Information for more impact: An interview with Kat Rosqueta, Executive Director, Center for High Impact Philanthropy and Candid Board Chair

In February 2022, Katherina “Kat” Rosqueta became board chair of Candid, the organization established in 2019 with the merger of Foundation Center and GuideStar, where she had also served as a trustee beginning in 2012. Rosqueta was integral to the planning that led to the creation of Candid and served as vice chair to T. Sylvester John, whom she succeeded this year.

To many, Rosqueta is best known as the founding executive director of the University of Pennsylvania’s Center for High Impact Philanthropy (CHIP), a collaboration between the Wharton School—where she received her MBA in 2001—and the School of Social Policy and Practice. Since 2006, Rosqueta has led CHIP’s effort to encourage the practice of an evidence-based approach to philanthropy.

Philanthropy News Digest spoke with Rosqueta about her career, her work with CHIP, and how it all connects with Candid’s 2030 vision.

Philanthropy News Digest: You’re a Philadelphia native. After earning an undergraduate degree at Yale and working for more than a decade in the San Francisco Bay Area, was coming home, first for an MBA at Wharton and then as a founder of the Center for High Impact Philanthropy at the University of Pennsylvania, inevitable?

Kat Rosqueta: The draw of family was always quite strong, but after a decade in Northern California there was a lot of reinforcement of the same ideas. I considered business school when I was at a point in my career where I needed more tools and a bigger community to figure out how I could make a bigger difference.

At the same time, people around me were saying: “Oh, nonprofits have to be more business-like.” I decided to find out what that means.

To give you some historical context, I left the Bay Area at the frothiest part of the first dot-com bubble. People thought I was insane to leave Silicon Valley and the Bay Area. Until that point, I was almost always involved in some sort of startup, and I had a bias—one that I think a lot of entrepreneurs, in my case, a social entrepreneur, had—around any kind of consulting.

But I got recruited to McKinsey & Company during the summer between my first and second year at Wharton. I found really sharp people that I was learning really quickly from and with.

To me, my time with McKinsey—and my earlier work in Wells Fargo’s Corporate Community Development Group—is reflected in our work at the Center for High Impact Philanthropy. No single sector—the business sector, the government sector, the nonprofit, philanthropic sector—alone can possibly advance the kind of lasting, positive social change that we all hope for.

You can even look at the origin story of CHIP, which was conceived as a collaborative effort between fellow alumni of the Wharton School and the dean and stakeholders from what was then called the School of Social Work, now Penn’s School of Social Policy & Practice.

And while it can be much more challenging and take longer to work in those kinds of collaborative efforts, or even with a really diverse team, that’s the only way to solve these really tough problems....

Read the full interview with Kat Rosqueta, founding executive director of the Center for High Impact Philanthropy and board chair of Candid.

How funders can assess nonprofit effectiveness for investment

As with any investment, the decision to support a nonprofit should be grounded in empirical evidence. An organization is worthy of investment if it’s having a concrete, positive impact in the community and it’s run well enough to maintain operations sustainably. Exceptions include startups that have exciting potential but may not be far enough along in their lifecycles to show trackable, long-term impact or demonstrate sustainability. Organizations launched by, from, and in the communities being served are often the most deserving of investment interest and consideration.

There are many ways to determine the effectiveness of nonprofits (in terms of their impact and internal capacities), from reviewing their tax documents to observing their work directly. Funders should be well acquainted with a nonprofit’s leadership team, its strategic plan and the KPIs it uses to track progress toward its goals, and its culture. Lived experience among staff and board leadership is also an important ingredient in the mix. Instead of viewing support for effective nonprofits as mere charity, funders should view it as an investment in the communities and mission areas they care about. When they focus on culture, capacities, and impact, they’ll ensure that their investments are being put to good use.

Learn all you can about the organization’s culture

While donors can learn a lot from tax documents (such as the Form 990, public documents that the IRS and nonprofits are required to share with anyone who asks), impact reports, and the media, there’s no substitute for in-person engagement with an organization. Funders should get to know the teams they’re investing in, which means they need access to meetings in person or via Zoom, site visits, and other interactions that can illuminate how nonprofit employees communicate and collaborate with one another, address disputes, execute their mission, interact with stakeholders, and so on.

According to a survey conducted by Glassdoor, more than three-quarters of workers say they consider a company’s culture before applying for a job there. The nonprofit workforce is no different—an unhealthy organizational culture can have a significant impact on morale, productivity, turnover, and other issues. Donors should also be on the lookout for management and leadership skills, relevant expertise (including business experience), and diversity at the staff and board level. When nonprofit leaders have lived experiences that help them understand the challenges communities face, they won’t just have a perspective that many others lack—their communities will also feel authentically represented.

Although it’s essential for nonprofit leaders to prioritize results and push employees to do their best work every day, they should also show genuine concern for their colleagues, welcome contributions from diverse voices, and establish norms of open communication to make sure their teams feel heard and appreciated.

Focus on nonprofits’ capacities

Before investing in a nonprofit, funders need to have a thorough understanding of the organization’s capacities—an assessment which should encompass everything from financial management to personnel to the execution of programs. There’s a reason more and more funders are providing capacity-building support to their nonprofit partners: When organizations are capable of deploying resources more efficiently, tracking performance, managing personnel, and maintaining a healthy culture, they’ll be more effective and less susceptible to risk.

Funders should be especially interested in security and stability on nonprofit leadership teams, diversity, and expertise among the staff, the relationship between staff and leadership, how sustainably the organization has been able to scale, the organization’s financial health, and how long it has been in operation. Considering many of the problems endemic to the sector, from a lack of revenue to insufficient cash reserves, it’s no wonder that funders increasingly are creating or funding programs that hire third-party experts to provide grantees with training in capacity building. Many funders also offer assistance to help nonprofits improve their internal capacities before they become eligible for funding, or after funding as part of their ongoing partnership.

When funders are well acquainted with the nonprofits they want to support—from the people running the programs to the infrastructure of support for their staff to the execution of programs—they can confirm that they’re investing in strong and sustainable organizations that will be capable of scaling impact for many years to come.

Outcomes over outputs

Capacity building, culture, and the other elements funders examine when deciding which organizations to fund ultimately converge on one overarching priority: impact. In assessing impact, funders have to go beyond superficial indicators of success and determine whether organizations are making a measurable difference in the communities they serve. Given that a majority of nonprofits say they have no consistent framework for measuring and reporting impact, this is clearly a major issue in the sector that funders can’t afford to ignore.

First, funders have to understand the mission and goals of a nonprofit, which will help them determine if they’re aligned with that mission, whether those goals are being achieved, and, when applicable, the nonprofit's theory of change and how it's executing that strategy. Next, funders should prioritize outcomes over outputs. The number of textbooks a nonprofit delivers to a school and the number of hours volunteers spend mentoring or teaching students are outputs, while potential outcomes would be the percentage of students who got on the honor roll, graduated, went to college, helped others in their communities, etc. Nonprofits should be able to provide information about the outcomes they’ve achieved, as well as tell a compelling story about the cohesion between these outcomes and their overall mission.

When funders invest in a nonprofit, they have one central goal: to help an effective organization scale its impact. By analyzing the culture, capacities, and outcomes of potential partners, they will simultaneously hold nonprofits accountable and direct their investments toward organizations that are doing the most good in their communities.

Marta Ferro is founder of Starfish Impact and a managing director at Angeles Wealth Management.

(Photo credit: Starfish Impact)

Empathetic leadership during the storm

"Lead with an iron fist," said some.

"Never let them see you cry," others recommended.

"You were born to lead," many affirmed.

Countless people have offered advice and encouragement to me as a leader over the years. Yet the idea of empathy in leadership has rarely been addressed.

As a Black female nonprofit executive in Texas who earlier this winter found herself in a vulnerable moment, I feel compelled to record some of my struggles. First there was the pandemic, followed by the killing of George Floyd and heightened racial tensions, and then — boom! — a winter storm with near-zero temperatures that collapsed the state's power grid and left millions of Texans in dark, unheated homes. Even as it was happening, I knew it was going to be bad, and most likely deadly.

My first instinct was to reach out to my staff and inquire about their housing, food, and other needs. In my experience, employers in times of crisis rarely do wellness checks on their employees (other than to inquire whether the employee will be coming into work or not). While nonprofits are quick to respond to community needs during a disaster, how many organizations offer direct support to their own staff? As an empathetic leader, I was concerned first and foremost that those closest to me were safe and out of harm's way.

During the deep freeze, I considered my teams' mental health and reminded them of our EAP program and insurance plans that could assist with counseling. With a team comprised largely of women of color, I understood how responses to crisis and trauma live in our bodies. But in my role as executive director of Faith in Texas, I also knew I had to consider all the harms suffered by the communities my organization serves.

Where did that leave me? Self-care seems to be the rage these days, but it's much easier said than done. Infuriated by the lack of accountability on the part of Texas officials, ERCOT, and electric companies serving the state, I decided to take a break from the news. But within an hour, an employee texted me asking if we could help dozens of families that had been locked out of their hotel rooms and had nowhere to go.

It was then that the magnitude of the crisis became apparent. This wasn't a time for self-care. As a single mother, my heart ached for the displaced mothers and their children. I imagined them trying to survive the freezing cold, dealing with harsh conditions as they scrambled to find public transportation to the suburbs, where mutual aid groups could secure them rooms. I imgained them trying to find food to eat, water to drink, hygiene products, even underwear for themselves and their kids.

It was more or less the same thing the employee who texted me was experiencing. A Black woman and mother of small children, she, too, was scrambling to find temporary housing. And yet she was advocating for others in crisis; self-care would have to wait.

In the days that followed, family and business colleagues from around the country reached out to check on me and my sons. And my answer to their first question was always, "I'm fine. Grateful to be safe, warm and healthy." But I was numb.

Through my contacts, I began to hear about helpers on the front lines — heroic individuals, small nonprofits, and local Black churches that were doing crucial, in-the-moment work to help people survive. I knew their names wouldn't be mentioned during funder calls. And while local and national media outlets were making an efort to highlight the work they were doing and individuals around the country were responding to calls for donations, I realized I had a responsibility to elevate all the organizations and people who were selflessly neglecting their own self-care to provide critical services. Truth be told, I wasn't sure if every organization had 501(c)(3) status, but that hardly seemed to matter. They needed — and deserved — all the resources they coud get. And they deserved to be trusted to use the money — not just in-kind donations —  in an effective manner. Standing up for grassroots organizations is another role I embrace.

Leading with empathy probably isn't the best long-term strategy for a Black female nonprofit executive looking to impress large funders and donors, but, inspired by John Hope Bryant's Love Leadership, it's the legacy I prefer to leave. Like Bryant, I recognize that there can be no strength without suffering, no power without vulnerability. As Black women calling for equity and healing, my sisters and I speak out of love and respect, from a history of suffering, and mindful of our own vulnerability. All we ask is that you give us an opportunity to show our greatness.

(Photo credit: Mario Cantu/Cal Sport Meia via AP Images)

Akilah S. Wallace is executive director of Faith in Texas. This article originally appeared in the Opinions section of  Women of Color in Fundraising and Philanthropy.

Evaluation has a key role to play in racial equity work

As a woman of color, evaluator, and nonprofit leader for more than ten years, I am encouraged to see a growing number of foundations and nonprofits embrace efforts to advance racial equity and justice.

At this uncertain moment in our history, we have an opportunity to heal, restore, and create a more inclusive and abundant future for all. It is an opportunity, however, that could disappear as quickly as it emerged — if we don’t seize it.

As we have learned over the last six months, efforts to address racial tensions and inequities and promote healing and narrative change are desperately needed. Those efforts can and should be evaluated.

The good news is that foundations and nonprofits can build on work that is already under way. Through its $24 million Truth, Racial Healing & Transformation (TRHT) initiative, the W.K. Kellogg Foundation is one of the foundations leading the way in investing in and evaluating such efforts.

Last year, my firm worked with a client to evaluate a TRHT program whose objective was to ease racial tensions and promote healing and narrative change among young people through book groups. In the process, we learned some surprising things.

A number of participants had "aha" moments — like the European-American youth who came to realize that saying the n-word, even in a song, was problematic. But there was another, more common outcome: Adult book group leaders were among those who most benefited from the program, with many saying the program helped them recognize their own implicit biases and understand what systemic racism really looks like at the level of the individual.

That unexpected outcome highlighted the need for more training and support for adult group leaders. Based on our findings, in year two of the program the client was able to enhance both the value it delivered and to foster more healing and peace-building in the community. Our big takeaway was this: nonprofits and foundations working to advance racial equity can be more effective by rigorously evaluating those programs.

Foundations and nonprofits should also foreground long-standing inequities in their evaluation efforts — inequities that often obscure root causes underlying the problem we are trying to address. A skilled evaluator can help surface such complex dynamics.

For example, when BECOME was asked to evaluate a first round of grants awarded by the Partnership for Safe and Peaceful Communities in support of innovative approaches to neighborhood safety in Chicago, we started with a literature review of violence prevention programs in other jurisdictions.

In the process, we discovered that interventions such as job programs or social and emotional skills training focus on the immediate needs of individuals. But adult violence also is linked to factors more distant — such as redlining or trauma due to heightened exposure to violence. Community violence too often is the legacy of policies that, over time, forcibly segregated communities by race and income, tilting the playing field against Black, indigenous, and other people of color. No matter how well designed an intervention might be, if it fails to address such root causes, it is unlikely to succeed.

One of the key findings we were able to share with the team at the Partnership for Safe and Peaceful Communities is that interventions delivered in a consistent fashion and coordinated with other actions had the most impact. That kind of approach is now a feature of the current iteration of the Chicago Fund for Safe & Peaceful Communities initiative.

Last but not least, we have learned that evaluation is most effective when it is culturally responsive and engages multiple stakeholders — especially those likely to be impacted by the intervention — in the process of developing questions, designing solutions, and recommending next steps based on lessons learned.

The resulting combination of learning, engagement, informed design, and collaborative implementation is much more likely to lead to programs that deliver safety and security, health and well-being, and education for all.

To create a society in which thriving communities of color and economic opportunity for all is the norm, we need to take steps now to address the root causes of poverty and racial injustice. Evaluation can help us do that.

Dominica McBride, PhD, is the founder and CEO of BECOME, a nonprofit organization that uses evaluation as a tool to advance social justice and thriving communities.

The Solution for Saving Mom-and-Pop Businesses

The COVID-19 pandemic has upended the U.S. economy, leaving every community facing tremendous uncertainty. One thing is clear, however: low- and moderate-income communities and the small businesses they support will suffer the most if we do not move quickly to address their needs.

Although Congress passed a $310 billion Paycheck Protection Program in April, many small businesses and nonprofits were left out. And the program has yet to reach many of the most marginalized in our communities, especially small businesses owned by people of color. Indeed, according to the Center for Responsible Lending, 95 percent of African American-owned businesses and 91 percent of Latinx-owned businesses likely will not be able to access the program. 

To help remedy the problem, the federal government has allocated $30 billion through the program to "community financial institutions" to enable them to be more inclusive in their lending to businesses that have been ignored.  But even with a portion of PPP funds set aside for institutions like community development financial institutions (CDFIs), minority-owned banks, and credit unions, the level of funding earmarked for those lenders is insufficient to meet the scale of the problem.  

To save mom-and-pop businesses — including local farms and food producers, as well as small manufacturing businesses — it is imperative that we mobilize private capital to address the problem. But more capital is only part of the solution. Capital, whatever its source, must be applied with precision and a thorough understanding of the businesses receiving funds to ensure that the amount, type, and timing of the capital are well-matched to the business and its goals. 

This is not the time to search for shiny new investable ideas. More than a thousand community development institutions across the United States already are working to fill  gaps in the capital markets without regard to a borrower's color, gender, or ethnicity.

In this time of anxiety and uncertainty, impact investors — private investors who seek to create social impact — should look to CDFIs as a bridge to low-income communities. Not only do we have a forty-year record of working in those communities, we also provide relationship-based technical assistance — advice that is especially valued as small business owners look to reinvent themselves for a post-pandemic economy. 

Over thirty-six years, our CDFI, the New Hampshire Community Loan Fund, has built a strong, resilient community business. In part through a relationship-based, community-organizing approach, we have grown our ability to lend the right capital at the right time to make a difference. In this time of trouble, this is what we bring to the table to help small businesses weather the storm: 

We know how to stabilize a business. Many businesses have teams that possess skills and local knowledge accumulated over years. By providing capital to such businesses when they hit a rough patch, we make it possible for them to keep those skills and knowledge in-house, thereby reducing local economic disruption over the longer term. 

We work collaboratively. CDFIs fill capital gaps created by the business models of mainstream lenders and investors. For instance, our CDFI focuses on providing growth capital, a type of higher-risk financing that allows for the greater uncertainty inherent in the small business economy that is especially well-suited to this uncertain economic environment. What's more, the loans we underwrite are based on cash flow and the strength of the management team, as opposed to collateral. Our strong track record (i.e., minimal defaults) isn't because we're quick to say "no," but rather is the result of our focus on helping the borrower succeed. And the strong relationships our business advisors have built with our borrowers give us confidence that when borrowers see trouble ahead, they will ask for help sooner rather than later, knowing that we'll be patient and work with them to resolve the problem. 

We're creative. Like growth capital, pivot financing allows us the flexibility needed to shape financing to the needs of each particular business. Relying on unrestricted community-sourced capital allows us to structure deals creatively, using all the tools in our financial toolbox, including grants, debt, sub debt, revenue-based financing, and equity. The greater the mission alignment, the more willing we are to stretch, accepting a greater share of the risk so as to keep costs low for the borrower. Our backstops are our knowledge of the business and the trust we have earned — both of which are priceless as we and our borrowers navigate our way through this crisis.

In this moment, impact investors and funders don't need to spend valuable time searching for new ideas. They can invest in the existing CDFI infrastructure, an infrastructure uniquely positioned to stabilize and pivot local businesses for whatever lies ahead. By focusing our relationship-based efforts on businesses led by women and people of color, as well as businesses that are creating better jobs for low-income workers, we are doing our part to ensure that fewer people will be permanently harmed by the fallout from the virus. In doing so, we also are actively working to enlist new allies to this critical work. The challenge is immense; the time to act is now. 

John Hamilton is vice president of economic opportunity at the New Hampshire Community Loan Fund.

Creating Symbiosis Between Marketing and Advocacy

How many times have you had to make a strategic decision designed to generate (or replace) critical support for your organization or cause? Maybe you lost the support of a key funder, or something happened in your issue area that required a decisive response.

Let's face it: even when things are calm, your organization is competing with dozens of other organizations and causes for public mindshare. Which is why I'm sure you've tried all sorts of traditional and digital methods designed to amplify your organization's message so that it stands out from all the "noise." 

Of course, generating any kind of action in our over-saturated media environment requires the efforts of two of your most critical teams: marketing and advocacy. It’s the job of marketing to acquire and recruit people to your cause, while advocacy works at the other end of the spectrum to activate those who are most likely to support — or are already involved at high levels with — your cause.

How do organizations achieve that happy state?

Successful cause leaders have discovered that the secret is to create a mutually beneficial relationship between your marketing and advocacy teams.

Finding the Sweet Spot

Often, when I sit down with cause leaders and ask about an upcoming event or campaign, I'm told (in so many words) that the organization is trying to expend as little of its limited resources as possible — and doing so in a siloed way. Sometimes, the marketing team will say, "Oh, it’s the advocacy team’s job to create passionate supporters and fight the good fight on the policy front," while the advocacy team members will say, "It's not our job to fill the room or make sure our message is getting to the right people. That’s marketing's job."

As anyone responsible for building a movement or a brand tied to a cause or issue knows, however, the sweet spot for any organization — the place where all its resources are used so as to create a whole greater than the sum of its parts — requires everyone, on every team, to work together.

Where am I going with this?

4 Design Essentials to Spark Lasting Change

American corporations, individuals and foundations gave over $425 billion to universities, cultural institutions, hospitals, and other nonprofit organizations last year, including significant funding hoping to address some of the biggest challenges we face across the country and around the globe — from climate change to homelessness. And yet, we have not made substantial progress on most of these systemic issues. That has to change.

The truth is the most critical and pressing systemic challenges our nation and our world are facing are too large and too complex to be solved by any individual organization working alone. But most funding flows to individual organizations. This mismatch is a key reason why progress too often stalls. To effect lasting, system-level change, funders must increase their support for coordinated, collaborative efforts — and demand no less from their grantees.

With decades of grantmaking experience between us, we decided to do the research to find evidence-based essentials that networks and coalitions need to make real progress toward meaningful, sustainable goals. Dell Technologies and 100Kin10, a network focused on addressing the nation's STEM teacher shortage, partnered to examine how to create and fund the kind of collective or networked efforts that can spark lasting change. This extensive analysis of successful, coalition-based social change efforts uncovered four "design essentials," elements that each effort needed to succeed.

Here is what we learned:

The Best-Kept Secret: A Strategic ‘Pivot’

There are countless examples of strategic "pivots" to point to in the for-profit world, many of them from the not-too-distant past. Remember when Amazon just sold books, when Netflix mailed DVDs, or when the Gap was a record store that sold Levi's? It's rare, on the other hand, to hear about nonprofits making the same kind of massive changes in strategy. Of course, taking a risk in Silicon Valley (where companies are expected to produce financial returns for their investors) is different than risk-taking in the nonprofit world, where organizations are responsible for having an impact on a social or environmental problem.

But pivoting — a shift in strategy that helps an organization achieve its desired impact — is crucial for nonprofits that want to succeed over the long-term. "Pivot" doesn’t have to be a bad word or signal failure. Think of it, instead, as a natural part of organizational evolution.

Pivots can be large or small, but they should emerge from a clear understanding of what is working and what is not. Using data (e.g., performance metrics, evaluations, and direct observation) to decide whether or not it's time to pivot will ensure that you pivot in the right direction. This kind of intentionality, coupled with the ability to admit what isn't working, makes a strategic pivot different than just throwing spaghetti against the wall and seeing what sticks.

Organizations that don't pivot eventually end up stuck doing the same old thing, even when evidence points them in another direction. In such a scenario, funders often start to wonder about their investment in a "stuck" organization and whether it's truly creating the impact they would like to see. To help nonprofits that are struggling with the pivot issue, as well as funders who may be sitting on the other side of the table, I wanted to share a story about a pivot made by my organization, UpStart, what we learned from it, and how you can benefit from the same kind of thinking and tactics.

UpStart's flagship initiative in Colorado was our Teen Fellowship program, which each year engaged twenty-four fellows in the fundamentals of social entrepreneurship through a Jewish lens. This program was a part of the larger Denver-Boulder Jewish Teen Initiative to increase engagement of diverse local Jewish teens. In the fellowship, teens worked in small teams to solve a particular problem in their respective communities, developing new initiatives and learning key skills that would help them navigate the world. The program was rated favorably by the teens who participated, but from an outcomes perspective it was becoming increasingly clear it was off-strategy.

Memo to Foundation CEOs: Get a Youth Council

Seven years ago, we launched a President's Youth Council (PYC) at the California Endowment, and it seems like a good time to tell you that the young people who've served on the council over those seven years have significantly influenced our programming as a private foundation, been a source of reality-checking and ground-truthing on how our work "shows up" at the community level, and have substantially increased my own "woke-ness" as a foundation executive.

Before I get into the details, I'd like to briefly share why we decided we needed a President's Youth Council and how it works: In 2011, our foundation embarked on a ten-year, statewide Building Healthy Communities campaign that was designed to work in partnership with community leaders and advocates to improve wellness and health equity for young people in California. We had already been using a variation of a place-based approach in our work, and so we selected fourteen economically distressed communities to participate in the campaign — some urban, some rural, and all, taken together, representing the complex diversity of the state.

At the time, I was aware not only of the privileged position I occupied outside my organization, but also of how sheltered I was as a chief executive within my organization. More often than not, I received information about the effectiveness and impact of our work in the form of thoughtfully crafted memos from staff, PowerPoint presentations, and glossy evaluation reports filled with professionally designed charts and graphics. Even when feedback in the form of recommendations from consultants or comments from the community came my way, it was all carefully curated and edited. As I had learned — and this is especially true at large foundations — when members of the community get "face time" with the CEO, it is a carefully managed and considered process.

Being at least vaguely conscious of these issues early on in our Building Healthy Communities work, I wanted to ensure I would have some regularly calendared opportunities to meet face-to-face with young leaders from the communities we were serving. So, we solicited nominations from grantee-leaders in each of the fourteen program sites, and a President's Youth Council, featuring mostly young people of color between the ages of 17 and 21 and of varying sexual/gender orientations, was born.

Seven years later, here's what it looks like.

Philanthropy Has Changed How It Talks — But Not Its Grantmaking — in the Decade Since NCRP's 'Criteria' Was Released

It's been ten years since NCRP released Criteria for Philanthropy at Its Best. As I reflect on the animated response to the report, I'm struck by how far the sector has come since 2009 — and, paradoxically, by how little has changed.

Our decision to publish Criteria was, shall we say, controversial. That NCRP had the temerity to assert that any set of criteria be applied to the field of philanthropy, let alone criteria grounded in our belief that grantmakers needed to prioritize marginalized communities and support grassroots-led problem solving to address the systemic inequities and injustices confronting communities in America every day, had more than a few people aghast.

Here's a sampling of the some of the pushback:

"[NCRP's] hierarchy of ends is breathtakingly arrogant." — Paul Brest, former president, William and Flora Hewlett Foundation, in the Huffington Post, 2009

"We reject the use of a single template to promote effective philanthropy." — Steve Gunderson, former president, Council on Foundations, 2009

"In the NCRP worldview, philanthropic freedom is not only at risk, it's an oxymoron." — Heather Higgins, former VP, Philanthropy Roundtable, in Forbes, 2009

Criteria earned NCRP new fans and more than a few critics. But when I consider the many books published in the last few years that have been critical of the field, I'm pretty sure that if we released the report today, few would bat an eyelash.

What's changed?

Criteria for Philanthropy at Its Best: At A Glance Criteria offered the following aspirational goals for grantmakers looking to maximize their impact in the world: Criterion I: Values ...contributes to a strong, participatory democracy that engages all communities. a) Provides at least 50% of its grant dollars to benefit lower-income communities, communities of color, and other marginalized groups, broadly defined. b) Provides at least 25% of its grant dollars for advocacy, organizing, and civic engagement to promote equity, opportunity, and justice in our society. Criterion II: Effectiveness ...invests in the health, growth, and effectiveness of its nonprofit partners. a) Provides at least 50% of its grant dollars for general operating support. b) Provides at least 50% of its grant dollars as multiyear grants. c) Ensures that the time to apply for and report on the grant is commensurate with grant size. Criterion III: Ethics ...demonstrates accountability and transparency to the public, its grantees, and constituents. a) Maintains an engaged board of at least five people who include among them a diversity of perspectives — including those of the communities it serves — and who serve without compensation. b) Maintains policies and practices that support ethical behavior. c) Discloses information freely. Criterion IV: Commitment ...engages a substantial portion of its financial assets in pursuit of its mission. a) Pays out at least 6% of its assets annually in grants. b) Invests at least 25% of its assets in ways that support its mission.

 

Philanthropic sector discourse has come a long way in the last decade

It has become commonplace for foundation staff to talk publicly about trusting grantees with long-term general support, investing in marginalized communities, and funding structural change.

5 Questions for…Lori Bezahler, President, Edward W. Hazen Foundation

In 2000, Lori Bezahler was young, idealistic and running the Education and Youth Services division of a large nonprofit in New York. She came across an ad that piqued her interest: Public Education Program Officer Edward W. Hazen Foundation. Bezahler was intrigued by the foundation’s idea that organizing could be used as a tool to change the conditions that adversely affect people’s lives, with a focus on communities of color and in the area of education. So she applied for and got the job. A few years later, in 2004, Barbara Taveras, the foundation's then-president, decided to step down. The foundation's board conducted a search for Taveras's replacement and chose Bezahler.

In the decade and a half since, Bezahler and the Hazen Foundation have been in the forefront of the movement for racial justice in American society, supporting the leadership of young people and communities of color in dismantling structural inequity based on race and class. To accelerate that work at this critical juncture, the Hazen board announced in March that the foundation would be spending down its endowment over the next five years in support of education and youth organizing, with a focus on racial justice.

PND spoke with Bezahler shortly after the board’s announcement to learn more about how and why the decision to spend down was made, how it will be executed, and what the foundation hopes to achieve over the next five years.

Philanthropy News Digest: The Hazen Foundation was established in 1925, making it one of the oldest private foundations in the United States. For decades, the foundation focused its resources on "the lack of values-based and religious instruction in higher education." Then, in the 1970s, it began to focus on public education and youth develop­ment, and in the late '80s it shifted its focus to community organizing for school reform. In 2009, under your leadership, the foundation made another shift, and began to focus more explicitly on race as the basis of oppression. Can you speak, broadly, to the process and the people who’ve helped shaped the foundation’s evolution over the last ninety-plus years?

Lori Bezahler: I'm glad you brought up the foundation's establishment, because I think Edward and Helen Hazen, the couple who created it, were really interesting people. They were childless themselves and were involved, during their lifetimes, in a number of char­ities that focused on young people. A lot of that work influenced the founding docu­ments of the foundation and its approach from the beginning, especially the importance of thinking about young people in terms of their whole selves, thinking about character development, about the way each of us incorporates our values and our beliefs into our lives. That's been a common thread through all the years and decades of the foundation's work. And over that span of time, a couple of people have been especially important in shaping the institu­tion that is Hazen today.

The first is Paul Ylvisaker, who was well known for the urban planning and anti-poverty work he did for the Johnson administration in the 1960s and later at the Ford Foundation, before becoming a dean at Harvard. He also was a trustee of the Hazen Foundation. From what I've read of our history and in board minutes and things like that he was influential in a number of ways. One was thinking about policies and their impact in broad structural terms. The other was the decision to recommend bringing Jean Fairfax, who just passed away at the age of 98, onto the board. At the time, Jean was a young African-American woman and lawyer for the NAACP Legal Defense Fund, and as far as we can tell from our research, she was the first African-American woman to be appointed to the board of a national foundation. In that role, she was instrumental in bringing attention to issues of race and representation by demanding that prospective grantees of the foundation share information about the demographics of their leadership, the nature of the community they served, and whether leadership was representative of that community. Jean was instrumental in moving the foundation's board to think more intentionally about where we, as an institution, put our dollars and the importance of self-determination.

There were others who followed in her footsteps. Sharon King led the foundation for a few years in the late 1980s, and it was under her leadership that the foundation began its work in the field of community organizing, or, as Sharon used to say, with organizations that had their feet in the community, that were grounded and embedded in the com­munity and not parachuting in, and that had leadership that was representative of the community.

After Sharon left, Barbara Taveras took over as president and really built out the foundation's understanding of organizing. She was very thoughtful in considering how a foundation could and should relate to the field through partnering, listening, and acting in a learning mode, rather than a prescriptive mode.

There were also a number of people who helped move the foundation in the direction of having an explicit focus on race. The person I would call out especially in that respect is Daniel HoSang, who was appointed to the board when he was at the Center for Third World Organizing and today is an associate professor of American studies and ethnic studies at Yale. Dan was a member of the board for ten years and really championed the idea that the foundation should specify race as a focus and think about it structurally rather than individually. He was crucial in that regard.

PND: Your board recently announced that the foundation was going to spend out its endowment over the next five years. How did that decision come about?

LB: The impetus to consider a dramatic change in how the foundation does business came about as the result of a sort of fundamental questioning of the foundation's role in a time that presents us all with great challenges but also great opportunities. It's a moment that is lifting up the potential and possibilities for the very work the Hazen Foundation has spent so many years doing. The relationships we've created, in the fields of youth organizing, racial and education justice; the way we've been able to bring that kind of work into the broader philanthropic conversation and raise it up to some of our peers and partners — all that figured into it.

And all those different factors caused us to pause and say, Are we stepping up? Are we doing everything we can be doing? Clearly, there are assumptions around perpetuity in philan­thropy, and they're based on some good thinking. I'm not saying that perpetuity is ridiculous — it's not. If you look at the numbers, you actually spend more over time, it gives you the opportunity to build something and be there for the long haul.

But there are moments when it's not enough, when the damage done by misguided policies or irresponsible leadership in the short-term will have ripple effects across time that demand you think differently about how you use your resources. And when, on top of that, there's an established body of work that you can build on to do something meaningful by concentrating your resources — well then you don't really have a choice.

That was the question we asked ourselves, and the process to get to the announcement took nearly two years. We did a lot of research, everything from literature scans to interviews to surveys. We talked to lots of people in the field, including our grantees and partners. We talked to people who had served in leadership roles in other spend-down institutions and asked them what worked and what didn't work, what were the pros and what were the cons. We looked at other options besides spending down. And we did a lot of financial modeling. I mean, we conducted an enormous amount of research, because I think the board felt very strongly that if we were going to do this, if we were going to turn out the lights on this institution and the work we have been supporting over many decades, it's got to be done in a way that is meaningful. The approach was deliberate and rational, but we also did a lot of soul searching about what it all meant and whether we were doing everything possible to fulfill the mission of the institution or whether there was something different we needed to do.

From 'Tribal' Knowledge to Technology: How Data Can Supercharge Your Nonprofit

Team members at nonprofit organizations often feel a special kinship. Everyone strives to deliver on the organization's mission and is passionate about the same thing — having a positive impact on people's lives and within their communities. In effect, the nonprofit you work for is like a "tribe" — a group of people bound together by a shared interest, a shared vocabulary, and specialized knowledge.

Many nonprofits rely on their staff's collective experience and "tribal knowledge" — undocumented information that is unavailable to those outside the organization — to keep things running smoothly. While both are invaluable, operating in such a manner tends to create gaps in actionable information. And it leaves the organization vulnerable to losing critical institutional knowledge when long-serving staff members retire or move on professionally. 

What's a nonprofit to do? 

Simply put, nonprofits need to be more efficient when capturing organizational knowledge, leveraging the experience of staff, and translating staff insights into action. How? 

With software and historical data. 

Filling Critical Gaps With Data

Better support for participants. Historical data can provide nonprofits with valuable insights that intuition or gut instinct alone cannot. Let's say a fifth-grade student in an afterschool tutoring program is scoring at a seventh-grade reading level. Intuition tells you the student needs to be challenged. But data can show you:

• which strategies have worked for similar students in the past
• which K-12 accelerated reading programs best fit the needs of the student
• how to quantitatively measure the success of your strategies 

Data gathered from digital tools can help the organization answer the above questions and create a program for the student that both stimulates and challenges her. And just as importantly, it will enable the organization to provide customized support for all participants in the program — all the time.

Putting hours back in the day. You probably work in the social sector because you have a keen desire to help others. Spending hours each day on administrative work (like data entry) can undermine that desire, while wasting valuable time on tasks that could (and should) be automated only adds to your stress. You may feel pressure to "make up" that time, but rushing through routine data-entry tasks can lead to mistakes that might have been avoided if you weren't so pressed for time. 

Hill-Snowdon Foundation's Courageous Philanthropy Defends Democracy

Since winning an NCRP Impact Award in 2014, the Hill-Snowdon Foundation has been unrelenting in calling out white supremacy and anti-black racism while taking risks to invest in black-led social change work.

The D.C.-based foundation's grantmaking has long been bold, but the leadership it has modeled through its Defending the Dream Fund matches the urgency of the real threats to our democracy. The foundation's decision in 2017 to simplify its practices and collaborate with other funders in creating the fund has resulted in more than $1 million in rapid-response grants being moved to groups working to fight policies that threaten the most vulnerable populations in the United States.

Even in 2015, however, the foundation knew this moment in American history — one that has seen the emergence of movements calling for just and fair elections, human rights for LGBTQ people and people of color, and economic equity — would not last forever.

So the foundation launched its Making Black Lives Matter initiative (MBLM), pushing philanthropy to look beyond the immediate moment and invest in longer-term infrastructure for black-led social change work. Grantees, funding partners, and other nonprofit groups in the community have rated that work as the most impactful they have done in recent years.

How did the foundation do it?

A Conversation With Ann Mei Chang, Author, 'Lean Impact: How to Innovate for Radically Greater Social Good'

Poverty. Mass migration. Economic dislocation. Climate change.

The problems confronting societies around the globe are big — and getting bigger. The resources available to address those problems, however, are shrinking, as governments burdened by huge debts and future obligations and corporations wary of controversy pull back from “feel-good” causes and collective action. And while countless foundations and civil society groups continue to fight the good fight, their resources seem Lilliputian compared to the magnitude of the challenges we face.

It’s a moment that demands big thinking, bold thinking — but also creativity and out-of-the-box thinking. The kind of thinking we’ve come to expect from Silicon Valley, the global epicenter of a certain kind of innovation and can-do spirit. The question, for many, is: What, if anything, can technologists teach nonprofits and social entrepreneurs about social change?

In her new book, Lean Impact: How to Innovate for Radically Greater Social Good, Ann Mei Chang, a respected social change-maker and technologist, tackles that question head-on. Based on interviews with more than two hundred social change organizations spanning almost every continent, the book distills the lessons learned by change-makers over the years into a set of "lean" principles for nonprofits looking to innovate their way to greater impact.

PND recently spoke with Chang about the genesis of the book, the sometimes testy relationship between tech and the nonprofit sector, and her advice for millennials and social entrepreneurs impatient with the slow pace of change.

Philanthropy News Digest: How did you get into social change work?

Ann Mei Chang: I studied computer science in college and then worked in Silicon Valley for over twenty years, at big companies like Google, Apple, and Intuit, as well as a number of start-ups. But I had known since my mid-twenties that I wanted to spend the first half of my career in tech, and the second half doing something more meaningful, something to make the world a better place. I hoped I would be able to make that change, and I was committed to it, although I didn't know exactly when or how. But as I got closer to that point in my career, in my early forties, I began to look around at all the things I cared about, and decided to focus on global poverty, as it seemed to be at the root of so many other problems I cared about.

I recognized there was a lot I needed to learn about a very different space. I ended up taking a leave of absence from Google and went to the State Department on a fellowship, where I worked in the Secretary's Office of Global Women’s Issues, with a focus on issues around women and technology. It didn't take long before I was hooked. I resigned from Google and signed on for another year. After the State Department, where a lot of the work takes place at the ten-thousand-foot level, I joined a nonprofit called Mercy Corps to learn how the real work was being done in the trenches.

Then I was offered my dream job — as the first executive director for the Global Development Lab at USAID, the agency's newest bureau with an inspiring two-part mission. The first part was to identify breakthrough innovations that could accelerate progress in the global development and humanitarian aid work that USAID does. And the second was to look at how we could transform the practice of global development itself by bringing new tools and approaches to table. The first was the "what," and the second the "how."

It fit exactly into the way I was beginning to think about what was really needed to make a difference. That's why it felt like a dream job — it was an opportunity to do this work at the largest aid agency in the world, in the belly of the beast, so to speak, but where I'd be responsible for thinking about how we could work differently and more effectively.

PND: It's an interesting career trajectory, in that it bridges the worlds of both technology and social change. In your experience, do technologists get social change? Or do they tend to see it as another problem that needs to be "engineered"?

AMC: That really depends on the technologist. As with everything, people in tech exist on a spectrum. I've known people in tech who think that technology can solve everything — we'll build a smart phone app and that will somehow end global poverty. There can be a naiveté and hubris, especially when you’re building products for people who live in contexts that you’re not that familiar with.

But there's also a thriving community of tech people in the global development sphere — we call it ICT4D, or information communication technologies for development — who are both technologists and development professionals looking at the intersection between the two. This community has developed something called the principles for digital development, which embody the best practices for the responsible use of technology in development.

One of the really exciting things that happened while I was in government was the creation of US Digital Services and 18F, where a lot of people from the tech sector came in to work for the govern­ment and saw that their skills could be put to use to help the government better serve people. It was catalyzed by the debacle with HealthCare.gov, which caused a lot of people to recognize that tech had something it could contribute that would really make a difference.

Impact Investing and Donor-Advised Funds

As interest in (and assets dedicated to) impact investing grows, institutional investors, foundations, and philanthropists alike are looking for an entry point into the rapidly growing field. At the same time, growing numbers of social entrepreneurs are looking to savvy investors and high-net-worth individuals as a potential source of funding.

Both groups have identified a compelling intersection of interests in the form of donor-advised funds (DAFs) that specialize in impact investment management and distribution. Charitable assets in donor-advised funds totaled $85 billion in 2017, and awareness of DAFs has grown significantly over the last five or six years. In fact, today there are three times as many donor-advised funds in the U.S. as there are private foundations.

While still just a fraction of the total, a handful of impact-focused donor-advised funds are seeking to bridge what Ayesha Khanna of the Points of Light Foundation calls "the pioneer gap" — by which she means a lack of funding for early-stage impact ventures, supply and distribution constraints, growing demand for expertise and new talent, and the role of partnerships as a lever for scale.

Thanks to the still-nascent but growing philanthropic impact infrastructure built by organizations such as RSF Social Finance, Tides Foundation, ImpactAssets, and others, savvy donors are finding it easier than ever to make impact investments in social enterprises and early-stage social entrepreneurs. Here are six things they are learning along the way:

DAFs can multiply the impact of their philanthropic dollars: Grants are a critical tool for social change, but once grant dollars are deployed, they are gone. Capital that is deployed to an impact investment — either as a loan, equity, or debt — has the potential to be redeployed to meet changing needs.

Donors appreciate that as investment gains are returned to a donor-advised fund, those gains can be recycled into future investments or deployed as grants.