Tactical Philanthropy Podcast: Cheryl Dahle

Today’s interview is with Cheryl Dahle. Cheryl was employee number 24 at Fast Company Magazine and spearheaded the launch of the Fast Company Social Capitalist Awards. During the interview, Cheryl talks about mainstream media coverage of philanthropy, the importance of social enterprises and the challenges faced by nonprofits that try to grow rapidly. You can learn more about Cheryl via the background notes I posted last week.

Cheryl will be answering your questions and comments in the Comments section of this post, so fire away.

You can click on the link below to read the transcript.

Sean Stannard-Stockton: Hello and welcome to the tactical philanthropy
podcast. I’m Sean Stannard-Stockton, author of the Tactical
Philanthropy blog and Principal and Director of Tactical Philanthropy
at Ensemble Capital. My guest today is Cheryl Dahle. Cheryl is West
Cost Bureau Chief of BlueEgg.com, and a contributing writer for Fast
Company magazine. Hi Cheryl, thanks for calling in today.

Cheryl Dahle: Hi!

Sean: Cheryl, you were employee number twenty four at Fast Company
magazine and over time, due in large part to your influence as I
understand it, Fast Company started to cover social enterprise issues
alongside the traditional business issues. You spearheaded the Fast
Company’s Social Capitalist Awards. Can you tell me why a company like
Fast Company became so interested in social enterprise issues?

Cheryl: Sure. I think one of the biggest reasons was that our mission
was to focus on innovation in the world and how people were using
business models to accomplish lots of change in the world. One side of
that was making lots of money, putting new products into the world,
breaking boundaries around design, and innovative business thinking.
And there’s also a flip side to that which is a lot of the innovators
we were focusing on who were in this non-profit realm, or whose aims
were not even non-profit but who were oriented toward social good, were
just as smart, just as innovative, and had just as much value to offer
to our readers in terms of lessons as those that are more typically
thought of as entrepreneurs, like the Bill Gates’ of the world or the
Michael Dells.

So from our perspective there was a lot of value for our readers in
writing about these stories. I think that there’s also a sense of
optimism there and a sense of possibility in that part of the coverage
that really goes to one of the themes of the magazine around work/life
balance and one of the things that we’ve continued to return to in the
magazine over the years is that people’s lives are getting less
bifurcated. There’s less of this notion that, “I have my work life and
it is completely cut off from my home life and my personal vision
around what my goals and values are in the world. Part of what we were
seeing was this incredible merging of people wanting to express their
values through their work and being hard driving, really creative,
really bottom line oriented business people. So social enterprise is
really one of the most perfect expressions of that kind of fusion. So
that was one of the pieces of that trend that we found really
compelling and thought that our readers would find really compelling as
well.

Sean: Fast Company isn’t the only mainstream business publication that
has been talking about social enterprise and philanthropy, but
historically, mainstream media has segmented issues around philanthropy
and non-profit activity in either seasonal issues or into niche media
like the Chronicle of Philanthropy. Do you think this trend toward
covering non-profit, social enterprise issues on an ongoing basis in
the mainstream media is this here to stay or is this just kind of an
outgrowth of Bill Gates and Warren Buffet events and something that’s
just an early twenty first century event.

Cheryl: I’m honestly not sure because I think that in order for this to
become a topic that the media visits in a nuanced and consistent way I
think it is going to take some shifts within media culture. I think
right now if you talk to people who are mainstream journalists, as a
topic, despite the fact that philanthropy is big business and there’s a
lot of money changing hands and it is actually a really important part
of the economy, it is seen as being “soft.” If you want to build a
career as a journalist within the mainstream world, focusing on
philanthropy really isn’t a great move for your career. So there’s this
weird pressure within the field of journalism to avoid this kind of
coverage, to avoid looking at these things because it is dumped into
this whole do-gooder category. That’s why I think you see the attention
being limited to the seasonal shtick. It’s sort of, “Oh, it the
holidays,” or “Oh, its time for tax write-off season, so we’ll spend
some attention on this.” I think the other piece of it that there’s not
a lot of consistent attention spent on philanthropy as a system and
social change as informed by philanthropy. If you are a business
writer, one of the things you want to focus on in choosing your stories
is, “What are the companies that are actually changing the game? What
are the executives and people that are coming up with groundbreaking
ideas?” So in order to understand which of those topics you want to
write about, you really need to understand the change within particular
business divisions and industry. You need to know your territory. And
there is a lot less time and energy spent on understanding, “What are
the levers that effect social change?” As a journalist trying to pick
which foundations are doing exemplary work, you would need to
understand social issues as much as you would need to understand the
financial issues involved. That again is not a very prestigious beat.
It’s not a beat that a lot of news organizations have budgets to fund.
It is seen as do-gooder territory. So I think that some of the shift
that needs to happen is actually within media organizations, the way
that they view these beats; and for individual reporters, the way that
they approach these types of stories – thinking about it not as, “Hey,
here’s a holiday roundup of some non-profits,” or “here’s some
interesting foundations.”

I would say to one of your other examples, the Bill Gates/Warren Buffet
angle, I’m gratified to see that there are more reporters who are
following philanthropy, I’m not excited about the lens of this being,
“Let’s follow what the celebrity rich people are doing.” They are doing
some interesting things. Don’t get me wrong, I think that’s a
legitimate story, but it’s the only story that’s getting out there in
mainstream media. If you look at innovation as a lens as opposed to
wealth and celebrity as a lens, you could come up with a lot more
stories than just two or three that run every year about what Pierre
Omidyar is doing or what Bill Gates is doing.

Sean: When you talk about innovation or business I agree completely
that that lens is a critical lens for people to see philanthropy
through, because it’s what makes it accessible to exploring in a more
in depth way. I think that’s part of why social enterprise is
important. I don’t think it is something that’s going to supplant the
non-profit as an organizational type, but it’s a very important lens to
look at philanthropy through. You’re involved in something like that
right now, so why don’t you tell us about your current project,
BlueEgg.com.

Cheryl: Sure, BlueEgg is an e-media company. It is basically about
trying to produce content and websites and information for the people
who walked out of Inconvenient Truth saying, “I get that global warming
is an issue, but what can I do about it?” And they are people who have
lives, live in certain parts of the country and have made commitments
to certain lifestyles and they are not going to move to Vermont and buy
composting toilets right? So it’s this notion that it’s “Green for the
rest of us.” And it’s trying to provide really practical information
and get us over this hump that the response to global warming is either
(a) I can’t individually do something about it or (b) it’s so
overwhelming that nothing we can do can actually make a difference. So
there are a whole lot of people who are actually interested in this
topic and from the perspective of trying to figure out, for instance if
you’ve just purchased a new home, where you would go for information
about the types of appliances you might buy or the types of renovations
you might do, materials you can use, energy savings, rebates on solar
panels. Those kinds of things. There’s not one place to go for that
kind of information. Our aim is that we will be that place where you
will be able to find practical information, inspiration and other like
minds who are interested in exploring what they can do but don’t
necessarily feel like they belong in this bucket of … greenies.

Sean: Why is BlueEgg a for-profit company rather than a non-profit?

Cheryl: Well, there are a couple of similar ventures out there that are
non-profits. One of the big reasons is that there are limited
non-profit funding streams available for big media products. For a
non-profit, I can think of a good example other than National
Geographic. So the issue then becomes that if you want to have a wide
impact, if you want to get to mainstream consumers and you want to
impact the way they think about the world, you need to think big. And
the level of that you need to scale to that level is simply beyond what
you could get through non-profit channels. The average grant size for
foundations is about $40,000 and if you look at becoming a multimillion
dollar company and having a distribution system that allows you to get
out to mass consumers, raising money in $40,000 increments just doesn’t
get you there.

Sean: In your introduction to the 2007 Fast Company Social Capitalist
Awards, which you’ve kind of inspired, you wrote, “To philanthropic
purists who fear that the stain of profit making might corrupt the
conscience of social endeavors, the message is clear: Quit thinking
small.” That speaks directly to what you’re talking about right now
with BlueEgg. Can you expand on why you’re thinking small if you’re not
pursuing profit making as part of what you’re doing?

Cheryl: Well, I think that a lot of it has to do with just the way that
the capital markets are structured for non-profits. If you look at the
way that startups work in the for-profit world, there are much more
structured and readily available streams of capital that wind up (a)
actually weeding out a bunch of bad ideas, which is a good thing, (b)
weeding out a lot of duplication, which is a good thing, and (c) enable
you to move pretty quickly. Which is not to say that it’s a fun or
Polly-Annish process to raise money for a startup, but what you wind up
with on the non-profit side is this sense of a real ceiling that you
hit in terms of growth. There have been some innovations recently in
taking a look at how that kind of thing might get restructured, but if
you’re a non-profit and you have a budget somewhere between $8-12
million, it’s really tough to find a foundation that can give you a
significant enough investment to get to the next level. You also run
into issues around the attitudes toward some of what gets funded, so
foundations are much more interested in funding specific programs and
specific line items than they are in funding growth. So on the
for-profit side you have a growth plan that has you actually invest in
people before you actually need those people to be deployed. You would
never suggest to a company that is scaling that they not be building
capacity – if they’re making widgets then factory capacity, if they’re
rolling out intellectual property its adding additional staff – you’d
never say to them, “We won’t pay for that. That kind of scaling isn’t
appropriate, but we want you to expand to reach a ton more people and
clients.” I think there’s a bit of a sense of wanting the non-profit
world to be able to scale without understanding what resources are
necessary to do it. That’s kind of what I meant by “playing small.”

Sean: Well Cheryl, thanks so much for joining us today and I hope that
all of us can think big in everything we do in this area. This has been
the tactical philanthropy podcast. You can visit us at
TacticalPhilanthropy.com. For more information about Cheryl Dahle and
BlueEgg Incorporated, visit www.BlueEgg.com, and you can learn more
about the Fast Company Social Capitalist Awards at
www.FastCompany.com/socap. Thanks for joining us.

16 Comments

  1. BSM says:

    That is a good point that journalism about giving is unintentionally limited by the lens that reporters apply.

    Who does stories based on “What are the innovations out there tackling problems?” I see lots of “Celebrity/Rich Person donates money” stories. I also think that one of the great problems with classic non-profits is that they actually exist so that rich people can legitimatize themselves by donating money. See Every University.

    Can anyone recommend a publication or a reporter who seems to really cover innovation in social solutions?

  2. Paul Ryder says:

    Brilliant! Cheryl’s right on the money about fundraising for non-profits. I used to chair a non-profit board and it’s impossible to raise the kind of money EVERY YEAR that is necessary to keep the doors open on a big enterprise. We had to start thinking about charging (those who could afford it) for our services. It made the organizations smarter and better than it was before. There’s a big difference between profit and greed and I think sometimes we think providing something of value and charging for it makes us bad guys.

  3. Sara Olsen says:

    This is a great insight: “the level of that you need to scale to that level is simply beyond what you could get through non-profit channels. The average grant size for foundations is about $40,000 and if you look at becoming a multimillion dollar company and having a distribution system that allows you to get out to mass consumers, raising money in $40,000 increments just doesn’t get you there.” Glad to see Cheryl leading the way in media to seeing what is instead of what is assumed to be, and respecting the reader.

  4. Cheryl Dahle says:

    To BSM: Another journalist who writes on these topics is David Bornstein, who wrote How to Change the World. (http://www.howtochangetheworld.org/) He was the first to write about Muhammad Yunus’s success with microfinance — waaay before anyone wanted to give Yunus a Nobel Peace Prize for it. But there are not that many journalists I know — writing for mainstream publications — who work on this beat.

  5. Cheryl Dahle says:

    Paul – Your experience with trying to find a revenue stream or “earned income strategy” is a common one for non-profits these days. One of the key things for non-profits pursuing this path to examine is how tightly integrated the product it sells can be to the mission of the overall organization. Meaning — selling t-shirts and ancillary, unrelated gizmos is less sustainable, less likely to be successful and less supportive of the brand than coming up with something that is tightly integrated. In some cases, that is intellectual property or know-how gleaned through services the NP is providing. Or, as in the case with Rubicon Programs (www.rubiconprograms.org) the product dovetails perfectly with the core mission. These guys have a high-end gourmet bakery that is staffed by the clients they serve in their programs for formerly homeless people.

  6. Cheryl,
    You are suggesting an interesting chicken or the egg approach in your comment that: “As a journalist trying to pick which foundations are doing exemplary work, you would need to understand social issues as much as you would need to understand the financial issues involved.”

    I would argue that if enterprising journalists took more time to explore the foundation world by looking at what individual institutions are doing, and made the effort to learn what separates one foundation from the other, as well as what they are accomplishing (or not), how they go about their work, etc., they would see a sector that merits far more coverage than it receives today. There’s no reason the news media can’t make a larger effort to do for the foundation sector what they do for other sectors of our society: examine, probe, report, comment, and generally try to help the broader public understand what these organizations do and why they do it. I also believe if that kind of concerted effort was made, journalists would find some very good and compelling stories worth telling, and stories that go far beyond the more typical reporting about how much foundations are giving to which causes.

    At the same time, I don’t blame journalists for their lack of interest or reluctance in covering foundations. We in the foundation world know we haven’t done the best job we can to invite that kind of routine coverage and scrutiny. But, I promise we’re working on that!

  7. Holden says:

    I find that practically all media coverage of philanthropy ends with dollars disbursed. The FastCompany awards is one of the only sources I’ve seen that has any helpful discussion of charities’ actual activities.

    But I’d like to see coverage go one step further, and discuss not just activities but results. Instead of hearing about how much Gates is spending to fight malaria, let’s hear about whether malaria is getting better or worse.

    I think that covering charity in this way would make it interesting, relevant, and newsworthy more than once a year. I think the reason this isn’t currently happening is because of a seemingly universal taboo on *criticizing* charities.

    A success story isn’t interesting unless it could have been a failure story (see sports). As long as charities are immune to controversy … they’re also going to be boring. Charities’ fundraising materials and press releases consist of generalizations and glosses over all failures … then they whine that nobody finds this interesting. Can’t have it both ways.

  8. Holden–
    I co-authored an op last year in the Chronicle of Philanthropy that raised similar points as you make in your comment. You can read it here.

  9. Cheryl, it seems to me that there is some negative coverage of charities, but it generally focuses on excessive expenses or other “scandals” related to mis-used funds. This focus is probably part of what makes the focus on administrative overhead ratio appealing to donors. This kind of bad outcome is quantifiable. But why don’t reporters simply ask foundations (who are suppose to be experts on giving) who the best (and worst) nonprofits are and tell those stories? This is how business reporters often tell stories about great companies – they talk to and quote money managers. For instance, Edna McConnell Clark Foundation could easily help a reporter tell a story about Nurse-Family Partnership that would be a compelling story about a great nonprofit.

  10. Cheryl Dahle says:

    Holden –

    I’m not sure a taboo against criticizing non-profits (at least on the part of the media) is as much of a problem as the fact that defining “success” (and crediting the cause) in the world of fighting social ills is much more complex than it is to keep score in the business world. As a business reporter, when I write about for-profit companies, the stock price, the profits, these “hard” measures of quantifiable progress are easy to use as proof of performance. (Though it is true that they are not perfect measures, either.) So the evolution of metrics that can quantify social return is critical. That takes some energy on the part of non-profits to tell their story differently, as well as on the part of the reporter, who must be willing to understand the framework of a social problem and the theory of change behind any given effort.

    It also takes money from foundations and other places to put into the studies and projects that can produce accurate metrics. Longitudinal studies tend to receive about the same level of enthusiasm from some foundations as capacity investment.

    I think one of the bigger problems, actually, is that reporters don’t know how to write stories with good outcomes using a storytelling method that incorporate compelling narrative. Negative stories have built-in conflict. You have to search harder with positive stories for the drama. (By the way, I am collecting a file of examples of these types of stories done well, so anyone with suggestions, please pass them along.) Most reporters don’t try.. so they hand in the fluffy and uncompelling “Do-Gooder Does Good” piece (YAAAWN!!), the editor grimaces and gets another reinforcement to the “let’s leave this stuff for the holidays when people need their annual dose of saccharine” attitude.

  11. Cheryl Dahle says:

    Sean –

    You’re right that talking to foundations is a good place to start. But since they also have a vested interest in their grantees looking good, it is just a place to start. The next step is looking at metrics, comparable organizations, theories of change, etc. All of which is doable.

    One of the hitches there is that doing this sort of due diligence requires expertise that most publications do not encourage a reporter to spend time accruing. Learning about the telecom business? Knock yourself out. That’s a *real* industry. Want to research microfinance and its impact on poverty? That’s “soft” stuff.

    There are a whole set of knee-jerk reactions that editors and writers have to certain topics as “soft” or not real reporting. If you write about good news, you’re seen as being a PR person or a patsy. Criticism is unfortunately equated with critical thinking, which it clearly is not.

    I often wonder not just how media would be different, but how the *world* might be different if every newspaper or magazine had a social innovation beat…

  12. Cheryl Dahle says:

    Bruce –

    I would probably write about foundations more frequently if I more commonly stumbled across innovation among their ranks. In the almost ten years I’ve been covering social entrepreneurship and the non-profit sector, I can name very few potentially game-changing innovations that have come out of foundations: venture philanthropy, venture funds (a la Rockefeller’s ProVeNex Fund or Google Foundation), and more broadly the movement toward investing endowments to eliminate the hypocrisy (PDF) of funding non-profits to fight social and environmental ills while buying the stocks of companies contributing to those problems.

    The number of foundations engaged in these practices is pretty small. The bulk of the sector seems content to be:

    –Completely unaccountable for the “social returns” on its donations. How many foundations develop sound metrics for the progress they’re accomplishing — without a wrongheaded transference of the burden onto the non-profits in which they invest?

    –Completely unresponsive to their “customer base” of non-profits. The cost to non-profits of chasing money – because the sector has not made a significant enough effort to streamline grant application, share information, or cooperate in any meaningful fashion – is shameful. Add to that the degree to which foundations tug organizations off mission to satisfy internal agendas, and you begin to see how much damage foundations actually cause.

    –Unaccountable for the overhead they spend to find and make investments. I know of no other industry that re-invents the wheel with such relish. How about sharing some due diligence? Anyone?

    –So afraid of failure that they continually play small, hide unsuccessful investments (which could produce great lessons learned) and virtually conspire to overlook terrific opportunities for collaboration.

    –More interested in building their own brands or bolstering their own flavor of the month approach to investment than in building great non-profits that can scale. (The whole movement around investment in capacity building is an antidote to this.)

    Here’s what I’d like to write about:

    –A coalition of foundations who decide their next big thing is to choose the best solutions in three areas — homelessness, early education and climate change –- and then pool their fund behind common metrics and organizations. These would be big bets…at least $50 mil grants.. and organized much the way that so-called non-profit private placements have been set up. Find the proven solutions. Scale them. Fail gloriously in some cases so we can figure out what to try next.

    –More spend-down foundations. I would love to see more foundations incented by making the boldest change and biggest leap forward they can in a short period of time than a fleet of organizations motivated to stay in business by playing small.

    –Rampant socially responsible investing (SRI). In an age when so many hybrid organizations and for profit organizations with social missions are languishing for lack of capital, it’s criminal that foundations manage their endowments as they do.

    All that being said… I agree with you that there are some smart foundations making wise investments in good programs. But handouts that wind up in the right pockets (without a game-changing approach) isn’t really a story to me.

    I would be delighted to hear about good stuff I’m overlooking.

  13. Cheryl,
    You certainly got my attention with your response to my question to you about the lack of coverage of foundations. I don’t accept your premise that unless foundations are doing innovative work they are not worth covering. Certainly that’s your choice, and I respect that. At the same time, whether by you or others in the media, there has be some place for accounting for work that gets the job done, whether it’s an innovative approach or a tried and true method. I also want to acknowledge the fact that you raise some important questions re: accountability, efficiency and effectiveness. And those are questions, I presume, a good journalist should be asking and foundations should be prepared to answer. I am concerned, however, that because you believe that none of the things on your list of what makes foundations worth covering exist there’s no reason to invest time and energy looking more closely. For what it’s worth, I’m going to share your comments with my colleagues in the field, and hope that they will be motivated to answer your questions and provide examples.

  14. Cheryl Dahle says:

    Bruce –

    Ok, I’ll admit to straying into a bit of a rant there. I do not mean to say that foundations do not play a worthwhile role or their work is not meaningful and worthwhile. What I’m saying is that foundations doing business as usual is a tough sell as a story. Business as usual means that the organization is giving away money and it’s having an effect.. that is the EXPECTED course. That makes it a tough sell, as the whole premise of newsworthiness is based on:

    –is it unexpected?
    –is it unique?
    –is is biggest or first?
    –are there famous or celebrity players involved (I hate this one, but is IS a lens)
    –is the impact greater/better/different?

    That last one is the toughest to prove, which is why you’ll see more reporters hanging stories on the other four criteria. (And, by the way, that is why the scandal story is the easiest sell. The counterintuitive hook of a “do-good” organization running afoul of ethics in some way is a slam dunk.)

    In order for me to write about a foundation’s good work, I need to be able to set it apart. In theory that would require looking at its whole portfolio and being able to draw conclusions about their overall impact, compared with other foundations. The lack of transparency of the field prevents me from individually making that kind of comparison in a meaningful way. And so far, no external analyst function or shared performance metrics let me get at it.

    So, I would say this: foundations need to help reporters figure out how to sell these stories of good work in a way that meets newsworthiness criteria. Help build a context …. and be willing to provide on the record sources willing to speak comparatively. This has been a big sticking point for me. I’d have written a story about the above points long ago, but (not surprisingly) few want to go on the record sharing their critiques of foundations… particularly if that’s how they’re funded.

    Hope this is helpful. I would be open to a further conversation on how to help foundations sell stories.

  15. RPaul Herman says:

    Hi Cheryl – Thanks for continuing to push the envelope – and tell the truth. I especially appreciated your insight about capital streams being efficient to (a) avoid duplication, (b) eliminate bad-ideas, and (c) do it fast.

    Many non-profits and foundations fall into this trap as they are more about the founders or funders than they are about the beneficiaries.

    In essence, nearly all charities are one-way engines (I give money to NGO; NGO gives services to beneficiaries) with no feedback loop – like Customer Satisfaction in the business world (which became standard with JD Power).

    The best social enterprises, citizen-sector organizations (the new name for non-profits), and sustainable businesses focus on two-way systems — that is the beneficiary/customer is first, all is organized around satisfying them, and typically there is a revenue stream that someone is paying for. e.g. public charter schools paid for by the school district, health care services paid for by foundations or the user, environmental carbon offsets bought by business revenue.

    In addition, Human Impact is rarely tracked (like Health, Wealth, Earth and Equality). Since there are few outcome measures about results, there is no scorecard. Without tracking impact, or even customer satisfaction, it is hard to judge efficiency or effectiveness (other than outdated metrics like overhead).

    HIP Investor (my firm) created a scorecard for business, social and government organizations to measure their outcomes/results, link it to profit or economic viability, and how one relates to the other.

    Until we have comparables about who best serves the beneficiary/customer, how that is financed by revenue not grants, and how to track impact per invesmtent unit, the non-profit/foundation world will struggle along.

    Kudos to Warren Buffett for not setting up yet another independent unit with a unique mission, but pile on to Gates Foundation to accelerate work that is at scale and quite focused.

    Thanks to Cheryl for Fast Company’s Social Capitalists that will recognize for-profit businesses as well as non-profit social entrepreneurs.

  16. Kristin Johnson says:

    As a former writer for the Valley School SYNTHESIS when Cheryl Dahle was the head honcho editor, I am a committed fan. I corresponded with Cheryl at FC. I am not surprised that she has been “green” and socially conscious a la “A New Earth” for her professional career. Brilliant!