Kjerstin Erickson was 20 when she launched FORGE. She didn't have a business plan. She didn't have a revenue model. She didn't have connections. And she didn't have a penny. But she now works in three refugee camps in Zambia, helping 60,000 refugees build better lives. This is her story.
In some weird, self-diagnostic way, I’ve spent a lot of time in the last 5 years thinking about the things that I suck at. No cause for alarm – this blog isn’t some not-so-subtle cry for help, or some kind of reverse-psychology call for approval. Rather, the need to identify one’s own strengths and weaknesses is one that I find ever more pressing in today’s leadership world. And I firmly believe that there is no better way to realize your own weaknesses than by doing something that requires all of your strengths.
In many ways, by taking on so much so young through FORGE, I’ve been forced to become intimate with my own shortcomings, limitations and failures in ways that I may never have if I followed a more traditional path. I figured it may be helpful to inventory some of them here in case it helps other entrepreneurs to identify some of their own weaknesses, or if it can contribute to breaking down a bit of the culture of perfectionism that penetrates our world. So I picked five of the things I suck at most to share with you today:
1) Multitasking
One of the first things that anyone who knows me well comes to learn is that I CANNOT, for the life of me, do two things at once. If I’m working on a document, I won’t hear someone call my name. If I’m in a conversation, I won’t notice an elephant walk through the room. A fire could start in my building and I’d obliviously keep working until someone grabbed me by the arm and pulled me away. While this means I can be very good at noticing the details of what I’m currently enthralled with, I miss out on a lot of things going on around me unless I intentionally focus on being aware of them. Since I even have a hard time being responsive to my surroundings when I’m thinking about something, I worry that I can come off as rude and aloof.
2) Managing People Who Need A Lot of Structure
I pretty much just suck at this. While I work well with people who are naturally entrepreneurial and good at executing and self-directing, I have a hard time giving people who need more direction the necessary attention and oversight to bring out their best. Because I thrive under having a lot of space in which to be creative and self-determined, I seem to lack the perspective necessary to see when and where someone needs more direction, less control, and more feedback. It may partly relate to my lack of ability to multitask – when I’m focused on one of the items or projects on my list, it’s hard for me to stay aware and on top of what my colleagues are doing at the moment. Not one to look over someone else’s shoulder, and generally underestimating how much direction the average person needs, I can easily under-manage (and thus see under-performance from) people who aren’t naturally entrepreneurial and self-starters.
3) Taking Care of Life’s Little Details
Whether it’s a flat tire that needs fixing, bills that need paying, toilet paper that needs refilling, or a cell phone that needs recharging, I plain old suck at taking care of the basic building blocks of a functioning life. I forget, put off, and minimize. I focus on other things until I’m in trouble because I have no clean laundry left to wear. It’s a habit that I’ve tried desperately to fix, and only to some success. In order to not drop the ball, I need Mint reminders to pay my credit card bill, Accuchex to auto-deduct our payroll, and someone else to process our mail. I also need multiple cell phone chargers (office, bedroom, and car), Google Calendar constantly open, and colleagues who remind me when I fail to do something I was supposed to. And still, I’ll probably forget to take my vitamins before leaving the house in the morning…
4) Balancing Email & ‘Real’ Work
Professionally, this is one I’m constantly struggling with. It seems that every time I get really on top of my email, I fall behind on important projects or ‘real’ work. And every time I get a lot of ‘real’ work done, I end up dozens of important emails behind in my inbox. Right now, I’ve got 246 starred emails awaiting response, but I also have an Annual Report to finish, financials to manage, a dozen Training Sessions to update, and several grants to edit. How can you stay on top of both? I’ve learned to severely shorten my replies to bare minimums (that’s often originally uncomfortable for females who like to be ‘nice’), but I find that I tend to put off responding to emails that require longer, more nuanced, or more in-depth answers. This, of course, just leaves work unfinished on the table.
5) Moving on After Letting Someone Down
More than anything, this is perhaps one of my greatest weaknesses. Like everyone, I hate, hate HATE letting other people down. It’s like in sports – I never cried over losing a game, I only cried over not winning a game for my teammates. As a leader of an organization, I feel like I’m letting people down every day. Whether it’s by saying no to a summer intern, by not approving a budget increase, by not finishing something when I said I would, or by not responding to an email within 24 hours - I’m seemingly inevitably disappointing people or not meeting my own ideal standards. This is pretty normal, right? The problem is that I have a hard time letting go and just moving on. If I’m late on a deadline, I feel embarrassed to the point that I don’t want to submit the thing at all. If I know I let someone down performance-wise, my instinct is to avoid them because they probably are upset with me and I don’t want to bring that to the surface. Of all the things I’ve mentioned here, this is the behavior I’m most ashamed of. It’s avoidance in its most self-defeating of manifestations. It’s something I’m working to improve, but it still qualifies as something I suck at.
While by no means an exhaustive list, recognizing the things I suck at above has been an extremely important part of both my and FORGE’s development. I could probably write a whole nother blog on how I’ve learned to cope with these things, the way in which my colleagues are instrumental in balancing my weaknesses, and the steps that I still need to take. But I’ve written enough for now. I’ve got emails 246 starred emails to respond to!
I was glad to hear that this week’s topic will focus on Money & the Social Entrepreneur. While we are often loathe to discuss them, personal finances are among the top points of concern for most embarking entrepreneurs. To make ends meet, we often have to make significant sacrifices, rely on the generosity of others, and get really good at buying and selling on eBay and Craigslist. We become masters of getting a lot out of a little.
My personal journey has evolved significantly over the past 5+ years. In the first 2.5 years, I lived in a warehouse (no windows or rooms), a Dead House (don’t ask) and friends’ houses, got free food through my friends who were still in college, and never, ever booked a hotel room when travelling. I also spent more than half of the year in Africa, where I could get away with spending virtually nothing. In FORGE’s third year, I met my boyfriend Nick Talarico, who, after his first trip to see our work, decided to quit his job, sell his house and car, and move out to California to help me build FORGE full-time. For the next two years, we lived off his savings as we slaved away from our apartment (which at one point, was 220 square feet total). It wasn’t luxurious, but we were doing what we were passionate about. Eventually, the savings dried up and we were both forced to start working part-time while continuing to run FORGE full-time (by that point, we had a staff of 100 people on-the-ground).
Four years in, FORGE hired its first domestic salaried staff person – a grantwriter that had volunteered with us for the previous 2 years. Despite a Harvard degree and previous experience, she worked for the equivalent of $30,000 a year (eventually bumped up to $36,000). At that point, I was able to support myself with my other job and continue my role in FORGE, so it made more sense to bring someone else on before me because I was going to continue working regardless. It wasn’t until February of 2008, 4 and a half years in, that I took the plunge and began being paid by FORGE for the first time (also at the rate of $36,000 a year). It was the greatest thing that ever happened to me. For the first time, I could both afford to pay for the kinds of conveniences that you never pay for when you starting up - like a hotel room when you travel (Hotwire) or a meal on delivery – and I could devote the entirety of my energies to FORGE without any other distractions.
It’s been more than a year now since I made that transition, and the results have been wonderful. Nick continues to work in Silicon Valley, while still devoting about 20 hours a week to FORGE. Between our salaries, we are able to live a comfortable life. We choose to live in Oakland rather than San Francisco or Silicon Valley because the rent prices are so much lower (for both housing and FORGE’s office), and that allows us the freedom to do other things. FORGE now has two more domestic employees, Abby and Vaughn, who also make pennies relative to their experience and talent but are still able to live enjoyable lives.
If there is lesson here, it’s that things eventually get better. At the outset, and for the first few years, resources will necessarily be limited – that’s all part of the game. It’s a test of our passion and our will. But it won’t be like that forever. While you may never live a life of luxury or true financial freedom (very few people ever do), I think you can eventually live a life of reasonable (and intelligent) comfort.
If there is a message I could pass on, it would be to avoid getting falling into the sacrifice mentality of social entrepreneurship. I’ve seen our sector get caught up in the ‘who-lives- a-dirtier-harder-and-more-sleepless-life’ battle, and it can be very tempting to try to prove our dedication to our cause through a lack of dedication to ourselves. But this is an unsustainable and self-defeating cycle. If we want to make the world a healthier place, we need to bring the same level of compassion to ourselves that we bring to our work.
PS – It’s worth noting that even the kind of penny-pinching bootstrapping I described above requires a degree of social capital that makes it more difficult for those less fortunate to stay afloat. For example, I was blessed with the availability and generosity of friends and family, I attended a school that had oodles of free food and allowed me use of their computer lab and printing even when I was no longer a student, and Nick had already built a degree of professional success that we were able to capitalize on. Had we been less fortunate in our support networks, FORGE’s launching would have been even more difficult. Nathaniel Wittemore wrote about the importance of this kind of capital and how it’s related to the current fiscal environment in the post Overclass: The Problem with the Bootstrap Era.
I’ve been here in Oxford for the Skoll World Forum for 2 days now. I didn’t quite know where to start with this post, so I just finished reading through the great list of eloquent blogs that have been written from the conference so far. I could add on to their great insights, but I feel like one thing needs to be said first….HOW DID I GET SO LUCKY AS TO BE HERE!?!?
I’m battling the feelings of someone not yet part of the club: I feel concurrently blessed and entitled, grateful and indignant. Most of me feels so overwhelmed by the quality of thinking, skills, and achievements in this group – I am in the presence of giants, and I feel small in comparison. I look around at all the people I’ve admired and been inspired by, and I feel like a kid in a candy shop. By the end of the day yesterday, my whole forehead ached from being so wide-eyed for so many hours. I don’t yet know how I fit in, and I worry that they made a mistake when giving me a badge.
And yet under it all, there is a voice from inside that tells me that I do in fact belong. FORGE may be younger or smaller in scale, but in the depth of my being I know that our innovations, operations, values-based processes, strategy of change, integrity, and impact are world class. We have a message to bring, we have a story to share, and we can be a contributor to this necessary global conversation.
Of course, I ask myself daily whether I’m delusional – is my conviction in FORGE just some myopic, self-centric psychological weakness that blinds me from seeing it’s relative insignificance? Could I be that idealistic, hubristic young person who is drunk off their own illusions? Sadly, I may never know. And thus I must go with the powerful directive within me that arises whenever I close my eyes and take a deep breath. The internal instinct that speaks so clearly whenever I connect to our common humanity tells me that FORGE is onto something special, and I must help it flourish. Period.
And so I remain here in Oxford in flux – awed, humbled, and floored, yet simultaneously convicted, confident, and driven. I recognize the beautiful opportunity presented to me, and I recognize that the challenges I’ve overcome to be part of this fortunate group of 800 individuals pale in comparison to the challenges overcome daily by Africa’s cadre of emerging social entrepreneurs. And yet, here I am. Doing the best to acknowledge and compensate for my own weaknesses and selfishness, and still take full advantage of the opportunity for FORGE.
So this is my first Skoll World Forum, and I'm feeling very blessed. I arrived in London this afternoon and will be heading to Oxford in the morning for the pre-conference events hosted by the wonderful people behind Ashoka’s University Program.
Given the incredible opportunity presented by having so many inspiring and experienced people in one place, I want to take best advantage of the forum for FORGE. I have a four main objectives:
Connecting with potential investors and funders interested in FORGE’s model of supporting social entrepreneurship in African refugee camps
Connecting with other organizations facilitating community-driven solutions to the cycle of poverty and conflict
Adding FORGE’s voice and perspective on social change to the conversation on global solutions, and spreading understanding and awareness of our model for locally-devised solutions
Building my own perspective, skills, and understanding of how to maximize FORGE’s efforts for social change
Yes, that’s a big agenda, and yes, I’m nervous. In order to prepare, I’ve been ‘pre-networking’ by scouring the awesome Connection Finder built for the forum by Asset Map (a project of the prolific Mr. Nathaniel Whittemore). From this cross-searchable directory of all Forum attendees, I’ve composed a list of the top 65 people I’d like to meet. I figure I’ll be lucky if I actually meet 20 of them, but it’s better to be prepared, right?
I'll be posting updates and coverage of the forum via twitter (@Kjer), and will be blogging as time permits. You can follow what's going on in realtime with the twitter hastag #swf09, or just click here for a good list of people tweeting from the Forum. And wish me luck!
This is the eight in a series of the Top 10 Things I've Learned About Transparency. You can read the rest of the posts in the series below.
Lately, I’ve had a lot of people asking me for tips on blogging. I’m no expert, but the one thing I have to recommend is this: take time thinking about what attracts you to the blogs that you read most regularly (and your favorite posts within them). Then ask yourself, how can you provide similar value?
I’ve done this for my favorite blogs, and realized that I can generally fit the value they provide into 4 main categories:
1) Informative: news, updates, statistics, gossip, etc, preferably with a bit of evaluation or commentary (for me, the Daily Entrepreneur series on Change.org’s Social Entrepreneurship blog, the link round-ups on PhilanTopic, and admittedly, even PerezHilton)
2) Practical: provides useful tips & recommendations (Beth Kanter for social media, or Zen Habits for simple productivity)
3) Thought-provoking: offers a unique perspective or a new way to think about issues (I love From Kala (by a FORGE Project Manager), Blood and Milk, and Wronging Rights)
4) Sector-progressing: lessons, insights or conversations that build the sector’s intellectual capital, shifts the discourse, & offers actionable alternatives (Paul Brest’s blog, Aid Watch, and Tactical Philanthropy).
Of course, the best blogs (including all that I’ve mentioned) have content that span several of these categories. And occasionally you have a blog like Seth Godin’s, which expertly covers them all (maybe least of all informative, but that’s also the easiest to value produce).
My last post talked about the importance of building an audience and meeting people where they are. The point of this post is to say that if we want our transparency to gain any traction, it has to come in a form that others find valuable. Unless you are a celebrity, just talking about won’t be enough to get most people to listen. Rather, we all must learn to talk about ourselves in a way that others find to be informative, practical, thought-provoking, or sector-progressing. That’s where transparency stands to create the most value – for everyone.
This post is the seventh in a series of the Top 10 Things I've Learned About Transparency. The rest of the series can be read below.
You know those people that open a wordpress or blogspot blog and post everyday, while only receiving a few visitors? That’s great for personal expression, but when it comes to the time tradeoff decisions of running a corporation, it’s a worthless endeavor. As I said before, transparency without action is just another form of egocentrism. Similarly, transparency without an audience is just another form of navel gazing. For it to be useful for your endeavor and for your field, you must build an engaged audience that participates in the conversation.
For the first two years of running this blog on SocialEdge, I put almost no energy into promoting it. Looking back, it could have been one of my greatest communication tools. Fortunately enough, being a part of the fantastic SocialEdge network, I had some built-in promotion that drew (at least some) eyes to the site. But we never spent a moment on Twitter, Facebook, other blogs, etc. trying to bring people into the conversations.
It wasn’t until Sean Stannard-Stockton of Tactical Philanthropy took note of my blog that things started to take off and my audience started to grow. I’ve since discovered that the blogosphere is a crazy, incestuous world where once you’ve gained a foothold, your voice can be multiplied exponentially. And its not until you get people engaged that the benefits can start accruing, for yourself and for the sector.
But you can’t wait for people to come to you – you have to meet them where they are. I’m almost embarrassed about how (relatively) long it took us to get on Twitter**, to start using our Google Readers effectively, and to start establishing ourselves as a voice in the field. Unless you already have a large audience that’s easily engaged, plan to spend (or have someone on your team spend) at least as much time building an audience as you do “practicing transparency” through your blog or other measures.
After a month-long blogging break, the following is the sixth in a series of the Top 10 Things I've Learned About Transparency
Because we naturally expect organizations to talk about their successes, we tend to only hear the word “transparency” applied to situations in which organizations talk about their challenges or failures. But it would be a huge mistake to equate transparency with the sharing of negative information. Transparency does not mean being willing to be open about problems - it means being willing to be open about anything.
If you are to take “transparency” to mean “a willingness to show your warts” you are going to end up with an audience that thinks that you are a pretty ugly duckling. And if you only use your voice to talk about the things that go wrong, you will soon become the boy (girl?) who cried wolf.
To me, transparency means “a willingness to show who you are, warts and all”, which is very different. Nonprofits wouldn’t be doing what they do if they didn’t have a lot of very positive things to communicate. This work is hard, it is full of ups and downs, but at the end of the day, we have a wealth of things to be positive about. The good comes along with the struggle and the uncertainty – it's all part of the package. For transparency to be real, it’s critical to paint a holistic picture.
The best part? What you say about your successes will be viewed much less skeptically in light of your challenges. No one trusts perfection – just ask Angelina Jolie.
This blog is the fifth in a series of the Top 10 Things I've Learned About Transparency. You can view the previous lessons below.
With all the recent moves of the new Obama administration, transparency has been front and center this past week. With all the positive press lauding the practice of transparency, I think it's important to remind ourselves that transparency is a means, not an end. Rather than a goal in itself, transparency is a leadership and collaboration tool. It's a way of doing business that I believe can help companies and organizations to communicate and achieve their desired goals. But talking, no matter how openly, is worthless without action.
It should be painfully obvious: walk the walk before you talk the talk. But these days, with the countless ways to broadcast ourselves, it is perfectly possible for social entrepreneurs to spend all their time marketing themselves online (whether or not people are actually listening). As such, it must be said that taking action to maximize the effectiveness of that organization, product or service MUST come before talking about it.
Especially in the early stages of an organization or venture, you need to be spending the vast majority of your time actually doing what you are working on rather than talking about it. As an organization evolves and has more substance to report on, public communication becomes more and more important because it has an actual impact. By that time, you may have built a management structure and have more of your time freed up for public relations. But when I see someone who purports to be starting a nonprofit venture spending their entire day blogging, digging, and tweeting, I'm gonna get suspicious about your motivations. Organizations are built through action. If you aren't spending 90% of your time implementing, you shouldn't have that much to talk about.
So as the hype factor around transparency grows, we all need to remind ourselves that transparency is a complement to our actions, but never a priority over it.
This blog is the fourth in a series of the Top 10 Things I've Learned About Transparency. You can view the previous lessons below.
In many ways, practicing transparency is a time-consuming process. You have to build an information repository, update it consistently, be available to engage in dialogue and respond to questions and concerns, and make sure that your data is in a form that is publicly accessible. Depending on how naturally on-top of data collection and reporting an organization is, this takes a varying degree of time. And as we all know, time is not free.
However, I’d argue that when done well, transparency can actually lead to significant efficiency gains that more than offset the extra time the organization spends on implementing the processes.
Think about all of the individual stakeholders, donors and grant-makers with whom every organization has to go through basically the same vetting process time after time. These stakeholders or potential stakeholders want to know your current plans, financial situation, the processes and results of your monitoring and evaluation, your current project successes and failures, etc. It takes significant amounts of time and energy to answer these questions individually.
But what if all that information made public and easily accessible? Stakeholders and potential stakeholders would be able to find all the answers they were looking for (and more) without needing to directly engage the nonprofit’s time. Instead, they could use more of their time with stakeholders to plan and actualize their shared goals and activities.
In FORGE, we’ve already started to reap the returns to transparency through greater shared understandings. Conversations with stakeholders that would typically begin with significant background discussions and Q & A now progress much faster into substance and action. As a result of our stakeholders having a greater basic awareness of where FORGE stands (based on this blog and the constant project reporting on our website), we are able to both save each other precious time and cut to the chase of achieving our shared goals.
I would urge other organizations to think about whether their fear of the time required to actively practice transparency might just be offset by these same type of efficiency gains. We all know what it’s like to answer the same questions…over and over and over again. Imagine if most of this basic background was publicly available, and stakeholders only needed to come to you with specific substantive follow-ups? That doesn’t just save time, it saves sanity!
This blog is the third in a series of the Top 10 Things I've Learned About Transparency. You can view the previous lessons below.
When you tell the world about your imperfections, you are naturally going to open yourself up to all sorts of questions, critiques, and feedback. When people see a problem, they want to get to the root of it. With FORGE, we had people pouring over our website, evaluating the quality of our board, and asking a lot of tough questions (Why did they change their funding model? Are they spending too much on salaries? Is there too much emphasis on the founder? What could they be doing better? And so on).
FORGE had to be ready to respond to and engage in such scrutiny calmly, even when it seemed totally off-base. We had to provide the details of how and why we made decisions. And when the comment hit a nerve of something that we needed to improve, we had to say so. Even the feedback that seemed completely inaccurate was valuable, because it pointed us to the ways in which we weren’t adequately communicating our structure, philosophy, or strengths.
I think that this kind of engaged scrutiny and feedback loop is extremely helpful for the nonprofit sector. In the same way that students will naturally spend more time on an assignment that will be graded than one that won’t be, the increased scrutiny that comes with transparency creates a higher expectation and incentive for performance in the nonprofit sphere. In order to be comfortable with intense scrutiny, the organization must be confident that they have been responsible in decision-making and can adequately explain themselves to their constituency.
If transparency became the norm, I believe that nonprofits would feel more compelled and incentivized to ensure that all of their proverbial ducks are in a row and that they can justify all of their actions and expenses along a clear metric of change. Not everyone will agree with every step they take, but a mutual respect and understanding can be built and a meaningful dialogue can be opened. Isn’t this a huge step in the right direction?
This blog is the second in a series of the Top 10 Things I've Learned about Transparency - which I take to mean being open, honest and receptive to feedback about the challenges, successes, failures, and mistakes that all organizations encounter. I came to these lessons through the attention that my blog received for being a model of nonprofit "radical transparency." I hope they prove useful for others thinking about transparency as a concept and as a tool.
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Fact:FORGE was transparent about its financial situation and the reasons behind it
Fact:FORGE subsequently closed its funding gap
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The correlation between these two facts has been the subject of substantial speculation. Here are the three main hypotheses:
The Cause & Effect Hypothesis: FORGE’s transparency allowed it to close the funding gap
The First-Mover Hypothesis: The ‘buzz factor’ surrounding FORGE being a first-mover in transparency, rather than the transparency itself, allowed FORGE to close the funding gap
The Non-Correlation Hypothesis: FORGE’s closed the funding gap for reasons other than its transparency
My opinion? All of the above.
While we’d all like to believe that there is a simple magic bullet to be found in FORGE’s story, our experience speaks to there being several confounding reasons that ultimately allowed us to emerge from our crisis.
Firstly, a large part of our influx of funding did come from simple ‘cause and effect’ – the transparency allowed us to raise money that wouldn’t have otherwise come in. One of the primary benefits of transparency is that people find out what you need and can ask themselves if there is anything they can do to help. It created a sense of urgency that got many supporters to go above and beyond what they would have done for us if we were cruising along as usual. If you aren’t upfront about your shortcomings, problems, and needs, people will assume that you’ve got it all under control. Furthermore, transparency builds trust and investment. Many of our past supporters actually gained more confidence and faith in us because they learned more about FORGE and our values in the process, which probably led to larger gifts than they would otherwise give.
Now, FORGE also benefited from being a ‘first-mover’ in radical transparency, and thus received attention for the novelty of an organization coming out publicly and discussing its weaknesses. To be clear, what people found ‘radical’ about FORGE’s story was not the simple fact that we said we were in financial straits, but rather that we were willing to discuss the reasons and weaknesses behind it and what we were doing to change those things. For demonstrating this new kind of paradigm, we attracted attention of people who wanted to support greater transparency in the nonprofit sector, even if they had never before considered giving to African refugees. If transparency someday became the norm, a transparent approach may not get the same kind of transparency-focused press that FORGE has recently received, but it will likely get people to step forward and help out or advise that wouldn’t have otherwise.
And finally, its important to note that FORGE also received substantial support from people who either didn’t know or didn’t care about what was going on online, but simply wanted to contribute to us. In my experience, it’s always dangerous to try and attribute one direct cause and effect to any outcome. Yet, I do believe that transparency was an important aspect of how quickly FORGE was able to raise the necessary funds this time around. But it wasn't the only aspect. AND, the story isn’t over - it should be interesting to see how our fundraising results keep up in the next few months. Now that our crisis is staved, is it going to be that much harder to keep going?
Over the past few months, my blog has gotten attention as a model of nonprofit "radical transparency" - which I take to mean being open, honest and receptive to feedback about the challenges, successes, failures, and mistakes that all organizations encounter. This had led me to do a lot of thinking about transparency as a concept and as a tool: where it can do good, where it can go wrong, and how it can be best used to advance the sector. I've decided to compile a list of the top 10 Things I've Learned About Transparency, which I'll be putting up throughout the next 2 weeks.
As readers of my blog know, FORGE successfully emerged from the financial crunch that had us all preparing for the worst. We are far from done worrying about what will happen to us in 2009, but the immediate threat of closing down in February is at least conquered. In the end, about 40% of the donations that helped us close that gap came from donors who had learned of FORGE through the "transparency" buzz surrounding my blog. The rest came from the generosity of our existing donor base who reached deeper into their pockets to help us in a time of need.
Because of this short-term 'success' at closing our funding gap, I've had several people and organizations approach me to ask how they might be able to replicate the transparency strategy. And yet, FORGE’s transparency does not mean that any nonprofit can go out, be transparent, and expect to have services thrown at them. Transparency is not a magic bullet. That’s not to say, however, that transparency isn’t a helpful value to adopt - both for the organization and for the sector at large.
Over the next two weeks, I'm going to share with you the Top 10 Thoughts on Transparency that have coalesced for me in the past 3 months. Here goes with the first one:
Lesson 1: Transparency is a Value, not a Strategy
The first thing I've told people who've asked me how they can apply transparency to benefits their own ventures is that you can’t just ‘choose’ transparency as a response strategy to a certain situation - people will see right through that. In order to be trusted and to have your message resonate, you need to build and maintain a track record of openness & honesty in all different situations.
In order for people to respond on a visceral basis to an organization's "transparency", they must be able to trust the messenger. In order for them to trust the messenger, the messenger must have a track record of being transparent and authentic in cases where it was less urgent or potentially adventageous to be so. Therefore, an organization cannot just turn to 'transparency' as a strategy to help them get out of a crisis - they must first show that it is a value throughout the organization.
The public's inherent distrust of strategies came up repeatedly during the past few months as FORGE generated attention for its "radical transparency". Many people who were not familiar with our background expressed the concern that FORGE coming out publicly in response to a crisis situation did not represent true transparency. In order to be able to respond to that legitimate fear, it's been really important to be able to show the ways in which transparency has been a value that we've demonstrated throughout our history. We may not have had a crisis like this before, and our transparency may not have generated this kind of attention before, but we’ve always been straightforward about both our successes and our failures. For example, we post each project's Monthly Progress Report in full on our website without removing the parts about the project's problems, issues, or concerns. In my own blog, I've talked about issues we've faced and difficult decisions we've had to make. And when people ask questions or express concerns, we are there to answer them frankly and publicly.
While we never actually called it transparency until recently (it is a bit of a buzzword), the value of being open and honest about our successes, failures, mistakes and lessons is one that has shaped every aspect of FORGE and its evolution. Five years in, it ended up helping us get out of a crisis in a wholly unexpected way. And yet, I hold that transparency is not a tactic that can be turned to when times get tough. Because in the end, people are rightly suspicious of being taken advantage of. They must trust you to invest in you. And trust can only be built through consistent action over time.
The following blog post is written by See Change, a program evaluation firm that uses a wide spectrum of research tools and methodologies to identify impact and outcomes and help organizations distill and align their ideas and strategies.
Recently, See Change's Principal, Melanie Moore Kubo, Phd, approached me with the generous offer of applying See Change's services to evaluate FORGE's impact and theory of change and to make recommendations for how we can better communicate our outcomes and strategies to the public. I of course accepted. And of course, the process will be public and transparent. Below is the first of See Change's blog posts as they start examining our work.
We have been reading about FORGE’s situation in the blogosphere now for a few months, and, like many people, have hoped that FORGE will solve their fiscal problems and have the chance to carry on. But certain questions about what’s happening with FORGE have dogged us – so much so that we made our own offer of pro bono consulting. See Change is a research and evaluation firm, and after reading post after post about whether FORGE will make it, or whether donors will contribute to the organization, our question has been, “Why not simply evaluate FORGE?”
No doubt many donors are moved emotionally by FORGE’s model, the plight of the African refugees who are their target population, and perhaps also by Kjerstin and her staff’s initiative and pluck. These donors are probably already giving to FORGE, and will likely continue to, as long as FORGE staff can find them (such as by implementing Curtis’s recommendations about developing a systematic and sustainable fundraising plan).
But there are potentially even more donors – individuals and especially foundations – who may be moved emotionally, but who don’t let their emotions alone determine whether or not they write a check. For many of us – though still far too few of us – our pragmatism interacts with our emotions. We want to help a deserving cause, but only if our contribution of time or money will be used wisely and well.
Kjerstin’s experiment in radical transparency was risky in that it may have raised concerns among more pragmatic, even cautious donors about the fiscal and fundraising strategies that FORGE has employed. Though welcome, such honesty may have encouraged some donors to sit on the sidelines while more evidence is gathered. The subsequent consulting support the organization has received may have gone a long way to convince these pragmatists that FORGE’s fiscal house can get stronger. But using money wisely and well in the social sector is only partly about good fundraising and money management. It also relies on the effectiveness of the intervention being used to create social good. Despite the solid face validity of the program model, we still don’t know if FORGE actually works. Does it actually improve well-being for African refugees? Beyond improving well-being, does FORGE actually develop skilled refugee leaders who will use their skills in new situations? Even if FORGE is successful at creating these types of outcomes, what is the likelihood that these outcomes will make a significant difference in African communities over the long term?
Our interest as an organization is to provide evidence about effective interventions, so that donors can know how and where to deploy their resources for the greatest social return, and so that non-profit organizations can know how to improve their practices to get closer and closer to their goals. We believe that an essential next step for FORGE is to develop an evaluation strategy, so that they can begin to provide evidence about their effectiveness to the world, and so they can find out about ways to get even better at the work they do. We will work with FORGE to set up just such a strategy in the coming months.
FORGE is not a large enough organization, nor are data collection conditions on the ground adequate to support the most rigorous evaluation approaches, such as the use of randomized comparison groups. When we first suggested to Kjerstin that an evaluation would be a useful strategy for FORGE, one of the challenges she mentioned was the “data-poor” environment presented by remote refugee encampments. Indeed, collecting reliable data in such a setting presents significant challenges to systematic research. However, FORGE’s situation is not that different from that of many non-profit organizations, even in the U.S. Getting good data is difficult almost anywhere, and designing a smart study is as much art as science. Most non-profits will never have the resources or logistical support to afford a methodological “Cadillac.” Yet there is still much that we can learn about FORGE and its program model from a wide range of research strategies.
There are four areas of work See Change will pursue with FORGE:
·Developing a theory of change
·Identifying priorities and methods for conducting a process evaluation
·Identifying a small handful of “best metrics” for an outcome evaluation
·Helping them use their stories as data
In the spirit of transparency, we will post regular updates about our work with FORGE staff, and ultimately, our findings. Up next: examining FORGE’s theory of change.
Wow, so much to report on at the end of the year.The chaos of the past few months has finally started to coalesce.I feel bad that I haven't posted any updates in the last weeks. They have been a roller coaster. My mother has been ill and away receiving treatment in Arizona, where I went to visit her the week before Christmas.It’s been one of those crazy times that we all face at some point in our lives when the demands from all directions are coming at fever-pitch levels.And yet, contrary to expectations just a few months ago, FORGE is going to be closing out 2008 on a positive and hopeful note.
So where do I start?Firstly, I want to express how much of a pleasure and honor it has been to work with Curtis Chang from Consulting Within Reach.Curtis has great perspective and a simple knack for distilling goals into deliverables and distinguishing between priorities.If there is one thing I’ve learned about Curtis, it’s that he believes in efficiency and prudence!As a nonprofit leader always trying to juggle a dozen balls, it’s been great to have his feedback and advise on what is and isn’t the best use of my time.
As a management team and as a Board, we’ve had some time to digest Curtis’ recommendations and have already started taking action on many of them (for example, growing the board and finding a person to take admin/finance responsibilities off of my plate).I’ll save the details for a further post, but we have a lot of promising organizational developments in the works.
Now, for the really good news – in the past month, donors have stepped forward to allow us to effectively close the funding gap for 2008.In a surprise turn of events, a foundation has generously offered to provide us with a $20,000 matching grant followed by a $30,000 administrative support grant in 2009.In response to the challenge, many of our past supporters rallied with second and even third large donations for the year.We had until February to raise the $20,000 matching, but we were actually able to cross the threshold today.The foundation has been very progressive and generous with its terms, and in the spirit of transparency even published its reasoning for offering the grant.
Of course, this story is far from over.2009 is going to be an unpredictable year for us all.We can proudly say that we made it through the thick of 2008 and will be able to send more funds to continue our programs into 2009, but we’ll need to stay extremely cautious and diligent to ensure that we leave 2009 in a stronger position than 2008.That is what so many people have bet on when they decided to take a chance to invest in us in these risky times, and that is what we are committed to delivering.
Thank you to the whole social edge community for your support and feedback through this (ongoing) process. I am looking forward to many new conversations and explorations in 2009. Right now, our challenge as a sector is a great one: working together to develop creative and effective strategies that will keep those who are already most vulnerable from bearing the brunt of our economic reality.
This is an executive summary of a fuller report outlining the steps FORGE needs to take to pursue long term sustainability.
This entry is from Curtis Chang, CEO of Consulting Within Reach (CWR). CWR has recently agreed to provide pro bono services to FORGE. As part of this experiment in radical transparency, Social Edge and Kjerstin have invited Curtis to regularly share about the experience in this context.
Introduction
In the beginning of November, I was engaged on a pro bono basis to provide FORGE with a road map towards long term sustainability. You can read here for more about how this process got started. The goal was twofold: 1) give FORGE actual guidance going forward and 2) give potential donors a sense of the organization’s long term prospects if it survived its immediate financial crisis.
As has been true during this brief experiment in radical transparency, Kjerstin and I have agreed to release this document for the benefit of our sector’s shared learning. You are invited to engage with your questions and comments. I would recommend first reading the full report to get a more comprehensive picture of the issues involved.
1. Overview: FORGE as a pathfinder
FORGE has found a new approach to African refugee camps that seeks to transform these “warehouses of pity” into opportunities for education, job training, and other forms of development. As far as can be ascertained, there is no other entity – either as a NGO or formal government body (including the United Nations) – that is pursuing this paradigm.
FORGE thus has already succeeded in the main task of a “pathfinder.” By “pathfinder,” I am referring to the way that a large convoy figures out where it needs to go when it finds itself lost in new territory and uncertain of how to proceed.
Two risks a pathfinder especially runs are a) running out of supplies; and b) losing touch with the main body. Ironically, a pathfinder can succumb to these problems even as it succeeds in its main task: the new route may be so far from the well worn path that the pathfinder ventures beyond the radius of safety.
FORGE has yet to learn how to manage these risks in an optimal fashion. It discovered its promising new route, but with the danger of a) running perilously short of funding and b) neglecting to network enough with more established parties.
Its immediate difficulties are traceable to its inexperience in balancing the rewards versus risks inherent in the path finding endeavor. I have elsewhere pointed out specifics of this inexperience, such as its messaging to potential donors, or the funding model.
However, it is important to reiterate that these difficulties only surface meaningfully for a pathfinder who is fulfilling its core mission: forging ahead far beyond where most felt it wise to stop. The ones who stay well within the radius of safety are rarely the ones who discover the new route.
2. Critical needs: fundraising and networking capacity
Now is the season for building FORGE’s own financial supply line and its relationships with the main body.
This reorientation is especially critical for Kjerstin. She has spent the vast majority of her time on program issues. By her estimation, less than 5% of her time has been spent on networking, and only slightly more on direct fundraising. In the future, she needs to spend more than 60% of her time on these functions.
While the priority of fundraising should be obvious, it is worth noting here why networking more broadly is also very important. There are three main reasons:
FORGE needs more outside validation and legitimacy. This lack is most evidenced by the absence of any established expert in the refugee field on the board. Addressing this problem requires that Kjerstin get out there regularly in the settings where thought leaders in the field congregate.
The organization needs to broaden its donor base, especially with foundations and high net worth individuals. This is only going to happen by developing a broader set of relationships than the ones FORGE currently owns.
Finally, the role of a pathfinder is to bring its findings back to the main body. It may very well be that in the long term, FORGE’s most scaleable influence will not be in the number of refugees it directly serves. I am unsure given all its limitations about how high its numerical growth ceiling can be. But I am convinced it can and should diffuse its ideas. For instance, it may be that FORGE will make its ultimate contribution by getting the United Nations Commission on Human Rights (which oversees most of the relief work in the camps) to incorporate aspects of its developmental model.
3. Short run tactic: pulling back its programmatic commitments
Developing funding and partnership capacity will take bandwidth and resources. FORGE needs to think of the next 1-2 years as a season where it maintains just enough of a presence in the camps to continue refining the model and building legitimacy, but pull back how far it extends itself programmatically.
The full report lists some of the short tem steps FORGE can take in this regard.
FORGE’s own calculations indicate that some combination of these steps could bring its operational budget to $265,000, about $135,000 less than this year’s budget. This will give them some more short term breathing room to build the capacity necessary for the long run.
4. Building the financial supply line
FORGE suffers constraints with three of the four main potential revenue streams:
Foundations: FORGE has experienced significant disappointment here. Despite devoting almost a full FTE to grant writing, it has made only minimal gains.
Government: According to Kjerstin, there is little available from the United Nations given FORGE’s model of focusing on development versus relief.
Corporations: This kind of funding is most viable when the issue intersects with the actual business in some meaningful way, or it is a high visibility issue in the mass culture. Sadly, no company looks at African refugees as a market and the overall issue has low cultural visibility.
This obviously places great weight on FORGE’s ability to do individual fundraising.
5. What FORGE needs for individual fundraising
It is in this area above all else that FORGE needs to obtain some immediate outside expertise. The staff team (including Kjerstin) and the board lack the necessary level of strategic thinking, experience, and/or bandwidth to conceive and execute a fundraising plan at the scale required. Organizational infrastructure needs to be developed in fundamental areas like donor management software and donor cultivation practices.
While providing an individual fundraising plan is beyond the scope of my work here, I will offer some guiding thoughts on a) the role of the board and b) playing to FORGE’s strengths.
a. The Board
FORGE needs to reconstitute its board. The current board has served well its purpose in the initial launch phase as it has given Kjerstin a lot of room to maneuver. But the current board is missing three types of individuals critical for fundraising:
C-level executive business leaders
Refugee policy expertise
Nationally (or at least trans-regionally) networked individuals.
b. Playing to FORGE’s strengths
I have written elsewhere that FORGE has an original “fundraising soul,” one that was born in the college student world. Clearly, it has to expand beyond that world. But it can still retain a connection to that student world in a way that actually fuels its expansion.
For instance, FORGE has a cadre of individuals who in the last five years took a year off of school to work in the camps, raised money for FORGE, and are now back at school or have recently graduated. This is an army of potential evangelists for FORGE. But they need to be led and equipped more proactively than they have been.
My answer to this question really depends on what one means by “FORGE?”
If the question is “Can FORGE as an organization make it?” then I must confess that I have no idea. Pathfinders do suffer a high mortality rate. FORGE faces some significant challenges. The plan outlined above requires some good execution, but truth be told, it also depends on good luck. For an organization at its life stage, a chance encounter with a wealthy individual here, a new government contact there could make all the difference.
If the question is “Can FORGE as an approach make it?” then I would answer, “I sure hope so.” The problem of African refugees is not going away and getting worse. Refugees are staying longer and longer in these “warehouses of pity.” And an entire generation of potential leaders in those communities is being wasted. A new route forward is desperately needed. So the paradigm of treating the camps as development opportunities where the refugees themselves lead the projects deserves a fair chance to gain wider traction. Personally, the second biggest reason I have invested my own resources is that I want that idea to be disseminated, regardless of what happens to FORGE as an institution.
Finally, if the question is “Can FORGE as a group of individuals make it?” then I would answer “Of course.” FORGE’s greatest strength is the passion and commitment of its people, starting with Kjerstin but extending to the US and international staff and the board. Those assets are both enduring and what economists call “fungible:” easily transferred to other contexts. And in that vein, I have told Kjerstin on numerous occasions that FORGE is most likely just the first of several causes she will spearhead over the course of her career. There are few better long term investments, in my book, than giving an obviously talented individual like Kjerstin her first shot at social entrepreneurship. This is the biggest reason I have given of myself to FORGE for this season, and have been quite glad for it.
P.S. Kjerstin and I will wrap up this project in early January and I'll weigh in one last time with concluding thoughts on this experiment in transparency.
So, its been about 7 weeks since I first started talking about FORGE's financial position and how we planned to get out of it. Since then its been quite a ride - a lot of people have stepped forward to offer their help, and even more have stepped forward to offer their opinion. We have welcomed it all.
Its been hard trying to balance both the public communications side and the nitty-gritty raise-the-actual-funds-side, but we've been working hard to do both. I plan on writing more about what this whole "transparency" thing means to me (there is a lot to say), but for the past two weeks our team has been focusing solely on raising the physical funds needed. That is, ultimately, our job.
I'm happy to announce that as of today, FORGE has raised over $55,000 of our $100,000 budget shortfall. This has all come in the last 6 weeks, and has been primarily from private donors (over $40,000). We have raised over $20,000 of that from people who have already supported us this year that were generous and passionate enough to reach deeper into their pockets, and thus have accessed a $10,000 matching grant from a community foundation. We've also received a $5000 grant from Operation USA for our community health program in Kala and a $2000 grant from the Rhodes Scholar Southern Africa Forum for our Peace Education and Computer Training program in Meheba.
We are officially over the halfway mark in filling our 2008 budget gap. And yet - we still have our work cut out for us. Filling the budget gap is only the first objective - the real prize is making sure that our funding model is "sustainable" and scalable to allow us to continue creating the impact that brought us all together in the first place.
Why copying the internet fundraising sensation may be dangerous for your (fundraising) soul
This entry is from Curtis Chang, CEO of Consulting Within Reach (CWR). CWR has recently agreed to provide pro bono services to FORGE. As part of this experiment in radical transparency, Social Edge and Kjerstin have invited Curtis to regularly share about the experience in this context.
I first started following their story and Matthew Flannery’s blog here on the Social Edge at the end of December 2006.
Their approach of raising funds by connecting individual lenders to micro entrepreneurs seemed like a revelation to me at the time.
As I’ve described elsewhere, going to the Kiva site has even become a small family tradition. On Christmas, we peruse the site and my two young daughters get to choose entrepreneurs and the loans our family will make.
It was no surprise to me that they’ve become the toast of the town, so much that Time recently named it one of the 50 best sites in the world. It’s become one of the definitional social enterprises of our new online era.
That’s why Kiva has become so dangerous for so many young social enterprises like FORGE.
One program officer at a leading foundation for social entrepreneurs related to me how often she hears individuals enthuse about how adopting the KIVA model will radically improve their prospects. I also hear this constantly from clients and potential clients wanting to do the same and hop aboard the online fundraising train.
But copying success can be dangerous.
A brief cinematic digression on copying success
In 1977, I sat as a 9 year in the darkened movie theater of the Golf Mill shopping center in Niles, Illinois, watching the final flickering scenes of the triumphant victory celebration in the rebel hideout. I hung on to the final echoes of Chewbaca’s celebratory roar.
I thought the world had changed forever.
Coming from a Chinese immigrant family, I hadn’t seen very many movies at that point; I’d only been recently allowed to go to the theater without my parents. So after Star Wars, there was this tickling anticipation in me of the wonders to come. What fantastic stories of space adventures would be next?
Here’s what came next:
Flash Gordon (1980)
Battle Beyond the Stars (1980)
Krull (1983)
The Last Starfighter (1984)
2010 (1984)
Bombs. Not just bad movies, but budgetary disasters. Studios invested huge sums in cutting edge special effects technology, directors built exotic sets replicating all manner of space vehicles and extraterrestrial locales, and there was a run on midget actors who could fit into robotic outfits.
Yet I couldn’t understand why these movies all failed to capture for me (and for everyone else) the allure and magic that was Star Wars.
Everything about Star Wars seemed to be there. And wasn’t.
Channeling my inner Roger Ebert now in my middle age, I’ve now come to see that what those Star Wars wannabees had copied was the technological shell of Star Wars. But what couldn’t be captured was the soul of that landmark film.
Star Wars wasn’t just a special effects driven space adventure. As creator George Lucas has explained, the soul of the story lay in his deliberate borrowing of some ancient archetypes of the Western storytelling tradition, especially as depicted in writings of the theorist Joseph Campbell.
Moreover, in its cinematic nature, Star Wars brilliantly fused the soul of several classic genres. It mixed in motifs like the American Western (and Japanese samurai) theme of disparate individuals coming together for a mission – and threw in elements of the classic romantic triangle. It played out Neil Simon’s Odd Couple relationship between the neurotic and the practical: the fact that Felix Unger shuffled about in gold colored metal and Oscar Madison only beeped and whistled was secondary. Most of all, in the cynical and shrunken spirit of the post-Watergate era, it reignited our sense of the grand epic of good versus evil.
The technological shell of Star Wars was important and even necessary for its blockbuster status. But it wasn’t sufficient. The high tech shell wasn’t a recipe for success, as those subsequent movies proved.
The Soul of Kiva
My point in this digression is that when you look at Kiva, you have to look at the soul behind the technological shell.
The soul of Kiva, in my view, lies in the fusing of four elements:
the fact that it is asking for loans that get repaid (and potentially re-loaned), not for donations
its model of regularly humanizing the need to the tale of a sympathetic (i.e. hardworking, enterprising) individual
facilitating a one to one giver to recipient relationship
a website that enables the giver to choose the recipient
Of those four elements, I would argue that the fourth technological factor was the least important. It wasn’t unimportant, but it served mainly as the shell for the first three truly revelatory elements.
FORGE very self consciously modeled its new funding model on KIVA. KIVA, along with other sites like Donors Choose and Global Giving, were their inspiration. And Kjerstin told me that the team carefully studied the best practices of these forerunners.
This year, it invested $30,000 dollars into building its current site that enables donors to choose a specific project to fund. Their hopes for the year was to recoup that investment, and to build on it as a cornerstone of their fundraising in the future. FORGE only launched the site mid year (it has so far raised a third of the targeted amount), so it is too early to pass even short term judgment on the site as a success, failure, or somewhere in between.
My concern here, however, is what FORGE can expect from the site going forward in its long term sustainability plans. For the long term, while FORGE didn't expect to be as equally successful from its online strategy as KIVA, it obviouslly did want to emulate some portion of the success. What is the likely size of that portion?
You can detect how much KIVA was on FORGE's mind by looking at their respective home pages as both were launched [sidenote: FORGE has been planning to change this shared graphic identity]:
Yet that borrowed graphic highlights precisely the aspects of KIVA’s soul that FORGE didn’t – and couldn’t – copy. KIVA’s arrows convey the loan aspect as it graphically depicts the return of those funds. It also conveys this sense that there is an individual on the other end. And it conveys the idea that there will be dynamism to this one to one relationship.
FORGE can’t replicate any of these aspects. A donation is different than a loan. A relationship to a project is different than to a person. And the dynamism of a project is different than the dynamism of an individual. FORGE was aware of these differences - it's not like they went into this endeavor as a mindless copycat - but as it plans for its future, it must appreciate just how fundamental these differences are.
The Soul of Funding Models
When I’ve described FORGE’s fundraising story, some critics have replied that the real lesson of FORGE is that you can’t just build a great site, but you also have to have a marketing strategy to drive people to the site. And that’s been the lesson that Kjerstin herself has voiced.
I don’t think that’s quite it, though. Sure, marketing to drive web traffic helps. But it’s not like Kiva consciously executed a saavy marketing campaign to drive their first burst of traffic. They got free marketing in the form of first, a Frontline news piece, and then later on in appearances like on Oprah.
Why was media attracted to them in the first place? I think it was because the media could tell a story that had winsome characters, relationships, and plot.
The archetypical story of KIVA has extrovert Jessica and introvert Matthew visiting micro-enterprises; Jessica especially wondering how they could connect their friends to these wonderful entrepreneurs; and then Matthew coming back to his job as a web developer. You can fill in the rest of the plot and how everything connected.
In almost every free marketing news exposure, that story got retold. And in many ways, their funding model served as a natural invitation to the audience to participate in the soul of that story. That convergence, I believe, is what made the funding model so brilliantly successful.
A nonprofit’s funding model is not just a purely tactical decision to maximize revenue. Its strengths or flaws can’t be just the product of marketing. And the coolest website can be soulless.
A fundraising model works best when it is a natural extension of the essential qualities of an organization: its founding characters, narrative, relationship to its audience – all that makes a great movie and story.
Recapturing FORGE’s fundraising soul
This doesn’t mean that it was a bad idea for FORGE to build its new site. It has the potential to be a useful tool. But all tools are only useful within their limitations. And a tool is not a soul.
Interestingly, FORGE’s original funding model did have a very distinctive soul. Its archetypical story is of Kjerstin Erickson as a 20 year old junior dropping out of Stanford to go work in refugee camps. She rallies other college students to the cause. Soon, FORGE is filled with other young, idealistic college students doing the same – and raising some key operational funds to keep FORGE growing.
And when those students were fundraising in their home communities or in their dorms, what kind of story were they telling? I bet that many of them at least mentioned Kjerstin’s story. I also bet that there were parents making donations to their kids (while worrying desperately about their safety), just like Kjerstin’s parents financed the organization for a number of years. And when these students returned from their overseas stint, they also repeated Kjerstin’s narrative as they told their college friends and recruited more to the cause.
And when you read the original free marketing news coverage of FORGE, the media repeated that narrative link from Kjerstin to FORGE’s current crop of students.
Now, as I’ve written already, I think from a social impact vantage point, FORGE made the right decision to stop using college students as primary staff in the camps and replace them with the refugees themselves. But I wish I could, with the benefit of hindsight and Obi Wan Kenobi like powers, go back to the point where Kjerstin is staring down the barrel of her funding decision and whisper, “Kjerstin, use the soul, use the soul.”
What would that have meant? Well, for starters, it would have meant moving more slowly and gradually. Organizational souls don’t change very quickly. An organization built on a culture of rallying and recruiting college students isn’t going to develop overnight the skills and instincts needed in the increasingly complex world of web marketing. FORGE certainly needs to expand its donor base beyond college students. But it has to be realistic about how fast it can move and how much it has to learn. A mixed funding model might have been a good way to experiment.
Even as organizations evolve and mature, the soul of an original funding model, like The Force, can still live on in other incarnations. It would have been wise to think if their student network could still have been given a meaningful role to play in fundraising. I’ve been advising Kjerstin to tap aggressively into that network these past few weeks. We’ll see if they can still come to the rescue. I’ll also examine some possible options in the final report.
For now, however, let me be clear: I’m not claiming that if I had been in Kjerstin’s shoes, in the rush and tumult that is the life of a social entrepreneur, I would certainly have had that wisdom. FORGE isn't alone in this: the rush to emulate KIVA is palpable in the nonprofit world these days. It may be that one of FORGE's biggest contributions to the sector in all this is its willingness to serve as a live case study exploring the limitations of that trend.
And who knows, maybe FORGE's site will turn out to be wildly successful beyond my expectations. To borrow from another favorite science fiction series, "Dammit Jim, I'm a consultant not a prophet!" I hope no reader will too glibly point fingers, especially if you haven’t done it yourself.
Even if you have done it successfully, there’s no guarantee that you’ll continue to do so. Even the blockbuster franchise who is raking in all the dough today could find one day that it has lost its soul.
And KIVA, if you don’t believe me and you're reading this, I have three words for you:
The following entry was written by Abby Speight, FORGE's Programming Director, who has been with the organization for the past 3 years. She just returned from a trip to the refugee camps where FORGE works, and shares her perspective on FORGE's situation below...
I just got back from a month in Zambia, where I visited all three of the camps where FORGE works. As I visited our projects and spoke with our staff, it became abundantly clear what’s at stake here. The irony, as Kjerstin mentioned, is that our programming is stronger than ever. FORGE’s ability to make concrete, lasting change in the lives of these refugees is palpable, and I’ve never been so impressed by the expertise and passion of our refugee staff. Yet, I’ve never been so scared that FORGE might not make it through all of this. It’s bittersweet to be knocked off your feet with progress that you know is in real danger of being seriously stunted, or stopped altogether. More than ever (and that’s saying a lot) I’m convinced that FORGE’s presence in these camps is making a critical difference in refugees’ lives and that shutting down our projects would be a crippling blow to these communities – both immediately and in the long run.
In Meheba Settlement I met with Anthony, the refugee leader of one of FORGE’s first projects planned by the refugees themselves. For the past six months, Anthony has been working with his community to develop the FORGE Health Service, a project that will provide basic health treatment and health education to a community that has been without a clinic for almost six years. Typically a quiet man, Anthony’s excitement when he spoke of the project was contagious, and his pride of all that he and his community had accomplished was inspiring. He spoke eagerly about the valuable leadership and business skills he’s acquired throughout this process and the respect and trust he’s gained in his community. But, most strikingly, he felt totally prepared and confident in his ability to spearhead future community development initiatives – next time without FORGE’s help. Anthony is determined that he can – and will – use the skills he learned to solve problems in the future, rather than relying on outside help or guidance.
The impact extends beyond even that. Anthony proudly related to me the importance of his role in the community. He said that by listening to the community and turning their input into action, he had empowered the people of Meheba to speak their mind. He is now approached consistently by his peers who want to discuss their ideas, opinions, and concerns. Because of Anthony’s work through FORGE, the community is suddenly vibrant and proactive, and people are thinking about possibilities rather than problems. He says they finally feel like they have a voice – and they’re using it.
The trip was not all inspiration and progress, though. Part of my mission on the ground was to work with our Project Managers to cut project budgets in half for the next four months. After a few agonizing days, we came up with a plan that will allow the projects to survive on the limited funding FORGE has available in the short term. We had to lay off many valuable employees (more than half in one camp), and supply budgets are shockingly low – most projects in Meheba settlement have less than $20 a month to spend on materials like notebooks, pencils and chalk—the modest resources that keep projects running. The community was hit hard by the news, partly because of the cutbacks, but mostly out of a fear that FORGE is preparing to leave. Refugees are no strangers to abandonment and broken promises. They have seen too many nonprofit organizations come and go. When we told them that the budget cuts were meant to keep FORGE in the camp and not as the beginning of the end, they were, as whole, relieved. “We understand budget problems and lack of resources,” Wakilongo, the Kala Community Driven Repatriation Center Project Coordinator told me, “We just fear FORGE leaving. We can make it work as long as we can work together.”
Since announcing our budget shortfall, we've received over $18,000 in new gifts (toward the $100,000 deficit). We've also received several pledges and committments that we are waiting to see formally materialize. Its been a good start.
In an exciting turn of events, a family foundation has come forward to offer $10,000 once we have raised $20,000 from our past donor base. So far, we've raised over $10,000 of the required $20,000, and we are confident that we will raise the rest. Once this happens, we will be at least 40% of the way to closing the immediate gap that will allow FORGE to continue our work in 2009. It's my belief that the first 40% is the hardest, as it is the early donors who must take the largest risk that we won't make it.
There is still a long way to go. But we've got our nose to the grindstone, and we'll keep plugging away...
How should potential donors conceive of FORGE’s financial situation? Is it still a worthwhile investment?
This entry is from Curtis Chang, CEO of Consulting Within Reach (CWR). CWR has recently agreed to provide pro bono services to FORGE. As part of this experiment in radical transparency, Social Edge and Kjerstin have invited Curtis to regularly share about the experience in this context.
Social Return on Investment
There are so many different ways to look at whether a nonprofit is a worthwhile investment for donors. A hot metric being tossed around in the nonprofit world is Social Return on Investment (SROI). SROI is an attempt to quantify the social impact per dollar given.
Actually quantifying SROI is incredibly difficult. What is the SROI when an at risk child gets mentoring? What calculations do you run? The total cost of illiteracy, incarceration, welfare, and other public costs multiplied by the statistical likelihood that a child without mentoring falls into those outcomes? As you can imagine, there are innumerable ways to cook the books to arrive at any figure you want.
I believe a metric like SROI is better used as a lens, not as a ledger. A lens is valuable to the extent it enables us to look at an organization with fresh insight and lines of inquiry.
In FORGE’s case, SROI is really trying to get at the question: “Is FORGE seeking the highest return?”
Or put more suspiciously, “Is FORGE wasting money?”
Is FORGE wasting money?
Let’s tackle the suspicion first.
FORGE’s annual budget is $400,000. This is for an organization that operates in 4 refugee camps, runs over 60 projects, and benefits 60,000 refugees with just the libraries FORGE has started, not to mention its other projects.
FORGE employs 12 international (mostly Western) field staff who work essentially full time for a year in overseas locations under incredibly difficult conditions. Incidentally, the next year’s crop of these staff is what is most immediately threatened by the current budget crisis.
The salary for each of these international staff? $250/month.
FORGE also now employs over 150 refugees themselves to conceive of new projects, provide entrepreneurial leadership and then manage other refugees. They are given a rare commodity in these camps - an actual paying job – at a pay rate that is the highest FORGE could offer without distorting the local economy.
The salary for each of these leaders? $50/month.
I’ll describe in my next post about FORGE’s US staff costs. But as a sneak preview, let’s just say there’s not a lot of fat there either.
I believe I’m not succumbing to client bias here in saying that I know of few – if any – international NGOs that are running leaner than FORGE is.
Is FORGE seeking the highest return?
As I said, the value of SROI for me is that it provides a helpful lens, particularly on whether an organization is making decisions to get a higher social return.
It’s an important lens because nonprofits don’t automatically do that.
Nonprofits can easily prioritize maximizing fiscal well being. And this impulse is completely understandable. A nonprofit is like any organism. It has to battle mightily to diverge from Maslow’s hierarchy in its decision making: feed itself first.
An organization can prioritize feeding itself by designing programs to fit foundation guidelines, even if those programs aren’t optimal. They can open an office in an area that a wealthy donor wants them to, even though someone else might already be on the ground and is better suited. The list goes on…
Now, the interesting situations that the SROI lens helpfully magnifies are ones where there is a tradeoff between social return and immediate financial return. What the metric helps to highlight are decisions an organization makes to maximize social return at risk to its fiscal self nourishment.
And that exactly describes what FORGE did.
Paradoxically, the financial decision that is most responsible for FORGE’s current financial plight is precisely the one that most increased its SROI.
FORGE got into trouble because it shifted from having college students run their development projects to paying refugees themselves. On the fundraising ledger, this cost them dearly as each student had to raise $5K for FORGE – a big chunk of the organization’s operating budget.
On the SROI ledger, it is a great play. Society gets greater returns in the incredibly rare commodity of refugee leadership empowerment, in more organic project design, in credibility among the camps, and more. These returns defy quantification with a dollar figure, but they are real nonetheless.
And I can't imagine any other single move that FORGE could have made that would have as dramatically boosted its SROI.
Moral Hazard
Now, could Kjerstin and FORGE have better managed this move so as not to jeopardize its survival so profoundly?
Yes. They could have moved slower, built more fundraising infrastructure, been less optimistic about their online efforts. But it’s not like they didn’t know the risk. And in their own way, they tried to plan accordingly. Those are all issues I’ll address in my final report.
But when the “Could they have better managed it?” question arises, I feel like another lens is coming into play: a moral perspective.
That lens is trying to highlight key moral questions:
“Did FORGE screw up?”
“Aren’t they to blame for their woes?”
“Aren’t we just going to reward incompetence by bailing them out?”
In economic terms, this is called “moral hazard:” the danger that in rescuing someone from the consequences of their actions, we will encourage further such actions. Thus, anyone who cares about moral hazard is implicitly making a moral judgment: Which kind of actions do we want to encourage and reward as a society?
So what do we want to encourage and reward in our sector? Cautious adherence to Maslow? Or willingness to bet one’s organizational survival on social return?
I know I’m setting up a theoretically false dichotomy. But we’re living in an age of dichotomies.
Read today’s paper. We as a society are now seriously contemplating plowing billions to rescue the US auto industry, a sector comprised of some of the most mismanaged, self-preserving, cautious, and socially irresponsible organizations around.
What are we saying if we as citizens consent to cleaning out the national treasury – which is rightly our money -- to rescue these organizations…and not at least consider tossing a penny in FORGE’s direction?
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