Kjerstin Erickson

An excerpt from The Wall Street Journal (page R6, April 23, 2009):

FORGE - Transparency Is Key

It isn't just the economy that's battering nonprofits. Many have been victims of recent financial scandals, and several have had to shut their doors as a result.

That has eroded trust among donors, and the only way to regain that trust is for nonprofits to be open about their finances, operations and policies. [...] Forge hasn't been caught up in the recent financial scandals, but it encountered other difficulties. [...]

In response, Forge founder Kjerstin Erickson began blogging about her mistakes and Forge's situation on socialedge.org, an online community for entrepreneurs, nonprofit professionals and philanthropists to discuss approaches and solutions to social problems. She began by telling her story and unveiling her financial records to the public, down to details including staff salaries and budgets.

Within days, bloggers, nonprofit consultants, foundations and donors caught wind of the story and began asking more questions and offering suggestions. Some readers stepped up to offer Ms. Erickson free consulting help, and a foundation followed with a $50,000 donation. Eventually, increased donations erased Forge's budget gap.

"Public confidence goes up, not down, when people quickly and honestly admit their mistakes and explain how they are going to move forward," says Mr. Stannard-Stockton, principal and director of tactical philanthropy at Ensemble Capital Management LLC of Burlingame, Calif. who picked up Forge's story on his own blog.

FORGE founder Kjerstin Erickson took the risk to be transparent in her blog on Social Edge as she openly described how market fluctuations and misguided strategic decisions were negatively impacting her social venture (read We're in trouble). She now has great news to share:

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 [December 29].  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.

Read the rest of her post, A hopeful ending to 2008, and Sean Stannard-Stockton's post, Foundation Transparency: FORGE Update.

You may remember that Kjerstin Erickson (watch her X-Interview here) took the risk to be transparent in her blog on Social Edge. As I described in my two previous posts, FORGE's founder very openly blogged about how market fluctuations and misguided strategic decisions were impacting the social venture she launched to help refugees in Africa.
 
There is a new twist in Kjerstin’s story and at least one lesson fellow social entrepreneurs should learn from her experience: transparency may actually pay off. Sean Stannard-Stockton, who wrote on Tactical Philanthropy that hers is "The Most Important Nonprofit Blog,” is now helping Kjerstin get access to a strategy consultant and a PR advisor. For free.
 
Curtis Chang, the strategy consultant who will work pro bono for FORGE, is now posting on Social Edge to help us all understand what Kjerstin and her team should (and shouldn’t) do to make sure FORGE survives:

"Our main role will be to outline a long term plan that builds FORGE’s capacity to market, fundraise, and manage itself in a sustainable fashion. If FORGE makes it out of this current foxhole, they – and their donors – will know what they need to do."

He adds:

 "When the folks at Social Edge heard about this arrangement, they thought it would be a further interesting experiment in transparency to share publicly about our process. They asked Kjerstin and me if we would jointly blog during the project.
 
We agreed but I stipulated that the normal client expectations of confidentiality would then not apply. For instance, if I discovered that FORGE really didn’t have a prayer, well, then I would blog about that. If you’re going to survive by the sword of transparency, you’ve got to be ready to die by it. Kjerstin agreed without hesitation."

Sean Stannard-Stockton has the last word (for now):

“Whether FORGE is saved or not, Kjerstin has displayed amazing bravery. FORGE exists to help refugees rebuild their lives. Kjerstin is willing to do whatever it takes to help them. She cares about the cause over the organization and so should all of us.”