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326 posts categorized "Impact/Effectiveness"

Thinking of Starting Your Own Nonprofit? Think Again.

April 09, 2014

(Susan Danish is executive director of The Association of Junior Leagues International, Inc. A founding member of 1,000 Women for Mentoring, she is a member of the board of the National Human Services Assembly and national representative for the U.S. for the International Association for Volunteer Effort.)

Headshot_susan_danishEvery year, Americans start thousands of nonprofit organizations. Some are dedicated to eradicating disease, others to addressing social issues such as poverty, homelessness, or gun violence. In fact, according to the Urban Institute, the number of registered nonprofits in the United States grew some 25 percent, to 1.57 million, between 2001 and 2011.

That's good, right? Not necessarily.

As someone who came to a second career in nonprofit management after working at some of the best-known consumer products companies in the world, I'd ask that we carefully consider whether there might simply be too many small nonprofits and charities in the United States for them all to be effective.

Yes, I'm aware that nonprofits sometimes close their doors and disappear. I also know that in 2011 the IRS revoked the tax-exempt status of some 275,000 nonprofit groups for failing to file an annual information return or notice with the agency for three consecutive years.

But even such a dramatic house cleaning doesn't change the reality: a large number of organizations focused on achieving a single goal – however desirable that goal – makes achieving that goal more difficult. That's certainly the case in corporate management, where such an approach typically results in fragmented markets and reduced market share for an ever-larger number of market participants. Of course, in the for-profit world, there are any number of solutions to the problem of too many companies competing for the same customers. Companies, for a variety of reasons, fail all the time. And as part of that process, their investors and shareholders lose their investment and, in theory, become smarter about where and how to invest the next time.

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5 Questions for...Olga Lech, Philanthropic Account Supervisor, Geller & Company

March 20, 2014

As globalization, technology, and financial innovation combine to create great wealth – and great inequality – individual donors and foundations are under increasing pressure to be more nimble, more strategic, and to take more risks. Even as philanthropy struggles to respond to these challenges, the role of the philanthropy professional is evolving. Business as usual is out; managing complexity is the order of the day.

Earlier this week, PND spoke with Olga Lech, a philanthropic advisor at Geller & Company, about some of the changes roiling the field.

Headshot_ olgalechPhilanthropy News Digest: We often hear that it's harder to give a large fortune away than it is to make one. Do you agree?

Olga Lech: I think they are equally difficult, but in different ways. The level of complexity changes – sometimes significantly – depending on what it is you are trying to achieve. If you simply want to be charitable and support good causes to make the world a better place, you may look to donate to a local charity such as a church or school in your community with a year-end gift that supports their operations and/or mission. If you are looking to be a philanthropist, however, your giving will most likely be focused on longer-term programs that seek to address bigger social issues, which would most likely cause you to look at other components such as sustainability, governance, and the recruitment of staff and volunteers.

The difference between charity and philanthropy is really where the complexity comes into play. Another dimension is impact. Philanthropy often strives for the highest impact in terms of results and outcomes, which in this global age can also require international cooperation and logistics. This often means you need to follow and measure the results of the projects you fund. That said, both charity and philanthropy are equally noble endeavors, and choosing which to pursue is a highly personal decision based on a variety of factors, not the least of which is complexity. 

PND: What are the most common mistakes made by high-net-worth donors? And what can a good philanthropic advisor do to help them avoid such mistakes?

OL: It all begins with the personal vision of the wealth owner and the degree to which an advisor can help translate that into an effective plan in line with other wealth management elements such as taxes, investments, and even succession issues. The advisor role is to not judge the endeavor, but to help strengthen it. For example, the John Templeton Foundation gave a grant to establish an institute for research on unlimited love. If the donor or client came to me with this idea, my role would be to research it, identify the most effective way to advance the cause, outline the risk factors, and find the best ways to mitigate those risks to protect the client's assets. The beauty of private philanthropy is that it allows donors to fund projects, programs, and initiatives that no federal, state, or local government would have the freedom to fund. And many of these initiatives lead to breakthrough discoveries with impacts that touch many lives.

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Catalyzing Impact Investments Through Coordinated Grantmaking

March 19, 2014

(The following post was adapted from "From Grants to Groundbreaking: Unlocking Impact Investments," an ImpactAssets issue brief by Amy Chung of Living Cities and Jed Emerson.)

Illustration_ImpInvPhilanthropy and the practice of grantmaking traditionally have been very separate from traditional investing in both culture and approach, but the emerging field of impact investing invites a productive collaboration between these two disciplines. Indeed, in an increasingly resource-constrained world, the ability to drive more impact investments into the communities and issues we care about is imperative. In the paragraphs that follow, we will explore how family foundations, philanthropic institutions, and public funders can use their grants strategically to unlock future impact investments in social businesses and socially driven business models that are either too risky or not ready for investors seeking financial returns.

In traditional capital markets, there are clear roles that different investors play in the sequence of financing for organizations as they move from seed stage to later stage. In the impact investing field, the role and needs of investors at different stages follows a similar though less clearly defined path. The relatively recent proliferation of socially driven business models makes it challenging for many to identify opportunities that are ready for investment or that have enough of a track record to provide confidence in their future returns. While such an environment provides investors with opportunities to be creative with financing, it also requires increased transparency and communi­cation from investees, funds, and intermediar­ies to accommodate different risk and impact profiles within the same deal or investment opportunity.

In many cases, the work of innovative socially driven business models may be accelerated by combining various types of impact invest­ment capital, in effect "stacking" capital that requires a financial return with capital that does not in order to "buy down risk" or otherwise make a deal happen that philanthropy or market rate investment alone would not be able to achieve. Because grants do not require repayment or a rate of financial return, they can be used more flexibly in certain transactions. For example, grants may be used to provide guarantees, fund a loan loss reserve, or serve as flexible lending capital, each of which may be needed in order to leverage or attract capital seeking a return. Coordinating grants with investment in this way may not only reduce the risk associated with particular transactions, but also can support socially driven financing models, thereby enabling impact investment opportunities that might otherwise not be possible.

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Weeeknd Link Roundup (March 8-9, 2014)

March 09, 2014

We forgot to set our clocks forward, but we didn't forget our weekly roundup of new and noteworthy posts from and about the nonprofit sector. Enjoy....

Daylight_savings_timeCommunications/Marketing

On her Nonprofit Communications blog, Kivi Leroux Miller shares the checklist she uses when evaluating clients' email newsletters.

Data

In a post on the Markets for Good blog, Beth Kanter shares three of her favorite DIY data vizualization tools. (Hint: You probably have two of them on your computer.)

Education Reform

In his Straight Up blog on the Education Week site, Rick Hess, an Education "policy maven" at the American Enterprise Institute, shares some suggestions for the Measures of Effective Teaching team at the Bill & Melinda Gates Foundation from blogger and award-winning teacher John Thompson.

Impact/Effectiveness

On Friday, New York State governor Andrew Cuomo announced the names of four finalists for the next round of the state's "Pay for Success" program, which aims to connect private and philanthropic investors with nonprofit organizations that provide direct services for vulnerable New Yorkers in the child welfare and early childhood, healthcare, and public safety sectors. For more information on the program and the finalists, click here.

As impact investment continues to gain traction — and favorable press coverage — an important piece of the story is being neglected: the role of government, Indeed, write Ben Thornley, Cathy Clark and Jed Emerson on the Huffington Post's Impact blog, "impact investing would barely exist — certainly not at its modest, current scale — but for the support and partnership of government."

If foundation leaders really want to "make a difference" — for their missions, their grantees, and the individuals and communities they serve — they would be wise, writes Tim Delaney, president an CEO of the National Council of Nonprofits, in the Nonprofit Quarterly, to focus their efforts at the state level. With so little being accomplished at the federal level these days, "the arc of history is being written in the states....[And unless] more attention is devoted to the state policy level, the stealth shift of burdens onto nonprofits and foundations will reach a disastrous tipping point."

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Most Popular PhilanTopic Posts (February 2014)

March 01, 2014

Tragedy in Syria. Civil strife in Ukraine and Venezuela. Not enough snow in Sochi and more than enough pretty much everywhere else. The Fab Four at fifty and other reminders of boomer mortality. Here at PND, February 2014 was best summed up by a colleague who dubbed it "the longest short month ever." It was also the busiest month ever for PhilanTopic, as readers flocked to Laura Callanan's four-part series on social sector leadership and found lots of other things to like as well. Here, then, are the six or seven most popular posts on PhilanTopic for the month that just wouldn't end....

What did you read/watch/listen to in February that made you think, surprised you, or caused you to scratch your head? Share your finds in the comments section....

Weekend Link Roundup (February 22-23, 2014)

February 23, 2014

Whatsapp_logoOur weekly roundup of new and noteworthy posts from and about the nonprofit sector....

Education

Writing in USA Today, Bill Gates, whose foundation is a strong supporter of the Common Core, tackles three myths that have grown up around the standards: that the framework was created without the involvement of parents, teachers, or state and local governments; that adoption of the standards means students will have to take even more high-stakes tests; and that the standards will limit teachers' creativity and flexibility.

Giving

Are the young and ultra-affluent turning their backs on Big Charity? It sure seems that way, writes psychologist turned investment advisor Phil DeMuth in Forbes. Is it because they're not interested in helping? "Far from it," writes DeMuth.

Forty-six percent are focused on doing good in their communities, and nineteen percent plan to become full-time philanthropists. Here's how they roll: they get involved in hands-on niche projects where they can make a difference. They want to see demonstrable results. Program evaluation is a must-have. They want to get in and they want to get out. They are not interested in providing an annuity to some tax-deductible charity organization. They will give them a fish and teach them to fish but they will not become the fish.

What are their causes? Two stand out: education and green. Well-educated themselves, they think school is cool. They want to plow the parking lot and put up paradise. In small-scale, targeted, active interventionist ways....

Harvard, which has a $32 billion endowment, announced a $150 million gift from hedge fund manager Ken Griffin earlier this week, its largest gift ever. And that has Matthew Yglesias, Slate's business and economic correspondent, thinking that almost anyone could come up with "a better use of $150 million than to give it to the richest university on the planet."

In the New Yorker, Barry Newman, a former feature writer and foreign correspondent for the Wall Street Journal, profiles Pete Depuis, whose Vancouver-based World Housing organization aims "to shelter poor people in five thousand free houses that would cost fifteen million dollars to build," with the money coming from the luxury developers who sign up to participate.

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Weekend Link Roundup (February 15-16, 2014)

February 16, 2014

Prez_day_buttonOur weekly roundup of new and noteworthy posts from and about the nonprofit sector....

Giving

Interesting article by Rick Cohen in the Nonprofit Quarterly arguing that charitable gift funds created by the likes of Fidelity Investments, Charles Schwab, and Vanguard have made "charitable giving for moderately wealthy people easier, more strategic, and more natural."

Impact/Effectiveness

"That the nonprofit sector has changed hugely in recent years is beyond dispute," writes Tris Lumley, director of development at London-based New Philanthropy Capital (NPC), on the Stanford Social Innovation Review blog. "It has grown, become increasingly professionalized, and over the last decade started coming to grips with planning and measuring its impact," Lumley adds. "Yet these are incremental changes, and I believe that the sector's trajectory does not point to a pivotal future role in solving social problems and delivering social justice." Lumley goes on to explain why this is the case and what a "new paradigm" for the social sector would look like.

Innovation

Which global companies/organizations are the most innovative? Google, certainly. Netflix and Airbnb, sure. But Bloomberg Philanthropies? Absolutely, says Fast Company, which cites the foundation's "sophisticated, data-driven solutions for every step of the [philanthropic] process, from identifying priorities to monitoring progress to scaling pragmatic solutions," as the chief reason for ranking it #2 on its list of the Most Innovative Companies of 2014.

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It’s the Year of Impact Investing: What Does That Mean for Foundations?

February 06, 2014

(Beth Sirull is president of Pacific Community Ventures, which, in partnership with ImpactAssets and Duke University's Center for the Advancement of Social Entrepreneurship, recently published the report Impact Investing 2.0: Insights: The Way Forward — Insight From 12 Outstanding Funds.)

Headshot_beth_sirullA growing body of evidence suggests that, as more investors get comfortable with the concept of impact investing — deploying capital with the intention of producing social benefits alongside financial returns — 2014 will be the year impact investing ceases to be a buzzword and becomes a real option for financial firms, pension funds, and endowed institutions. Indeed, research by JPMorgan Chase projects that impact investments worldwide will approach $1 trillion by 2020, while a 2013 survey by the World Economic Forum suggests that nearly two-thirds of U.S.-based pension funds expect to make an impact investment in the future. Meanwhile, major Wall Street firms such as Goldman Sachs and Morgan Stanley have already assembled teams dedicated to impact investing. What does all this mean for foundations, and what role should and can they play in the fast-growing impact investing field?

The term impact investing was coined in 2007, but activities of this kind have been around for much longer. Since 1969, when program-related investments (PRIs) were created under the U.S. tax code, private foundations have provided more than $4 billion in unconventional financing for enterprises and activities that further their charitable purposes in areas such as poverty alleviation and education. In recent decades, socially responsible and sustainability-oriented investments have expanded in the public markets and in private equity.

In the last few years, attention has largely been focused on building the supply side of the impact investing field. The Global Impact Investing Network (GIIN) has convened a group of more than sixty investors representing $11 trillion in assets under management, including $60 billion in impact investments; the White House has used its bully pulpit to activate investors; and in 2013 the G8 created the Global Social Impact Investment Task Force. All this activity is promising, but it isn't enough to unleash the true potential of impact investing in terms of delivering game-changing social, economic, and environmental gains.

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Weekend Link Roundup (February 1-2, 2013)

February 02, 2014

Groundhog_bingoOur weekly roundup of new and noteworthy posts from and about the nonprofit sector....

Communications/Marketing

The 2014 Nonprofit Blog Carnival is off to a roaring start, having pitched its tent on Beth Kanter's blog during January. The topic for the month was how do you measure your nonprofit's marketing or communication strategies, and close to twenty posts were submitted, including contributions from Niki Kidd, a principal at Social Change Consulting ("Using Data to Assess Your Peers"); David Hartstein, WiredImpact's "storyteller and measurement guy" ("8 Metrics To Measure Online Fundraising"); Lori Jacobwith ("If You're Only Sharing Boring, Unclear Data, What's the Point?"); Cassie Bair, vice president of marketing at Mobile Accord ("Measure the Love in Your Mobile Communication Program"); and the Ad Council's Anastasia Goodstein ("Nonprofits and Big Data: An Inside Look at How the Ad Council Is Leveraging Data for Social Change"). Good stuff.

Fundraising

In a post on her About.com site, Joanne Fritz highlights six mistakes that nonprofits make in their online fundraising. Based on responses to something called the Online Fundraising Scorecard survey, they include not personalizing emails with a person's first or last name, forcing potential donors to navigate three or more pages before they can actually make a gift, and not suggesting a next step for donors once they've made a gift and had been thanked.

Higher Education

If you only have time to read one longish post this weekend, make it Clay Shirky's latest, "The End of Higher Education's Golden Age." In it, Shirky, a Distinguished Writer in Residence at the Arthur L. Carter Journalism Institute at New York University, argues that the model of higher education that developed in the U.S. in first half of the twentieth century was "perfectly adapted to an environment that no longer exists." What's more, writes Shirky, higher education's present difficulties -- its growing unaffordability, dependence on "contingent labor" (i.e., poorly paid grad students), unhelpful focus on elite institutions, inability to adapt to changing demographics -- are "the bill coming due for forty years of trying to preserve a set of practices that have outlived the economics that made them possible." As always from Shirky, a well-researched and thought-provoking essay.

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Weekend Link Roundup (January11-12, 2014)

January 12, 2014

Calendar01_JanuaryOur weekly roundup of new and noteworthy posts from and about the nonprofit sector.

Communications/Marketing

Kivi Leroux Miller has a nice infographic on her Nonprofit Communications Blog illustrating key findings from her 2014 Nonprofit Communications Trend Report.

Interesting post on the Open Democracy blog by Janey Stephenson, an activist and filmmaker, about the language of activism and how word choices subtly shape the way activists position themselves with respct to contentious social issues.

Data

The Markets for Good team has announced the launch of its first reader-proposed theme, "Beyond Data Silos," which was suggested by Andrew Means, founder of Data Analysts For Social Good. Means frames the conversation, which is open to contributions from all comers, thusly:

[W]hether they hold grain or information, silos are stores of value. Recognizing that, and without parsing this metaphor to death, we can ask new questions. Chief among them is how to get the most value from data that lies in different parts of an organization and from data that could be shared for greater good between organizations. Also, how can we ensure faster communication of key information across an organization, across the sector?

Looking forward to reading what others have to say about these and related questions over the next three weeks or so.

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Weekend Link Roundup (January 4-5, 2014)

January 05, 2014

Cold_thermometerOur weekly roundup of new and noteworthy posts from and about the nonprofit sector. Looking forward to a year of great posts and stimulating disussion in 2014!

Communications/Marketing

What does it take to measure your marketing or communication strategies well? That's the topic of this month's Nonprofit Blog Carnival, which is being curated by the tireless Beth Kanter. Here, according to Beth, is how the carnival works:

  • Write up a post with examples, tips, methods or cautionary notes on the art or science of measurement for communications or marketing.
  • Write anything you want as long as it is about measurement and learning from your data.
  • E-mail a permalink to your post to nonprofitcarnival@gmail.com by Monday, January 27.
  • Check Beth’s Blog on Wednesday, January 29, to see if your post is included and enjoy a bump in traffic as the carnival is promoted across the Web.

To learn more, check out this post on Beth's Blog.

Impact/Effectiveness

On the Stanford Social Innovation Review blog, the Case Foundation's Kate Ahern looks at two reports released in the fall that "provide new insights on promising financial returns from a range of impact investments."

Nonprofits

Gene Takagi, a San Francisco-based nonprofit and exempt organizations attorney and thoughtful observer of the sector, shares ten of the most popular posts published on his Nonprofit Law Blog in 2013.

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Weekend Link Roundup (December 28-29, 2013)

December 29, 2013

New_year_2014_shutterstockOur final roundup for the year of new and noteworthy posts from and about the nonprofit sector. See you in 2014!

Giving

In a Q&A on the Harvard Business Review blog, Michael Norton, an associate professor at Harvard Business School and co-author of Happy Money: The Science of Smarter Spending, suggests that the way corporations and individuals approach charitable giving is starting to change -- for better and worse.

Higher Education

On the Inside Higher Ed blog, Dan Greenstein, director of postsecondary success at the Bill & Melinda Gates Foundation, argues that "higher education is at a tipping point, and that it will soon look nothing like it does today, except perhaps at a few ivy-covered, well-endowed institutions." Lots of pushback in the comments section.

Impact/Effectiveness

Tracy Palandjian, co-founder and CEO of Social Finance US, and Jane Hughes, director of Knowledge Management at the organization, have an excellent piece on the Stanford Social Innovation Review blog that looks at three possible future scenarios for the social impact bond market. They are:

  1. Boom-Bubble-Bust
  2. SIBs Are the Wave of the Future — and They Always Will Be
  3. A Successful Market for Social Outcomes

Palandjian and Hughes then examine some of the factors that will determine which scenario plays out. If you're at all interested in the impact investing space, this is a must-read.

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Weekend Link Roundup (December 14-15, 2013)

December 15, 2013

Our weekly roundup of new and noteworthy posts from and about the nonprofit sector....

Snowman_clipartEducation

Good profile on Tech Crunch of Rutgers professor Bruce Baker, the "Nate Silver of education." Like "Silver's influential and statistically nuanced election forecast blog posts, Baker has gained notoriety for reexamining data to trounce his adversary's conclusions," writes Gregory Ferenstein. "And, with Silver's new independent 538 channel, Baker's brand of statistics-heavy argument could be the future of education journalism."

Giving

In a provocative post in Salon, liberal stalwart and former Clinton administration official Robert Reich notes that "a large portion of the charitable deductions now claimed by America's wealthy are for donations to culture palaces -- operas, art museums, symphonies, and theaters" -- and "elite prep schools and universities they once attended or want their children to attend" and as such are "investments in the life-styles the wealthy already enjoy and want their children to have as well."

Was the second annual #GivingTuesday event a success? Notwithstanding the positive headlines and torrent of tweets leading up to and during the day itself, there isn't "a single shred of hard evidence [to suggest] that #GivingTuesday is good for the entire nonprofit sector," writes ML Innovations president Michael J. Rosen. Before Rosen is ready to deem the event a success, he'd like to see answers to such tough questions as: How many new donors did #GivingTuesday participants v. other nonprofits acquire in 2013? Among 2012 #GivingTuesday nonprofit participants v. other nonprofits, what is the retention rate of donors who gave on that date? And is #GivingTuesday simply changing when people give (i.e., on that Tuesday instead of Wednesday, Thursday, Friday, or another day)?

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SIBs: Private Gain or Public Good?

December 12, 2013

(Mark Rosenman, professor emeritus, Union Institute & University, is a frequent contributor to PhilanTopic. In his previous post, he argued that foundations and advocacy organizations need to rethink how their resources can be deployed to build the infrastructure and institutions of democracy in the twenty-first century.)

Rosenman_headshotNot long ago, New York City and Goldman Sachs began to experiment with a new financial instrument known as a social impact (or pay-for-success) bond that raises capital from the private sector for nonprofit social programs which in the past would have been funded largely by government. If, after an agreed-upon period of time, the program in question is able to demonstrate success, the investors are paid back, along with a profit, by their government partner. The concept has generated a fair amount of buzz, in part because deficit-strapped governments, underfunded charities, and resource-constrained foundations see SIBs as a potential new source of program dollars.

Unfortunately, the SIB model is being touted as the next best thing without any critical examination of the assumptions behind it or the funding crisis which drives it.

What, for example, would happen if taxes were cut to the point that government is hard pressed just to fund defense/public safety, entitlements, and its own operations and so has to turn to private investors who demand a profitable return to finance critical public infrastructure and nonprofit services? If some have their way, we're likely to find out.

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Towards Greater Transparency in Philanthropy

November 29, 2013

(Mary Glanville joined the Institute for Philanthropy in May 2012 and was appointed managing director in the organization's UK office in February 2013.)

Headshot_mary_glanvilleThe Institute for Philanthropy has released a new report, Towards Greater Transparency in Philanthropy, that looks at the attitudes of individual donors toward sharing information about their giving. Information sharing is already seen by large foundations as a good way to increase their effectiveness -- the Bill and Melinda Gates Foundation, for example, recently announced its decision to join the International Aid Transparency Initiative (IATI), making it one of the first private foundations to do so -- and we wanted to see whether the same inclination existed among donors in our networks.

To that end, we asked thirty-three donors from the United States, the UK, Canada, Lebanon, and Mexico a range of questions about the perceived value and challenges of "open" philanthropy. After their responses had been collected and analyzed, four key findings emerged:

First, the thing most of them felt would help to make their philanthropy more effective (19 out of 33 donors) was "sharing evaluations with other foundations." Second, most respondents thought the greatest benefit of sharing more information about their giving was that it "facilitates collaboration (21 out of 33 donors). Third, 24 out of 33 donors said they would be interested in further discussing the possibility of a standard for sharing information about their giving with other donors. And fourth, several donors made it clear that despite seeing the value in sharing more information about their philanthropic activities, the main reason they hadn't done so was to safeguard their family's privacy.

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