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Weekend Link Roundup (July 23-24, 2011)

July 24, 2011

Us-heat-DOME Our weekly roundup of new and noteworthy posts from and about the nonprofit sector....

Grantmaking

Writing on the White Courtesy Telephone blog, Greater New Orleans Foundation president Albert Ruesga urges readers to consider the ur-question in philanthropy: What should my goals be, and why? In other words, "How do independent foundations, which have almost complete freedom in the choice of what they can fund, rationalize their choice of grantmaking goals?"

Impact/Effectiveness

On his Light on Leadership blog in the Washington Post, NYU Wagner School professor Paul Light suggests that nonprofits, "having been pushed to behave more like businesses for years...are now being treated as such by federal courts." Indeed, a federal appeals court judge recently decided "to allow states to regulate the Girl Scout cookie business the way they would a commercial business." Writes Light:

Given the court decisions challenging commercial activity, the downturn in giving, and continued government negligence, nonprofit leaders need to think harder about transformation. They must attack the duplication and overlap through consolidation with their competitors; flatten their bloated hierarchies and confusing management structures; invest in the frontline workforce that is straining under rising case loads; and harvest these savings for basic investments in information technologies, training and modest compensation increases needed to assure high performance.

Nonprofit leaders also have to get much better at measuring the value they produce. They have relied too long on the public's empathy for their revenues, when survey after survey shows that givers want measurable value for their dollars. Americans understand that there is great need out there, but they are often confused about the impact of their dollars. They continue to believe that nonprofits have the right priorities but waste too much money. They want greater efficiency, not more pictures of needy children.

If a nonprofit cannot explain how every dollar given generates more than a dollar in results, it should close its doors....

Is he right? Share your thoughts in the comments section below. (H/t Phil Cubeta.)

On her Philanthropy 2173 blog, Lucy Bernholz, who is "all for the principle of 'failing fast' and learning from our missteps," looks at a few efforts designed to help foundations and nonprofits reflect on their mistakes while sharing lessons with their peers.

In remarks delivered earlier this week at the Hudson Institute as part of a panel discussion on "Reclaiming the Moral Life of Philanthropy," Center for Effective Philanthropy president Phil Buchanan argues that foundations "are morally obliged to seek to know how we are doing, and how we can improve."

International Affairs/Development

In a follow-up to an earlier PhilanTopic post that criticized the Patriot Act for preventing NGOs and development agencies from coming to the aid of starving people in southern Somalia, PND's Nick Scott updates readers on the situation and provides a list of organizations working in the region.

On the Philanthrocapitalism blog, Matthew Bishop and Michael Green wonder whether the Nathan Cummings Foundation can leverage its position as a minority shareholder to get scandal-scarred New Corps to change its most egregious practices, as it did earlier with Smithfield Foods, the giant pork processor. Write Bishop and Green:

Could the greatest influence of philanthropic foundations on the media business come not through grantmaking but through their role as investors? Possibly, but only if there is a seismic change in the foundation world. For another striking aspect of the Nathan Cummings Foundation's experience is that it is still all too rare. Yes, organizations like Rockefeller Philanthropy Advisors are pushing foundations to make better use of their shareholder power as a force for good; the More for Mission campaign is trying to get foundations to use more of their endowment capital for what is now known as "impact investing." But they have so far made little progress, despite plenty of talk. This type of activity still comes a distant second (or last) to what many see as the ‘real' business of foundations: grantmaking....

Philanthropy

At the Stanford Social Innovation Review blog, Paul Park says that funders shouldn't think of themselves "investors" but rather as "purchasers," adding that "viewing funders as purchasers rather than investors provides a clear rationale for avoiding the nonprofit starvation cycle."

That's it for now. What did we miss? Drop us a line at rnm@foundationcenter.org. And stay cool out there!

-- Regina Mahone

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