicant that what they wrote in their decline rationale was so vague and useless it was no more informative to the nonprofit than the form letter they used to get saying we get more solicitations than we could ever fund therefor we must decline you, etc.

Maybe I am unique, or maybe it is just because I used to be a fundraiser, but if my proposal gets declined, I would want to know why. That way I can take steps to fix the problem.

Why does the foundation world (or at least what I have seen so far) seem so reluctant to give honest, straightforward feedback to applicants? If somebody sucks – tell them so they can fix it.

We don’t have to be rude or mean, and I certainly respect all nonprofits enough not to actually use the word "suck", but I am still going to decline you. If your case is weak, I’m going to call it weak. Then I will tell you why it is weak, so next time you can be more competitive. If your governance structure is inappropriate, I will tell you why so that you can come in line with best practices.

I know as foundations we are seen as being the ones with "the power" in the relationship between grantmaker and grantseekers. But with that power, don’t we also have the responsibility to help nonprofits better themselves? We exist solely to benefit the nonprofit sector they comprise.

The Vocabulary of Philanthropy

June 11, 2007 – 9:16 am

More blogs weigh in on the for-profit vs. nonprofit war of words, here, here, here and here.

One of the posts quotes an email from Dave Chakrabarti, a major contributor to the debate on this blog, encouraging his network to weigh in on the debate:

Coming under fire for offering services for free, by nonprofit funders who do not seem to understand the difference between “mission-driven” and “profit-driven”, forces me to suggest that we, as a sector, need to develop stronger language regarding these issues. Most of all, we need to work towards a different model of sustainability, so that we can pose alternate definitions when a potential funder equates “sustainability” with a system based on marginal returns for services offered…

…Responses appreciated. Backup on Tactical Phil would be awesome (I think I’m outnumbered).

One of the interesting attributes of this debate has been the way it has spun off in a couple different directions at once. Currently there are actually three different arguments being waged, 1) Are nonprofits that use earned income strategies better than donation based nonprofits? Does “sustainable” mean not relying on donations? 2) Is it appropriate to tell a group of nonprofits that some of them “suck” or is doing so counter-productive? 3) Should funders avoid wasting time with underperforming nonprofits and allocate capital to top performers? Should nonprofits that provide subsidized services/products to other nonprofits only deliver those services/products to effective nonprofits or any that ask for them?

It is the third question that Mike Brown was discussing when he made his now infamous comment. But I think the splintering of the discussion showcases the lack of shared language between the for-profit and nonprofit mindsets. Rather than call for reinforcements and retreat to our respective corners to refine our side’s language to better “win” the debate, I think we need to cross the great divide and create a shared Vocabulary of Philanthropy.

The “shorelines” and “international borders” that I’ve referred to are places of great turmoil where various forces push against each other. It is in these zones that people feel a need to protect themselves and so quickly fall into line with their side’s “official party line”. People feel safer in groups. But if this cross-disciplinary conversation is going to produce something new and not just be a spectacle, we need more people to drop their defenses and wade out into the middle ground and see what we can find.

For the record, I believe that “earned income” strategies have nothing to do with nonprofit sustainability. Philanthropic donations are a perfectly acceptable way to attain sustainability. The question is do you have a way to finance the service that you plan to offer. Philanthropic donations are just a way for one group to bear the cost of another group’s needs. There is nothing about charging the recipient of a service that makes a nonprofit more sustainable that “charging” another group (i.e. soliciting donations).

Tactical Philanthropy Podcast: Paul Shoemaker Interview

June 7, 2007 – 11:28 pm

Today’s podcast marks a new chapter in my evolving attempt to facilitate cross-disciplinary conversations in the field of philanthropy. As I announced yesterday, interviewees will now be expected to participate in a discussion of the podcast topics in the days after each release. However, for this to be successful I need your help. My readers have already shown a great interest in posting comments and emailing me their thoughts. Now is your opportunity to do the same with the thought leaders who are featured in the podcast. So leave your comments and questions and check back often to watch the discussion unfold.

Kicking off the new format is Paul Shoemaker of Social Venture Partners (SVP). SVP is like a giving circle on steroids. Using a venture capital model, SVP makes grants but also provides their grantees with knowledge, skills and valuable contacts. If you want more context about Paul and SVP check out info here, here and here.

As you develop your questions for Paul, I would encourage you to think about the following topics that we’ve already discussed: giving circles, measuring impact and outcomes, venture philanthropy, the impact of high tech entrepreneurs entering philanthropy for the first time, and “new” vs. “old” philanthropy.

Paul defends the venture capital concept, criticizes “big mouthed”, arrogant individuals for diluting the term “venture philanthropy”, tells us why he thinks there really is a “new donor” today, and talks about the rise of giving circles. Let Paul know what you think. Leave a comment at the end of this post or email me any thoughts or questions. I have Bill Schambra lined up to try this new format and a major foundation CEO considering giving it a try. Help me make this work and I think this venue will attract important leaders and spark a lively conversation. Thanks so much to everyone who has been participating in the discussion here. It has been my great honor and pleasure to watch the debate unfold.

Expand this post using the link below to read the transcript.

 

Read More »

Reviving the Giving Carnival

June 7, 2007 – 8:07 am

When I started the Giving Carnival, the intention was to facilitate discussion between philanthropy bloggers. It seemed to work rather well, but I quickly realized that the discussion was too much of a closed loop. I’ve written at length about my interest (obsession?) with cross-disciplinary conversations and approaches to solving problems. So I stopped producing the Giving Carnival and thought about how I might open the discussion to include non-bloggers and even non-blog readers (hat tip to Phil Cubeta for his suggestion that is at the root of the new format).

Today I’m happy to announce that I am merging the Tactical Philanthropy Podcast and the Giving Carnival (with a hat tip to Jesse and Anand of Innovatorz for getting me to think about how to make it easy for non-tech geeks to use social media tools). Tomorrow’s interview is with Paul Shoemaker of Social Venture Partners. Paul has agreed to respond to comments/questions from readers/listeners. Simply drop a comment or email me your thoughts. Soon I’m going to require interviewees to agree to this format. I’ll be announcing upcoming guests and asking for readers to submit questions they’d like me to ask. If you have guests you’d like to hear from, let me know.

More Philanthropy Debate

June 7, 2007 – 7:51 am

Very few foundation employees ever comment on this blog. I’d love them to join the discourse, but I get the sense they feel it is far too risky to let an individual express an opinion that might not be inline with “official foundation statements”. I think it’s a shame, because their point of view is being left out of the debate.

Nonprofit employees on the other hand leave frequent comments. We already had the back and forth between fellow CompuMentor/TechSoup board members Daniel Ben-Horin and Mike Brown. Today we get the thoughts of one of the employees, Antony Chiang. Public disagreement? Heavens, what will people think? I don’t know about my readers, but my opinion of CompuMentor/TechSoup (which was already high) just shot through the roof. Let me know how you view this kind of public debate and how you would react to public comments from foundation employees and board members.

Antony:

No discourse like this should go on without the uniquely insightful perspective of someone like myself … my primary credential being the timekeeper at Mike’s panel at NetSquared.

However, I should perhaps warn that in addition to that impressive role, I have the distinct privilege to be part of the team expanding TechSoup’s impact internationally (and thus needing to be very nice to Daniel in this blog comment), as well as having worked in the cross roads of the non-profit / for-profit / technology intersection for quite some time.

My first reaction to the minor uproar I have to admit was “Really? Intentionally provocative but what was the big deal?”. Reading Daniel’s initial feedback about “content vs. context” was helpful (see I warned that I was going to be nice to Daniel). Got a good chuckle out of the NRA example, and I would say that essentially Mike was at a NRA/NPO panel where he said “some gun-owners/NPOs suck” and indeed got "didn’t get out of range/feedback regarding his insensitive language”.

To be fair however, here is some additional “context” that should be noted. First, this was a new model for NetSquared where the purpose was for 21 projects to persuade attendees to vote to fund them in a VC style pitch. Second, one of three key judging/voting criteria was “Economic Sustainability”, also phrased as “having a plausible financial model”. And the format was a panel set up to question each project representative on that factor (the other two being social impact and technical innovation). Third, Mike’s role was moderator (not just expert panelist). Here’s my point in more detail:

First, this was a competition. The nonprofits were there to compete for dollars, as well as drum up interest by resources like volunteer Yahoo developers and expertise in marketing / finance / strategy. The model and the whole conference reminded me very much of other “social enterprise” competitions, modeled on VC pitch competitions, where ‘business plans’ are presented for ‘startup venture funding’ to an audience of foundations/VCs. And I would add that the NetSquared community is a deliberate mix of VCs / Corporate / NPO / Foundations / Experts. So every organization there in my mind was buying into the social enterprise model, at least for two days.

Second, worthy projects were supposed to demonstrate economic sustainability. I was at all four of the economic sustainability panels. And I have to say that precious few of the projects demonstrated persuasively any economic sustainability. Panelists and audience members kept asking the same questions of all of the projects that it got to the point where moderators were asking projects to introduce themselves and then answer one key question right off the bat “What is your planned mix of earned income versus donation/grant income” usually followed by “how will the earned income be …. well … earned”. Sometimes the answer was “we’ll be 100% (or mostly) grant funded” and frankly that put the damper on any useful questions or suggestions other than to suggest funders who had an interest in their type of project. A perhaps meandering way of saying that the context was very much ‘market place’, and capital flowing to the most effective users of capita l. Daniel’s point is well taken that in the NPO ecosystem, the ‘market’ context is a new fad and not of general applicability, but at NetSquared at least I interpreted social enterprise as being the accepted model.

Third, Mike took his role as moderator with more gusto in my opinion than any of the other moderators. Maybe I’m just saying that because I had to catch his attention every four minutes to tell him the clock was ticking and he was always in the middle of fostering lively debate. At the outset, he encouraged everyone to ‘ask the hard questions, this isn’t softball”. He played fast and loose with the format of the session for the purpose of creating a more lively discussion, where all the other moderators followed it exactly. My impression is that he was trying to push participants in general (both project founders and audience) to ask hard questions, go deep and get really valuable feedback / resources than if just easy ones were asked.

With the disclaimer of fading memory, I seem to recall that this controversial statement (and subsequent explanation/observations) was made in the context of a project that wanted funding to give away free websites and free web tools. So absolutely no economic sustainability around what they wanted to get funded. And panelists and audience members alike were trying to get the project reps to at least consider charging some who could afford, or place advertising, or other ways to create earned income. And philosophically, should we be giving resources to just any nonprofit, when some are less effective (s**k) than others. Foundations and other funders certainly don’t just give grants to any org that asks. Mike wasn’t saying the project being questioned s**ked. My interpretation of this part of the panel was an observation that this organization should consider thinking like a funder and give free sites to ‘worthy’ NPOs and charge all the rest perhaps. Or at l east that’s what I was thinking at the time as yet another alternative way to try to get this org to consider earned income strategies. On the one hand I admired the org reps’ refusal to budge from their specific vision. And even a hyperbole didn’t work. On the other hand I didn’t think they were ‘competing’ very well to at least say “hmm those are some interesting suggestions we’ll consider and hopefully this demonstrates that we have some possible viable models of economic sustainability”. Or another way to say this – this project was in the wrong competition if they wanted to blatantly keep their specific vision/strategy and expect to win.

And one final observation regarding part of this thread, is that I remember Mike introducing himself as “Mike from TechSoup”. I wonder how many in the audience read his bio and knew his vocation, but my guess is most didn’t. My hunch tells me they would have been offended by the phrase no matter who said it.

Which leads me to my lesson learned. S**k is not in the warm fuzzy cup is half full nonprofit vocabulary. It’s not so much being PC as it is having one vocabulary with my buddies, another with my toddler, and another at the office, and yes, one at NetSquared. So while disagreeing with Daniel’s specific analysis, yet coming full circle to his observation that the context here was a nonprofit conference. When all is said and done, this wasn’t a rough and tumble VC pitch competition where you better have a tough skin, it was a NetSquared conference. Warm, yes. Fuzzy, yes. Dedicated to non-profits, yes. Culture and language of non-profits … a definite yes. Dare I say ‘sensitive’… also yes. Nonprofit staff are a self selecting bunch of folks (hugs all around please). It was perhaps the most collaborative competition I have ever seen. “No one left as a loser” was actually a truth at this one. Cliché but true. Everyone got a free trip to the conference , ended up with at least some extra dollars and a boatload of great connections and feedback. Competitors were not tech entrepreneurs, and instead talked like nonprofits talk and asked how they could work together on overlapping goals. So my final verdict … content = accurate. Vocabulary in this context = did not cross the line for some (myself included) but did for others.