Yearly Archives: 2008

Philanthropy Daily Digest

December 31, 2008 – 6:00 pm

New Year’s Resolution

December 31, 2008 – 11:29 am

The field of philanthropy is a bit like an uncharted wilderness. Unlike most 100+ year old fields, there is no real set of “best practices” in philanthropy. There is no agreed upon way to evaluate a charity. Most donors have never even heard of some of the basic tools of giving like charitable trusts and donor advised funds.

Recently I’ve been discussing with a pretty esteemed group of philanthropic leaders what “strategic philanthropy” even means and how we can tell if someone is practicing it.

As a field we still have an aversion to admitting that philanthropy ever fails at anything. But as everyone knows, admitting a problem is the first step to fixing it.

Personally, I’m still in the thick of learning about philanthropy. I have a large stack of books about philanthropy next to my desk that I have yet to read and another large stack of those I have. But with One-Click ordering from Amazon, it seems that my “To Read” pile grows faster than I can keep up.

So let’s be ambitious and work hard to build a new and better philanthropy. But let’s also be humble and realize that we all have so much to learn. Philanthropy as a field of practice is still in its infancy. So rather than resolve that next year we will do more, do better, do faster. Let us humbly resolve that in 2009 we will make better mistakes than we did in 2008. Let’s make mistakes that are the result of daring, well informed risks. Mistakes that demonstrate our willingness to embrace the unknown and try things that other people tell us can’t be done. Let’s make mistakes that we can be proud of, the kind of mistakes that we brag about over a beer with friends, “Remember that time when we….?!”

And who knows. Maybe we’ll all create something wonderful.

Happy New Year’s and thanks for reading Tactical Philanthropy!

Field Building in Philanthropy

December 31, 2008 – 11:02 am

As we end 2008 a lot has changed since I launched Tactical Philanthropy in 2006. But we have a lot farther to go to build the field of philanthropy. Fidelity Charitable Gift Fund has just given me a $100 charitable gift that I can send to any US based nonprofit. I’d like to give the funds to a philanthropic intermediary. A nonprofit group who is improving the state of philanthropy in some way. I’d like your help to decide where to give.

If there is a nonprofit group who you think is improving the field of philanthropy, leave a comment to this post with the name and your argument (short or long, it is up to you) as to why you think they are improving the field. The explicit mission of the nonprofit does not need to be to improve the field of philanthropy. I want to hear why you think they are doing effective field building.

I’ll make the $100 grant to the subject of the most compelling arguement.

Tactical Philanthropy Trivia

December 31, 2008 – 8:11 am

All five of the Tactical Philanthropy Trivia questions have now been correctly answered! The last question was:

“I once asked if philanthropy was over the hill, or passed its peak (although I used a different phrase). Why did I suggest this might be true and what did it have to do with the show Happy Days?”

Reader Jessica correctly answered that I had asked if philanthropy had “Jumped The Shark” back in late 2006 when I read about the planned philanthropy reality show called Secret Millionaire. The show of course went on to be a hit in the UK. You can read about the history of the phrase “jumped the shark” here.

Thanks to Razoo for offering up the charitable gift certificates as prizes for this little end of the year diversion!

Seth Godin on Expertise & Passion

December 31, 2008 – 4:20 am

Underlying the debate on nonprofits paying their employees market rate salaries and generally using the profit incentive to maximize social good, is a debate around whether passion is the main ingredient for producing social impact or whether it is expertise.

Seth Godin wrote on this very topic yesterday and with his permission I’m republishing his entire post:

Expertise and passion

Should the person who runs the customer service operations at a ski school also be required to love skiing?

Can the CFO of a large church be an atheist?

Does the head of marketing at Kodak have to have a passion for chemicals?

It’s true, “write what you know, write what you love.” The commitment comes through. But does that mean that boring products shouldn’t be marketed? Does it mean that the community theater must limit the list it considers for any job only to people who are ‘in’ the theater, who have paid their dues?

How many worthy causes have lousy operations teams? How many hobbies and sports are staffed by fans, not professionals?

I think if the work is important, it should be done with passion and skill and flair. But the work of balancing the books, or running Google adwords or making sure that customers are treated well at the ski school often has nothing to do with the product or service itself.

It’s more important that you be passionate about what you do all day than it is to be passionate about the product that is being sold.

Give me someone with domain expertise and the passion to do great work any time. Belief in the mission matters (a lot!), but it doesn’t replace skill.

Best of both worlds: someone who has passion (and skill and insight) about their task and passion about the mission. The latter can never replace the former. Organizations staffed with sports fans or true believers worry me, because they often use their passion as an excuse for poor performance. What worries me more are the employees who have neither expertise nor passion.

(All that said, I’ve never met a great marketer who wasn’t passionate about what she sold. In the case of marketing, it’s not just a nice combination, it’s a requirement.)

Philanthropy Daily Digest

December 30, 2008 – 7:00 pm

FORGE Closes Funding Gap

December 30, 2008 – 10:33 am

Unbelievable.

Just two month from announcing the $100,000 funding gap that threatened to close down FORGE, exectutive director Kjerstin Erickson announces today that they’ve closed the gap and are ready to take on the rebuilding process in 2009.

Now, for the really good news – in the past month, donors have stepped forward to allow us to effectively close the funding gap for 2008.  In a surprise turn of events, a foundation has generously offered to provide us with a $20,000 matching grant followed by a $30,000 administrative support grant in 2009.  In response to the challenge, many of our past supporters rallied with second and even third large donations for the year.  We had until February to raise the $20,000 matching, but we were actually able to cross the threshold today.  The foundation has been very progressive and generous with its terms, and in the spirit of transparency even published its reasoning for offering the grant.

Of course, this story is far from over.  2009 is going to be an unpredictable year for us all.  We can proudly say that we made it through the thick of 2008 and will be able to send more funds to continue our programs into 2009, but we’ll need to stay extremely cautious and diligent to ensure that we leave 2009 in a stronger position than 2008.  That is what so many people have bet on when they decided to take a chance to invest in us in these risky times, and that is what we are committed to delivering.

My hat is off to Kjerstin and her unbelievable determination, the Tactical Philanthropy community for their role in all of this and FORGE’s existing supporters who dug deep when the broader community rallied to their side.

Wow!

Sacrifice Notion Sabotages Nonprofits

December 30, 2008 – 9:31 am

My most recent column in the Financial Times. You can find an archive of past columns here.

Sacrifice notion sabotages our non-profits
By Sean Stannard-Stockton
December 30, 2008| Link to Original FT.com column

As we finish 2008 amid the worst recession in decades, many Americans are sacrificing some degree of personal comfort to support a charitable cause. But while sacrifice may be a noble personal virtue, the concept of sacrifice is sabotaging the non-profit sector.

When Americans give to charity, they want their donation to go directly to “the cause”. The non-profit organization, it seems, is viewed as nothing more than a bureaucratic entity whose cost of existing should be minimized as much as possible. Non-profits are expected to be run on a shoestring, their employees are supposed to live on modest wages, and all costs are expected to be kept to a bare minimum. The grandest claim that most non-profits can make in a fundraising pitch is the declaration that 100 per cent of donations go to the program. At the root of this mentality is the idea that doing good is best executed by those willing to sacrifice.

This mentality hurts the very causes that donors seek to help.

The fact is, great organizations are run by talented people, powered by cutting-edge technology and based on the best research. All of these cost money. Rather than asking non-profits to starve themselves of resources, donors should look to invest in the best non-profits and give them license to use the money to build outstanding organizations.

Together with sacrifice is the fixation on giving to non-profits in “need”.

Donors give to non-profits in response to expressions of need. Even large, sophisticated foundations will often stop funding a non-profit when they feel the organization no longer needs their money. In many ways, this is the same as a doctor who discharges a patient just as the person recovers enough to no longer need life support, instead of providing the care and nourishment that the patient requires in order to thrive. For the same reason that such a patient will end up returning time and again to the hospital, many non-profits find themselves back on life support every time they hit a bump in the road. We do not want a non-profit sector that is simply stable; for the sake of the very causes we seek to support, we want non-profits that thrive.

Many donors who seek out “efficient” charities that keep expenses low do so out of a desire to give in a more businesslike way. However, no less an authority on business thinking than the Harvard Business Review argues in its December 2008 issue that demanding non-profits cut expenses to the bone is counterproductive. In the article Delivering on the Promise of Nonprofits, consultants Jeffrey Bradach, Thomas Tierney and Nan Stone of The Bridgespan Group argue that donors should “invest in good overhead.”

“B-level leadership teams will not deliver A-level results. Yet donors are inclined to fund programs while minimizing overhead, including essential expenses such as basic infrastructure and leadership development,” the authors of the article write. “Donors must be willing to invest in capacity building for the organizations they support and hold them clearly accountable for generating results.”

It is in the last line that the link between robust organizations and the ability to affect a cause is made clear. Today donors to non-profits are demanding more and more evidence of results. Accountability is a good thing, but if donors want to demand results they must also deliver the resources required to build strong, healthy organizations.

Is it possible that individual donors will begin to embrace the idea of helping build great non-profits?

Or will they remain stuck on demanding that non-profits keep expenses low?

One reason for hope is the recent announcement from Charity Navigator, the charity evaluation website that launched in 2001, of its push to move past a rating system that rewards non-profits for keeping organizational expenses low and begin to incorporate measures of the actual results that non-profits achieve.

Having hired Ken Berger as its new chief executive over the summer, Charity Navigator is preparing to start educating its 5m annual visitors that there is more to a great organization than low expenses.

Charity Navigator might be the big gorilla in terms of the number of donors it reaches, but until it rolls out new evaluation criteria, donors who want to embrace personal sacrifice but support great non-profits might want to consult the websites of GiveWell.net, SmartLink.org, PhilanthropyCapital.org and GreatNonprofits.org before they make their next donation.

Dan Pallotta & Robert Egger Hash Things Out

December 30, 2008 – 9:12 am

In the comments section to my post about Dan Pallotta’s new book Uncharitable, Dan skewered Robert Egger for his quote in the Chronicle of Philanthropy that Dan “Strip-minded the cause” and for the negative treatment that Robert afforded Dan in his book Begging for Change.

Robert, the president of DC Central Kitchen and a member of the Nonprofit Times Power & Influence Top 50, has now come back with a response to Dan’s comments. Joining the mix as well is Sasha Dichter, the head of Business Development at Acumen Fund.

There is real tension and disagreement in this conversation. But I think it is a worthy conversation to be had. This isn’t controversy for the sake of spectacle, it is an opportunity to hash out real differences, kick in some rotten doors in our thinking, and hopefully come out the other side better for it.

You can catch up on the full comments here. You’ll find Dan’s comments regarding Robert here, Robert’s rebuttal here and Sasha’s take here.

Philanthropy Daily Digest

December 29, 2008 – 7:00 pm