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19 posts from June 2008

Surviving Change: An Organizational Checklist

June 30, 2008

While economists on Wall Street and Washington, D.C., argue over whether the economy has slipped into recesssion, the majority of Americans have made up their minds. Last week, a key measure of consumer confidence calculated by the New York City-based Conference Board dropped to 50.4 from a revised reading of 58.1 in May -- its lowest level since February 1992 and the fifth-lowest reading ever recorded by the survey -- while on Friday the University of Michigan/Reuters index of consume sentiment fell to 56.4 -- the lowest reading since 1980 and the third-lowest in that survey's 56-year history. Indeed, according to the Michigan survey, nine out of ten Americans said the economy was in recession and two-thirds said they expected the downturn to last several years.

That's bad news for nonprofits, which, as the economy worsens, will have to figure out how to meet the growing demand for their services against a backdrop of falling revenues (both public and private). Seems like a good time, therefore, to revisit the recession-proofing recommendations for nonprofits outlined in this post from February.

Whatever we call it -- slowdown, downturn, recession -- the economic gloom won't last forever. But before it lifts, our sector is likely to experience a fair amount of turmoil. Many nonprofits will struggle, some will be forced to merge or cut back their operations, and more than a few will go out of business.

What can nonprofit leaders do to ensure that their organizations survive the tough times and have the stength and vigor to thrive in the years to come?

To build a sustainable organization capable of meeting the challenges and opportunities of the next ten years requires vision and lots of hard work, writes Frances Hesselbein, founding president and current chair of the Leader to Leader Institute, in Leader to Leader 2: Enduring Insights on Leadership. Her advice, offered in checklist form (below), is intended as a beginning,  not as a be-all-and-end-all. As she writes: "Changing circumstances will require additions as new challenges arise and deletions where needs have been met. New customers must be welcomed as we move beyond the old walls both physically and psychologically. Tomorrow may be tenuous...but the message [for leaders of the future] is clear: Managing for mission, innovation, and diversity will sustain us and those we serve...."

Frances' checklist:

-- Revisit the mission every three years, each time refining or amending it so that it reflects shifts in the environment and the changing needs of changing customers as part of a formal self-assessment process.

-- Mobilize the total organization around mission until everyone can tell you the mission of the enterprise -- why it does what it does, its reason for being, its purpose.

-- Develop no more than five powerful strategic goals that together are the board's vision of the desired future of the organization.

-- Focus on those new initiatives that will make a difference.

-- Deploy people and allocate resources where they will have an impact, that is, only where they can further the mission and achieve the few powerful goals.

-- Practice Peter Drucker's "planned abandonment": jettison current policies, practices, and assumptions as soon as it becomes clear that they will have little relevance in the future.

-- Expand the definition of communication from saying something to being heard.

-- Provide board members and the entire staff and workforce with careful planned and continuing learning opportunities designed to increase the capacity and unleash the creative energy of the people of the organization.

-- Develop the leadership mind-set that embraces innovation as a lifeforce, not as a technological improvement.

-- Structure the finances of the organization so that income streams are focused on the few great initiatives that will change lives, build community, and make a measurable difference.

-- Transform performance measurement into a management imperative that moves beyond old forms and assumptions and toward creative and inclusive approaches to measuring what we value and valuing what we measure.

-- Scan the environment and identify major trends and implications for the organization in preparation for riding the wave of rapidly changing demographics.

-- Build a mission-focused, values-based, demographic-driven organization.

-- Plan for leadership transition in a thoughtful way. Leaving well and at the right moment is one of the greatest gifts a leader can give an organization.

-- Groom successors -- not a chosen one but a poll of gifted potential leaders. This is part of the leader's daily challenges.

-- Make job rotation and job expansion into widespread organizational practices that are part of planning for the future.

-- Disperse the tasks of leadership across the organization until there are leaders at every level and dispersed leadership is the reality.

-- Lead from the front, with leaders the embodiment of the mission and values in thinking, action, and communication.

-- Recognize technology not as a driver but as a tool. Change the technology as needs change, don't change needs and style to match the tool. Shape the future, don't be shaped by it.

-- Infuse every job, every plan with a marketing mind-set. Marketing means being close to the customer and listening and responding to what the customer values.

-- Build on strengths instead of dwelling on weaknesses.

-- Throw out the old hierarchy and build flexible, fluid, circular management systems with inclusive leadership language to match.

-- Allocate funds for leadership development opportunities and resources for all the people of the enterprise.

-- Develop a richly diverse organization so that board, management team, staff, employees, faculty, administration, and all communications materials reflect the diversity of the community, and we can respond with a resounding yes to the critical question: "When they look at us, can they find themselves?"

Quite a list, but surely not exhaustive. What has Hesselbein overlooked? What would you add to it? 

-- Mitch Nauffts

Quote of the Day (June 28, 2008)

June 28, 2008

Quotemarks"The most important things a leader can bring to a changing organization are passion, conviction, and confidence in others. Too often executives announce a plan, launch a task force, and then simply hope that people find the answers -- instead of offering a dream, stretching their horizons, and encouraging people to do the same. That is why we say, 'Leaders go first.' "

-- Rosabeth Moss Kanter

Hope Equity: An Idea Whose Time Has Come

June 27, 2008

Hope_equity_2The Web is a cool place. And thanks to a newly relaunched site called Hope Equity®, it just got a little cooler. The brainchild of the folks at the Heifer Foundation, a spinoff of Heifer International, the widely admired international-aid organization, the site aims to make endowment giving easy and accountable to donors interested in causes and projects related to hunger, poverty, and environmental conservation. The main innovation of the site is something called Micro-Endowments™, which function like typical endowments (the principal remains intact and only the income goes to work toward the designated cause) -- with a major difference: Your endowment gift can be of any size.

The existing Micro-Endowments™ on the site, many of which originally were set up to support the foundation's work, are dedicated to activities in a specific country (e.g., Cameroon, Ghana, Nepal, Nicaragua, the U.S.), a specific cause (disaster recovery, economic development, gender equity, health), or a specific population (Native Americans, women, youth at risk). If you're not drawn to any of those, you can set up your own Micro-Endowment™ -- in fact, you can set up as many you'd like, designating each to be either public or private. And the latest in social networking technology makes it easy for you to monitor the size of your gifts, see when funds are allocated, read about the progress of the projects you are supporting, and connect with other like-minded donors.

As I said, an idea whose time has come. If you don't know the site, take a few minutes to check it out; you'll be amazed at how far online fundraising has come.

(And while you're at it, be sure to cast your vote in this week's PND Poll, which asks: How long will it take for online giving to fundamentally alter the charitable giving landscape? To cast your vote, visit: http://foundationcenter.org/pnd/.)

-- Mitch Nauffts

California Leads, Will the Nation Follow?

June 26, 2008

(Michael Seltzer, a noted authority on the nonprofit sector and philanthropy worldwide, is a regular contributor to PhilanTopic.)

As I've previously noted in PhilanTopic (here and here), the California State Assembly passed a bill, AB 624, in 2007 that would have required foundations in the state to disclose the ethnic composition of their boards and staffs and to provide details of grants awarded to minority-led organizations.

On Tuesday, the Sacramento Bee reported ("Pressed by Legislator, Nonprofit Foundations Agree to Invest in Minority-led Organizations," Aurelio Rojas, 6/24/08) that some of the state's largest foundations had agreed to make a multiyear, multimillion-dollar investment in minority communities. In return, State Assemblyman Joe Coto (D-San Jose) agreed to drop his sponsorship of AB 624, effectively killing the bill.

And so a debate that riveted the attention of the foundation field and diversity advocates across the nation has come to an end. Foundation leaders in California have succeeded in persuading state legislators that, when it comes to diversity, voluntary rather than legislated action is the right way to go, while the bill's advocates can point to the historically unprecedented commitment of the California Endowment and Ahmanson, Annenberg, California Wellness, Hewlett, Irvine, Packard, Parsons, UniHealth, and Weingart foundations to minority organizations across the state.

The real story, however, may not be about the conclusion of another round in the neverending debate between those who advocate for legislative versus voluntary action when it comes to regulating organized philanthropy. Instead, the history books are more likely to note how a small but substantially endowed group of independent and family foundations closed ranks in a common cause.

Let me be clear. This is not a case of donors joining together to provide funding to an organization or collaborating with other foundations on a new initiative, neither of which is especially newsworthy. What has transpired is an ongoing commitment by a group of large California foundations to address a key issue of our time -- the growing economic and social disparities affecting low-income and minority Americans, and the undercapitalized, community-based organizations that have been created in an attempt to make health care, education, and housing available and accessible to all Americans.

The agreement struck by these California foundations invites the question: What would happen if all U.S. foundations agreed to put poverty alleviation and the elimination of economic and social disparities based on racial, ethnic, gender, and other differences on their agenda and allocated a portion of their grant dollars toward that end?

After all, if the 180-plus member nations of the United Nations can agree to a set of Millennium Development Goals, why couldn't each and every one of America's foundations commit to an agenda of greater support for minority America in the broadest sense, bringing a higher standard of living and a fair share of the philanthropic pie to lower-income and minority communities?

That's a vision many of us could get behind.

-- Michael Seltzer

NASA's James Hansen Tells Congress Action on Climate Change Needed Now

June 24, 2008

If a tree falls in the forest...

My presentation today is exactly 20 years after my 23 June 1988 testimony to Congress, which alerted the public that global warming was underway. There are striking similarities between then and now, but one big difference.

Again a wide gap has developed between what is understood about global warming by the relevant scientific community and what is known by policymakers and the public. Now, as then, frank assessment of scientific data yields conclusions that are shocking to the body politic. Now, as then, I can assert that these conclusions have a certainty exceeding 99 percent.

The difference is that now we have used up all the slack in the schedule for the actions needed to defuse the global warming time bomb. The next President and Congress must define a course next year in which the United States exerts leadership commensurate with our responsibility for the present dangerous situation.

Otherwise, it will become impractical to constrain atmospheric carbon dioxide, the greenhouse gas produced in burning fossil fuels, to a level that prevents climate change from passing tipping points that lead to disastrous climate changes that spiral dramatically out of humanity's control.

Changes needed to preserve creation, the planet on which civilization developed, are clear. But the changes have been blocked by special interests, focused on short-term profits, who hold sway in Washington and other capitals.

I argue that a path yielding enery independence and a healthier environment is, barely, still possible. It requires a transformative change of direction in Washington in the next year...

Click here for the full text (4 pages, PDF) of Hansen's remarks.

-- Mitch Nauffts

How Many Nonprofits Is Too Many?

June 23, 2008

A few years ago I had a chance to interview Audrey Alvarado, then the executive director of the National Association of Nonprofit Councils. (Full disclosure: Alvarado was also a Foundation Center board member at the time.) During our conversation, I asked Audrey whether she thought there were too many nonprofit organizations in the United States. She responded by saying it depended on one's perspective, then added:

On one level, you can look at the question in terms of efficiency -- that it makes sense for groups offering duplicative services in a community to combine their forces. But if we look at the contribution nonprofits make in our communities apart from the services they deliver -- I'm thinking here of all the things they do to build social capital and strengthen civil society -- then I'm not sure that efficiency is the metric we should be focusing on. In fact, I've argued that, given the lack of civic engagement in this country, we don't have enough nonprofits. I don't doubt that there will be, and probably needs to be, some pruning in the sector, whether through mergers or groups simply shutting their doors. But if we're willing to sacrifice some nonprofits for the overall good of the sector, we also have to be willing to redouble our efforts to strengthen the capacity of the nonprofits that remain.

Passionpurpose_cover_2I was reminded of that exchange the other day as I was browsing a new report from the Boston Foundation. The report, Passion & Purpose: Raising the Fiscal Fitness Bar for Massachusetts Nonprofits (116 pages, 9.57 mb, PDF), offers a detailed look at the nonprofit sector in the Bay State as well as its impact on the regional economy: According to the report:

  • There are more than 36,000 nonprofit organizations in Massachusetts;
  • In 2007, the sector generated $87 billion in revenues and held more than $207 billion in assets;
  • The sector employs 447,000 workers, almost 14 percent of the state's working population -- about twice the national average;
  • In recent years, the number of public charities in the state has almost doubled, despite flat population growth and a sluggish economy. [My emphasis.]

To underscore the many roles the sector performs, the report's authors divide the state's nonprofits into three broad groupings:

  • Grassroots organizations have $250,000 or less in total annual expenses and fuel the creation and expansion of civil society through grassroots action and volunteerism;
  • Safety Net organizations have $250,000 to $50 million in total expenses and deliver services that build social safety nets for vulnerable citizens and otherwise enhance the quality of life;
  • Economic Engine organizations have more than $50 million in annual expenses and contribute in significant ways to the economic health and competitiveness of the region.

Not surprisingly, the report finds that "grassroots" nonprofits (think youth sports leagues and small art groups) are the most rapidly proliferating and have the thinnest financial profiles; that "economic engine" organizations (think Harvard and Mass General) are the healthiest, financially speaking; and that "safety net" organizations, which are clustered in the areas of housing, human services, health, and community improvement/development, are the most vulnerable in terms of their finances -- a situation exacerbated by their reliance on government funding.

Alas, revenues are not keeping pace with the growth in the number of nonprofits in the state -- and that, according to the report's authors, has serious implications: too many nonprofits weakens the entire sector and burdens donors; too few resources suggests that new strategies are required to garner needed support; too short a focus by managers, leaders, and stakeholders in the sector means future services -- and the sustainability of organizations -- is put in question.

The solution is not simply more money, says Elizabeth Keating, visiting associate professor at the Carroll School of Management at Boston College and one of the lead authors of the report. "What the research tells us is that we need a new nonprofit culture. This is not an indictment of the sector's leadership -- we have talented, committed people driving nonprofits forward. But they are undercut by a culture that sees investment in capacity as a diversion of money from what matters most -- which is service."

To help change that dynamic, the report's authors offer a "financial stewardship vision" for the sector based, in part, on three questions that every nonprofit should be able to answer in the affirmative:

  1. Liquidity: Do you have sufficient cash resources to deliver on your mission and pay your obligations on a timely basis?
  2. Profitability: Are your earned income revenues sufficient to cover your current expenses and allow for appropriate growth?
  3. Sustainability: Do you have enough of your own resources to continue operations into the future?

The report ends with a "call to action" that argues, among other things, for more mergers, strategic alliances, and collaborations within the sector to strengthen balance sheets, create economies of scale and efficiency, eliminate duplicative costs and administrative redundancies, and encourage more group purchasing. And it urges funders to do more to support the cost of mergers and strategic alliances and to nurture a culture of collaboration within the sector. Which is pretty much exactly what Audrey Alvarado was urging three years ago.

What do you think? Are the folks at the Boston Foundation onto something? Are there too many nonprofit organizations, or do we need more? And if there are too many, where does the blame lie? With the IRS? With naive, overly optimistic founders? With funders who talk the talk but find it difficult to walk the walk when it comes to collaboration and investing in the organizational capacity of their grantees? Are these even the right questions to be asking?

Don't be shy. Let's start a conversation....

-- Mitch Nauffts

Quote of the Day (June 22, 2008)

June 22, 2008

Quotemarks"If the confusion about effectiveness were not enough, philanthropy is even more muddled when it comes to the meaning of accountability. Concerns about accountability are most commonly spoken about in terms of transparency -- the need to provide documents and information to the world. Thus, in the service of greater accountability, many foundations have gone to great length to make their grantmaking procedures clearer, to publish annual reports, and to meet regularly with nonprofits to explain their work. The premise of accountability as transparency is that the main problem to be overcome is one of information sharing. Donors often seem to believe that if only they could build a good web site and promulgate clear guidelines, their accountability work would be done. The problem is that accountability is not an empty vessel into which "information" about procedures can be dumped. Real philanthropic accountability demands substantive content in the form of data on the actual performance of the donor. This means instead of sending out materials that clarify the grantmaking process, donors need to actually share with the world information on whether important philanthropic objectives are really being met. Accountability, to be meaningful, must have high stakes and be grounded in disclosures about things that truly matter, namely whether philanthropic missions are being fulfilled. In this sense, it is impossible to be accountable without disclosing information about the donor's effectiveness...."

-- Peter Frumkin, "Wielding Philanthropic Power Responsibly: The Power of Legitimacy" (2005), excerpted from Giving Well, Doing Good: Readings for Thoughtful Philanthropists (Amy A. Kass, ed.)

Gilbert Center Survey: Online Cultivation of Donors

June 19, 2008

I have the deepest respect for Michael Gilbert and the work he has done, especially in the area of online communications, to benefit nonprofits and the nonprofit sector. (I even had the pleasure of interviewing him a few years back -- okay, more than a few.)

Michael's Nonprofit Online News (which has been around almost as long as PND) is conducting a new survey on the topic of online cultivation and stewardship of donors. The survey is only eleven questions long and shouldn't take more than two or three minutes to complete.

Results of the survey will be made available to all who fill it out. The deadline is Monday, June 30.

-- Mitch Nauffts

YouTube and Nonprofits

June 16, 2008

Like many of you, I've been spending more and more of my time sampling the eclectic delights of YouTube. And if I didn't before, I'm starting to appreciate what the fuss is all about. Sure, as a platform for serious discussion YouTube is a mile wide and an inch deep. But for nonprofits with a story to tell and limited resources to devote to the telling, it's an increasingly cost-effective way to get the word out.

So I was pleasantly surprised when I got an e-mail last week from Ramya Raghavan, YouTube's new Nonprofits and Activism Manager. YouTube launched a Nonprofit Program last September, and it's Ramya's job to let nonprofits know how they can use the site to raise awareness about their causes, engage their supporters, and fundraise. Organizations that sign up for the program receive a listing on YouTube's nonprofit channel and video pages, increased video uploading capacity, the chance to be featured in one of the "promoted videos" areas on the site, and the option to embed a Google Checkout gadget on their channel to drive fundraising. And there's more.

But why don't I let Ramya tell you:

-- Mitch Nauffts

Quote of the Day (June 14, 2008)

June 14, 2008

To An Athlete Dying Young

The time you won your town the race
We chaired you through the market-place;
Man and boy stood cheering by,
And home we brought you shoulder-high.

To-day, the road all runners come,
Shoulder-high we bring you home,
And set you at your threshold down,
Townsman of a stiller town.

Smart lad, to slip betimes away
From fields where glory does not stay,
And early though the laurel grows
It withers quicker than the rose.

Eyes the shady night has shut
Cannot see the record cut,
And silence sounds no worse than cheers
After earth has stopped the ears:

Now you will not swell the rout
Of lads that wore their honours out,
Runners whom renown outran
And the name died before the man.

So set, before its echoes fade,
The fleet foot on the sill of shade,
And hold to the low lintel up
The still-defended challenge-cup.

And round that early-laurelled head
Will flock to gaze the strengthless dead,
And find unwithered on its curls
The garland briefer than a girl's.

-- A.E. Housman (1859 -1936)

'Meet the Press' Host Tim Russert Dies

June 13, 2008

Tim_russert_3_2Just heard the news that Tim Russert, political journalist and moderator since 1991 of "Meet the Press," NBC's long-running Sunday morning news/interview show, collapsed during a taping of the show earlier this afternoon and has died of a heart attack. He was 58 years old. Shocking and very sad.

Russert had legions of friends and fans and will be missed by all who knew him and admired his work.

-- Mitch Nauffts

Quote of the Day (June 10, 2008)

June 10, 2008

Quotemarks"...Foundations are private, not public, institutions. They cannot function like governments. The responsibility of meeting the public interest is in the hands of government, not private foundations. Government has provided the tax exemption for charitable institutions in the belief that charitable activities can be better carried out by private organizations than by government itself. The government recognized, when it took this step, that there are many different kinds of charitable activities that may be carried out by many different types of organizations. The public interest is served not by each individual organization, but by the diversity of organizations and purposes that come into being as a result of the general encouragement provided by the tax exemption...."

-- Michael S. Joyce, "Letter to the Council on Foundations" (1984), from Giving Well, Doing Good: Reading for Thoughtful Philanthropists

Melinda Gates Interviewed by Walt Mossberg

June 09, 2008

The weekend edition of the Wall Street Journal included a special tab devoted to the sixth annual All Things Digital conference. Produced and hosted by Journal technology writers Walt Mossberg and Kara Swisher, the event featured interviews with the likes of Bill Gates and Steve Ballmer, Jeff Bezos, and Rupert Murdoch. Melinda Gates also was there and sat down for a one-on-one chat with Mossberg.

In part one of the interview (video highlights below), she and Mossberg talked about her days at Microsoft, how the Bill & Melinda Gates Foundation, the world's largest, is trying to bring advances in technology (especially biotechnology) to the developing world, and the foundation's approach to problem solving:

And in part two (the more interesting part), she talks about how the foundation is run and her role there, what Bill's role is likely to be when he devotes himself full-time to philanthropy starting in September, and her assessment of the problems of the public school system in the United States and what the foundation is doing to address those problems.

(Don't be put off by the Intel spot before each segment; it is the Wall Street Journal, after all.)

-- Mitch Nauffts

Dispatch From Burma (#2)

June 05, 2008

Nargis_01_may_2008_0440z_2A few weeks back I posted this excerpt from an eyewitness report submitted by an anonymous contributor to the Asia Foundation's blog, In Asia. According to the frequently updated Wikipedia entry for Nargis, the official death toll from the cyclone stands at 90,000, with at least 50,000 people still missing. However, some observers claim the government has simply stopped counting the dead and that as many as a million people have or will die as a result of the storm and the Burmese government's shameful neglect of the survivors.

Here's the first part of a harrowing followup dispatch from the Asia Foundation's on-the-ground correspondent:

Rangoon, Burma -- One month has passed since Cyclone Nargis hit Rangoon and the Delta region of Burma. Electricity is back on at the house where I am staying in Rangoon, though the phone-line is still down. Monsoon season has begun and it rains heavily almost every day -– dark and angry storms that threaten to drown the city in a daily deluge as murky waters rise up from the overburdened sewage systems.

Solid information about the situation in the Delta area is still frustratingly hard to come by due to restricted access. At UN cluster meetings, agencies and NGOs struggle to put together a comprehensive overview of which communities in the affected areas have been reached and where the gaps in aid coverage are. Behind the misinformation and rumours that are circulating, there is a fear that the situation may be even worse than anyone has yet conceived.

A few days ago, I met a 45-year-old fisherman who comes from a small Delta town south of the hard-hit Laputta area. He travelled to Rangoon last week with a cousin who needed extensive surgery after being battered by bricks and other debris during the cyclone. The fisherman sat very still during our conversation and often lapsed into long silences. He lost his wife and two young daughters to the storm, and has not been able to find their bodies. In his village of 2,000 people only about 175 survived....

Click here to read the dispatch in its entirety.

-- Mitch Nauffts

Robert F. Kennedy (Nov. 20, 1925 - June 6, 1968)

Tonight, before I go to sleep, I will say a prayer for Bobby, Jack, and Ted.

"...For the fortunate among us, there is a temptation to follow the easy and familiar paths of personal ambition and financial success so grandly spread before those who enjoy the privilege of education. But that is not the road history has marked out for us. Like it or not, we live in times of danger and uncertainty. But they are also more open to the creative energy of man than any other time in history. All of us will ultimately be judged; and as the years pass, we will surely judge ourselves on the effort we have contributed to building a new world society and the extent to which our ideals and goals have shaped that event.

"Our future may lie beyond our vision, but it is not completely beyond our control. It is the shaping impulse of America that neither fate nor nature nor the irresistible tides of history but the work of our own hands, matched to reason and principle, that will determine our destiny. There is pride in that, even arrogance; but there is also experience and truth. In any event, it is the only way we can live.

"That is the way he lived; that is what he leaves us.

"My brother need not be idealized, or enlarged in death beyond what he was in life, to be remembered simply as a good and decent man who saw wrong and tried to right it, saw suffering and tried to heal it, saw war and tried to stop it.

"Those of us who loved him and who take him to his rest today, pray that what he was to us, and what he wished for others, will some day come to pass for all the world. As he said many times, in many parts of this nation, to those he touched, and who sought to touch him: 'Some men see things as they are and say why; I dream things that never were and say why not?' "

-- Eulogy for Robert F. Kennedy by Sen. Edward M. Kennedy, St. Patrick's Cathedral, New York City, June 8, 1968

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