During the Council on Foundations conference I wrote about a session called “Linking Money to Mission: Structuring Your Grants to Promote Grantee Performance” featuring Clara Miller of Nonprofit Finance Fund and Nancy Roob president of The Edna McConnell Clark Foundation (EMCF). I just received copies of the presentation from both speakers and want to share some additional thoughts.
At the end of her presentation, Clara gave a list of “Enterprise Friendly Funding Principals”. Here they are:
- Make the program decision first…[full stop]…then structure the money
- Ignore overhead rate and fundraising cost in favor of good metrics
- Builder or buyer? Not every organization can and should grow
- Have a scalable grantee? Become a good builder: keep it simple, look at the whole enterprise, and join others
You can find a complete discussion of the “builder or buyer” language here.
Nancy Roob’s presentation focused on EMCF’s efforts to help scalable organizations grow with quality. The example she used was Nurse-Family Partnership (NFP). In explaining the effectiveness of NFP, Roob certainly did not cite overhead rate or fund raising cost. Instead, she shared these statistics:
- Child abuse and neglect: Down 48%
- Arrests of previously home visited children: Down 59%
- Children with behavioral troubles: Down 90%
- Arrests of mothers after visits: Down 61%
- Months mothers stay on welfare: Down 30%
EMCF isn’t the only group to notice the measurable impact of NFP. If you’re interested you can The Colorado Trust’s publication "Invest in Results. The Story of The Colorado Trust’s Nurse-Family Partnership & Invest in Kids Initiative" and the Coalition for Evidence-Based Policy randomized controlled trial showing a major impact on life outcomes of the mothers and their children.
In her presentation, Nancy said that one of the major questions that EMCF is trying to answer right now is how they can work more effectively with other funders. From what I know of EMCF, it seems that they have an excellent program in place and are practicing a very effective form of philanthropy. I’m sure that the evidence they are building will do a lot to convince other big foundations to join them in supporting effective, scalable organizations. But imagine the leverage they could employ if they managed to tell the story of their grantees to the public at large (which gives at an annual rate of over 7 times the level of foundations). That is the promise of things like Project-Agape. With leaders like EMCF providing data and the qualitative story of high impact nonprofits, a well-developed social networking site could channel massive philanthropic dollars to good causes.
Seems to me there are similarities in your description of the EMCF approach with one of your earlier posts about how philanthropy should be practiced: “The single most important thing is figuring out what works…where and how can I reduce social problems or enhance social programs…and just focus on whether something works.” That’s the point of taking organizations like NFP to scale.
Yes. And so the question becomes how do we discover organizations like NFP and how do we demonstrate their impact. NetSquared and RWJF Disruption Innovations both seem to be intriguing ways to go about the process.
Organizations have to demonstrate impact by developing and implementing the capacity to collect data and measure progress toward outcomes. Foundations need to develop and employ systems for finding high performing nonprofits and investing in requisite due diligence to learn all they can about a potential grantee as well as how best to invest in that organization, and against specific outcomes.
Thanks for the kind words, Sean. Over the past four years, we’ve helped Nurse-Family Partnership (NFP) set the groundwork to scale their operations so they can reach a significant portion of the 650,000 families in need of their services every year.
What we’ve learned so far is that effective programs like NFP can be sustainable at a larger scale, but it takes significant upfront resources to build the necessary infrastructure before organizations can grow with quality. So here at EMCF we are exploring new ways to capitalize (“fund” if you will) an organization’s growth plans before they set out to expand. That way organizations like NFP can focus their energies on building and maintaining quality, rather than being distracted by chasing dollars to fund each step.
You’re right – its going to take more than just foundations in this effort. We see the emerging generation of new philanthropists as an important – if not critical – partner in our work to help organizations with proven services reach greater numbers of youth.
This is an area of great interest to us, and we’d love to continue the discussion with you and your readers.