Philanthropy

Getting Global Philanthropy Going This event is sponsored by Alliance Magazine, in conjunction with the December 2004 issue of Alliance, which focused on “Getting Global Giving Going”. What would it take to really get global philanthropy going? This question was the subject of a special feature in the December 2004 edition of Alliance. As part of that feature, we brought together a roundtable of people from all over the world to brainstorm the topic. We begin this online event with a summary of their discussions (click here to read complete text), which ranged around a number of key questions: Is global philanthropy increasing? What are the barriers to its increase? What can be done to stimulate it?

What would it take to really get global philanthropy going?

Is global giving increasing?
‘People are asking for a tenfold increase in giving, but we need a hundredfold increase,’ said Shankar Venkateswaran (American India Foundation, India – AIF). For the purposes of this discussion, when we talk about global philanthropy, we really mean redistribution – giving from rich countries to poor countries, and giving from rich to poor within poor countries. Has this increased?

There were mixed views, but generally our respondents felt that it had gone up slightly, though this is not true of giving by governments. But all are agreed that it needs to increase much more. In some cases, people also felt there had been a change in culture. ‘We are seeing a new understanding of how private money can be an important contributor,’ said Marcos Kisil (IDIS, Brazil).

Making giving easier and more attractive
Tax incentives
Panellists all felt, as David Bonbright (ACCESS) said, that ‘tax incentives are largely irrelevant to people’s giving’. Moreover, argued Hylton Appelbaum (Liberty and Donald Gordon Foundation, South Africa), why should governments let rich people off contributing to the public purse, so that they might or might not dip into their pocket for a cause that appeals to them?

Diaspora giving
Diaspora giving is a potential growth area, as AIF shows, and it could also spark indigenous giving as emigrés forge links with home communities. But many felt that it depends on having a vehicle like AIF. As Andrew Kingman (Allavida, Kenya and UK) said of Africa, ‘there’s very little established here in terms of infrastructure to tap the diaspora.’

Enhanced public perception of NGOs
Then there is the reputation of NGOs to consider. People are unlikely to give money if they think it is going to NGOs who they feel are either self-serving, inefficient or untrustworthy, and this is still the case in many developing countries. Improving this perception of NGOs will be critical if global giving is to increase substantially.

More information and measurement
‘People feel overwhelmed by not knowing: where could I give my money effectively,’ said Peggy Dulany (Synergos Institute, USA). This was part of a general uncertainty that people felt was hampering giving.

Could the internet help? Many thought it could, both in facilitating online giving (still in its infancy, as many admitted) and in advertising need in a direct way. Another approach to overcoming the information deficit and providing a reliable guide to NGOs’ effectiveness is performance measurement. David Bonbright talked of ACCESS and how it would ‘make visible to givers … the good work that is being done on the ground’. Both for Bonbright and for Vicky Garchitorena (Ayala Foundation, Philippines), the most important single stimulus was ‘more information, more easily available’.

Partnerships with local organizations
Another suggestion for increasing giving was partnerships with local organizations. While Andrew Kingman suggested we should be making more use of domestic grantmakers, Rien van Gendt (Van Leer Group Foundation, Netherlands) suggested partnerships with community foundations and grantmakers’ associations.

Foundation advocacy
A strategy favoured by Tim Wirth (UN Foundation, USA) is philanthropic advocacy: ‘I happen to think that the opportunities that are available through political [with a small “p”] advocacy give people enormous leverage and help to get issues to scale.’

David Bonbright feels foundations may also be able to play a part in stimulating individual giving, acting as the ‘smart money’, giving a lead and helping to leverage and direct individual giving.

Creating a culture of giving
Family and peer group influence
Making giving easier is vital, but even more urgent is persuading people to give in the first place. How can we do that? ‘People respond a lot to what their peers do,’ Peggy Dulany pointed out. Things like giving circles not only encourage people to take the plunge, they also enable people to learn from each other and gain guidance in how and where to give.

Role of the media
The media, though a powerful weapon, can be double-edged. While it is a big factor in ‘sensitizing people’, it can also dwell on the threatening nature of global problems to an extent that sometimes paralyses giving. The Patriot Act, for instance, and the general rhetoric about the so-called war on terror, Barry Gaberman (Ford Foundation, USA) felt had had ‘a chilling effect’ on philanthropy. Peter Wheeler (New Philanthropy Capital, UK) emphasized the need for ‘true compassion as much as fear’.

Bridging the gap in experience
What can be done to bridge the gap in experience and in human sympathy between those who have and those who are in need. Many panellists, including all those from the US, thought the biggest single thing would be, as Adele Simmons (Global Philanthropy Partnership, USA) put it, ‘getting young people out and working overseas, particularly in developing countries’. This would create a lasting bond between individuals in rich countries and communities in the developing world. The need for a sense of personal connectedness was perhaps the strongest message to emerge from the discussion.

Caroline Hartnell is editor of Alliance Magazine.

Adele Simmons is President of the Global Philanthropy Partnership and Senior Adviser of the World Economic Forum.

Alliance Roundtable: Full text from the December 2004 Roundtable

Caroline Hartnell - Feb 1, 2005 5:20 am (#1 Total: 32)
Alliance Magazine


Where to now?

Our roundtable panellists have opened the debate and given us plenty to think about. Among the things that stand out are:

the need to create a new culture of giving among individuals;

the need to make it easier for individuals to give, both by simplifying the process and by assuring them that their donations are going to reliable groups.

We hope the discussion over the next two weeks will explore these questions further.

And, without wanting to dwell on it, the tsunami disaster, which has happened since the roundtable, has thrown a new light on the discussion. A disaster on an almost unprecedented scale, it has produced an equally unprecedented response. In the roundtable, panellists speculated on the future role of the internet in sparking giving. Even the most optimistic of them could not have anticipated the amount of giving that has taken place over the internet for tsunami relief.

What lessons can we learn from this about the use of information technology in promoting giving? If people have given once over the internet, will they be ready to do so again, or does it depend on the cause?

Another set of issues relate to the longer-term effects on giving. Is there a way in which we can capitalize on the energy and compassion unleashed by the disaster and turn it to longer-term account? On the other hand, given the amount of aid that has flowed in, it is inevitable that some of it will be wasted and this will equally inevitably attract the attention of the media. Will a combination of this and the blunting of the edge of people’s compassion with time produce a reaction and will this make people less generous in the future? What systems for accountability and transparency are in place and are they working?

Will the overwhelming response to the tsunami tend to make people more or less generous in the future?

We very much look forward to hearing from all of you over the next couple of weeks.

Charles Cameron aka hipbone - Feb 1, 2005 3:52 pm (#2 Total: 32)
HipBone Games / Rheingold Associates


Caroline, you write:

without wanting to dwell on it, the tsunami disaster, which has happened since the roundtable, has thrown a new light on the discussion. A disaster on an almost unprecedented scale, it has produced an equally unprecedented response.

I am very heartened by the magnitude of the response to the tsunami, to be sure, but I am also a bit wary of what happens to "every day" concerns when something this large comes down the pike. I was distressed to read a friend of mine, Christopher London of Educate the Children Nepal, writing elsewhere today (and quoted here with his permission):

The redirection of donations to tsunami vicitms is hurting us, as I expected it would. Human tragedy is infinite and the capacity to deal with it (mentally, morally, spiritually and economically) is most decidedly finite."

This wasn't a gripe, it was someone in the field who was profoundly grateful for the current safety of his organization's staff on Nepal in light of the recent coup there, summarizing the situation and mentioning the dip in funding as one of the elements he's coping with --

It's my Nepali staff that I have to worry about. That and keeping enough money flowing into the organization that we can even have a staff.

And yet that's it, right there where he's preoccupied by a sudden change in the specifically Nepali context, there's also the influence of the tsunami on global patterns of giving to be considered.

We humans are a funny lot. We follow fads and fashions. We don't have an intuitive map of the totality of global suffering such that we can respond at every moment to the greatest need, we respond to what the press tells us is the fashionable need.

And sometimes, sometimes in the aftermath of some great but perhaps avoidable catastrophe, our press or politicians will admit that yes, there was a disaster over there and we didn't bring it to your notice in time, we didn't respond to it in time.

There's not enough attention to go around, so we focus in on iconic causes, which are really a bit like celebrities: as the French phrase causes celebres might suggest. Tibet, I've heard it said, gets a great deal more attention from advocacy groups than say the Uigur, because Shangri La, because the Dalai Lama, because Hollywood, because fashion…

So there's a disconnect. We want to respond to actual need, it seems to me, to obtain the greatest benefit in relief of suffering from our contributions -- but in the aggregate we respond to something more like a need spotlight, which if it highlights Sri Lanka and Bandar Aceh may leave Kathmandu a little short of funding… And that disconnect should concern us, to the extent that issues of greatest need and benefit concern us.

I'm fascinated by this business. I'm fascinated by the people who mourned Princess Diana, never having met her, on the basis of her press aura, fascinated by those who want to know the latest about Jennifer Anniston and Brad Pitt (and indeed know more about Donald Trump, his thoughts, his palaces, his taste in shirts, than they do about their own cousins), whose travels to exotic lands take place via soap operas or romance novels, while their daily commute is something less than inspiring.

I'm fascinated by our ability to make a Kennedy, a King, a Mother Theresa stand for an ideal – but it worries me that we then repose so much of our own hope in these iconic figures that, how can I say it, there's less to go around elsewhere. We give enormous oomph to Bill Gates, and indeed he does some remarkable, phenomenal things with it – but are there perhaps a thousand smaller craft that can't survive the wake of the great ship Microsoft?

I'm arguing that the marketplace of fame, of projection, of icons, of importance and reputation and size – duly constituted by the processes of human psychology – does something to the ways in which we distribute our attention, our caring, our philanthropy which we haven't counted on, which is in its own way magnificently self-defeating, which we need to recognize and make allowances for.

Because otherwise the well-amplified appeal will drown out more urgent but smaller cries, and our response to the tsunami will be not only a magnificent gesture of concern and aid – but also a dip in our caring elsewhere, a shortfall for an educational venture in Nepal…a medical outpost in Uganda

Rain on Roke may be drouth in Osskil Ursula le Guin once wrote, meaning that there is a balance in all things. I'm hoping we can learn to avoid drouth in Nepal while bringing much needed philanthropic rain to Sri Lanka. That's all...

yvonne morgan - Feb 1, 2005 11:32 pm (#3 Total: 32)
Charities Aid Foundation Southern Africa


I agree that expanding the pool of givers, to include especially more individual giving, is an important way forward. I'm not sure that tax incentives don't play a role, though. Perhaps it depends more on the type of giving and the type of giver.

For instance, I did a brief electronic poll recently among employees of two large South African corporates, and asked them if they would consider giving through a Give As You Earn (payroll giving) scheme if there were to be an immediate tax benefit each month reflected on their salaries. (the question was directed at those employees not already giving through their company's payroll giving programme). 99% said they would. Although this can't be considered definite commitment, perhaps it indicates that we would be wrong to dismiss tax incentives completely as motivations for giving.

Sonja - Feb 2, 2005 4:45 am (#4 Total: 32)

--Your Message Here--

I think that people give for different reasons. One of these is the extent to which, as an individual, you can relate to the person who needs your help.

The Tsunami disaster was a completely unavoidable natural disaster that could have impacted on anyone who happened to be in the vicinity at the time. The appeal to individuals in first world countries is (I think) the fact that they could completely relate to the people whose terrifying stories they heard over and over again on CNN and Skye News. Individuals could not be 'blamed' for putting themselves into a vulnerable position. That person on the beach who lost his/her child could well have been them.

Now contrast this to the plight of the millions of people living with HIV in Africa. There is potentially a sense of "well that could never happen to me" as well as some apportioning of "blame" - "those people" must have been promiscuous or careless etc. Their infection could have been prevented.... I am not suggesting that this thought process is necessarily a conscious one but I do believe that this "othering" process may account (in part) for the difference in the response.

Sonja.

 

 

simon hebditch - Feb 2, 2005 4:54 am (#5 Total: 32)

--Your Message Here--

Message from Simon Hebditch from Charities Aid Foundation in the UK

 

We are now confronting one of the major problems we face if we want to raise charitable giving substantially - how do we convert the emotional commitment illustrated by the tsunami appeal into a generally higher level of giving on a regular basis? It seems to us at CAF UK that, in the right sense of the word, we must try and harness present commitment. The omens are not necessarily good - the follow up to 9/11 didn't lead to a transformation of giving. Neither did the Bob Geldof Band Aid/Live Aid events in the 1980s.

On the other hand, a recent CAF/NOP survey of British adults showed that 65% are intent on at least continuing their normal charitable giving alongside the gifts they made to the tsunami appeal. Also, over 80% of British adults gave money - a very high figure.

On tax incentives, I think it is difficult to generalise. It is clear that the cause and commitment come ahead of tax incentives but such reliefs can be an added bonus to some donors -especially at the more wealthy end of the market.

 

 

Svitlana Kuts - Feb 2, 2005 7:30 am (#6 Total: 32)


--Your Message Here-- Global giving largely depends on how it is applied locally. Western donors are giving in conspiracy - local donors will never follow them in the absence of giving culture. The very point of NGOs support does not work as people support the cause not the institution. Internaitonal donors arrive in countries like ours support NGOs and report that they support the NGO not a cause. This is about Ukrainian revolution - we all saw tremendous wave of giving to people on Kiev Maidan, almost without apeal. They were giving to people fighting for their future (to cause) not to organizations. My point is that NGO managers should forget about how to pay salaries to their office but think how they are solving problems, and western donors should report about supporting the cause (or its prevention) not organizations. Tax incentives in the transaction between donor and recepient look rather like the tax relieve option, it undermines philanthropic impulse. There should be clear government policy on tax deductions for philanthropy, so people understand that they are giving to publicly accepted causes.

abc4all - Feb 2, 2005 8:18 am (#7 Total: 32)
A Better Community For All (ABC4All)

Self-Funding for Charities: What the World Needs Now

A Better Community For All (ABC4All) has been in development for six years. The purpose is to create an action plan that will harness ALL consumerism via credit cards to benefit charities worldwide with self-funding. Included is the creation of an endowment fund, the Millennium Endowment Fund (MEF), that will match, or double any charitable contribution generated via such consumerism. Such “Directed Consumerism With Automatic “TechnoGiving” (DCAT)™” thereby supports worthwhile causes worldwide.

IMPLEMENTATION / MISSION

ABC4All has begun implementation in 2004. The mission of ABC4All is to assist with self-funding of worthwhile causes the world over: "Maximizing Charitable Contributions on and off the Internet"™  

In 09/04, there was the simultaneous establishment of the Foundation of A Better Community For All (FABC), a National Heritage Foundation, and The ABC4All Triple Giving Program (ABC4AllGGG)™ or TGP.

TRIO OF FOCI

Implementation of ABC4All has begun with a Trio of Foci: 1) Community Health, Exercise and Nutrition for All (CHEN4All), 2) The ABC4All Triple Giving Program (ABC4AllGGG)™ and 3) The Path of 8Petals leading to Health Heights™.

THE ABC4All TRIPLE GIVING PROGRAM (TGP)

With ABC4AllGGG or The Triple Giving Program (TGP), there is established the means by which the ABC4All mission can be fulfilled. The cornerstone of ABC4AllGGG is The Giving Card (TGC). TGC has received an endorsement by the Vatican.

No risk or obligation is involved for businesses, charities or consumers to participate. Once consumers are enrolled as a Friend of ABC4All (FABC) and then expand their support via enrollment via ABC4All in The Giving Card (TGC), automatic micropayments will be generated based on ALL consumerism executed with existing credit cards (no new card is required) that are used by the Friends of ABC4All.

FRIENDS OF ABC4ALL / MILLENIUM ENDOWMENT FUND (MEF)

With the creation of the Millennium Endowment Fund (MEF), The Foundation of A Better Community For All (FABC) will match, or double any charitable contributions created via such directed consumerism. The Friends of ABC4All with their participation can support one or more charities of their choosing.

ABC4ALL LEGACY

By establishment of A Better Community For All (ABC4All), no individual or group benefits, only the worthwhile causes to which the micropayments are designated by participating consumers, the Friends of A Better Community For All (FABC). The ABC4All legacy is thereby established and will continue into perpetuity. Finally, ALL consumerism is harnessed to the betterment of mankind.

Respectfully Submitted

Burton Danet, Ph.D., Co-Founder, A Better Community For All (ABC4All)

Caroline Hartnell - Feb 2, 2005 10:06 am (#8 Total: 32)
Alliance Magazine


I completely agree with you about the danger of the tsunami appeal drowning out other voices and other needs that are just as pressing being neglected.

The hope is that the response could be built on to create a wider and more all-embracing feeling of responsibility for our fellow human beings. In Britain, certainly, the public response to the tsunami appeal was seen to have pushed the government to respond more generously. Will this feeling just die down as the tsunami fades from the television screens, or is there a way to build on it? What the Millennium Campaign is trying to do is galvanize public feeling in rich countries so that governments are forced to increase aid levels to the UN recommended 0.7 per cent level. So the question for us, I guess, is how can we build on the response rather than just let it deflect attention from other needs?

DennisWhittle - Feb 2, 2005 11:09 am (#9 Total: 32)
Chairman and CEO, GlobalGiving


Caroline and Adele,

This is a timely conversation - thanks for initiating and hosting it.

You hit one of the nails on the head when you wrote:

Getting young people out and working overseas, particularly in developing countries...would create a lasting bond between individuals in rich countries and communities in the developing world. The need for a sense of personal connectedness was perhaps the strongest message to emerge from the discussion.

I would extend this beyond young people to all people. One of the striking things about our experience at GlobalGiving is the number of people who want to feel a personal connection to the project or organization or even other donors. The degree to which we can do this will determine the pace of our growth.

This is a challenge in a web-based environment, but it is doable. We are experimenting with a lot of different features. Some don't work, and we abandon them. Others do work, and we embrace and extend them. One of my favorite successes to date is the use of GlobalGiving as a wedding registry by the Nobel Prize winner Joe Stigltiz and his fiance. They and their friends around the world TOGETHER raised thousands of dollars for grassroots projects overseas.

How can we build these donors networks out more broadly?

Caroline Hartnell - Feb 2, 2005 12:13 pm (#10 Total: 32)
Alliance Magazine

I'm sure it's too sweeping to say tax incentives don't play any role in increasing giving - though none of the Alliance Roundtable participants felt they play a big role. I agree with Simon Hebditch that they they're particularly likely to make a difference at the wealthier end of the spectrum, and this certainly seems to be the case in the US.

But it's always seemed to me counter-intuitive that a tax benefit should actually make people give. After all, even if I get a tax benefit, giving to charity will still cost me money. (This may not be true at the very high-wealth end of financial management, which I don't know about.) So I'm interested in Yvonne Morgan's example of employees saying a tax relief might encourage them to give through a company payroll giving scheme. I wonder if they were already giving in some other way?

 

DennisWhittle - Feb 2, 2005 12:29 pm (#11 Total: 32)
Chairman and CEO, GlobalGiving


Caroline,

Our experience on this at GlobalGiving is that the main things driving employee giving through the workplace are:

Awareness - usually the company markets the opportunity to employees. This is especially important for international giving, since most employees are not aware that there are now channels that enable them to give to projects overseas.

Ease of giving - the company provides either a paper form or, increasingly, a web interface to the employee

Small bites - the employee can make a small donation each pay period that adds up to a lot on an annual basis

Company Matching - this is key. Most of our corporate customers offer a match to their employees' donations

What happened to my money? - Increasingly, donors want to know exactly what happened to their money, and what impact it had.

Tax deductibility. This does remain a key issue, at least in the US. If one giving channel did not offer it, I believe that donations through that channel would fall.

I will send a separate note on tax deductibility for appreciated stock, since it deserves to be highlighted.

DennisWhittle - Feb 2, 2005 12:39 pm (#12 Total: 32)
Chairman and CEO, GlobalGiving


As Caroline noted, tax deductibility matters particularly for high-income and high-wealth donors.

One tax-management strategy is particularly valuable, and I have been amazed at how many people are not aware of it.

In the US, most people can donate appreciated stock, and get a tax deduction for the full amount. So, for example, if someone paid $5,000 to buy 100 shares of stock 10 years ago, and the stock value has gradually risen over time to $15,000, they can get a substantially greater tax deduction by donating the stock itself rather than selling the stock, paying the taxes, and then donating the net proceeds.

I realize that this does not apply specifically to giving internationally. But since $10,000 can make a HUGE difference to a project in a developing country (and hence give the donor a greater sense of having achieved something), we are starting to see a number of donations in this range. And almost all of them are being funded by appreciated stock.

Robert Daoust - Feb 2, 2005 9:22 pm (#13 Total: 32)

"Each citizen should spend one or two hours every week rescuing an individual who will suffer or continue to suffer severely if this citizen do not intervene." That formula is the key to really get global (and local) philanthropy going. Money will never suffice, personal involvement is necessary first and foremost. Our own individual actions produce social ills of all kinds, or prevent good things to happen : it is only by systematically committing ourselves to rescue individuals in need that we will become aware of the effects of our actions, that we will stop undoing with one hand what we are doing with the other hand, that we will realize how much we are vulnerable and need solidarity, us as well as them.

That formula is the basis of a solution to the world problematique. To use the terms found in the Alliance Roundtable text, it is "the most significant innovation" that is sought for, it has "more information and measurement", and its main feature is "personal connectedness". Just picture yourself a Sunday afternoon, connected to your branch of universalrescue.org, examining what you can do to save individual X who will suffer severely from hunger if you do not intervene. It must be understood that universalrescue.org would have the mission to manage a system for the control and prevention of ALL those individual cases of severe suffering that CAN be controlled or prevented if and only if new individual citizens become involved in the system. Such an organization could be started easily with less than 100 000 dollars. The first few successful interventions would provide a powerful impetus for the rise of the enterprise.

That formula is offered freely to anyone who might find value in it. Everyone is invited to pay attention to its compliance with the following passages from the Alliance Roundtable text.

"People feel overwhelmed by not knowing: where could I give my money effectively,’ remarks Peggy Dulany. This is echoed by Rien van Gendt: ‘There is a kind of popular thinking that it’s complicated … And they would like to not just write a cheque but be engaged themselves."

"A lot of people want to feel really connected with what they’re helping in a positive way."

"Almost all the participants, in one form or another, expressed the sentiment that what’s needed is to find ways of bringing givers or would-be givers into intimate, personal contact with problems which are generally remote from their experience. This is perhaps the strongest message to emerge from the discussion. (It should be stressed that givers themselves often want this in some form or other. As Marcos Kisil remarks: ‘They are looking always, the donors, to become part of the process of change.’)"

"At some point, all participants alluded to the need to bridge the gap in experience and in human sympathy between those who have and those who are in need."

"And in spite of the greater visibility of organized philanthropy, the people who need to reach for their chequebooks are individuals. As we’ve seen, by far the greatest share of giving is done by individuals, yet according to Venkateswaran, ‘oddly enough, people are not asking individuals’."

Robert Daoust www.algosphere.org info@algosphere.org

Ise Bosch - Feb 3, 2005 10:37 am (#14 Total: 32)


To create a culture of giving: donor education! I think it makes sense to look where there is potential to give MUCH more. Here in Germany we have increasing top wealth but virtually no guidance on strategic giving. I assume this is similar in most countries outside US, GB, maybe NL. I'd love to hear from countries with a large wealth differential, like S. Africa, Argentina, etc. - re. the "give back" factor. This is not only about funding, it's about social healing. What cross-country exchange could support donor education there?

Mal Warwick - Feb 3, 2005 11:20 am (#15 Total: 32)
Author, consultant, public speaker


This discussion is unsettling, because in some ways I feel it's off the mark. First of all, the biggest problem faced by developing countries is not a lack of philanthropy from the Global North but a dramatic economic imbalance between poor countries and rich ones. Despite overseas aid, increasing private investment and philanthropy, and modest debt forgiveness by the richest countries, capital still regularly flows *from* poor countries to rich ones. The poor just go on getting poorer. And the very people who are most influential in the realm of philanthropy are in the best position to influence their governments to address this fundamental problem. If rich countries were to forgive Third World debt on a massive scale and direct multinational institutions such as the World Bank and the IMF to forego the destructive policies they foist on their clients in the Third World -- policies that impoverish rather than enrich the people they allegedly assist -- the need for a substantial increase in philanthropy as defined in this discussion would diminish sharply, or even disappear.

Second, not all "philanthropy" is good. Indeed, much private philanthropic activity in poor countries plays a negative role, reinforcing centuries-old bad habits forged in colonialism. Broadly speaking, philanthropy with an agenda is rarely of value in the Third World. Grants, loans, and technical assistance that are tied to religious teaching or that require the recipient to hire Western consultants, or -- even worse -- "aid" that's disbursed in the donor country to buy its goods and services is not much help. Such "assistance" typically helps the giver more than the beneficiary. At its worst, it saddles a poor country with yet more debt.

However, there are two ways that philanthropy from rich countries can truly help poor people in the Global South rise out of poverty. By providing capacity-building funds and tools, we can help them build home-grown institutions with the ability to generate local resources, making them truly self-sufficient. We can also fund much broader and more far-reaching efforts to identify sound, successful locally-run NGOs that have demonstrated the capacity to make a difference in their communities. All over the world, there are NGOs that operate ethically, effectively, and in concert with the culture of their communities. Philanthropy is at its best when we help them -- in the ways that they want us to help.

Mal Warwick, Berkeley, California, writing from Mexico City

cellulator - Feb 3, 2005 11:43 am (#16 Total: 32)
Christopher London


Continuing in this vein, a major problem is continuity in donor funding. The giving for the tsunami is 1) siphoning money away from prior commitments and 2) to the extent that it is bringing in new donors (e.g., my father, who never gives to anything) will not bring them in permanently. So, as has been mentioned, just as the waves eventually subsided, so too will the donation dollars.

But this isn't unusual, it is typical. I just came across an analysis of Bank investment in post-conflict situations (http://econ.worldbank.org/files/15710_CollierHoefflerAidPostConflict.pdf). Investment is heavy in the initial post conflict years, but just when the investment could begin to take root, funding slows to a trickle. It is indicative of a general problem in giving: it is short term. Change doesn't happen in the short term.

So, while agree with Mal's concluding comments, it needs to be added that funding this work needs to be based on a long term commitment, and a willingness on the part of donors to weather the ups and downs, two steps forward one back, nature of social change. In our experience many individual donors do make such commitments. But grantmakers should start making at a minimum three year grants, instead of the one year and out which often happens.

Caroline Hartnell - Feb 4, 2005 12:35 pm (#17 Total: 32)
Alliance Magazine


Thank you for this corrective comment. I don't think philanthropy will ever be the answer to the world's problems and I entirely agree with you that a lack of 'philanthropy' is not the major problem facing developing countries, and that any sort of philanthropy with strings attached is likely to be positively harmful.

I also agree that supporting good indigenous NGOs in poor countries is a valuable role that northern philanthropy can play. Finding such NGOs, and supporting them in various ways in order to help them become more attractive to donors, both in rich countries and in their own countries, is in fact the specific focus of many of the 'mechanisms' discussed in the Alliance Roundtable - diaspora philanthropy organizations, internet marketplaces such as GlobalGiving and Give India, and ACCESS, among others.

Another valuable role for philanthropy, I think, is supporting northern NGOs that are trying to pressure governments and multilateral agencies like the World Bank to adopt fairer trade policies, cancel debt, and deliver on the 0.7 per cent targets for aid.

Philanthropy may have a limited role to play in the overall scheme of things but it could surely do more and better than at present. How to encourage it to do more and better is the aim of this discussion.

Caroline Hartnell - Feb 4, 2005 12:41 pm (#18 Total: 32)
Alliance Magazine


Dennis

Your list of the different things influencing workplace giving seems to put tax incentives in context nicely. They're not going to be a driver of giving but they're an important part of the mix, especially where there's competition, ie where one scheme offers tax deductibility and another doesn't.

Adele Simmons - Feb 4, 2005 4:24 pm (#19 Total: 32)
Global Philanthropy Partnership


I have just returned from the World Economic Forum meetings in Davos. After the second day, the focus of the meeting shifted from "Touch Choices" to "We Must Act." Bono, Bill Gates, Bill Clinton, Tony Blair, Jeff Sachs, President Benjamin Mkapa of Tanzania, and Domenico Siniscalco, the Minister of Finance from Italy, participated on a panel that made a powerful case for immediate assistance for Africa. Prime Minister Blair focused on climate change and Africa in his talk a day earlier.

Bono called the current situation in Africa an emergency. Blair and Gordon Brown outlined their plan for an International Finance Facility that would speed up the flow of aid, and the British made a commitment to meet the 0.7 percent of GNP for Overseas Development Assistance. People said time and time again that the time for talking had ended and prompt action was required. The challenge from Porto Allegre was welcomed. There will be debate about how best to proceed, how to ensure accountably and transparency, and the role of African governments in determining how the aid is used.

Many of the foundations and NGO leaders at the Forum saw the significant attention being paid to Africa and poverty reduction overall as an important step, and discussed various ways of ensuring that support from governments and businesses for poverty reduction is maintained (and that pledges are fulfilled). In my view, the tsunami event has helped to mobilize an interest and capacity in giving and renewed a commitment to Africa and to long-term development issues. The challenge will be making long-term investments in development where immediate results will not be visible, and making these investments in regions that do not receive daily coverage on the evening news. In a culture that promotes instant gratification (corporations’ quarterly reports, one-year grants to NGOs), patient and committed social investments become increasingly important.

Robert Daoust - Feb 5, 2005 9:47 am (#20 Total: 32)


Caroline doesn't think philanthropy will ever be the answer to the world's problems and she agrees with Mal that a lack of 'philanthropy' is not the major problem facing developing countries. I agree. Philanthropy is not THE answer but AN answer, and lack of it is not THE major problem, but A major problem. The aim of this discussion, says Caroline, is how to encourage philanthropy to do more and better. Ok, let's look at that. How much more and better do we want it? As Shankar Venkateswaran puts it: "People are asking for a tenfold increase in giving, but we need a hundredfold increase." I agree with him, as most observers do, but then I must depart from Caroline's and Mal's ways of thinking.

The prevailing vision since more than 30 years is what I would call "provide structures instead of rescue". In the words of Mal : provide capacity building funds and tools, help people build home-grown institutions that will make them self-sufficient, help locally-run NGOs that make a difference... All this is good, but is limited by the lack of political will to go in that direction. Here is where philanthropy must come to the rescue! Changes in structures will come because compassionate people will insist on having them. Philanthropy must probably be regarded as "the first" answer to the world problems.

Now, no one wants to come back to giving fishes when fishing can be taught. However, perhaps teaching or enabling to fish is not the answer anymore, in a world threatened with resources depletion and a myriad of other intricated problems. What I propose is a new sophisticated form of direct rescue : each citizen should be invited to spend one or two hours every week rescuing an individual who will suffer or continue to suffer severely if this citizen do not intervene. In other words, we would become involved with individual X who is suffering too much, and perhaps we would feed that person with our money while we would become involved, by our own interest so to speak, in a local economy conversion from fisheries to seaweed export.

David Bonbright, during Alliance Roundtable : "In a sense it’s not how much people are giving, it’s the fact that they’re getting involved, not just giving money but also themselves."

In a world where millions are so much suffering, I want to know exactly who my money and time is helping. Albert Camus : "In his greatest effort, man can only purpose to reduce arithmetically the pain of the world." (The Rebel : An Essay on Man in Revolt). If your organization is not able to guarantee that my action is rescuing someone who would be lost without me, why should I care to help you? I mean, there will not be a massive endeavor to better the world if we don't have a plan to help ALL (one by one) those who MUST and CAN be helped.

Charles Cameron aka hipbone - Feb 5, 2005 2:17 pm (#21 Total: 32)
HipBone Games / Rheingold Associates


Robert, your incisive comment:

If your organization is not able to guarantee that my action is rescuing someone who would be lost without me, why should I care to help you?

reminds me, pretty obviously and directly, of the "tough love" criteria for triage used when a limited number of physicians are available to treat an enormous number of patients in a crisis – clearly, the physicians' priority is to treat those patients who are most likely to survive if treated and most likely to die if untreated, whereas treating those patients who are liable to die even if treated will and those who are liable to survive even if left untreated will by definition result in physician time being without effect (ie without affecting the individual outcome in terms of survival or death).

The heart, in its generosity, has no wish to leave anyone suffering in the untreated category – yet the mind in its clarity sees the necessity for this kind of difficult triage if we are to accomplish as much by way of the relief of suffering as possible. The Buddha was practicing something of the same kind of triage when he refused to answer complex questions such as whether the world had a beginning or an end, whether there was such a thing as a soul, etc, for his monks until they had meditated to the point of grasping the roots of suffering (his first noble truth) and thus delivering themselves from it. As a physician, he maintained that answering such questions, delightfully interesting though they might be, while suffering remained a problem, would be like answering a patient's questions about the height and gait of a man who fired a poisoned arrow, and the wood and feathers from which the arrow was made, while the arrow head had not yet been removed and the poison was still working in the patient.

Triage, then, and thus also Robert's remark, can be taken to represent a marriage of heart and mind – a marriage which hones the heart's generosity for maximum impact. This business of head and heart working in union is no slight thing. Our society is primed to divide people into "feeling caring nurturing" and "thinking tough aggressive" types, with the idealists tending to fall into the nurturing category where the thinking types can safely

I'm sorry to keep bringing us back to theses somewhat abstract / lofty principles, but it seems to me that the marriage of head and heart is precisely what social entrepreneurship is all about: it's heart entrepreneurship, its social intelligence in action. I suspect, too, that we'll get the level of giving that's requisite when we realize that idealism is not a sort of luxury that can be marginalized / tolerated on the margins of an unabashedly pragmatic and materialist society, but a necessary ingredient in the sustainability of the very system in which we live. Besides, Donella Meadows shows us that the most powerful place to intervene in any system is at the level of its paradigm.

Idealism is now, even if it wasn't before, a key survival trait for the human species and for the world.

I want to emphasize this because they key concept here is that we've arrived at the tipping point, that we can now recognize, in a whole array of different areas from ecology to geopolitics to "family values", that we are depleting the "commons" – of resources, but also of trust – to the point of no return, and that altruistic / philanthropic / gift behavior and even self-sacrifice are therefore paramount.

We will get the giving we need when the immediacy of the situation comes home to us. Feeding the hungry is not just a gesture that Christ, Buddha and Mohammed all happen to encourage – it's part and parcel of ensuring our world does not collapse under the weight of our differences. We are one of necessity, not just by some metaphysical fiat which we can safely ignore.

If I'm right about this, then philanthropy's task, in raising the funding from "normal" to "tsunmami" levels, or getting that "hundredfold increase in giving", is to sharpen the awareness of our interconnectedness, and specifically of the various system properties which – crossing all national, ethnic, religious, political and disciplinary boundaries – threaten the future of our grandchildren, as the indigenous peoples would say, to the seventh generation.

That's a whole different mindset, a whole different approach from the mindset used in distributing what funds we have, in assessing the efficacy of particular programs, their scalability and so forth. That's radical, that calls for the transformation of understanding. And the fascinating thing is that that understanding will already be present quite keenly, though not easily expressed, where the suffering is already greatest. But it will be the places where suffering is least, where people have the greatest luxury of freedom from suffering (through good health, satisfying and well paid work, liberty of conscience etc) and thus the least likelihood to think about it and be concerned about it (except on special occasions when the Fox or the WSJ happens to focus on it) where its impact actually needs to be felt.

If all (and I mean all) our focus is on disbursing funds, or evaluating their disbursement, or even "normal" means of raising them (charitable advertising, and so forth) – if that is all that those whose hearts and minds call them to giving, philanthropy, and social entrepreneurship concentrate on – then who is left to tackle this grave and insistant matter, the realization of the full implications of our joint necessity?

To whom do I look for that part of the picture? Where do I sign up if that's the area I feel the need to address?

Caroline Hartnell - Feb 6, 2005 10:53 am (#22 Total: 32)
Alliance Magazine


You say that ‘Changes in structures will come because compassionate people will insist on having them.’ I agree with you, but for this to happen surely compassion needs to be transformed into political will. Compassionate people need to put pressure on their governments in order to bring about the changes in structure that are needed. Mobilizing this compassion is a key role for campaigning NGOs in areas like Fair Trade and debt. And supporting this is surely a key role for philanthropy.

I’d like to ask you a question about your ‘direct rescue’ concept. Do you mean this literally, in other words that each citizen would spend one or two hours physically with someone who needs their help? If this is the case, I’m not sure that it meets the need for global rescue, where the people who are suffering are so concentrated in countries far away from many of those with the resources to help them. In the Alliance Roundtable Peter Wheeler also spoke of the need for ‘true compassion’, which he defined as being willing to ‘treat any human being as a brother or sister’, wherever they are.

And it’s the distance element that makes me unsure about your maxim: ‘If your organization is not able to guarantee that my action is rescuing someone who would be lost without me, why should I care to help you?’ The work of identifying good, credible organizations in developing countries, and helping build their capacity where they need it, seems to me crucial, but once we’ve identified good organizations to support, it seems to me that we have to take some risk and take some of their impact on trust. If we can’t do that, we will probably never be willing to directly support NGOs in developing countries.

Caroline Hartnell - Feb 6, 2005 11:08 am (#23 Total: 32)
Alliance Magazine


You say ‘We will get the giving we need when the immediacy of the situation comes home to us’ and that ‘philanthropy's task, in raising the funding from "normal" to "tsunmami" levels, or getting that "hundredfold increase in giving", is to sharpen the awareness of our interconnectedness’ – and I agree with you wholeheartedly. And I certainly hope that this discussion will contribute something to these central ‘heart and mind’ issues.

But ‘disbursing funds, or evaluating their disbursement’ is surely crucial too. It’s crucial for raising funds, as highlighted by Robert’s ‘If your organization is not able to guarantee that my action is rescuing someone who would be lost without me, why should I care to help you?’ comment and by many Roundtable participants. People are not going to rise to the tsunami levels of giving that are needed if they don’t feel it will do any good.

But it must also actually do some good. It is widely accepted that much international development aid over the last 50 years has not done much good. Ensuring that the development agenda is set by poor people rather than well-meaning people in richer countries seems to be a key part of ensuring we do better in future, and building the capacity of indigenous civil societies in poor countries to develop and implement that agenda is therefore crucial. We need the money, at tsunami levels, and we need to use it well.

Charles Cameron aka hipbone - Feb 6, 2005 1:30 pm (#24 Total: 32)
HipBone Games / Rheingold Associates


Hi, Caroline:

And thank you so much for initiating this conversation, and for returning time and again to participate in a manner which has enriched and I dare say helped to bond us all.

You write:

‘disbursing funds, or evaluating their disbursement’ is surely crucial too.

Absolutely. I am very far from wishing to devalue either the disbursement or the evaluation -- without the first, we have no social benefit, and without the second our social benefit risks being ineffective and thus essentially in vain. My point is simply that we have had agencies in place actively helping the needy around the world for a considerable length of time (eg the Red Cross Treaty, 1864), and making serious attempts at mechanisms for evaluation for some time now (as evidenced in several earlier conversations and events here in SocialEdge) -- and that the people of heart who manage to get themselves employed at "making a difference tasks" are thus busy (on the whole) either raising funds, disbursing them, evaluating their disbursement, or using them in the field for particular programs in health, disaster relief, education, etc.

I think all of that is wonderful, indeed it's that little piece of the human whole which keeps me feeling life is worth living, not the immensely greater energy that pours through the airline industry, or entertainment, or pharmaceuticals (licit or illicit) or much of politics...

But raising the consciousness of our interconnectedness, so that an increasing number of us come to realize that "giving" is not a decorative sprig of parsley accompanying the main course ("meat and potatoes") of life, but something far closer to the central nutrition of the entire social enterprise (the "fruit and vegetables" of the nutritionists) -- that seems to me to be something that doesn't fall directly in the remit of any particular part of the whole social entrepreneurial enterprise. And that's why I want to emphasize it, because it may be the part we're not focused on, the part we can get blindsided by -- and yet the part which, if we can pull it off, will give us the greatest opportunity for societal benefit across a whole range of issues.

So I'm hoping my comments will be taken as additives to your own, and not in any way as contradicting yours.

Ensuring that the development agenda is set by poor people rather than well-meaning people in richer countries seems to be a key part of ensuring we do better in future, and building the capacity of indigenous civil societies in poor countries to develop and implement that agenda is therefore crucial.

I am very much in agreement with you on this. I guess what I'm saying is that changing the mindset of potential givers – all those who contributed to tsunami relief from the widow with her mite to those who make decisions about the state's millions – in such a way that social giving is seen as a survival necessity, and service to others as being as crucial as self, looks to me to be an enormous task, equivalent to the Manhattan project, or landing that first man on the moon.

I am not sure who has time for this project. I'm not sure it's on anybody's agenda. I just suspect we need it.

Thanks again for your presence here, and for Alliance...

Robert Daoust - Feb 6, 2005 2:28 pm (#25 Total: 32)


Caroline says : "I agree with you, but for this to happen surely compassion needs to be transformed in political will". You may replace "but" by "and", because all you say in that paragraph of yours is similar to what I would say myself. Perhaps a point you've missed is that, for me, political will is going to be in sufficient supply ONLY when a sufficient number of individuals, by motive of philanthropy-or-compassion-or-enlightened-self-interest and by means of an adequate organization, will be personally involved in rescuing other individuals.

The answer to your question in paragraph two is no, helpers would not necessarily spend one or two hours physically with someone needing their help. When I gave the example "Just picture yourself a Sunday afternoon, connected to your branch of universalrescue.org" I had in mind someone connected to the Internet.

Your remark about distance is interesting. It is precisely because of distance that I want a guarantee. We need to know BY THEIR NAMES (or their individual numbers if you prefer in order to preserve confidentiality) the millions who suffer too much and who are actually the clients which our rescue enterprise must manage to satisfy. I know there is a cost to identifying individual cases of severe suffering, but I am willing to pay for it because sound management requires it and because more funds will be attracted by the clear accountability it implies. Moreover, it is congruent with the most recommended trend in favor of involving locally helped people, since they become personally engaged in a kind of contract... Not all organizations would have to comply to this guarantee requirement, of course, but only a few who would like to be associated with the so called universalrescue.org. Others would go on with business as usual. And these others would have better support (or opposition, dependingly!) from people like me because I would better appreciate what they are doing indirectly for the control and prevention of the individual cases of severe suffering that I am dealing with.

You know, the classic capitalistic view on aid has been something like "let us make the cake bigger and there will be more for everyone", or "let us bring more water in the lake and every boat will be higher", while "philanthropy will take care of marginal cases or collateral damages". That's what has been called trickle-down economics, I guess. Obviously, it does not work quite as intended. I think it needs a counterpart, a "trickle-up economics". If, systematically, we would start bringing rescue to everyone who must and can be saved, global prosperity would soar incredibly, wouldn't it? To comment Charles' last message, beginning that endeavor would be a small step for people like you and me, but a giant leap for the world community.

Caroline Hartnell - Feb 8, 2005 6:15 pm (#26 Total: 32)
Alliance Magazine

I'd like to take the conversation back to Adele's post a few days back.

'In my view, the tsunami event has helped to mobilize an interest and capacity in giving and renewed a commitment to Africa and to long-term development issues. The challenge will be making long-term investments in development where immediate results will not be visible, and making these investments in regions that do not receive daily coverage on the evening news. In a culture that promotes instant gratification (corporations’ quarterly reports, one-year grants to NGOs), patient and committed social investments become increasingly important.'

I think everyone who has contributed to this discussion has stressed the need somehow to mobilize the huge surge of compassion and giving in response to the tsunami for longer-term social investment. The challenge, as Adele says, is how to do this.

All ideas needed!

Bonnie Koenig - Feb 9, 2005 2:22 pm (#27 Total: 32)
President, Going International

A number of people have commented on the importance of getting more people to travel/work overseas to directly understand need.  Most successful international giving programs will tell you that this is a highly effective strategy.  But the reality is that the larger part of the potential pool of donors are outside the reach (for one reason or another) of this type of experience.  Perhaps then we need to be more creative in developing programs that allow potential international givers to have a transformative and positive “citizen of the world” experience closer to home? 

venkat - Feb 9, 2005 8:19 pm (#28 Total: 32)

Hi, Caroline. By creating such a great discussion, you're pushing my workload this week to 100 hrs. I simply MUST go to work but can't resist throwing in my 2-bits.

All- I run GiveIndia (www.giveindia.org) that tries to connect individual donors to individual causes (often individuals in need of help). Robert- we do exactly what you ask, tell each individual donor who was actually helped by his/her money. See www.giveindia.org/give/common/assist.pdf. Post-tsunami, we gave a small sum of under $10,000 to help an NGO in Andhra Pradesh, India, help fishermen repair their boats. 450 boats were repaired, and we have photos of those 450x3=1350 men standing next to their boats, the names of each person, the village, etc...- will go live on our site soon. This can get even better, but it is a decent start. It costs us roughly 1-2% of the donated money to give this feedback. We've given feedback to more than 10000 individuals in the last 4 years. Robert, part of what you say is also echoed in a famous MK Gandhi quote- "we must (ourselves) be the change we wish to see in the world". If each one of us connects with and helps 1 person, the world CAN be changed!

Mr Cameron, I feel privileged to read your posts and the point about marrying heart and mind. Creating the "connectedness", which is what Robert also stresses, is critical. www.indicorps.org is trying to do this with young diaspora Indians, getting them to spend a year in their motherland. But this is even needed locally. For instance, at every traffic light in Mumbai, we (the well off) have mentally shut out the little kids standing there with their scrawny outstretched arms... I am trying hard to convince my own team that we shd take groups of 20-30 payroll donors (we run a payroll giving program in Indian companies) out on a Sunday to cook food (own effort) go out on the streets, serve these children and talk to them. I want us to be able to create a school program where we take children from private schools to visit 6 different places (show them poverty, show them disease, show them child labour,...- but all with the POSSIBILITY of change) and after 6 months, tell each one of them- now YOU go ahead and raise money/resources for whatever YOU believe in from your friends/family, etc. and do what you wish to... would LOVE to have schools giving kids course credit for this (like the movie Pay It Forward)....

Got to rush, it's 8:45am and we have 4,000 donors to send receipts to today ! They all supported someone's run in the Mumbai Marathon on Jan 15. I wish I could meet the 400 people who reached out to these 4000 and thank them personally for being the change.

Robert Daoust - Feb 10, 2005 11:47 pm (#29 Total: 32)


With your message, Venkat, you're pushing my day long past midnight! I began reading giveindia.org and givefoundation.org, and could not stop reading! My comments will come tomorrow morning. Meanwhile, I invite people here to look at http://www.giveindia.org/give/organisation/SearchOrganizations.do?Key=Search and click on some of these NGOs and see some "donation options" that are offered with each NGO...

jimfruchterman - Feb 11, 2005 8:18 am (#30 Total: 32)
Benetech


I visited Brazil late last year for the Schwab SE Summit. A surprising thing was that corporate sponsorship was the biggest single funding stream for both of the successful SEs I visited in Rio, especially since it's our smallest funding stream here in the U.S.

I asked why, and got two explanations most commonly: - lack of tax incentives for individuals - lack of a philanthropic cultural norm

Enacting tax incentives by itself may not be enough, but national law is one way to express norms!

Robert Daoust - Feb 11, 2005 1:44 pm (#31 Total: 32)


Hi, Venkat. You bring an amazing contribution to this discussion about getting global philanthropy going!

You claim that GIVE is "the first 'philanthropy marketplace' or 'charity exchange' [September 2000]". If we look at your operating model(http://www.givefoundation.org/opemodel.htm) and its parallel between investors and donors or the stock market and the giving industry, I'm inclined to believe your claim. Your idea seems really great, and seems working too. I think you are building the kind of sound platform from which the next global philanthropy revolution will be able to soar.

I was moved with what can already be done with your organization. For instance, the Association for Leprosy Education, Rehabilitation & Treatment offers me to "Sponsor diagnosis & treatment of 2 leprosy patients" for less than twenty dollars, feedback with photos included (http://www.giveindia.org/give/ngoprofile/ShowDonationOptionsDetails.do?ngoid=135&optionid=669&quantityForUser=0)!

Indeed, you do exactly what I ask, at least on the point of feedback to donors, but I beg you not to miss my main point about severe suffering as a paradigmatic new criteria in the field of philanthropy. If there is not a systematic concern with the totality of individual cases of severe suffering that must and can be resolved, I am afraid philanthropy will not raise much above the new platform you are laying.

You are providing a really good structure. What strikes me is the prominent place given to well identified individual beneficiaries within many of your selected NGOs. I suppose this is an effect brought up by your feedback requirement, and I am quite impressed. What I would like to see now, in many sponsoring offers, is an estimation indicating how much an individual case is considered to be a case of severe suffering that must and can be resolved. This is an essential information in determining the return on my investment when my sector of interest is the relief of suffering.

For the rest of my comments and questions, I will write to you personally Venkat.

Thanks Caroline and Social Edge for having brought us closer.

High engagement philanthropy (or venture philanthropy, as it is also known) has become more and more common over the last decade. Funders and nonprofits are finding new ways to work together to complement and maximize the impact of monetary grants, often with great success.

In the under-resourced nonprofit world, it can be tempting to welcome any kind of help a funder might offer – after all, the more the better, right? Not necessarily. The choice about whether to enter into an engaged relationship with a funder must be weighed carefully. These partnerships can be powerful ways to strengthen an organization’s capacity, but engaged philanthropy isn’t for everyone. To make a smart decision about whether your nonprofit organization is “ready to engage,” consider whether some of the key elements of a successful relationship are in place.

Common goals and values.

Entering a high-engagement relationship with a funder is a bit like choosing a companion for a cross-country road trip: a good match can be the foundation for a positive shared experience, while a bad one might mean discovering half-way through that you weren’t even aiming for the same destination to begin with.

Before you decide to partner with an engaged funder, it’s crucial to make sure that you and the funder have the same broad goals for your organization. Some investors, for example, focus exclusively on growth or even national expansion; is this your top priority, too? If not, you and your new partner may find yourselves in conflict at key decision points, a situation made even more challenging when the funder has already made a significant, multi-year financial commitment. In contrast, when goals are well-aligned from the beginning, an engaged funder can be a powerful ally. Be sure to have candid discussions with a potential high-engagement investor -- before you partner -- about your goals for your organization and the relationship.

As you have these conversations, you can also begin to imagine what an ongoing partnership would be like. Is the potential investor responsive to your needs and questions? Do they communicate clearly and effectively with you? Are they open to learning from your organization? Do they follow through on what they say? Your early discussions can be a good indicator of how things will work after your partnership begins.

Investment of resources – theirs and yours.

High engagement is a two-way street. At its best, it’s a collaborative relationship in which each party shares its resources (including time), experience, and knowledge so that together, the two organizations can accomplish their goals. It can go terribly awry when there are disagreements about the level of participation that’s expected.

"High engagement is a two-way street."

Drawn by the allure of receiving long-term support from a potential funder, many nonprofits underestimate what will be required of them in a highly-engaged partnership. This can vary across funders and even across a single funder’s grantees, but one thing is clear: both parties must actively participate in order to reap the benefits of engaged philanthropy. Be sure you understand in advance how much time – and whose – your organization will need to contribute for meetings, joint projects, reporting, and other activities. You’ll also want to know how much participation to expect from your potential funder. In addition, consider whether the funder’s skills and assistance match what your nonprofit really needs, especially since you’ll be asked to dedicate time and energy to these efforts too. (The most effective engaged philanthropists will minimize any requirements that don’t serve a useful purpose for your own organization.) Finally, if you are considering partnerships with more than one engaged funder at once, think carefully: nonprofits often find that one such relationship at a time is all they can handle, because of the significant effort required.

Transparency.

True transparency is a quality that is sadly lacking in the traditional philanthropic sector. Nonprofits are often understandably uncomfortable baring their weaknesses to funders, and funders can be vague about how they will measure the success of their grants. In high engagement philanthropy, however, these barriers can significantly hinder the development of an effective relationship.

Experienced engaged funders know that nonprofits can be plagued by organizational challenges, and in all likelihood, they’ve already seen the kinds of problems you’re facing in their other grantees. It may feel scary to tell a major investor about your real organizational warts, but unless you do, they are powerless to help. Over time, as the trust and respect between partners increases, these candid conversations will become easier. The first one, however, can feel like a leap off a cliff – but it’s crucial to building an honest, productive partnership.

Funders, too, should have transparency as a goal. They should be very clear about what they plan to provide, and what they expect from you in return. As the relationship progresses, they should create regular opportunities for two-way feedback, where they share their impressions of the relationship and also ask for yours.

Long-term commitment.

Multi-year relationships are critical to the success of engaged philanthropy – it takes time to build trust and to understand how to collaborate effectively with a new partner. Think carefully about entering a relationship with an engaged funder that will last for less than two years; will you really be able to accomplish what you hope to? An effective engaged funder will stay involved over a number of years (at least three and preferably more), and will work with you to help build your organizational capacity so that when the funding relationship does end, your nonprofit will be prepared.

High engagement philanthropy has great potential to bring funders and nonprofits together in innovative ways. Our experience at REDF has shown that successful relationships can produce increased trust, effective collaboration, strengthened organizational capacity, and lasting social change – particularly when both parties enter the partnership having carefully considered whether engaged philanthropy is right for them. Nonprofits can help ensure success by investing time for careful thought and reflection before they agree to an engaged relationship with a funder.

Kristen Burns is the President of REDF. As President, Kristen sets REDF's strategy, oversees its operations, and provides assistance and coaching to REDF Portfolio members. Under her leadership, REDF maintains its rigorous measurement practices and demonstrates the effectiveness of social enterprise in creating lasting positive change in the lives of low-income and formerly homeless individuals.

Kristen Burns - Oct 19, 2004 5:36 pm (#1 Total: 9)
REDF


I'm interested in hearing others' thoughts on how a nonprofit can assess its own readiness for a highly engaged relationship with a funder; I imagine there are additional perspectives out there. Looking forward to a lively discussion!

bigchainring - Oct 21, 2004 9:20 am (#2 Total: 9)


hi

I work at the ymca in boston, to help integrate computer/internet technology into core ymca programming...or at least that's my 10 second line when people ask me what I do;)

This discussion caught my eye, because I have talked to my boss about the possibility of exploring venture philanthropy. I got a less than enthusiastic response.

I believe that vp may actually help to jump start because we are at a point where the tracking and gathering of data about the "cyberYs" (now that they are up and running to some degree) is becoming important for [continued] funding reasons.

From what I have read, I believe that the business process focus of vp would help not just the Y, but many nonprofits, who may be stuggling to exist in a world of efficiency.
I'm also aware that a focus on business can go too far in the nonprofit world...but that is one of the "edges" I am currently exploring;)

My frustration after exploring vp orgs is that they all want their portfolios to go national...and I have read about several nonprofits that are having real problems with going national...I don't believe the effort I am involved with is ready to spread across other ymcas.

Interested to hear other thoughts/reactions..
thanks.
matt

================================== Matt Crichton CyberY Developer YMCA Boston/Training, INC. 617-542-1800 x32 mcrichton@ymcaboston.org bigchainring@hotmail.com Cyber Y: http://www25.brinkster.com/ymcaboston/index2.htm Personal: http://www20.brinkster.com/bigchainring/index.htm AmeriCorps VISTA 2000-2002 (Seattle, Boston)

We also pay the price of learning to fear each other.|| You see it everywhere: the fear of smiling and greeting someone else,|| fear of sitting to closely to certain people on the T and the overt|| fear of even rising our eyes to meet another’s while walking.|| It’s funny that the city forces us to live so compactly on top of each other,|| but we resist acknowledging that we do. (What's UP Magazine Sept04)

Kristen Burns - Oct 21, 2004 5:35 pm (#3 Total: 9)
REDF


Hi Matt,

Thanks for your post . . . yes, sometimes even within the same organization there can be very different perspectives about whether a relationship with an engaged funder is the right thing to do!

When the fit is right, venture philanthropy/engaged philanthropy can bring lots of rewards, including an increased focus on demonstrating results -- and the support required to get there -- as well as the application of business principles as appropriate. At REDF, we currently have five nonprofits in our portfolio who tell us (and others) that their work is strengthened as a result of our relationship.

When the fit is wrong, however, a highly engaged relationship can be a distraction at best and a disaster at worst. We’ve learned this lesson first-hand as well! In fact, we’ve written case studies about it – you can read more in a .pdf file available on our website at http://www.redf.org/download/boxset/REDF_Vol2_3.pdf.

Some venture philanthropy funders do specifically target nonprofits that are ready to “go national,” and I think you’re wise to consider whether your project is really ready for that yet. That said, not all engaged funders require their grantees to be on a national trajectory (few of REDF’s portfolio enterprises are) – again, it’s all in the fit.

tutormentor - Oct 21, 2004 7:53 pm (#4 Total: 9)
Cabrini Connections Tutor/Mentor Connection


I would welcome a relationship with a donor who shares the same vision and goals is willing to provide time, talent and treasure to help the enterprise be successful. I use my organizations web sites to achieve our mission, and as an invitation to investors who'd like to help.

The candid conversation with an investor is one I'd love to be having with lots of potential investors. However, I have trouble getting past the "send me a proposal" stage.

So, I'm waiting for the interested investor to show up so we can start developing a relationship. Is there a place to go to put your organization on a list?

The web site is www.tutormentorexchange.net.

Dan Bassill

peelcee - Oct 22, 2004 3:01 am (#5 Total: 9)
People's Life Center


--Your Message Here-- Greetings from peoples' life Center. It is 20 years servicing organization close contact with depressed people. We are having seven sectors. Through these sectors we implement the programmes. sectors name 1) DEVA Child development sector 2) Vidivelli working women federation 3) Dalit empowerment sector 4) Transsexuals empowerment sector 5) Minority council 6) Micro entreprenuership 7) Research and development sector. Kindly support us in all the ways (financial, technical, ideas and etc)

Kristen Burns - Oct 22, 2004 5:32 pm (#6 Total: 9)
REDF


When funders decide to make long-term, highly-engaged commitments to their grantees, a common side effect is that they may not be able to take on as many grantees at a time with the resources they have available, or that they can’t initiate new partnerships as often.

It might be valuable to make sure that the engaged funders you’re targeting are aware of your work even before they’re ready to consider a deeper relationship with you, so that when the time comes, you’re already on their radar screen. I’m not aware of a list for this purpose, but maybe another reader is? In my opinion, targeted conversations with the funders you’re interested in pursuing might be a more effective way to increase their awareness about your efforts.

A proposal can be a positive step; if you’re finding that your proposals aren’t successful, perhaps one of the funders you’ve approached would be willing to give you some feedback on the reason it was turned down? In the San Francisco area, I know of several organizations that offer classes and advice to nonprofits interested in increasing their proposal success rate; there may be a few in your city too. Even a few hours with a development consultant, reviewing your past proposals and gaining specific recommendations for future ones, might be time and money well spent. This is a challenge that most nonprofits share -- I encourage other readers to post their ideas as well . . .

For peelcee, I noticed from your other posts that you’re based in India. I’m less familiar with international efforts, but one organization you might be interested in checking out is NESsT (www.nesst.org). They operate in Eastern Europe and South America, and focus on nonprofit-run enterprises. Perhaps they’d be an informational resource for you.

edward - Oct 25, 2004 1:22 pm (#7 Total: 9)
self


In providing advice to a range of not-for-profits, I have concluded that a critical need for your organisation if considering engaging with a venture funder/partner, is to think clearly at the very start about eventual evaluation of projects. How will you, and your partner, monitor and evaluate the progress and outcomes of the joint activity? This thinking needs to cover what you will monitor and evaluate, how you will do this and why you will do it. I have seen in several cases that misunderstanding (and worse) arises between partners when it later becomes clear that there was no real shared and joint understanding of respective perceptions, needs and obligations to other stakeholders (perhaps including shareholders). If a not-for-profit thinks through these issues of monitoring and evaluation, this will be an important part of any assessment of readiness. This all sounds very obvious, but in the real world where we are all highly committed to our missions, it's always so much more tempting to 'just get on with getting a partner' than do the mundane work of figuring out the structures and processes around project delivery. --Your Message Here--

Kristen Burns - Oct 25, 2004 5:05 pm (#8 Total: 9)
REDF


A great point, Edward. It's critical to make sure you and your prospective partner agree in advance about what "success" will look like, and how you'll know whether you've attained it. And it's true, in the real world where money and resources are scarce, nonprofit leaders can be tempted to skip this step and engage with any partners who present themselves . . . a very risky move!

bigchainring - Nov 3, 2004 10:41 am (#9 Total: 9)


hi kristen I was disappointed to see so few posts...I think this is an important topic.

Here are some more questions I have...

This from…www.redf.org/faq_intro.htm..

1. “Venture philanthropists look for ways to be appropriately engaged in supporting the work of the nonprofit beyond simply providing funding.” What is appropriately engaged?

2. Access to long-term, adequate and appropriate financing. “If you want a venture that is economically successful, you will need managers able to deliver. They may come out of the nonprofit sector, but they must have the appropriate skill set to bring you the success you deserve.” Is there a bias towards forprofit being the only way to go for trying to do a business deal..? All forprofit and no nonprofit is bad. I believe each world can learn from the other.

3. Anybody have experience around social intrepreneurship? I feel this is what I’m doing inside the YMCA.

4. “At the same time it is important for nonprofits to understand the limitation of [MBA] student interns. While they provide a significant, meaningful contribution to nonprofits, there are also challenges to integrating them into the organization in an appropriate way. How to best make use of interested students is an important issue to be managed by each nonprofit.” Anybody have good/bad experiences with [mba] students?

5. “Smaller organizations have greater flexibility to approach their work and carry less of an institutional memory that needs to be shifted in order to pursue enterprise creation.” The YMCA is huge…and insititutional memory is probably very deep…anybody have experience with this?

thanks. matt crichton

Special Guests David Carrington Independant Consultant Sarah Chiles NYU Stern School of Business Lee Davis NESsT Jed Emerson Blended Value Rob John Oxford University Fellow Alex Nicholls Skoll Centre for Social Entrepreneurship Serena Porcari Fondazione Dynamo Bruce Sievers Stanford University

A Warm Welcome to You! This week, a team of five MBA students from China, India, USA and Costa Rica has invited special guests and the Social Edge community to join them in exploring the challenges and opportunities for pioneering a Venture Philanthropy Fund at Oxford University. Venture Philanthropy (VP) is an investment approach to the funding of start-up and early stage social entrepreneurial organizations characterized by the high-engagement of funders in strategy, capacity building, performance metrics and governance. VP is growing as a practice in the UK and across Europe, and an active role of Oxford’s Said Business School and the Skoll Centre for Social Entrepreneurship could leverage and shape this effective investment tool for social change. As a part of Oxford’s MBA Program, a team of students has partnered with Rob John to carry out a New Business Development Project aiming to assess the viability of creating a VP Fund that would be used to pioneer and learn from a high impact philanthropic model in the UK which respectfully supports the accelerated growth of social entrepreneurial organizations.  The purpose of the Fund will be two-fold: 1) Social Change Investment Vehicle Providing financial and managerial support for and by students, alumni and members of the Oxford community launching or scaling social ventures. 2) Teaching Tool & Learning Laboratory Highly-engaged philanthropy requires respectful partnerships and two-way learning.  Given that this model of philanthropy is relatively new to the UK, Oxford is well positioned to provide experiential learning opportunities for a range of academics/students, practitioners and financers as well as document and analyze the outcomes which will add value to the UK field of philanthropy as a whole. Whether you are a seasoned philanthropist or someone who has never heard of VP, the team needs your help to shape the future of philanthropy in Europe by sharing your ideas for this investment tool and learning laboratory. To spark the conversation, here are a few questions: Introduce yourself & tell us about your interest in this topic. How do you envision the opportunities & challenges for Venture Philanthropy in the United Kingdom?  What have we learned from elsewhere in the world where the model is being adapted/ adopted? Could business schools around the world leverage the development & learning of highly engaged philanthropy as a complement to other philanthropic models? How? Do you have any advice to us for developing a VP fund?  Any questions for us? To post a message for this discussion, type in the blue box below and push submit.  If you are not a registered member, you will be led to a 5 second free registration process and then your message will be public.

Pamela McLean - Feb 12, 2005 5:24 am (#1 Total: 60)


You invited introductions and questions

I am a volunteer with CAWD, as small UK charity that supports several grassroots community development projects in rural Nigeria. The projects are locally led. The UK link began through personal friendships - the charity registration came later. Details of how it started can be found on www.cawd.info Lack of resources has meant that the website has been neglected and is outdated – but it is a good record of the beginnings.

CAWD’s work has led to CawdNet. That network includes skills we have previously lacked. Within the next few weeks we plan to launch a new website (probably at www.cawd.net) to describe CawdNet – which is a “making things happen” network that has developed through CAWD’s networking.

CawdNet’s approach has been influenced by SocialEdge, by David Bernstein’s book, and by attending the 2004 Skoll Forum on Social Entrepreneurship. Until Social Edge we didn’t know the term Social Entrepreneur. We just knew that the way we were doing things didn’t quite fit in with the ways other people did things.

It’s hard to explain – we’d be using the same words – but somehow when it came to possible action, in their policy statements, and so on, seemed to want what we wanted. So we were pretty much on our own.

Personal friends “didn’t seem to get it” either… and it was hard to defend or explain the “Africa project thing”. It all fell into place and made sense when a speaker at the Forum started to describe things in terms of hybrid organisations – a mix of social/charitable initiatives and buisness enterprise. Exactly so! What a relief! At last we had words to explain ourselves.

Understanding our hybrid nature has led us to split CawdNet initiatives into CawdSocial projects and CawdEnterprise projects. People can relate to that. They know where they are with us now. We can simply say – “We are doing this as CawdSocial” or “This is going to be CawdEnterprise”. Then everyone knows which set of rules we will be working by and how to behave towards us. We would dearly love the brainpower and support of MBA students – working in the UK, or Nigeria, or a mixture of both.

We are based in UK and Nigeria. We make good and creative use of ICTs to maximise communication across the digital divide, and key CawdNet people travel between Nigeria and the UK. Site visits and field trips could be arranged if that was wanted, but good work of various kinds could also be done without them. “Information can go to students” if it is not judged cost effective or appropriate for “the students to go to the information”.

Much of the information related to CawdNet is as easily available in the UK as in Nigeria – although nothing beats a site visit for a proper reality check. Much of our work happens through ICT enabled meetings rather than face to face (not expensive leading video conferences etc – but affordable emails, yahoo chat, Skype and such like). Much of our work has to do with pushing available ICTs to the limits – and more - because we work in locations beyond the boundaries of the normal telecoms infrastructure - but that is a separate story.

So my question is – Do you have to limit yourselves to Europe – or could you stretch a point to include us? It’s not a big stretch, given that CawdNet was initiated by CAWD, which is UK based, and there is currently a genuine concern to address the issues of African welfare and development in new ways (CAWD: Charity for African Welfare and Development). Would you widen your boundaries and consider working with CawdNet? We would really appreciate working with you.

Pamela McLean - Feb 12, 2005 5:38 am (#2 Total: 60)


The "hard to explain" pragraph should have read.....

It’s hard to explain – we’d be using the same words – but somehow when it came to possible action, the link wasn’t there. It was as if the words had different meanings for the people who were writing official documents and for us. It was odd, because in their policy statements, and so on, they seemed to want what we wanted. So we were pretty much on our own.

Keely Stevenson - Feb 13, 2005 9:25 am (#3 Total: 60)
Royal Bafokeng Economic Board

Hello,
Thank you for sparking the discussion, Pamela-- its wonderful to see you on Social Edge.  Your example is an important part of the issues we need to consider as we design this model, and I look forward to exloring it further.

I wanted to begin by thanking our Special Guest thought leaders and by warmly welcoming each of you who have joined us for this special online event.  Please don’t be shy, jump in and share your opinions.  We learned a lot from the Ready,Set,Engage discussion on Social Edge in October as well as from the launch of the Satter Social Entrepreneurship Fund @ Stern School of Business in NYU.  These resources might be useful to people trying to understand the type of issues we are considering.

My component of the business plan is focused on the financial projections and modeling.  This means that I am considering the best strategies, forecasts and limitations for capitalizing & growing the Venture Philanthropy Fund at Oxford as well as examining the various investment instruments we can use to support social ventures and manage our operational costs associated with that support. 

We are most keen to hear where you believe the challenges and opportunities are in launching such a plan.  My team and I look forward to exploring some of the possibilities with each of you over the week.  

Warm Regards,
Keely

Yandong Li - Feb 13, 2005 6:15 pm (#4 Total: 60)
Oxford MBA Student

Hello,

Welcome and thank you for joining the discussion.  I am one of the five Oxford MBA students who launch this event. I came from China, a place where VP is most needed.

My responsibility of the business plan is to draw the organizational design of the VP funds.  I am trying to find the best organizational structure enabling the VP fund achieve its two folds goal: an active VP fund and a teaching vehicle.

I am looking forward to sharing your insightful idea regarding the business plan.

Best Regard,

Yandong 

Bruce Sievers - Feb 13, 2005 11:43 pm (#5 Total: 60)


Hi Keely et al.,

I am checking in as one of your guest commentators with a couple of very brief questions about the nature of your new fund.  As someone who has written critically of venture philanthropy in the past but also serves on the board of an organization that supports social entrepreneurship (NESsT), I am curious about your vision of the operation of your investment vehicle.  Do you see it as sponsoring quasi-commercial income-generating activities within nonprofit organizations that you are assisting, or viewing the entire investing process as guided by venture capital principles?  I am much more enthusiastic about the former than the latter, because I think establishing new forms of income generation for nonprofits is generally positive (assuming they can avoid "mission-creep"), while the attempt to translate the techniques of for-profit venture capital into the nonprofit world is fraught with problems, such as pushing organizations toward inappropriate and counter-productive performance measurement. So, can you say a bit more about what you mean by "providing financial and managerial support . . . for launching or scaling social ventures."? Thanks, Bruce

robjohn - Feb 14, 2005 2:09 am (#6 Total: 60)
Rob John, Skoll Centre, Said Business School, Oxford


Thanks for the contributions so far. Early bird stuff, as Valentine's Day is only just dawning here in UK. I guess I'm the originator of this project - that my able team of MBA's is now pursuing with considerable energy and innovation, so I'd be happy to respond to Pamela and Bruce.

I've spent most of my professional life working for international development charities (so I have a strong resonance with Pamela), the last five of which were with a global microcredit network. The UK part of that network was set up in the early 1990's using (what today) we might call venture philanthropy. A long term, hands on engagement with a funder who added considerable value above and beyond the 7 years of grants. To those from the business world it looked like venture capital, except the return to the funder was social value not financial. To those from the charity sector it looked like a new and exciting way of working with a social entrepreneur, providing risk capital together with advice on strategic planning, marketing, communications, and access to networks of other funders. I was later asked by its trustees to run that VP fund, and for 4 years helped grow and develop the mission of social entrepreneurs using this powerful form of philanthropy.

VP focus is on building the charity's capacity to grow and develop, to get more mission out through the door. In my experience VP works well when the charity is ready for some degree of step change and positively values what the VP can offer beyond funding. A VP engagement may involve many years of funding and partnership, as the major provider of funds for organisational development (as with the microcredit network); or it may mean a more modest engagement in helping the charity exploit a new idea or income stream initiative - a little seed capital and some business planning advice. My experience shows me that VP funders need to be geographically close to their portfolio nonprofits. In the case of an international development charity this will primarily mean working closely with the UK part of that organisation (as with the microcredit example above). If the Oxford fund becomes a reality, I think we should initially focus on working with geographically near, relatively small charities, helping them develop a new idea which works towards their goal of extending and deepning their mission.

Bruce, I take on board you initial queries. Even calling this VP fund invites a lot of criticism before we're off the blocks - reflecting the trenchant debate in this area the last few years. I am talking about a grant based seed fund which adds value to its modest financing of a charity through releasing the business planning, marketing, communications and coaching potential that the School has in its MBA's and faculty. I would never stretch the venture capital model too far, this is about social return not financial. It may be that the best kind of fit for this Fund is in helping a charity expolit a new income stream, perhaps by developing an untapped commercial possibility. We could set up a small social fund and give away £5,000 grants to small charities; or we could set up a VP fund and make that £5,000 work much harder by bringing in the skills of the School and motivated MBA's.

Let's develop what these 'skills' are, and how they might be delivered, as the debate continues this week.

Best

Rob

Pamela McLean - Feb 14, 2005 4:15 am (#7 Total: 60)


Ref your mention of: “grant based seed fund…. releasing the …….. potential that the School has in its MBA's and faculty…… set up a VP fund and make that £5,000 work much harder by bringing in the skills of the School and motivated MBA's.”

What is described above is what I understood the relationship to be about i.e. # The social entrepreneur brings knowledge of the issues - the problem to be addressed and the practicalities of how to solve it, local knowledge, networks and enabling skills within the community etc. # The MBA students bring the organisational and business skills that are needed to set things up and get them running efficiently. # The VP fund ensures that the money is there to make it happen.

As I understand it the fund is the vital ingredient to make the collaboration a worthwhile practical exercise, rather than simply a theoretical one. The VP fund would enable action to be taken. If the money is not there to carry through what the MBA students suggest then such a collaboration could turn out be a useful exercise to the MBA students, but just a big tease to the social entrepreneurs.

Without money to follow through, the collaboration could even be counterproductive because of the disruption caused; the opportunity cost to the social entrepreneur of enabling the students to really understand what is going on; and the difficulty of living with the subsequent disappointment of falsely raised hopes. How horrid to know what transformation would be possible given the MBA insights, skills transfer and structures “if only we had the money……”. And I mean real money – not pointers to potential funding sources that take time and skills to apply for and may or may not lead anywhere in the end.

I hope the VP fund will enable MBA student expertise to translate into long-term reality and experience for their host social entrepreneurs.

hgonzalez - Feb 14, 2005 7:35 am (#8 Total: 60)
Oxford University -Said Business School-

Dear all:  I am a member of the MBA team who will benefit greatly from this discussion, and also hope to contribute in the on-going discussion of financing the citizen sector.

In this specific debate, we are keen to learn from the experiences of people who have beein around the setting up venture funds as well as from those who have received them and created social value as part of this funder-recipient partnership.

The goal of our team is to design a "business plan" to set up a Venture Philanthropy Fund" based at Oxford's Business School.  We hope to gather a lot of the information we need from this discussion, and Bruce's, Pamela's and Rob's comments are already on this way.

 

Bjorn - Feb 14, 2005 11:07 am (#9 Total: 60)
SV2 (Silicon Valley Social Venture Fund)

So, my name is Bjorn and I manage a venture philanthropy giving circle in Silicon Valley.  I have a few points…

1) While bright ideas are the lifeblood of the social sector, money is like Oxygen.  Whatever you do, you need to provide enough funding to make it work.  You need more than just a business plan, more than a marketing plan, you need the resources to implement those plans… fewer relationships at higher funding levels is probably much better than the broad and shallow approach.

2) Remember, your alumni are not the service providers, not the one's doing the work (most likely).  Your interactions need to be respectful that the orgs you are helping are probably the experts in their areas... the social sector works differently than the for-profit world and the main criticism of the field has come from people who come in with an "I know best, listen to me, change according to my input" kind of mentality.

3) I have a personal bias against funding capacity based on a written proposal.  Proposals are a polite fiction that are really not well suited to getting at the root of capacity weaknesses.  McKinsey has a great capacity assessment tool that could be used to identify those issues, but you probably need to commit to an organization before they let you see all their dirty laundry.

Pamela McLean - Feb 14, 2005 11:07 am (#10 Total: 60)


Bruce mentioned “pushing organizations toward inappropriate and counter-productive performance measurement.”

As I think about the realities (potential benefits and disadvantages) of MBA student collaborations with social entrepreneurs, I replay, in my mind, various experiences that our organisation has had in linking with “outsiders” from organisational structures unlike our own. I won’t detail the examples here but just the resulting observation.

It may be worth emphasising that social entrepreneurs work with all kinds of “invisible capital and currencies” (goodwill, shared vision, commitment, hope, trust, persistence, voluntary help, in-kind donations, etc) that can be disrupted, and which have to be managed and maintained just as carefully as other more visible currencies such as our cash-flow. These currencies are hard to quantify or explain; yet we have to balance all of them. There may well be hidden costs in improving the bottom line

Pam CawdNet

audrey_zhou - Feb 14, 2005 5:27 pm (#11 Total: 60)
Oxford Business School

Welcome to Oxford VP Fund forum.

I am in the Oxford MBA team working on this business plan. My responsibility is to design a business model to run the Fund, which covers the issues of how to become a partner, how to apply to be an investee, and selection criteria.

We would very much like to have you involved in our discussion. Your contributions are highly appreciated.

Serena_Porcari - Feb 15, 2005 3:02 am (#12 Total: 60)
CEO Fondazione Dynamo


I am Serena and I am managing as CEO a Venture Philanthropy foundation, born in Italy in April 2003. The name of the Foundation is Dynamo - Engine of Philanthropy. The founder is a Venture Capitalist who, in his early 44, realised that after several experiences in sustaining non profit organisation, wanted to build up his own foundation inspired to the model of venture philanthropy. Even if the foundation is pretty new to the non profit world, it has been a steep learning curve. The initial intuitions and then the critical success factors of Dynamo are: - the founding Venture Capitalist company covers the operating cost and the initial set-up capital for Dynamo. There is no investment fund dedicated to grantmaking. - Dynamo aggregated several professional partners, who donate pro-bono hours to manage projects (Bain &Co., TBWA, ASA Executive Search, several legal firms, KPMG and many others), covering various business skills. The idea is to engage their competences with the help of Dynamo to sustain social entrepreneur and existing organisation in exploiting their mission and/or their non profit ideas. - Dynamo potentially covers all the life cycle of the idea-project- initiative. I am saying potentially as our work is just at the beginning. Every project/initiative would have a dedicated fund-raising with a committment of Dynamo to cover from 10 to 20% of the capital required. Usually the investment campaigns aims at covering the seed capital and at least 3 years of operarating cost. I personally joined Dynamo in April 2004, after some experiences in Venture Capital and 8 years of career in IBM, in Italy, France and UK. By the way, I love to be part of this online discussion, as I personally strongly believe in the power of technology to enhance communication and to boost many social ideas.. I agree with Bruce. The Venture Capital model should be reviewed and applied correctly to non-profit initiatives. Dynamo believes on the importance of providing all the skills to sustain development and growth and on the sustainability of what we support in the long term, which often is related to economic and commercial activities.

robjohn - Feb 15, 2005 3:50 am (#13 Total: 60)
Rob John, Skoll Centre, Said Business School, Oxford

Just to pick up on Pamela's point.  The whole time I've spent working in VP, I see the combination of smart money (i.e. not funding the projects but funding the core cost needs of developing the organisation) and the right kind of advice/support as the synergy which makes VP work.  There are funders that provide cash only; there are some providers that offer advice/support only.  Either's good, but the combination, in VP, is powerful.  To be realsitic, this Oxford fund is not envisaged to be a full blown VP operation.  The sums of cash available will be modest, but none the less I think valuble, when leveraging skills, advice and support from the School. 

Absolutely agree with Bjorn's comments.  Any 'we know best' attitude will fail from the start.  It's the hubris that caused so much early criticism of VP.  All we bring to the table is a combination of skills and cash.  The real capital comes from social entrepreneurs, which as Pamela says, is often an intangible kind.  We need a mutual respect, humility and real understanding of what each brings to the table.

hgonzalez - Feb 15, 2005 5:27 am (#14 Total: 60)
Oxford University -Said Business School-

In just our first day of discussion, we have gathered provoking ideas regarding the limits and opportunities of Venture Philanthropy.  This is just great since it is part of our intention.

On the other hand, benefiting from Bjorns experience in managing a VP giving circle I wanted to ask how donors evaluate/assess the impact of their giving?  This question rather than addressing a model per se, would hope to learn from specific metrics (probably several ones)  that have satisfied various donors.

I am sure that Serena also has ideas to share regarding impact assessment, and we would also be interested in learning from Dynamo's governance structure since this particular issues is being discussed by our group.

Thanks to all for sharing such great ideas, and will follow closely to your comments.

schiles - Feb 15, 2005 9:46 am (#15 Total: 60)
NYU Stern School of Business


Hello All-

My name is Sarah Chiles and I am the director of the Satter Social Entrepreneurship Fund at NYU Stern School of Business. We launched the Fund last academic year with $300,000 in seed funding from a Stern alumnus. NYU Stern's Satter Fund has been set up to support and foster social venture creation among members of the NYU Stern community. The Satter Fund, modeled on a venture philanthropy fund and a first among business schools, operates as a competitive market run by highly engaged grant makers. Project proposals compete for grant funds based on their measurable return on investment, both financial and social. The Fund provides start-up assistance to promising Stern-affiliated social entrepreneurs, including students, faculty, alumni and staff. In addition to grants of $25,000 to $100,000, the Satter Fund provides management assistance to the grantees. An Advisory Board comprising practitioners, faculty and administrators awards grants annually to support new projects. All applicants are required to submit a Letter of Inquiry and Full Proposal using our online system, and then our Board hears presentations from the "semi finalists" to meet the management team face to face.

The management assistance we provide comes in several forms: we work with the grantees on their business plans and financials, link them with alumni mentors based on functional and industry need, give them pro bono legal, consulting and accounting assistance through our corporate partners, and monitor their progress through simple reporting requirements. We also keep them top of mind for networking opportunities and help them further potential future funding relationships.

This year, we have also added a new Social Venture Fund Practicum course which allows Stern MBAs to manage a $100,000 social venture fund of their own. As part of this course, the students are working with our new set of applicants to the Satter Fund to assist in their business planning and presentations to the Board.

Obviously, there are more details from our experience thus far I can provide, depending on the specific issues the group is interested in discussing. Having read through all the previous posts, I'm eager to learn from this discussion and be a part of further the discourse around how b-schools can support social entrepreneurship.

Thanks!

Bjorn - Feb 15, 2005 10:58 am (#16 Total: 60)
SV2 (Silicon Valley Social Venture Fund)

Often times there is a two-way benefit for Venture Philanthropy, where the person volunteering their time/expertise is seen as deriving a great deal of personal fulfillment or personal growth from the act of volunteering.  For SV2, we look for the success of the grantee AND the growth of the donor, so success has two dimensions. 

 

This would be very much less the case with an institution like the Edna McConnell Clark Foundation, where professional program staff are the ones working closely with the grantees.  Their success is going to be solely derived from the success of the grantee..

 

Yandong Li - Feb 15, 2005 3:23 pm (#17 Total: 60)
Oxford MBA Student

Thank you for insightful ideas!

Agree with Bjorn,money is like Oxygen. To bring Oxygen in, VP funds needs to prove their add value capacity to win donation as VC funds do to attract investment.  We are trying to design a small yet unique organization which would ensure this capacity, an organization allowing  a group of people, including  VP experts, social entrepreneurs, and scholars and MBAs…., work efficiently, innovatively, and passionately.

This brings my question to Sarah Chiles: As the leader of the first VP fund ever established in a business school, what you think is the major success in term of organizational design for NYU Stern’s Satter Fund?  What will be the difference, in your view, between NYU model and Oxford one, given the differences in vision and location between two?

Thanks,

Alex Nicholls - Feb 15, 2005 4:53 pm (#18 Total: 60)
Skoll Centre for Social Entrepreneurship

Hi everyone. I am Alex Nicholls, the university lecturer in social entrepreneurship at the Skoll Centre in Oxford. It has already been my pleasure to work with Keely, Henry, Rob and others on various social entrepreneurship projects at the Said Business School and I want to congratulate the Oxford VP team for catalysing this useful and interesting discussion.

 

I have a couple of quick observations.

 

Firstly, it is worth noting that there is an established track record of financial support for socially focussed business projects at the Said that goes back to 1998. This has largely taken the form of an alumni-supported resource called the Community Fund. Indeed, when I did my MBA at Oxford in 1999-2000 this fund covered the costs of our travel to Belize to do some fieldwork on an eco-tourism project. Consequently, there is an important tradition of Oxford MBAs putting their money where their social mouths are and I see this putative VP fund as being the logical – and very welcome -conclusion of this tradition.

 

Secondly, as our friends at Stern have already noted, there are a number of other interesting student-lead support models for social entrepreneurs already in existence. Whether it is the Setter Fund or the more broadly focussed work of Net Impact and New Sector Alliance, new forms of campus-driven social entrepreneurship are emerging across the world. It seems to me that the Oxford VP group may have much to gain from networking some key learning across these diverse players to leverage more resources into social ventures in a coordinated way to maximise social impact. Several of the VP team will be travelling with me to the important social enterprise event at Harvard in March and I hope we can build some useful links then. It strikes me that this is an approach that a number of much bigger foundations could benefit from!

mrsujeetkumar - Feb 15, 2005 5:06 pm (#19 Total: 60)
Oxford University

Hello,

Thanks for ur valuable insights. I am one of the five MBAs, working on the modelling of the VP Fund.

Performance measurement has always been a big challenge for the donors/ VPs, particularly given the myriad ways in which impact ( and I mean social impact & outcomes) can be described & quantified. In this context I am keen to know what are the "inappropriate and counter-productive performance measurement", as mentioned by Bruce.

Sarah, could u kindly explain, how does your Board finally decides which projects/ proposals to accept/ fund. I mean, what criteria does the Board adpot, before being satisfied that a particular proposal has the potential to add value to a social mission. Moreover, what reporting requirements do u adopt to monitor progress.

Thanks again to everyone.

hgonzalez - Feb 15, 2005 5:44 pm (#20 Total: 60)
Oxford University -Said Business School-

It is great to see the discussion going so well.  Alex brings a very interesting approach to the importance of leveraging existing networks into the VP model and the need to maintain synergies as more players get into the field.

Regarding VP Funds based at Business Schools, I believe that it brings enormous value to students, alumni, faculty and the community of social entrepreneurs as a whole.  It can be used as a "hands-on" teaching vehicle where students can experience the due-deligence process to allocate a grant, create a new venture business plan, and even make an entrepreneurial idea into a reality. 

However, there are some issues that we as "the team" working on this business plan have debated, and NYU's experience and everyone else's point will be highly appreciated in discerning the following:

-Niche:  Where is the best place to locate this fund within the Business School?  Should it exist with a separte indentity? Or can it leverage from existing research centres that share a similar mandate?  If so, what structure would it be needed in order to ensure delivery and effectiveness

-Continuity:  How can the VP structure maintain ownership from the students and alumni body given the high turnover of cohorts in a one-year MBA.  Can any of the governance instances take care of this?

-Reality check:  What mechanisms could be put in place in order to ensure a balance between academic interests and those of practioners as projects get funded?  Shall we fund start-up projects only? Or can we also fund for expenses related to institutional and capacity building? 

These as well as the issues of organization structure posted by Yandong, and performance indicators are of great importance for our team as we try to gather data to make the most feasible and "down to earth" business plan.

Many thanks for all the input and let's keep this discussion going!!

Cheers.  Henry

Serena_Porcari - Feb 16, 2005 2:08 am (#21 Total: 60)
CEO Fondazione Dynamo

Two comments on impact assessment and governance.

The main project we are managing is the design, construction and management of a Summer Village for children with chronicle illnesses. We have been working with the US Association (Association Hole in the Wall Camps) who has been managing such summer camps for children since 1988; with the help of Bain&Co. we started developing a business plan including all the aspects related to the village and the economic performance (start-up capital & operating expenses). In this specific case our board (made by several skills, from consulting to investment banking) decided to support the project for several reason, after two months of due diligence for the following reasons, which are very aligned with DYnamo's mission and capabilities:

• the project is absolutely innovative: in fact, this is the first project of its kind in Italy
• the complexity of the project requires careful planning and organization on multiple levels
• the project will involve various partners active within the Fondazione Dynamo network on an operational level
• the development of the project will create new partnerships between the public and private sectors
• the project will create the opportunity to collaborate with an international network on a high level
• With Bain we developed an impact assessment metrics based on the difference benefit of the stakeholders group. If you want I can provide an example.

I do not know if it helps, but it is a concrete ongoing example of how we are working as venture philanthropist.

In terms of governance some comments on how we are organised, which very much depends on local legislation. We set up a "Fondazione di Partecipazioni", with the following characteristics:

• the founders are defined at the beginning. The capitalise the foundation and they manage the important decision (fondatori promotori). They are the initial board members
• there is another group of founders who can participare economically to the foundation and who can elect 1-3 members to the board
• there is final group of participants to the foundation , who can support in various ways, without any ingerence into governance. You can imagine to have also the local government as participant.

The foundation can own the 100% of a commercial company which should not distribute profit but which can manage and run commercial activities, with a better fiscal treatment. If you are interested to understand more which could be the similar organisational structure in the UK, I can check with our pro-bono legal firms.

David Rankin - Feb 16, 2005 12:35 pm (#22 Total: 60)


The discussion looks great so far!

I am David Rankin, Vice President for Programs at the Great Lakes Protection Fund. My team provides financial support (debt, equity or outright grants) for projects to improve the health of the Great Lakes ecosystem. We are a private, not-for-profit corporation, but not a charity. I agree with Serena that governance design strongly depends on the form of the organization, which in turn depends on the legal/statutory environment where you choose to organize/incorporate.

My background includes experience leading initiatives in government and the not-for-profit sector. I have an undergraduate degree in environmental science, and an MBA (finance and strategy emphasis).

I am very intrigued with Bjorn's personal bias against funding capacity based on a written proposal. I strongly agree that proposals are "polite fictions." So this prompts two questions: Bjorn, do you have a template term sheet that you use to structure your support? If so, are you willing to share it? I, for one, would be very interested.

My offer is this- I am willing to review/comment/discuss concepts or draft documents related to the Oxford initiative (or any of the others already identified above), if the authors believe that I can add value.

I look forward to this session!

drankin@glpf.org www.glpf.org

schiles - Feb 16, 2005 1:36 pm (#23 Total: 60)
NYU Stern School of Business

I want to try to provide some information from our experience to answer several of the questions that have come up.

But first I want to invite you all to our Conference of Social Entrepreneurs: Financing Start Up Social Ventures on Friday March 4th at the Stern School. I noticed some of you from Oxford will be here for the Harvard conference on the 5th and thought you might want to come here as well!

In reference to the board decision making process and reporting requirement questions:

We have put together evaluation guidelines that cover everything from the clarity and reasonableness of the organization's theory of change, venture model, marketability, management team, social impact assessment, financial plans, and overall feasibility of the plan. In the end, it comes down to a subjective decision by the Board after much discussion as to whether the venture can achieve significant social impact.

-Niche: Where is the best place to locate this fund within the Business School? Should it exist with a separate indentity? Or can it leverage from existing research centres that share a similar mandate? If so, what structure would it be needed in order to ensure delivery and effectiveness

Our fund is really focused on social entrepreneurship as opposed to venture philanthropy. In that way, we felt the Fund was best located in our entrepreneurship center where we could bring all the programs and resources of the faculty and staff to bear on the success of the ventures.

-Continuity: How can the VP structure maintain ownership from the students and alumni body given the high turnover of cohorts in a one-year MBA. Can any of the governance instances take care of this?

For us, we launched the Satter Fund as an entity administered by the School but supported by students through our Practicum course.

-Reality check: What mechanisms could be put in place in order to ensure a balance between academic interests and those of practioners as projects get funded? Shall we fund start-up projects only? Or can we also fund for expenses related to institutional and capacity building?

For Stern, we wanted to leverage the mission and resources of our entrepreneurship center so we focus our support on only start up projects. This is the target of our broader programs.

Look forward to continued discussion.....

Jeff.Mowatt - Feb 16, 2005 2:06 pm (#24 Total: 60)
P-CED

I'm Jeff Mowatt, the sole sponsor of P-CED, incorporated in the UK as a guarantee company just under a year ago. We tried hard to find such a venture philanthropy at that time, proposing a business model competing in the UK for-profit world to deliver surplus revenue to moral collateral based microfinance, orphan aid and education projects in Eastern Europe.

We were obliged to exit the UK because such start-up funding didn't exist at the time, finding a three way division in this area of funding - Charity, bona-fide cooperative and venture capital. Our organisational model was incongruent with all of these, aiming to be a social enterprise in every aspect of this paradigm.

We're located in Eastern Europe now, largely because of this.

I'm very concerned about the way social enterprise is being promoted in the UK finding that government right to the top isn't responsive to what it's preaching. I may yet be proven wrong but having approached the APPG on Social Enterprise on this very subject as a final resort 2 weeks ago, I have to conclude that I'm not going to get an answer.

What is it that makes this area so inaccessible I wonder? I'm pretty sure I understand the words that are being said but there's this feeling of being locked out, perhaps for lack of academic credentials, maybe being seen to be stepping into someone else's domain. I can understand that, I'm British after all.

Venture philanthropy start up assistance will be a welcome change nevertheless.

Regards,

Jeff Mowatt  

audrey_zhou - Feb 16, 2005 5:18 pm (#25 Total: 60)
Oxford Business School

It's great to see the discussion is going well so far. Thanks a lot for everyone's sharing.

I am one of the five MBA students working on this business plan, particularly in the field of designing a business model for Oxford VP Fund. This is a critical component.

Would anyone kindly shed light on this topic? i.e., what selection criteria is used to assess an application? How to become a partner of Fund? How to run the grant committee?

Thanks again!

 

kiranmenon - Feb 16, 2005 10:09 pm (#26 Total: 60)
The Footprint


Hi everyone,

I am a Social Entrepreneur from India who runs 'The Footprint'. We are in the field of Corporate Social Responsibility and integration of Sustainability in corporate processes and technologies.

At present I am also mulling the launch of a Social Venture Fund for the region. The Venture Fund would be one of the only such ventures in this part of the world. I have been in touch with some of the 'big' players in the sector across the globe.

One of the biggest issues that philanthropic funding has seen - at least in this part of the world - is the disconnect between the funders and the social change that takes place on the ground. large philanthropic funding comes from international funding organizations or philanthropists and this poses a great challenge - The funders NEVER get to see how and where change is being created by using their funding!

To tackle this problem one of the solutions we are working on - with the Venture Fund I am looking at launching - is to tap the social responsibility and philanthropic budgets of companies in the country. This ensures the proximity of the funders and the organizations.

Also, one of the critical issues that we have identified is the lack of Strategic and Operational Management skills amongst the not-for-profit community members. Therefore the Venture Philanthropy model was the best solution that has come up in the recent past. Through the VP route, stress should be laid more on capacity building and strategic management rather than on the funding opportunity that exists!

I would also like to throw out a 'heads up' as far as the management team of the fund is concerned. It is imperative that the team is diverse in its skill sets and includes those that have experience in venture capital management and capacity building efforts in organizations. The critical factor is to draw the balance between operational management, funding and portfolio management for the Venture Fund.

These are some of the issues that has been identified and some of my views that I have written about... Wanted to end this message by commending those that have initiated this dialogue.

Kiran Menon www.thefootprintonline.com

Rachel Elliott - Feb 17, 2005 2:44 am (#27 Total: 60)
Ibstock Community Enterprises Ltd

Hi - its all good stuff but are we talking the same language?

What do you mean by 'social enterprise' - flawed as it is, I would want to stick to the DTI's definition.  This excludes corporate social responsibility and voluntary sector becoming more enterprising in its approach.  However, I would want to strengthen the definition by looking at issues of ownership and governance.

I think we have a lot to learn from our forebears in the co-operative and mutual sectors.  However, many within the sector in the UK would argue that these are now on the fringes of our world.

My next problem is the way in which the UK uses the term 'venture capital'.  This implies a significant financial return for investors.  Almost without exception, the legal forms that UK social enterprises use mean that they cannot make this type of return to investors.

I would always want to argue for the equal validity of social or environmental returns on investment but unless we develop suitable metrics for measuring these we will always struggle to make these as valid as financial return.

If the proposed fund needs to be self-sustaining, and generate sufficient surplus to cover its own admin costs, then it must make some financial return.  Usually, for UK Social Enterprises this will mean loan finance rather than equity shares.  As yet, most of us struggle to generate sufficient income to make repayments at commercial levels.

So these are the challenges as I see them.  Sorry to be such an anorak but I think if this is to work we need to be very clear what we all mean.  Only then can we move forward.

You might want to check out the evaluation work that Stephen Thake has been doing on the Adventure Capital Fund.  This is available on the new economis foundation website www.neweconomics.org, along with lots of other interesting stuff.

Toby Beresford - Feb 17, 2005 2:58 am (#28 Total: 60)
MicroAid


Hi all, Good conversation and good project.

Brief intro: I run MicroAid using the internet to transfer technology and knowledge to community groups worldwide. See attached summary file for more about our Community Group Online Centre subscription service.

I have a couple of 'imagined' questions intended to stimulate discussion on the project:

The Sierra Leone Question I am in Aberdeen Road, Western Area, Freetown, Sierra Leone. I want to help local people become economically empowered and relieve poverty in my local area. How will your VP fund affect me? How will I access it?

The Tonbrige Wells Question As a philanthropic investor I might be prepared to purchase £100 worth of units in your VP fund and keep them for three years, after which point I'd like to sell them and get some or all of my original stake back. I don't expect any financial increases in my investment however.

Can you offer a social return on that money each year? As an investor I would want to see that social return in tangible, measurable terms. This would allow me to compare funds to identify where my social money is best invested. My preferred measurement would be related to number of economically empowered poor rural women in sub saharan africa but I'd be prepared to settle for what you can measure.

Good luck with the project. Looking forward to seeing you all at the Skoll Forum.

Kind Regards Toby

Attachments:

MicroAid Community Group Services.pdf (36 KB)

Pamela McLean - Feb 17, 2005 7:20 am (#29 Total: 60)


Kiran Menon writes “Also, one of the critical issues that we have identified is the lack of Strategic and Operational Management skills amongst the not-for-profit community members. Therefore the Venture Philanthropy model was the best solution that has come up in the recent past. Through the VP route, stress should be laid more on capacity building and strategic management rather than on the funding opportunity that exists!”

That is certainly true for CawdNet. We do need money – of course we do – but pitifully small amounts by the standards of business. What we need enormously is to get some kind of business head on our shoulders.

We are good at understanding problems, recognising potential solutions, mobilising people to help, and getting things done in ways that work locally. When it comes to money matters and business we are pathetic. We recognise this. We are ignorant to a level any business- person would find hard to imagine.

Pamela McLean - Feb 17, 2005 7:45 am (#30 Total: 60)


In a previous email I commented on CawdNet‘s lack of business acumen. I need to clarify that. CawdNet is a network linking various individuals from a number of different organisations. Those organisations include projects which are run in extremely efficient and business like ways. I think particularly of the micro-finance bank run by Fantsuam Foundation. I think also of Muji Lawal at the Ago-Are InfoCentre and her meticulous records and accounts.

The “pathetic” approach to business which I referred to lies more at the very core of the CawdNet associates – especially with me and one of my close colleagues. We are the two people most likely to come up with ideas for what we should be doing – but lack the business background to help us with costings, negotiating and generally putting ideas onto a firm business footing. From a business point of view we are probably our own worst enemies.

I hope this puts the record straight, and ensures recognition of the business professionalism of other people, in established projects, related to “the CawdNet family”.

robjohn - Feb 18, 2005 9:04 am (#31 Total: 60)
Rob John, Skoll Centre, Said Business School, Oxford

So many thought provoking posts the last few days.

Serena:  glad to hear what's happening in Italy with Dynamo.  You say Bain helped in the early business planning.  Is the firm still involved with ongoing strategy consulting?  Do you have tips on how a VP fund partners with a firm of consultants? What are the oppprtunities and limits of such a partnership?

Toby:  Good to know that MicroAid is still thriving. You mention being able to demonstrate that someone who puts money into the fund can see a social return, even on an annual basis.  If wonder if that is harder to capture for us.  We probably will want to invest our cash and skills building some aspect of the organisational capacity of a nonprofit - if the inputs are successful, it leads to improved mission, which in time is measurable (with the caveat of correctly attributing our inputs to improved mission).  This would be harder to measure and report than, say funding the organisation's project work.  How can we do that? 

Rachel: On the fund being self sustaining.  Well that's a moot point.  Does it have to be?  We could aim for the fund to use a mix of grant and loan, with probably a small proportion of the total spend recycling a few times.  This way the fund would run down over time unless topped up.  We're only using the term venture capital to describe a form of financing where the investor is engaged with and adding value to the organisation being invested in.  For us, this hands on approach is about bringing in skills and advice not receiving a financial return.  If the fund demonstrates it can add value beyond the cash value of its grants, I hope that will attract others to invest in the fund and keep it rolling.

Kiran: great to get a contribution from India, a country that must have the biggest community of social entrepreneurs.  A few years back I came across Impact Partners, a VP fund working out of Mumbai, which funded the start up of Magicbus India, an amazing outfit working with street children.  Impact raised its capital through the NRI community in New York's financial services industry.  I don't know if Impact is still active, but Magicbus is thriving.  It always struck me that India had so many of the right ingredients to make VP effective, and indeed didn't really need cash from Indians abroad.  Is there a business school in India we could link up with who might want to explore a the VP approach with us?

Sarah:  Thanks for the input and offer for some of the team to visit what you're doing at Stern, that would be very instructive, if we can make it work out.  The Satter fund was our initial inspiration - thanks!

Rob

Toby Beresford - Feb 18, 2005 9:49 am (#32 Total: 60)
MicroAid


Hi Rob

Thanks for the reply and kind words about MicroAid.

On measuring capcity improvements, I agree with you and think it is fine as long as the indicators reported back to the investor are linked to the results of the capacity improvements and not to the improved mission. This will allow the investor to make direct comparisons as to effective use of funds which I think is crucial to the success of a Venture Philanthropy fund.

i.e. if we're a healthcare provider (say a diabetes disease management unit) and the new funds allow us to hire a salesperson selling additional preventative healthcare tools to our patients (an easy to use glycometer for example), we would expect to see results measured in the form of increased glycometer sales and income.

There is then an implicit link to mission improvements in this - that more patients self-regulating using glcometers means less diabetes complications.

As an investor I would be happy with this, as long as it was left implicit. If it was made explicit then you're quite right I would be project funding rather than capacity funding and might argue that my funds would be better spent simply buying the glycometers for the patients myself!

Toby

Serena_Porcari - Feb 18, 2005 10:28 am (#33 Total: 60)
CEO Fondazione Dynamo

Rob,

Yes, Bain & Co'S Milan Office is still consulting the project. Once Dynamo started we signed with them a contract for three years and we agreed on a number of man days per year which Bain donates to Dynamo and its project. We are their single pro-bono activity in Italy and the partnership is very successful. Dynamo is staffed as a normal project and people are selected on a volunteer basis.

In my opinion the relationship is very positive if:

- the project selected are ambitious, complex and relatively long (more than 3 months) to leverega competencies and scale of the consulting firm

- The projects selected are innovative an potentially visible

- There is a good people relationship between the management of the VP  fund and the consulting firm's partners

Some drawbacks could be:

- I think it would be difficult to manage specific pro-bono partnership with more than one consulting boutique;

- It is complex to manage correctely pro-bonos versus a market with consulting fees, which is becoming very active and competitive also for non profit...

Pamela McLean - Feb 18, 2005 3:39 pm (#34 Total: 60)


Returning to what Kiran Menon wrote “The funders NEVER get to see how and where change is being created by using their funding!”

Interesting point – and a very encouraging one for us at CawdNet, as we try to discover how to engage with the social entrepreneurship community and to find possible partners and friends. Often when I read what funders want it is depressing – somehow it doesn’t seem to relate to us. But what Kiran says – people wanting to know how and where change could be created - now that is something we can respond to. We can provide information in plenty.

Our whole purpose is to enable information to flow. CawdNet is an information hub, reaching out equally to the connected communities on the Internet, and the rural communities that we serve in Nigeria, who are beyond the limits of the normal telecoms infrastructure. We are longing to find people who would like to see what we are hoping to do (and already doing) who would like to see changes created by their funding. We struggle to fill in the kind of forms that funders require - with measurable objective that don’t seem to capture what we are really trying to do. The attachment gives you a flavour of “our kind” of information. There is an explanation, a link to a short video clip (of local people giving feedback) and a couple of photos.

Attachments:

SocialEdge Sharing information..doc (467 KB)

Pamela McLean - Feb 18, 2005 6:37 pm (#35 Total: 60)


Thanks to SocialEdge and the MBA students for arranging this discussion. I have the impression it was just for a week, so if that is correct it will soon be drawing to a close. I have appreciated mixing with people who have such varied areas of expertise.

Looking back it has been a rich learning experience – I have been thinking what I learnt and the influence of the week – written in the attachment.

Many thanks to all contributors for what I have learnt (and what my CawdNet associates will learn) as a result of this discussion – and thanks in anticipation to the organisers of the forthcoming Skoll World Forum … Roll on March 30th.

Attachments:

SocialEdge Looking back on the week.doc (21 KB)

Keely Stevenson - Feb 19, 2005 2:49 am (#36 Total: 60)
Royal Bafokeng Economic Board

Wow!  I must say that I am thoroughly enjoying this dialogue and deeply appreciative of the thought and time that each of you are contributing.  Pamela, your document was wonderful!  We will actually run this through to Tuesday, so we have 4 more days.  Here’s a few things I’ve heard from the community the past few days:

 >> A VP Fund’s promise of quality ‘managerial support’ to complement financial support for social ventures must be authentic and upheld appropriately.  Value of Leverage:  a little bit of good unleashes a lot of good if in the hands of the right social entrepreneurs at the right time—wasting their time with unnecessary process or irrelevant metric/measurement expectations would put the Fund’s mission in deficit.  Being cognizant of the cultural differences and values of NGOs/social ventures and private business/venture capital is vital for designing goals, processes and procedures. 

>>Are we speaking the same language?  The discussion has been useful in exploring the range of possible Fund activities and the values driving those activities.  We are getting some clarity to determine the Fund’s coordinates on the axis of funder engagement (high to low) vs. financing type (philanthropic to commercial…associating return expectations on grants, loans, equity appropriately).   I agree w/ Rob, and I imagine us to be on that NW corner of the axis where we focus on (respectful) high engagement grant partnerships, perhaps evolving a small component of the Fund into loan offerings.  We might also be able to partner with the b-school’s new Venture Capital Fund in terms of issues related to equity in social enterprises, but this would not be our primary focus.

>>Evident through sarah's stroy at NYU, the affiliation with a University provides a unique network of resources which can be coordinated and focused on the social ventures.  The question of by Yandong of where to legally structure this (within SBS, a community foundation, as an independent charity) all seem to point to being a fund within the school.  How we can synergize the faculty consultation/research capacity, alumni consultancy/donations, MBA class time/talent will be key to success in effective budgeting for quality services, and more importantly community building.  How we tap and  manage probono external resources through partnerships such as the one Serena describes with Bain & Co or with knowledge sharing among other b-school and VP Funds as mentioned by Kiran will be equally important.

 
So, drilling down a bit to more detail, what would it take to operationalize this?   As I mentioned, my component of the business plan focuses on the financing (strategies for raising capital and instruments for investing it). 

 

On Practical Aspects of Fundraising:

So far, offline advice says that we should look to high net worth alumni or corporate donors to capitalize the VP Fund and then look for finding on an ongoing basis.  However, Oxford’s business school is relatively new which means we have a smaller pool than most, and most students come from countries that do not have core cultures of philanthropic giving supported by tax benefits.  It is my understanding that here in the UK, it is not common practice to ‘give back’ to your university.  What should the source of funding look like?  Bundling donations of many individuals, one major donor, corporations, foundations, all of the above?  What’s a comfortable amount to launch the fund…how shall we set our targets?

Should we plan phases and eventually spend the fund completely down over 5-7 years? 

For example, we could raise 1 Million to launch it as has been suggested to us in an offline interview, and then invest/grant 200,000 annually over five years (25-50K per social venture, most being renewed for 2-3 years).  We could continue to provide capacity support a few years following the last grant and then spend a year analyzing the impact of the Fund overall (perhaps a doctoral student @ Oxford could lead this).  At that point determine whether the Fund’s success deems another more sustainable grant or whether it could be considered an experiment whose lessons learned contributed to the field as a whole.  I guess that leads to another question:  What does success look like specifically for the VP Fund?  If transparency and accountability are important to us, then we must think clearly about meaningful and rigorous measurement of our own success from outputs, outcomes and impacts which balance our goals of strengthening our social venture partners as well as teaching and learning about VP in the UK.

OK—lots of great ideas you have shared… keep them coming and thanks again!

tutormentor - Feb 20, 2005 9:36 am (#37 Total: 60)
Cabrini Connections Tutor/Mentor Connection

I've been in a lot of generic forums where concepts of investment or uses of technology are discussed, but few where they are part of a knowledge base or a focus on a specific problem.  For instance, my organization focuses on connecting business volunteers with innercity youth in long-term strategies that result in these youth entering jobs and careers by age 25. We use maps of Chicago to illustrate that the city has almost 200,000 kids who need such help and that there are many neighborhoods and many different programs where a volunteer, business or investor could begin a long-term commitment.

However, there are few knowledge libraries that these volunteers, investos, etc. can go to where they can learn from what others are already doing, collaborate with peers on learning, capacity building or quality improvment, or innovate new ways to lower costs or improve results in all programs, not just one or two.

I've approached business schools at Northwestern and other places suggesting that a way to demonstrate how good the school is would be to set up a live business, managed by grad students and faculty, that focuses on collecting information about what business do to mentor kids to career, and marketing that information each year to increase the percent of alumni who use this information in their own business and community to mentor kids toward the university and a career.  So far I only get nods of "good idea" and "but" which is accompanied by many reasons why the people I'm talking to cannot get involved.

However, by posting this idea and similar ideas in a knowledge library and by collecting and hosting ideas of others, we pilot the idea so that it begins to be a resource for anyone who cares about this topic, and anyone who cares to use the information in their own community, or in partnership with us.

I'd like to find web sites where this concept is applied in other service sectors or other cities and countries. 

While I've described this as a model of tutor/mentor, think of this in light of the tsunami.  We've seen maps showing where the waves hit. Can anyone show me a map and a database that shows what charities and service organizations are operating in each part of this map, so that if I were a volunteer or investor I could chose where I would want to get involved?

If just one innovator created a T/MC style map and information library, they could lead a public awareness which would make this a portal that many would go to for many decades to find where and how they can continue to support the on-going effiorts needed to rebuild these thousands of communities.

Without the map I'm afraid too much aid will go to too few places. Without the portal and a committed team of leaders, public attention will soon shift to the next tragedy and the people in these communities will be left to fend for themselves.

Daniel F. Bassill
Tutor/Mentor Connection
www.tutormentorconnection.org
tutormentorexchange.net

 

venkat - Feb 20, 2005 8:26 pm (#38 Total: 60)

Rob,

Impact Partners closed down 2 years ago. They were not able to generate a 2nd round of funding. The first round went well and helped Magic Bus, Akanksha and 2-3 other nonprofits.

There would be many academic institutions in India willing to collaborate with Oxford on this. The SPJain Institute of Management and NM Institute of Management, as well as the Tata Institute of Social Sciences might be interested. I'd be happy to link you to them offline if you like.

About me- I run an org. called GIVE Foundation, our mission is to catalyse efficient & effective giving in India. We are 5 years old, we currently channel US$2m a year to over 80 nonprofits in India thru a "philanthropy exchange" (www.GiveIndia.org) and help corporations spend their philanthropy budgets strategically.

In India, we have 2-3 operating versions  of venture funds-

1. Ashoka (www.ashoka.org) continues to incubate 10-15 social entrepreneurs every year by picking up the 'cost of the entrepreneur'.
2. Aavishkaar (www.aavishkaar.org) funds social enterprise, with an expectation of financial return (or at least capital recovery).
3. Impact Partners was an attempt to do what a lot of people above are talking of, provide small GRANT funding, but lots of management support.

My comments:
Toby's point is important- an investor will want to know what measurable outcomes  (even if they are intermediate milestones) will be achieved. This expectation is passed on to the FUND itself if the investor's money goes to the fund, rather than directly to a project. So, Keely, when figuring out fundraising, I would recommend paying thought to what metrics your fund will report on to the investors, in order to demonstrate "success", and to attract 2nd round funding. As a corollary, it might make sense to first define a focus/mission for the Fund itself (e.g., to provide funding to nonprofits that will build the capacity of the organisation to achieve its mission).

The other thing to keep in mind is that the "management support" will come from students, most of whom will be at Oxford for only 2years, so the core competence of the Fund will be led/managed by a transient population. You need to think thru how that will be handled so it doesn't create jerky experiences for the supported initiatives. My own recommendation would be to start small and local (social venture fund that will try to build capacity of charities in the Oxford/Reading area). Building management capacity long distance is not easy.

regards

venkat

Jan Luebbering - Feb 21, 2005 3:19 pm (#39 Total: 60)

Hello,

I finished my studies with a degree in Business Administration in September 2004 at the German Business School WHU Koblenz (www.whu.edu). During the investigation phase for a thesis on social entrepreneurship in Germany, I have been discussing issues on social entrepreneurship with Alex and Rob in Oxford during summer 2004. I am currently travelling through Latin America (at the moment in Mexico) conducting interviews with social entrepreneurs, among others on the topics of where support is mostly needed and how to implement such a support.

I would like to draw attention to two aspects:

Ensure the sustainability of the support
1)
On the one hand MBA students can dedicate only a limited time to such a support project on the other hand a certain time is necessary to understand the challenges of every SEO. I would therefore suggest to implement a system that ensures that one team consisting of the same students supports one project for at least 2-3 months. This mostly implies - as already mentioned in the forum - short distances to the social entrepreneur or projects that allow support via internet,chat etc.
It is implicit in such a MBA fund that the social entrepreneur needs to invest quite a lot of time and effort in order to provide inside information and on the other hand to obtain a support that really helps (e.g. an adapted in-depth marketing strategy).

Recommendation: Ensure to avoid a gap of expectations among social entrepreneur and MBAs through a strategic plan mentioning fixed objectives and a time-line beforehand (milestones) as is common in Venture Capital Funds.

How to call the Fund ?
2)
My next comment refers to Rob's statement: "Even calling this VP fund invites a lot of criticism before we're off the blocks - reflecting the trenchant debate in this area the last few years. I am talking about a grant based seed fund which adds value to its modest financing of a charity through releasing the business planning, marketing, communications and coaching potential that the School has in its MBA's and faculty."

I completely agree with Rob that the main added-value of such a Fund would be the skills of SBS members. Therefore, Management Consulting is the core service that will be provided.

Taking into consideration that the main asset of the MBA students is their knowledge in strategic management issues and that the amount of support money is limited (£5,000) I would like to make a suggestion: Why not call the project "Oxford's social entrepreneurship consultants" instead of Social Venture Capital Fund or Venture Philanthropy in order to shift the attention from the Venture/Investment/Capital expectation of grants or money.

One could use the money as an additional supply to start e.g. the implementation of a marketing plan as suggested by Rob, but the USP would be the support in form of management knowledge and not in form of financial support. Typical misunderstandings that happen in Venture Capital relationships between investor and entrepreneur could perhaps be avoided.

Best regards from Mexico and Good Luck

Jan

jan.luebbering@web.de

tutormentor - Feb 21, 2005 8:34 pm (#40 Total: 60)
Cabrini Connections Tutor/Mentor Connection


I'd like to follow up on my earlier post. I think that it's great that a team of MBAs might provide expertise to a project for a few months, or even a year. However, most important issues need a constant application of talent and effort over many years, not just a few months. I encourage you to consider a strategy that engages MBAs in specific causes, and keeps them involved for the rest of their life as they use their MBA to build a career.

If you can create a portal to support such involvement MBAs who become involved in a cause may still be returning to the university, and the current wave of MBA students, 20 or 30 years from now. As the stay connected and grow in their career they will become more sophisticated in their understanding of problems and solutions and have more workplace experience, wealth and leadership leverage to apply to solving any problem that they are connected with.

In this context their can be many 2-3 month MBA projects that sustain and expand such involvement.

Dan Bassill Tutor/Mentor Connection www.tutormentorconference.bigstep.com

Randall Roth - Feb 21, 2005 10:45 pm (#41 Total: 60)

My name is Randall Roth.  I am an alumnus of last year's SBS MBA class.  Though the thrust of my projects was not strictly related to venture philanthropy, I shaped plans for two projects that met at the intersection of public/private entrepenuership.  One such initiative sought to establish a professional services firm dedicated to helping developing nations attract foreign direct investment.  The other endeavor revolved around helping a UK science foundation redefine its mission so that it could serve as a nationwide conduit between U.K. academic insititutions and the private sector.  The impetus of this effort was to prevent great intellectual property from collecting dust in university ipatent offices and put the ideas to some constructive commericial uses.  The difficulty of overcoming initial skepticism from potential stake-holders was an initial problem that my projects faced.  I anticipate that you will also encounter skepticism about the viability of incubating a start-up venture philanthropy fund.

At face value, this is not any great insight.  Yet in spite of my team's early identification of the problem and concerted efforts to generate buy-in, one perception that we repeatedly had to countenance was how such a small initial effort could make enough of a dent in the marketplaces that we were trying to serve to justify seed funding.  It's no use trying to put out a fire with a water pistol was one retort that I remember hearing following one of our proof-of-concept interviews with an interested party.   A second concern was whether either of the two projects could efficiently scale.  Both efforts were beset by limitations stemming from the labor intensive nature of the mandates that we were presented with.

It can be expected that a venture philanthropy fund will face similar doubts initially.  With so many competing vehicles, from charitable foundations and public trusts to quasi-governmental social service entitities, it begs the questioin of whether having one more NGO competing for a limited pool of funding will make any real impact or will only serve to dilute an already market already saturated with 'worthy causes'. 

There seem to be two ways around this. The first is to attach yourself to the coattails of a more established entity (i.e. the Skoll Foundation) and draw on the administrative, intellectual, and public relations resources of this parent.  In essence you would serve the role of a pilot program fronting the efforts of the larger organization.  The second option is to try to weave together networks of like-minded venture philanthopists. The first option seems the surest and quickest way to achieve critical mass without facing the communication, coordination and effort duplication pitfalls of a multi-polar effort. 

A good model to emulate is that of the William H. Gates III foundation.  Indeed, the U.S. in general is a good place from which to solicit ideas and look for case studies to guide you.  For instance, many U.S. academic insitutions are supported with the help of philanthropists that want hands-on control of how their financial largesse is allocated.  Whether gifts are pledged toward capital improvements or financial aid scholarships, U.S. philanthopists like to take a key role specifying the criteria for the disbursement of funds and program design, including the definition of milestones and other contingent performance factors.

Serena_Porcari - Feb 22, 2005 6:51 am (#42 Total: 60)
CEO Fondazione Dynamo

Few words to add after the last comments.

- In order to manage the sustainability of Fondazione Dynamo (financing of operative costs and funds for projects) we are discussing the following options:

• The Ventura Capital company who owns the Foundation will open a manage a VC fund (for profit) on special situations, together with some investment partners. A defined percentage of the management fees will be dedicated to the foundation, which means you have an ongoing financing source and you do not have to fundrase.


• The Foundation identifies a commercial business (service or product), the profit of which will finance the foundation's costs. It would also be a starting capital for new project.


• The Foundation identifies another institutional partner (big company foundation) in order to share mission, strategies, actions and costs.

In terms of skills, the management and capacity building always require a mixed team. Legal and accountants, consultants, communication (internal/external) experts, executive search experts and other specifically required by the single business idea or project plan. Very often the knowledge of the industry of reference is well known by the social entrepreneur.

The advice is to set a mixed team of skills to manage capacity building or due diligence, either at the board level or at the operative level. MBAs skills are valuable but not enought unless they carry more then consulting approaches.

It has been a great pleasure to be part of this online event. I will personally use some of your advices to strenghten our foundation and to implement our agreement with Bocconi University. Please, feel free to contact us throught the website (www.fondazionedynamo.org) and good luck!!!

 

Lee Davis - Feb 22, 2005 11:00 am (#43 Total: 60)
NESsT

Dear All,

This has been a great discussion and I wanted to chime in before it ends! It's very exciting to see the students at Oxford pushing for this idea. We at NESsT had the pleasure of having 4 Oxford MBAs work with us in our office in Santiago a few years ago and we know that once an Oxford MBA puts their mind to something there is no stopping them!

 

I don't want to repeat issues that others have already raised but a few thoughts come to mind from our perspective having run a venture philanthropy fund for emerging markets (NESsT Venture Fund) for a number of years:

 

- Venture Philanthropy for what?: I think it's important to step back from the discussion of how to "do" venture philanthropy at Oxford and first answer the question of what the market needs. In otherwords, before trying to focus in on how to manage, structure, and finance the fund, it's important to first have greater clarity on the niche you are trying to serve. VP is a tool -- a means to an end, not an end in itself. Those of us active in the field share some common principles related to the "engaged philanthropy" approach but we apply the VP model to achieve very different (though generally complementary) ends. NESsT applies the VP model to support the development of social enterprises (by which we mean business activities of nonprofit organizations) with the belief that this will help them to diversify their funding base AND tha the discipline necessary to operate a social enterprise successfully will then benefit the overall organizational capacity, financial sustainability, and social impact of the overall nonprofit. Others have applied VP approaches to "scale up" small or replicate successful nonprofits. Still others apply VP to support the work of "social entrepreneurs" (ie individuals) who have a particularly unique/effective approach to addressing/solving community problems. So, my point being: don't put the chicken before the egg (or the horse before the cart?). Many of the questions you are trying to answer, it seems, will be answered depending on what type of organization/enterprise you want to support. And I would advise: FOCUS FOCUS FOCUS. You will have a much more effective result if you don't try to be all things to all people. Define a niche need in the nonprofit market and focus on proving/demonstrating a VP model for effectively addressing that need.

 

Having said that, I realize that an important part of the Oxford VP model is to allow students an opportunity to experience this type of work. But I think you can come to a good balance between the two objectives so that you define a niche market but also one that allows students multiple opportunities for learning.

 

- levels of funding: while I agree with the point that you don't want to spread yourself too widely, I don't think you should underestimate the power of the capacity-building component of your model. The financing can be VERY important for CERTAIN types of social enterprises/organizations but that also will depend on where you focus. In our case at NESsT, we focus our Fund on very small, grassroots nonprofits in emerging markets (mostly in Central/Eastern Europe and Latin America). Naturally, a small amount of money can go much further in some places than others, but many of the organizations we're working with find it very difficult to attract mainstream/international money for their work and thus are committed to finding ways to generate some of their own income for the long-term. We fundamentally believe that a lot of money can also do a LOT of damage! and a small amount of money used in the right place (with the right incentives) along with strong capacity-building support can have a much more dramatic effect. 

- management: The one concern that comes to mind for a VP fund at an institution like Oxford would be continuity. If you are looking for a truly engaged relationship with the organizations in your portfolio, that is only achieved through a LONG-TERM commitment. Students come and go! So while you are committed to providing students an opportunity here, be careful not to sell your portfolio short. Be sure to build in a component of the VP Fund's management that will not change (eg a permanent manager/employee or fund manager) who will ensure that those relationships are not harmed by the fact that students will only be around for a short time. Otherwise, you're not practicing what you preach regarding engagement. Also, not to be criticized for not being participatory or democratic, but I don't think all/any students, by default, should be allowed to work on the fund portfolio -- or at least not directly. YOu need to be rigorous in ensuring that the students you involve have the skills/personality/commitment that you need in order for your VP fund to be considered anything more than a student experiment. Otherwise you are not being respectful to the fact that the nonprofit organizations with whom you work are professionals and deserving of your respect -- not simply a laboratory for student experiment.  

- volunteers: I think one way that you might consider strengthening the capacity-building component of your fund woudl be to get local business leaders involved and perhaps team them up with students. WE have had great success with our Business Advisory Network in leveraging local pro bono support from business leaders with expertise our portfolio needs (law, tax, accounting, marketing, etc). By involving these leaders you also get the community involved (who would likely already be interested in some of the local nonprofits with whom you'd be working) and you are helping to strengthen those ties and also (as I mentioned earlier) help to provide some long-term continuity to the relationship. Meanwhile, students can work with those business advisors to gain experience but also work with the portfolio.

 

For what it's worth, we've posted a paper on the NESsT website reflecting on some of the lessons we've learned in managing the NESsT Venture Fund in emerging markets. "Unique and Universal" can be downloaded at: http://www.nesst.org/furthering_publication.asp It may be less relevant to a UK context, however. Also, some of the other resources at the "NESsT University" link might be interesting/helpful: http://www.nesst.org/university.asp.  

I hope my rambling comments are somewhat useful!

Best,

Lee

    

dbbrooks - Feb 22, 2005 4:21 pm (#44 Total: 60)


As a means of discussion I would like to point out that this project is soundly based upon the shoulders of high calibre people (this is based upon personal experiences with the management team). Of course, one might desire an exact calibration of project potential; however, on a broader scale it may be found that this first venture in which you will be engaging together could lead to other opportunities. Indeed this project could be a springboard to some other project of much grander proportions, depending upon how it unfolds and what is made of the various opportunities.

One never knows whom one may meet in Oxford!

sbhargav - Feb 22, 2005 10:00 pm (#45 Total: 60)


Hi,

I guess this discussion is ending so maybe this post is too late. My interest is in a very narrow subset of this field and that is in catalysing the creation of social elephants ( the kind that form the case studies in CK Prhlad's recent book "Fortune at the Bottom of the Pyramid"). I do not discount the importance of social rabbits but that is not my area of interest.

I am based in New Delhi, India and am a charter member of TIE ( The Indus Entrepreneurs ) in Delhi. I have two short one pagers on an "Angel Fund for Social Entrepreneurs" and "creating wealth and doing good". If anyone would like a copy and to interact please send me an email directly at sanjaybhargava@yahoo.com.

My belief is that for social elephants to be catalyzed in greater numbers top talent has to try and create them and normally top talent is motivated by greed ( the thought of becoming wealthy if your venture succeeds).

I may be wrong but I believe that both creating wealth for the entrepreneur and investors while doing good are possible in quite a few cases.

Cheers

Sanjay

lindadcheng - Feb 22, 2005 10:50 pm (#46 Total: 60)

Hello everyone!  I'm new to all of this - entrepreneurship, social venture philanthropy.  I'm currently a graduate student at the University of San Francisco, pursuing two master's degrees - an MBA and an MA in Asia Pacific Studies.  I'm also working as the program coordinator for the USF Entrepreneurship Program, and am trying in my own small way to steer the program more towards concerns of social ventures and philanthropy.  Have learned so much from this exchange, and would love to hear more about suggestions for ways in which to incorporate these concerns into my work.  Care to chat directly - lcheng2@usfca.edu.

Kylie Charlton - Feb 23, 2005 1:01 am (#47 Total: 60)

Congratulations to the MBA team using the New Business Development Project to explore the creation of a VP Fund.  As an '03 alumni of Oxford and member of the Oxford Business Network for Social Entrepreneurship it is exciting to see the value that comes from an MBA programme that allows students to bring together business and social sector disciplines.  Value not only to the students but also to the wider community if the VP Fund is successfully launched.

The discussion to date has raised some really interesting issues and challenges that the team faces in establishing a VP Fund.  On the otherhand it provides well deserving encouragement of the value that a venture philanthopy approach can offer start-up and early stage social enterprises. 

Seeing the application of a venture philanthropy (or social venture capital) first hand at Unitus (www.unitus.com), a microfinance accelerator that partners with microfinance institutions around the world to work with them to remove capacity and capital constraints, I can confidently say that the VP approach does work.  VP does however require careful application to take full account of the context of the organisations being targeted so that real value is realised by both the social entrepreneur and the social investor.  As many people throughout this discussion have warned, there is no perfect template that can be applied uniformly across organisations and a VP Fund needs to be equipped operationally to enable its approach to be customised to individual social entrepreneurs/enterprises. A strong influence on successful customisation will be ensuring that the students involved in delivering the services of the VP Fund are in fact well qualified and suited to do so - for as rightly pointed out by Lee Davis the work of social entrepreneurs/enterprises is no place for a student experiment.

Aside from attaining flexibility to meet the needs of individual social entrepreneurs perhaps the biggest challenging facing the team is in creating a structure that provides continuity - a point raised by numerous people during the course of this discussion.  The VP Fund must be able to support its selected 'investments' over the medium term in order to realize the true social value of a VP approach that not only provides funding to social entrepreneurs/enterprises but assists them to build capacity that allows growth and scale to enable maximisation of the social value of their endeavours.  Continuity must be built into the operational structure, governance mechanisms, and agreements entered into with the social entrepreneurs/enterprises.  Continuity is not only critical to the social entrepreneurs/enterprises that the VP Fund supports but also to the social investors in the VP Fund who want to see medium to long term social benefits arising from their investment. 

Remember in everything that you do in developing the VP Fund that you must consider both sides of the equation - the target social entrepreneurs/enterprises and the social investors.  You cannot have VP Fund without both sides of the equation and the equation must be in balance for fund to prosper and realize its potential.  Be sure you clearly identify and define an 'investment criteria' for the VP Fund that satisfies the needs of the target social entrepreneurs/enterprises and social investors.

Goodluck!  I look forward to hearing the results of your work.

Rachel Elliott - Feb 23, 2005 9:09 am (#48 Total: 60)
Ibstock Community Enterprises Ltd

The newsletter says this is open to the 24th so I thought I would risk another post.  As someone who is featured as a 'Fabulous Beast' I am interested in all this animal imagery (sbhargav) - the latest DTA creations are Mighty Mice!

To respond to Rob, responding to me.  As a social entrepreneur, I am absolutely fed up of funding streams that constantly reinvent themselves, run out of steam, etc.  If I had £1,000 for every funding bid that I have worked up, either for ICE or for other organisations, only to have the criteria changed, deadlines shifted, etc, etc I would have a good reserve of working capital ... as it is, ... .... ....!

To me, to even consider setting up a fund which is not sustainable is to perpetuate all the bad practice that those of us out here doing it for real live with all the time that gets in the way of us being entrepreneurs and drives us back into the old boxes of dependency, fragility and stress.  If this fund is to do something different, then it needs to think differently.

Unless there is a philanthropist out there is prepared to fund the brokerage of students (and other members of the community) with social enterprises, something/one that supports their engagement together, and the distribution of any funds that might be available, then this will simply have been another one of those good ideas.  I have wanted a business coach/mentor for many years and have tried to source such a person through a variety of programmes, all of which no longer exist.

The venture philanthropy that led to our own sustainability (Business in the Community's Better Towns Competition) no longer exists and current government sponsored potential equivalents such as ACF and Futurebuilders are timelimited and constantly evolving.  Whilst I accept that we live in a world of change, it would be good to have a small point of stability.

The DTA has as one of its core strap lines "Here to stay" ... this is my own approach to running social enterprise.  We are here to stay and it is not helpful to have to rely on short-term programmes/relationships for our development.  It will be 10 years on 25 May 2005 since the first community meeting was held in Ibstock that led to our creation.  Whilst many members of the community who went to that meeting still live in Ibstock, I believe I am the only person who attended it from one of the statutory partners who promoted the consultation.  Is it any wonder that one hears of consultation fatigue and cynicism from communities that any of this will make any difference whatsoever.

This for me is the main concern around the Fund - it will always be dependent on a transient population of supporters.  Whilst individual relationships may be forged that endure for a long time, this will be a matter of personality rather than something that can be planned for.  So to foster this and make it meaningful and realistic for both parties, there needs to be stability behind it in terms of the management of the fund, and this means a self-sustaining source of finance ... ...

As with all good things, however, I believe that it is worth working for ... if you don't dream, then nothing will change, and we will continue to have these conversations, rather than ones about how we actually make a difference.

Rachel

Tara Roth McConaghy - Feb 23, 2005 2:19 pm (#49 Total: 60)


The insight from such a varied and knowledgeable group of people is quite encouraging. As a former employee of a venture philanthropy fund, I think that this type of hands-on vp experience for business school students is a great way to engage those who are new to the concepts of vp and social entrepreneurship. It also provides an ideal outlet to develop new skills in a lower-risk arena with the potential for tremendous benefits to the local community.

Another idea that I would recommend is providing some sort of technical assistance to organizations that may not meet the fund's investment criteria. I just spoke with venture capitalist in the US who will be volunteering a few hours a month at a social enterprise that was not eligible to receive funding from his firm. Depending on the level of student interest and the number of portfolio organizations receiving support, students could contribute further to growing the fields of social entrepreneurship and engaged philanthropy through this way as well.  Yet another challenging activity for the eager MBAs!

Thanks for the great conversation!

Tara Roth McConaghy 

Ed Barker - Feb 23, 2005 3:13 pm (#50 Total: 60)

This has been an outstanding conversation - I am sorry to have been late in arriving.

I would point those who are interested to the resources available at Venture Philanthropy Partners, one of the oldest VP firms in the US. VPP has made documentation and evaluation a cornerstone of its experience, and its most recent report provides an excellent window into the lessons, tradeoffs, and challenges of its first years in existence.  The report, High Engagement Philanthropy: A Bridge to a More Effective Social Sector, integrates both the reflections of VPP staff as well as the staff members of the organizations that received VPP's investments. It can be found at www.vppartners.org.

I'd also like to echo the sound counsel of Lee Davis regarding the structure and focus of the fund.  Figure out what the market needs, focus on that niche, provide structures that ensure continuity in the interactions with the organizations that receive investment, and choose carefully the students to be involved.

Best of luck in establishing the fund.

Ed Barker, Senior Consultant, Community Wealth Ventures

hgonzalez - Feb 23, 2005 5:23 pm (#51 Total: 60)
Oxford University -Said Business School-

This is just a note to thank EVERYONE for such an enriching discussion.  We will now take all this source of knowledge and will digest it into our business plan with the aim of showing the opportunity and potential of a university based VP fund which will add value to MBA students and faculty through  "hands-on" experience of social change.

There are many thought-provoking statements that will allow our team to refine our business proposition, and some other ideas and issues will remain unanswered given that such a dynamic field always needs reinvention and we are sure others out there will come next to add more value to the Fund which we hope to launch.

We look forward to meeting some of you at the Skoll Forum in Oxford at the end of March or perhaps meet again in this useful space of discussion and knowledge transfer that Social Edge offers.

Once again thanks a lot, and to the Social Edge team our infinite appreciation for allowing us to experience an open-space for testing our ideas of new business developments.

Cheers!!

Pamela McLean - Feb 23, 2005 7:26 pm (#52 Total: 60)


Lee Davis said “We fundamentally believe that a lot of money can also do a LOT of damage! and a small amount of money used in the right place (with the right incentives) along with strong capacity-building support can have a much more dramatic effect.”

I would echo that for the organisations that I know. It reminds me that early in this discussion Rob wrote “The sums of cash available will be modest, but none the less I think valuable, when leveraging skills, advice and support from the School.”

At that point I was intrigued by what he and others would consider to be “modest” and equally what would be considered “lavish” or “extravagant”. I remembered the “culture gap discomfort” I felt at the Skoll forum last year. A fellow participant firmly explained that what I was experiencing as “distressing extravagance” (which I longed to be able to redirect when it was offered to me) was simply “appropriate hospitality”. I realised that “cross-cultural CawdNet” was simply overlapping yet another unfamiliar culture and must be adaptable, and learn to behave appropriately and graciously in it.

I cannot speak outside of what I know, but the observations may be more widely applicable. The organisations in our network are used to agonising over small sums of money and stretching it all as far as it can possibly go. We are certainly held back by lack of money as well as by lack of business skills. However as Lee Davis suggests “a lot of money”, especially if it came suddenly, could well be destabilising.

We are accustomed to having to do things in small, small steps. We want to take more steps, in more directions, taking more people with us. We want to serve more of the needs of more of our Special Interest Groups, and cascade what we do to other sites beyond the main one. These are things we have been thinking about for long periods of time, and more money, plus additional business skills, could help us to do it all and to do it more quickly – but it needs to be a gradual progression.

If, more money and MBA skills would mean that the steps suddenly got too big and too fast then the people in the communities might not be able to “keep up with the leaders” any more. “A lot of money” could mean rapid growth, beyond the existing local skills level, and too many outsiders coming in “to do the work” instead of to gradually build local skills. It could mean drifting away from being the needs led responsive-yet-pro-active grassroots network that we pride ourselves on being – and telling people what to do instead of listening to them and offering ideas and information.

The VP fund and MBA social entrepreneur collaborative ventures need to be a shared learning experience, with sufficient money to ensure that - During the initial learning stages, the planning stages, and the stages where the students pass on their skills the host organisation does not incur costs through hosting the students – remembering the cultural differences regarding what are judged to be trivial and non-trivial costs, and opportunity costs as well as direct financial costs. - The initial plans that the students come up with can be implemented - The implemented plans are not just little short demonstrator projects but genuine sustainable long-term ones.

Going back to the original point of “a lot of money”. It is possible that what a fund manager might regard as a “small amount of money used in the right place” a social entrepreneur would regard as a very welcome “lot of money”.

Sohodojo Jim and Timlynn - Feb 23, 2005 7:46 pm (#53 Total: 60)
Sohodojo


To the venturesome SBS students (Hi, Keely!) hosting this event, we'd like to draw your attention to a concurrent conversation, ' Funders on The Edge: Draper Richards Foundation'. One thread within this parallel discussion will be familiar to those who participated in, or read the archive of, the 'Building Blended Value' mega-event last year. That is, there is an informal community of Social Edge members whose social entrepreneurial missions/visions share a common theme. We are imagining and pursuing development of what might best be described as social business ecosystems or social business extended network enterprises.

Social business ecosystem/networks are an indication of the social sector's movement into what Manuel Castells has characterized as the Network Society and its associated Network Economy. His classic trilogy, The Information Age, richly documents the impact of networks on our individual and organizational lives. Social business ecosystem/networks are influenced not managed, and their participants' behaviors are constrained by sustainable mutual advantage rather than command and control. Not unexpectedly, these ecosystem/networks have very different capitalization requirements than conventional organization-centric ventures. Different capitalization requirements necessitate different due diligence processes and performance measurement methods for prospective investors and donors.

As your student group works on the structure and processes of your fund, we encourage you to remember two of the historic roles of the university; to prepare its students for the future, and to provide leadership in identifying and helping to shape that future. With this in mind, we strongly encourage you to add a social business ecosystem/network scenario to the range of 'How will we handle' scenarios that you use to shape the SBS venture philanthropy fund. Without such a scenario to help guide your design efforts, you run the risk of creating an efficient and effective fund that helps to keep re-creating the solutions and organizational forms of the past at a time when breakthrough innovations are most needed and possible.

To help seed this scenario development, we encourage you to consider this input/output diagram and associated sources and distribution of funds diagram for a social business ecosystem/network together with this post, 'Funding Networks: Have It Your Way...', from the Building Blended Value event. By incorporating a social business ecosystem/network scenario into your design evaluation process, we are confident that you will both help prepare Skoll Center SBS students for the future and help shape our society's dynamic networked future.

msliew - Feb 24, 2005 1:54 am (#54 Total: 60)
Peacebuilder/Social Venture Capitalist


Hi, this is Meesen Liew , seen here waiting for take-off on the glider plane, appropriately christened: " The Free Spirit of Social Enterprise".

I am a former corporate venture capitalist with a large diversified media group in Singapore. I am embarking on a social enterprise venture that seeks to generate earned incomes to fund other social enterprises and initiatives worldwide.

Atttending this year's Forum will put my social enterprise venture quicker on the launching pad, as I will be able to network with you all in Oxford and share some of my thoughts.

Would appreciate if The Oxford's Venture Philanthropy Group could secure a place for me to attend this year Skoll World Forum .

Looking forward to meeting you all in Oxford .

Attachments:

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mitchellgordon - Feb 24, 2005 8:23 am (#55 Total: 60)
Community Resources for Justice

Hi to all -

My name is Mitch Gordon, I am the Chief Advancement Officer for Community Resources for Justice a Boston, Massachusetts based nonprofit working with adult and juvenile offenders and ex offenders and recommending policy and best practices to legislatures regarding corrections and the criminal justice system. We have evolved over 126 years as a nonprofit through mergers and landscape changes.

It is rare that an organization as established as ours can get the attention of VP until we venture into the realm of new and innovative programming (and we have attracted Community Wealth Ventures among others to our Social Ventures program).  We, in fact, have introduced new programming over the past 40 years or so that has then become standard practice across the state and even the country. 

I have a couple of comments and questions

I resonate with what Bjorn states as to the cautions of VP coming in with too much "know how" and not enough listen.  I also agree about his concern regarding assessing a nonprofit with only a written proposal...(proposal as a polite fiction - I like that phrase)

I have been taken with VP foundations that take the time to get to know the organization.  Interestingly, those relationships are far more time consuming for both the foundation and the nonprofit, and I think the result is a stronger relationship and a more honest picture of goals, objectives, successes and failures.  I think the nonprofit has to be ready to make that investment of time too – and it is far more than the time it takes to write a “polite fiction”.

I recently participated in a presentation by Jim Collins author of Good to Great and Built to Last.  Jim was addressing nonprofits and using the insights from the research of both of his books.  What he observed was compelling - that a for profit business strives to be successful and success can bring a fly wheel effect – very simply put - success brings customers, customers bring money, money brings investment in product, which attracts customers with money etc...

In looking at nonprofits he found just the opposite - that a foundation might support for one or two or three years but as the nonprofit programs became more successful the funding would go away - "they don't need it anymore" - almost an incentive for nonprofits to strive for mediocrity..."as long as we really need the funding, they might stay with us."  Or perhaps – regardless of the outcome- successful or not – when the funder tires of funding that project or wants to move onto something new/innovative the project might lose that funding source.

I think one key to VP funding is to help the nonprofit approach its ongoing sustainability issues and longer term funding investment – Some questions I have –

Will you help a nonprofit to forecast and project out over 3 + years, 5 years, etc., where it will get its funding?  And will a VP help to reach out and broaden the relationships of nonprofits and leverage their support? Does VP funding require a nonprofit to be of a type that can generate a “for profit” type of revenue stream? Finally, is the nature of VP to invest longer term, and if so is the nonprofit able to still be flexible enough to adapt to the needs of its client base (that might change during that period) and still be able to count on the VP support?

Yandong Li - Feb 25, 2005 7:27 am (#56 Total: 60)
Oxford MBA Student

Many thanks to everyone involved in this meaningful discussion. Thanks to our honorable special guests.

During this short period, we were blessed to see so many valuable inputs which will definitely enrich our thinking in long term.  There are challenges and opportunities non-profit sector faces, but some of our discussions and some successful existing examples indicate that VP fund might be a promising approach.  We get intensive feeling that it is important to understand factors such as  government regulation, donors’ engagement, real need of social entrepreneurs, and interactive dynamic between Non-profit and for–profit worlds. We will work hard to get clear idea of those questions unanswered.

Thank you again, welcome to Oxford!

 

Social Edge - Feb 25, 2005 1:59 pm (#57 Total: 60)

Sorry I'm posting so late, but the discussion still appears open, so here goes.  I think there are many quite valuable comments in the discussion which will be quite valuable to many other current and potential VPs.

My experience in this area is in managing a foundation (Global Catalyst) that used somewhat of a VP style (we called it "engaged philanthropy").  I've also helped replicate a successful social enterprise using some VP funding.  And, I'm now advising a team that's developed a new VP fund for youth social entrepreneurs in Asia which just received initial funding.

I don't think you can overestimate the time and effort that it takes to work with a new venture as a VP.  At Global Catalyst we found that a full-time person could at most work with 3 or 4 active ventures at a time; this translates into about 10 hours per week.  And, continuity in support is crucial.  I second Lee's comments about making sure that there is ongoing support for enterprises beyond the involvement of students.

There's some great research on this, which some of you have probably seen, but just in case don't miss the reports of Venture Philanthropy Partners on high engagement philanthropy at http://www.vppartners.org/report2004.html and on capacity building at http://www.vppartners.org/learning/reports/capacity/capacity.html .  Also, Christine Letts has written thoughtfully about VP.

mrsujeetkumar - Feb 25, 2005 4:37 pm (#58 Total: 60)
Oxford University

Rethinking Accountability Online Event Summary

                 Oxford's Exploration of Venture Philanthropy
(Hosted by Audrey Zhou, Henry Gonzalez, Keely Stevenson, Sujeet Kumar &Yandong)

Social Edge Online Discussion event Summary

 

From February 15th – February 22nd, 2005, Social Entrepreneurs, practitioners from the social sector, academics & Social Edge community members joined a team of Oxford MBAs on a highly thought provoking online discussion on exploring the challenges and opportunities for pioneering a Venture Philanthropy Fund at Oxford University. The Dialogues on Venture Philantrophy Fund framed a collective understanding of emerging field of VP, and produced valuable insights into a few issues like:

• The opportunities & challenges for Venture Philanthropy, particularly in the United Kingdom? 
• Lessons that can be learned from elsewhere in the world where the model is being adapted/ adopted, particularly Stern at NYU.
• How can business schools around the world leverage the development & learning of highly engaged philanthropy as a complement to other philanthropic model. 

(Visit the complete dialogues at:

robjohn, "Oxford’s Exploration of Venture Philanthropy" #31, 18 Feb 2005 8:04 am

 

Special Guests:

David Carrington, Independent Consultant

Sarah Chiles, NYU Stern of Business

Lee Davis, NESsT

Jed Emmerson, Blended Value

Serena Porcari, Fondazione Dynamo

Bruce Sievers, Stanford University

Alex Nicholls, Skoll Centre for Social Entrepreneurship

_______________________________________________________________________

Pamela from CawdNet sparked the discussion and   discussed the secret of running in the middle ground of Hybrid organizations, a mix of social/ charitable initiatives and business enterprise, and the imperatives of recognizing another cultural boundary – business -and adapt to the cultural norms there. She emphasised that social entrepreneurs work with all kinds of “invisible capital and currencies” (goodwill, shared vision, commitment, hope, trust, persistence, voluntary help, in-kind donations, etc) which are hard to quantify or explain; yet we have to balance all of them.

VP focus is on building the charity's capacity to grow and develop. A VP engagement may involve many years of funding and partnership, as the major provider of funds for organisational development or it may mean a more modest engagement in helping the charity exploit a new idea or income stream initiative - a little seed capital and some business planning and strategic advice. Rob recounted his experiences as how VP works well when the charity is ready for some degree of step change and positively values what the VP can offer beyond funding. He further felt that VP funders need to be geographically close to their portfolio nonprofits.

Bjorn from Silicon Valley Social Venture Fund cautioned that though bright ideas are the lifeblood of the social sector, money is very crucial. More than just a business plan, more than a marketing plan, we would need the resources to implement those plans. He preferred fewer relationships at higher funding levels, and talked about the two-dimensional benefit for Venture Philanthropy, the success of the grantee AND the growth of the donor.

 

Alex, from Skoll Centre at Oxford, noted about the established track record of financial support for socially focused business projects by Oxford MBAs dating back to 1998 and saw this to-be-launched VP fund as being the logical conclusion of this tradition. According to him new forms of campus-driven social entrepreneurship are emerging across the world and that the Oxford VP group may have much to gain from networking some key learning across diverse players to leverage more resources into social ventures.

 

Serena dwelled on Governance & Measurement. In her opinion the project selected should be ambitious, complex and relatively long (more than 3 months) to leverage competencies and scale of the consulting firm & also it should be innovative and potentially visible. She felt it was very complex to manage correctly pro-bonos versus a market with consulting fees, which was becoming very active and competitive also for non profit. Her advice was to set a mixed team of skills to manage capacity building or due diligence, either at the board level or at the operative level.  MBAs skills were valuable but not enough unless they carried more then consulting approaches.

 

Jeff from P-CED voiced his concern about the way social enterprise was being promoted in the UK and how the government right to the top wasn't responsive to what it was preaching. He was optimistic that Venture philanthropy start up assistance will be a welcome change.

According to Kiran, a Social Entrepreneur from India who runs 'The Footprint', one of the biggest issues that philanthropic funding has seen – in places like India - is the disconnect between the funders and the social change that takes place on the ground. The funders NEVER get to see how and where change is being created by using their funding!  Also, another critical issue that he identified was the lack of Strategic and Operational Management skills amongst the not-for-profit community members. Therefore he felt that through the VP route, stress should be laid more on capacity building and strategic management rather than on the funding opportunity that exists!

On measuring capacity improvements, Toby from Micro-Aid thought that the indicators reported back to the investor should be linked to the results of the capacity improvements and not to the improved mission. This would allow the investor to make direct comparisons as to effective use of funds which he thought was crucial to the success of a Venture Philanthropy fund.

Rachel from Ibstock Community Enterprises argued for the equal validity of social or environmental returns on investment but warned that unless suitable metrics for measuring those are developed there would always be struggle to make those as valid as financial return. For her the main concern around the Fund was the need for stability behind it in terms of the management of the fund, and this meant a self-sustaining source of finance. She believed in the "Here to stay", approach to running social enterprise. 

Daniel from Tutor/Mentor Connection discussed about Channel Marketing of Social Investors, by creating a knowledge library and by collecting and hosting ideas of others, so that it begins to be a resource for anyone who cares about this topic, and anyone who cares to use the information in their own community.
He also encouraged the MBA team to consider a strategy and to create a portal that engaged the MBAs in specific causes, and kept them involved for the rest of their life.

Venkat from India recommended paying thought to what metrics the fund would report on to the investors, in order to demonstrate "success", and to attract 2nd round funding. He also recommended starting small and local (social venture fund that would try to build capacity of charities in the Oxford/Reading area).

Jan from Mexico suggested implementing a system that ensured that one team consisting of the same students supported one project for at least 2-3 months. His further recommendation was to ensure to avoid a gap of expectations among social entrepreneur and MBAs through a strategic plan mentioning fixed objectives and a time-line beforehand (milestones) as was common in Venture Capital Funds. Given that the main added-value of the Oxford VP Fund would be the skills of Oxford MBA members, he suggested calling the project "Oxford's social entrepreneurship consultants" instead of Social Venture Capital Fund or Venture Philanthropy in order to shift the attention from the Venture/Investment/Capital expectation of grants or money. .

Oxford MBA students raised specific issues like organization structure and performance indicators and addressed to Sarah from NYU Stern School of Business many questions related to the Satter fund at NYU. In particular, she responded to the following questions:

-Niche: the best place to locate this fund within the Business School/ Should it exist with a separate identity? Or can it leverage from existing research centres that share a similar mandate?

Satter fund is really focused on social entrepreneurship as opposed to venture philanthropy. The Fund is located in the entrepreneurship center where they are able to bring all the programs and resources of the faculty and staff to bear on the success of the ventures.

-Continuity:  How can the VP structure maintain ownership from the students and alumni body given the high turnover of cohorts in a one-year MBA.  Can any of the governance instances take care of this?

The Satter Fund was launched as an entity administered by the School but supported by students through our Practicum course.

-Reality check:  What mechanisms could be put in place in order to ensure a balance between academic interests and those of practitioners as projects get funded?  Shall fund start-up projects only? Can also fund for expenses related to institutional and capacity building? 

Satter Fund foccuses their support on only start up projects.

Lee Davis from NESsT pondered on the question: Venture Philanthropy for what? VP is a tool -- a means to an end, not an end in itself. He, therefore, advised the SBS team to define a niche need in the nonprofit market and focus on proving/demonstrating a VP model for effectively addressing that need. He was greatly concerned about the continuity & a long-term commitment. He said the plan should make sure to build in a component of the VP Fund's management that would not change (eg a permanent manager/employee or fund manager) who would ensure that those relationships are not harmed by the fact that MBA students would  only be around for a short time. Recalling his experiences, he further felt that one way to strengthen the capacity-building component of the fund would be to get local business leaders involved and perhaps team them up with students. Involving these leaders also gets the community involved and helps to strengthen those ties and also helps to provide some long-term continuity to the relationship.

Randall Roth, an alumnus of last year's SBS MBA class, described how the difficulty of overcoming initial skepticism from potential stake-holders was an initial problem which his project team faced. 

Kylie Charlton from UNITUS, also an alumnus of SBS, was confident that the VP approach did work, but warned that there was no perfect template that could be applied uniformly across organizations and a VP Fund needed to be equipped operationally to enable its approach to be customized to individual social entrepreneurs/enterprises. She reminded to consider both sides of the equation - the target social entrepreneurs/enterprises and the social investors, while developing the VP Fund

In his classic trilogy, The Information Age, Manuel Castells has richly documented the impact of networks on individuals and organizational lives. This book encouraged Sohodojo Jim and Timlynn to imagine and pursue development of what might best be described as social business ecosystems or social business extended network enterprises.  They exhorted the MBA team to remember two of the historic roles of the university; to prepare its students for the future, and to provide leadership in identifying and helping to shape that future. With that in mind, they strongly encouraged the team to add a social business ecosystem/network scenario to the range of 'How will we handle' scenarios that they use to shape the SBS venture philanthropy fund.

Mitchell Gordon from Community Resources for Justice voiced his concern regarding assessing a nonprofit with only a written proposal. He thought that one key aspect to VP funding was to help the nonprofit approach its ongoing sustainability issues and longer term funding investment.

Aside from attaining flexibility to meet the needs of individual social entrepreneurs perhaps the biggest challenging facing the team is in creating a structure that provides continuity - a point that was raised by numerous people during the course of this discussion.  Continuity must be built into the operational structure, governance mechanisms, and agreements entered into with the social entrepreneurs/enterprises.  Continuity is not only critical to the social entrepreneurs/enterprises that the VP Fund supports but also to the social investors in the VP Fund who want to see medium to long term social benefits arising from their investment. 

Many others like Tara, David Brooks, Henry, Yangdong, Audrey, Lindad, Ed Barker, Sanjay Bhargava and Meesen Liew participated and contributed in the discussion.

During this short period, we were blessed and enlightened with so many valuable inputs. Our MBA team profusely thanks EVERYONE for such an enriching discussion.  We will now take all this source of knowledge and will digest it into our business plan with the opportunity and potential of a university based VP fund which will add value to MBA students and faculty through ‘hands-on" experience of social change.  Once again thanks a lot to each one, and to the Social Edge team our infinite appreciation for giving us this space for testing our ideas of new business developments.

(Truncate Display)

Keely Stevenson - Feb 25, 2005 4:57 pm (#59 Total: 60)
Royal Bafokeng Economic Board

Thank you for sharing your valuable ideas and time.  We promise to thoughtfully consider the challenges and opportunities you have set out for us.  For those of you who will be at the Skoll World Forum at the end of March, we hope to engage you verbally when we present our plan on a panel. 

Warmest thanks to a community I love,

Keely

mark read - May 24, 2005 8:09 am (#60 Total: 60)
coordinator of careers,work experience and enterprise secondary school lancs uk

Help! Can you? I have the uncomfortable feeling that I clearly remember from my early undergraduate days. Am I in the right place? As a secondary school teacher of Careers, I have been keen to encourage an alternative view towards employment in my students, a view that regards work as only one way of finding self-fulfilment. Similarly, my responsibility for delivering Enterprise in School (for the uninitiated, a statutory requirement in English schools from September) is equally open to interpretation. I regard enterprise as an opportunity for schools to fulfil their real purpose in education: to allow students to understand better real issues which affect themselves (as young adults, in our case) and in the world beyond their school environment. For me, enterprise can do this if it realises its potential to make a difference to people's actual lives, at a local community level or further afield. Reading these articles has increased my enthusiasm but also, as happens so often with the internet, left me frustrated at the possibility of unrealised potential. Contributions like the ones I have read are interesting but I would love to find out more about how they might be of practical value to humble education practitioners like myself. If there is possibility of funding, we would welcome any financial assistance. More than that, I would like to make contact with any like-minded people who are interested enough in young people’s education to lend their time and advice. Perhaps radically, the school is naïve but enthusiastic about social entrepreneurship, not just from an academic perspective, but as a way of engaging our youngsters with real projects: learning about business in its different forms, but also how enterprise can be used in a ways which have a benevolent social impact. Can we, together, utilise young people’s sometimes naïve enthusiasm and idealism? Can you help?

Twenty years ago, philanthropy in the United States was strictly a charitable act. Research shows that philanthropists, including donors, board members or community volunteers, acknowledged a direct link between their success in life and the opportunities that society had provided to them. They deeply appreciated their good fortune, and were driven by a sense of obligation to repay society for it.

Philanthropists tended to be financially successful men with well- established professional careers. Philanthropy became important to them later in life. On average, they were near the age of retirement or older. They took a shotgun approach, contributing to many organizations at once. Twenty years ago, the typical board member served on a half-dozen boards at the same time. To them, the breadth of their contribution was as important as the depth.

This paradigm of American philanthropy had existed since the late 1800s, remaining unchanged. But by the 1990s, the nature of philanthropy in America had begun to shift.

Today, the transformation, while not yet widespread, is in full swing. A radical revolution is quietly but forcefully underway. A new generation of philanthropists is emerging, distinguished from their predecessors by their motives and methods for giving.

Research shows people are becoming philanthropically engaged at far younger ages than before. Many are still in their thirties, with careers too short to have yet realized substantial professional success. Their primary asset is time, not money, and they believe that philanthropic engagements are a way to use their professional skills to benefit society. They are far more racially and socio-economically diverse than preceding generations. Unlike their predecessors, over half are women.

I am part of this generation. I was an early employee at a successful start-up company, and realized substantial professional success early in my career. In 1999, while in our mid-twenties, my wife and I created a family foundation. At first blush, our story might seem consistent with the old paradigm: a financially-successful couple, appreciative of their good fortune, decides to give back to their community.

Yet our motives for giving place us squarely in America’s new philanthropic generation. Charity is a crucial motive, of course. But I give for many other reasons, too. In the United States, most people have well-paying jobs, live in good neighborhoods, and send their children to adequate public schools. They avoid the direct consequences of our societal ills. Some people are lulled into believing that they can avoid them altogether.

They are mistaken. Our society is highly connected. The costs, no matter how indirectly they affect any given family, impact us all. They significantly drain our collective welfare. We can address them, or ignorantly accept their costs. Organized philanthropy is one avenue I use to address them.

I give because I believe my investments will produce tangible results during my lifetime. Social change is complex, and meaningful results require long periods of time to emerge. Previous generations of philanthropists, men who had become engaged only later in life, could not reasonably expect that to occur during their lifetimes. Simply because of my early start, I can expect otherwise.

My philanthropic efforts are investments in society, not acts of charity to benefit future generations. Consequently, I treat them as investments. I am deeply engaged in organizations and their operations. I focus on how they employ capital to solve social problems.

My philanthropic efforts are investments in society, not acts of charity to benefit future generations. Consequently, I treat them as investments. I am deeply engaged in organizations and their operations. I focus on how they employ capital to solve social problems.

Other members of my generation hold the same expectation, which explains the rise of “venture” philanthropic organizations around the country. These organizations, such as Social Venture Partners, employ the language of investment and business. Grants are investments, and beneficiaries are investees. The non-profit sector is the philanthropic economy. Small foundations are analogous to local banks. Engaged philanthropists approach non-profits like angel investors approach start-up companies.

This does not suggest that every for-profit practice translates to the non-profit economy. It does mean that today’s emerging philanthropists care about outcomes in a more substantial, detailed manner than their predecessors. This transition may be turbulent for many non-profit organizations. Yet I suspect the long-term benefits will be substantial.

Finally, I give because I want to reduce society’s long-term demand for social services, especially those provided by government. Our society’s need for social services is broadly recognized, and far more are provided by the government than private philanthropy. In one sense, American’s biggest philanthropist is its government, as its expenditures on such services dwarfs the philanthropic sector.

Yet politicians, attentive to short-term realities like elections, are not very good philanthropists. They focus on matters with immediate effects. Consequently, they myopically argue over what kind of social services to supply. They invest too little energy addressing demand.

The organizations I am most excited to work with increase the welfare of children by augmenting their education. I believe very little separates people who will demand government services over long periods of time from people who will not. Children with adequate support at the appropriate point in life will mature into adults who are the latter, not the former.

Against the immense scope of services provided by government, the impact of my effort may be nearly microscopic. Yet I am not alone. My optimism about the future, and my eagerness to participate in it, is due to the emergence of today’s new generation of philanthropists.

My generation is not homogeneous. We include both men and women, are racially and socio-economically diverse, and represent the entire political spectrum. A few are wealthy, most are not. Some share my philosophy and objectives, but many do not.

We are united by our relative youth, our inclination to serve only a few organizations at any one time, and most importantly, our desire to see tangible results. Our motivations for being philanthropic extend beyond charity. This is a radical change, and I believe profound, positive consequences lie ahead.

Mike Hanlon and his wife, Molly, are active in several Seattle-area philanthropic organizations. They created a private family foundation in 1999, focused on projects that serve children and educators. Mike was an early employee at Amazon.com, working there from 1995 to 2001.

Mike Hanlon - Sep 21, 2004 3:04 pm (#1 Total: 5)
Social Venture Partners


For your reference, Mary Stewart Hall, formerly of Seattle University's Not-for-Profit Leadership Program, is the source of the trends in philanthropy that are mentioned in this piece. She was not involved in writing this essay, but I have heard her speak many times on the trends she's observed in American philanthropy. Thanks--Mike

Vaserius - Sep 22, 2004 4:51 pm (#2 Total: 5)


Hi Mike,

Thanks for sharing your personal motivations for giving!

When we were planning this event, we wondered what others in the Social Edge community felt about giving. A few of the questions we asked on the event page are:

- Why do you give? - How has philanthropy evolved? - Can charity be an investment?

I'd love to hear what everyone thinks!

- Vaz

suewageman - Sep 23, 2004 9:35 am (#3 Total: 5)


I have been working in the nonprofit sector for 15 years. Almost 10 years ago, I realized that I was giving significant amounts to organizations similar to my own - and very little to the organization where I worked. I wondered why I should be giving so much to others when I was investing my career, much of my "free" time, and passion in this one organization. I knew how much Board members were expected to invest - and the staff leadership also invested significant amounts. I was not even a manager, but I came to believe that if I truly believed in our mission, I should be personally investing cash as well as my labor. I now invest the most in the organization where I work. I still invest elsewhere, but not at this level.

I have found that most other nonprofit staff seem to be baffled at my reasoning. Just like the board members who think that their investment of expertise ought to be enough, staff I have talked to wonder why anyone would give cash when they already work so hard.

I wonder what others think about this.

Mike Hanlon - Sep 27, 2004 8:49 am (#4 Total: 5)
Social Venture Partners


Sue,

At first blush, your decision seemed remarkably generous to me. Yet after some reflection, I think it's perfectly consistent with the new paradigm of philanthropy discussed in the essay.

Academic researchers haven't yet identified why people are focusing their philanthropic investments (time and money) on fewer organizations, but it is occurring. As people give to fewer organizations, the remaining investees receive relatively more investment. Consequently, the philanthropist's expectations increase. This fuels demand for tangible results that people didn't necessarily expect when their investments were relatively small.

Mike

Online donations are a relatively small, but rapidly growing, piece of the charitable contribution pie. It’s also changing the way people think about and make donations.

With online giving, you raise smaller amounts from many —as opposed to raising large amounts from a few big donors.

Mari Kuraishi works for GlobalGiving, an online marketplace that enables donors to fund social entrepreneurs doing amazing things in communities around the world. Donors choose, specifying the outcomes and projects they want to support, and how their contributions are used.

Today, over 260 projects, in 60 countries, appear on www.globalgiving.com, across a wide range of themes. More than $2.6 million has gone to the field. By aggregating thousands of donations—large and small—GlobalGiving is helping to create a growing source of funding for social entrepreneurs.

GlobalGiving is also getting granular data about what people choose—globally. The GlobalGiving Index, introduced this week on Social Edge, is designed to keep you abreast of what’s going on in the marketplace. It will report on projects, themes, and parts of the world receiving the most funding weekly.

The index can’t tell you what’s happening in the big picture—e.g., how much money is going to international causes at any given time. But because we cover so many countries and themes, and we are trying to make it easy for donors to give even small amounts globally, there’s a lot of data about: what’s the cause of the day; how has donor response differed between tsunami and the Kashmir earthquake, etc.

• Give us feedback—are we measuring things that matter to you?

• Have online donations delivered on the promise of the Internet, in terms of efficiency and cost savings?

• Have they changed the way you steward donor relationships, and generate loyalty?

• How do you deal with security and trust?

Share your thoughts, strategies, and best practices.

abc4all - Jan 17, 2006 2:57 pm (#1 Total: 11)
A Better Community For All (ABC4All)

ABC4All, in development for 8 years, is implementing ways to maximize online donations via cooperating groups.  Present technology exists to create opportunities that have never existed before, first to maximize such donations, then to match or double the donations via an endowed nonprofit foundation.  These concepts have been posted at the site for the future global portal of ABC4All, under professional design.  The capabilities for realizing the Mission are in place:  "Maximizing charitable contributions on and off the internet."  T.E.A.M.s will execute the mission:  To Educate All:  Millenium Endowment Fund.

Respectfully,

Burton Danet, Ph.D., Co-Founder

A Better Community for All (ABC4All)

http://abc4all.net

mkuraishi - Jan 17, 2006 3:36 pm (#2 Total: 11)
GlobalGiving


Burton, you put your finger on it when you say this will create opportunities that have never existed before. We're a little unsure of where things will go, what will appeal to potential donors when choice is at their fingertips, so we've been interested to see the dynamics emerge through the transactions to date at GlobalGiving. As a practitioner yourself, do you have any suggestions, reactions, etc. as to whether we are measuring some of the right things within the GGI? Would be v. interested in your feedback.

abc4all - Jan 17, 2006 4:38 pm (#3 Total: 11)
A Better Community For All (ABC4All)

Mari, thank you for your comments.  In fact, much capability has remained dormant, especially as more and more people have become more confident and trusting of the internet.  While we have a long way to go to ensure security and safety, careful approaches will have to prevail.  To respond directly to your question, it will take me some time to develop a more detailed response which I will develop later, but for now please allow me simply to state that I have had the awareness of the potential the internet holds for philanthropic expansion for many years.  Only more recently have I encountered parties, first via the National Heritage Foundation http://nhf.org and then later via companies emerging with value propositions clearly about to dominate global markets because of the internet, especially those countries where credit cards are yet to be introduced.  Thus it is no longer "on the internet" but both "on and off the internet" where the outstanding capabilities can be harnessed.  Should you have greater interest in a continuing dialogue perhaps we should arrange a time for a personal consultation so I can share with you more details than might be appropriate for this conversation.  When possible, I will further comment more specifically in response to the question you raise re GGF.

 

Paul O'Hara - Jan 18, 2006 10:37 am (#4 Total: 11)

Link to the GG Index http://www.socialedge.org/globalgivingindex.html

Hi Mari,

Thanks for this discussion and an index of 181 looks like a very good week for this time of the year. Congrats!

I don't really know what people are looking for from the Index, but here are a couple of observations / suggestions / questions.

It would be interesting to see the GG Index History in Graphic Format. Weekly revenue for the past couple of years would give a good sense of seasonality and growth trends  (possibly with additional commentary on spikes as a result of marketing campaigns etc.)  Equally, it would be interesting to see the trend in the number of donors weekly over time.

What's the relationship between "Natural Disaster" related donations and "Long-Term Development" related donations over time?  In which broad segment are people putting their dollars.

I would consider an average donation of $803 for last week as high.  I guess the average is going to be skewed by Business or other Org. donations.  Would it be possible to see the average donation for Individual and Organisation separately?

I look forward to seeing the Index expand.

Paul

Ruby Brower - Jan 19, 2006 6:43 am (#5 Total: 11)


What does my nonprofit organization need to do to get involved?

Eli - Jan 19, 2006 7:57 am (#6 Total: 11)
GlobalGiving


Hi Ruby -- Eli here from GlobalGiving. Currently, the primary way to get involved is by posting a project. Most projects come through a network of sponsors who vet each project for eligibility, help project leaders enter their projects, and assist in providing feedback to donors. The current list of project sponsors can be found at http://www.globalgiving.com/aboutus/partners.html#16.

If you can not find a sponsor, there is another avenue. Every year we offer organizations not affiliated with project sponsors the ability to post projects. We are currently revising these guidelines -- but send us a note at projecthelp@globalgiving.com and we will be directly in touch with the informatin once its ready and we can address any additional questions. Looking forward to hearing more from you.

Eli

Patrick O'Heffernan - Jan 19, 2006 9:34 am (#7 Total: 11)


I love the index. These kinds of data are a great way to understand the impact of what we do. A question: has Global Giving seen an increase in donations from inon-western countries thorugh the online route?

Patrick O'Heffernan - Jan 19, 2006 9:38 am (#8 Total: 11)


I also notice that the online donation of $803 is very high (unless this figurea also includes foundation grants)...in my own work, $78 is more the average. The small size of hte grants also shows that, I think, the funds can be used very efficiently...that the donors get a lot of impact for th eir dollar, which may be why the average donation is high.

jochi - Jan 20, 2006 3:28 pm (#9 Total: 11)
Marketing Communications Director, GlobalGiving

Hi Patrick, Joan from GlobalGiving here.  Our office is actually physically moving from Bethesda to DC today, so it's been a crazy day and we haven't been online--apologies for not getting back to you sooner.  I wanted to respond to a couple of the things you raise--first of all, regarding non-Western donations, I can say (and this is anecdotal, I don't have hard and fast numbers with me) that we have seen an uptick in non-US donations, all made online...this is very positive. We're trying to learn more about how these people have heard of us--many seem to find us through various Search engines.  Giving originating overseas also seems to have been directed largely toward disasters (e.g. Kashmir earthquake).

I also wanted to clarify that the average donation amount reported through the GlobalGiving Index represents our total donations, not just the online portion, so you're right that that $800+ is high.  We find that many "major donor" contributions are actually done the old-fashioned way, by writing a check, and the reported amount does represent these contributions.  Many people use our website to do the research and select a project, but still ultimately opt to mail in a check!  Do you find that to be the case as well?

Hope that helps...I'm sure Mari can add more when she unpacks her computer!  Let us know if you would like more details.

Joan

Eli - Jan 20, 2006 3:37 pm (#10 Total: 11)
GlobalGiving


Hi Patrick -- I'm going to give my two cents on one element of donations from non-western countries and ask my colleagues to chime in on the rest. Following the Tsunami, many corporations matched their employees contributions to relief efforts. Our online platform enabled several corporations to extend this match to their employees based in other countries. The platform specifically enabled the corporations to track donations and enabled their employees to give via a credit card. We also know of an India-based group that sought to use the platform to contribute to Katrina relief projects.

Pamela Hawley - Jan 23, 2006 3:27 pm (#11 Total: 11)
Founder and CEO, UniversalGiving

Patrick,

Thank you for your message about giving.  At UniversalGiving (http://www.universalgiving.org) we match both donors and volunteers with qualified international organizations and projects. 

To your point, we certainly see a lower amount on the donation front, but see different trends according to the target market.  For example, we see a difference between high networth donors; corporations; and young professionals.

As per donations increasing online outside of the U.S., we do see this on the corporate front: both from U.S. Headquarters abroad, as well as in-country.

Thank you for your great questions!

All my best, Pamela

How do we really make a difference in the world? We act, we reflect, we learn and we change, argue Jenny Hyatt and Allan Kaplan in the June issue of Alliance magazine. This is particularly important for donors as they control resources that can enable or disable social change.

Too often, however, reflection and learning are neglected out of organizational complacency, fear of failure, and a paradigm of impact which is over-reliant on what can be counted rather than what counts.

Funders talk about listening to their grantees and their beneficiaries, and spend time and money on evaluating their programmes, but what lies behind the rhetoric? Do they really absorb the lessons that their work throws up or is organizational learning simply one more item on the list of neglected good intentions?

In this Alliance special feature, guest editors Jenny Hyatt and Allan Kaplan set out the critical features of a learning organization and suggested that many funders were struggling to live up to these. To read their article, click here.

In response, a number of donors looked at their own organizations and described the means, formal and informal, by which they seek to profit from their own and others’ experience. Contributors include the Bernard van Leer Foundation, Dutch organization SNV, the Carpathian Foundation, South Africa’s Social Change Assistance Trust and Oxfam.

Hyatt and Kaplan caution against the ‘we measure impact’ mentality, which can result in a feeling that learning is mainly about measuring things ‘out there’ rather than something embedded in the fabric of organizational life.

Do you agree with this view of learning? Have your say NOW!

Welcome to the Social Edge Café! Join Caroline Hartnell (Editor, Alliance magazine), Jenny Hyatt (Director, The Development School) and Allan Kaplan (a South African consultant and a core associate of The Development School) in the conversation.

Jenny Hyatt - Jun 20, 2006 3:06 am (#1 Total: 15)
Director, The Development School (London)


Welcome to this discussion on donors as learning organisations. I wanted to open with a warm encouragement for you to participate and make this a lively conversation. Read the articles in Alliance and see what they bring forth for you. For me, this forum is very timely. This weekend i will be in Serbia for my last meeting as a member of the Board of the Balkan Community Initiatives Fund (BCIF) - a grantmaking foundation we set up in 1999. Its Executive Director - Alex Vesic - is one of the contributors to this Alliance. Leaving its Board has brought back its whole living history to me and I have become aware how much learning has been placed at the centre of BCIF's development. Perhaps this is best expressed in how it has regularly looked at its purpose and its values. Hence, it has not become a chaser of money bent on its own survival but an intelligent donor that is clear about how it understands and works with change. Yet this has taken leadership (from Alex and the Serbian Montenegrin Board members) and the creation of time to consider issues and opportunities as they have arisen. I worry that some leaders of foundations do not create the 'space' that is needed for their organisations to be self-aware, centred and open to emergence (see article by Al Kaplan and I). Indeed, some constrain that space by buying into the myth of activity equalling performance. If foundation leaders do not have that critical capacity (and courage) to open and hold the space for learning then they push their organisations towards mechanistic approaches which herald the death of creative grantmaking to enable social change.

Caroline Hartnell - Jun 20, 2006 4:43 am (#2 Total: 15)
Alliance Magazine

A very warm welcome from me too to this Social Edge discussion. The special feature on donors as learning organizations in the June issue of Alliance magazine raised a lot of interesting issues, and this is a great opportunity to carry on the conversation that was started there.

In her opening post, Jenny stresses the danger of organizations adopting 'mechanistic approaches' to learning that will stifle creativity and responsiveness. For me, one of the big issues that emerged from the Alliance feature was how to reconcile the more open and 'for its own sake' approach to learning that Jenny and her co-guest editor Allan Kaplan advocate with what another contributor, Phil Buchanan of the Center for Effective Philanthropy, describes as 'the responsibility of foundation staff and board members to use their learning to inform improvement in performance'.

I'll be very interested to hear what other people have to say about this.

Patrick O'Heffernan - Jun 20, 2006 5:34 pm (#3 Total: 15)


Too often NPO's skip evaluation unless they are told to do it by their funders. The reasons are usually time and money - both in short supply and often not provided by funders. But there is another reason. In my 20+ years in the NPO/NGO field, one thing I have learned is that "impact" and "evaluation" are not the same thing. Impact is more than the result of a single project; it is the results of the work of an NPO or a cluster of NPOs or of a funder over time. It is analagous to "cummulative impact" in environmental assesment....it asks "what is the cummulative change to society over time of this project and others before, after, and with it?"

This kind of impact analysis is more properly done by the funder in conference with NPOs who have worked in the field for years. This does not mean tht NPOs should not evaluate their project -- but those evaluatons will be more of a "lessons learned" than an impact analysis.

This kind of long term view takes place in venues like the Global Philanthropy Forum, Indpendent Sector, and at discussions hosted by the Packard Foundation with its donees.

Gordon Whitaker - Jun 21, 2006 7:28 am (#4 Total: 15)

Jenny Hyatt and Allan Kaplan call our attention to the importance of learning for donor organizations (and those who guide and manage them).  They discuss some of the preconceptions that create blinders that can limit organizational learning, including a preoccupation with the donor organization's own view of the world and a reluctance of the powerful (those with the money) to share power.  They lay a valuable theoretical framework for those in donor organizations to think about learning with the NGOs they fund. 

How might such learning partnerships be created and sustained?  Hyatt and Kaplan helpfully point out that formulas and procedures can become blinders that limit learning, but without some guidance about how to create opportunities to learn together, many potential learning partnerships are likely to fall into familiar patterns of donor dominance and lack of learning.

I want to suggest that creating "mutual accountability" between donors and the NGOs they fund can provide a framework for learning partnerships.  By "mutual accountability" my colleagues and I refer to negotiated agreements about what products (or changes in the world) each partner expects to produce under the relationship, what alterations each partner has authority to carry out unilaterally, what information each partner will provide the other, and how the partners will review/revise their relationship.  Accountability need not be hierarchical;  it can be shared.  The acronym PAIR calls attention to four critical aspects of any system of accountability and suggests that these can be jointly determined, rather than set by the more powerful party for compliance by the less powerful party.

As Patrick O'Heffernan suggests, discussions among funders and those they fund bring a range of insights together and encourage deep learning.  Those discussions need not be ad hoc or episodic, however.  Discussion can be built into the grant-making process as negotiation about what donors and NGOs expect to accomplish (and what they plan to do to get there), how much flexibility of operation each will have, what kinds of information each will provide, and how they will learn together to revise or renew their work.

For more discussion of "mutual accountability" see articles available at http://ncinfo.iog.unc.edu/pubs/electronicversions/pg/pgfal03/article3.pdf and http://www.innovations.harvard.edu/showdoc.html?id=10358 or our project website at www.publicintersection.unc.edu .

tutormentor - Jun 22, 2006 7:59 am (#5 Total: 15)
Cabrini Connections Tutor/Mentor Connection

I think that what's being discussed is really a two part discussion. 

Part one, is a discussion among donors of how to give effectively, with accountability and without the funds being misused in ways that would be embarrasing to the donor.

Part two is, how do donors use their resources and those of NGOs and others to solve important problems facing communties throughout the world. 

I don't know of many places where there is an ongoing and open dialogue between donors and NGOs as part of an on-going as part of a learning process. For instance, I cannot get a meeting with many donors, without a proposal in front of them. If they tell me they don't want to look at a proposal from me, they cut off any learning they might acquire from a discussion with me. Furthermore, some of the meetings are five and 10 minute events, which seem more for protocal than for learning.

To me, even if we met every month for an hour, the problems that my organization addresses (helping poor kids to careers) are too complex to be learned from my one on one discussions with a few donors.

And while donors create public forums to share their research and publications with groups of people (I've been in forums with 100 to 500 people), these provide little opportunity for questioning, interaction and brainstorming ways to use the knowlege.

Thus, I believe that internet libraries and collaboration portals, focused on specific issues (health, hunger, war, poverty, etc.) could be meeting places for donors and NGOs and anyone else who wants to learn more about any specific issues, then find paths of greater or more effective, involvement.

By putting knowledge on the Internet, we create the opportunity for anyone to go to that knowledge as often as they want to learn from the experiences of people from all over the world. In such places, the discussion should be "what do we know about the problem, or about those who are working to solve the problem" and "what ways could anyone in the discussion be involved in providing solutions?"

By creating discussion and collaboration forums linked to specific knowledge sectors, we create the ability for people to help each other collect, organize discuss, and understand specific problems, and then decide how and with whom, they want to work to be part of a solution.

If these exist, and if donors are actively involved, it would be nice to know where they are.

Allan Kaplan - Jun 22, 2006 10:57 am (#6 Total: 15)
The Development School, London


I'm not entirely sure that this message will be posted, as I'm having trouble connecting, but this is not so much to contribute to the discussion as much as to extend warm greetings to all those who join, to apologise for arriving late, and even more for having to depart before I have even connected into the discussion.  Unfortunately I have to leave in a very few hours for Ghana, so I really have no opportunity right now to engage.  I will however try to connect up in when in Ghana, and contribute from there.  Must just note - for the sake of some of those from the US who have joined the discussion - that Ghana have just beaten the US in the Fifa World Cup, and I'm expecting to arrive to rapturous joy.  I will try and connect from there.  Greetings 

Caroline Hartnell - Jun 23, 2006 6:18 am (#7 Total: 15)
Alliance Magazine

The interview with Lizzie Zobel in the June issue of Alliance provided some interesting insights on learning among beneficiaries, NGOs and donors. On the one hand, Lizzie's NGO, engaged very frequently with their beneficiaries - children and teachers in public primary schools involved in a reading programme - and reflected endlessly within the NGO on what they learned. During the course of this, their 'understanding' (interestingly, a word she used throughout the interview) of the situation they were working in evolved continuously, and they constantly adjusted their behaviour accordingly. But engagement with donors was very different, and involved a lot of deference to donors' pre-existing views and expectations of the programme.

I really like the term 'understanding', applied to both parts of the discussion tutormentor refers to above. Donors need to understand their own role, what they're doing and how they're doing it. They also need to understand the problems within the communities they want to work in and how they can help. In all cases, action flows from deeper and always evolving understanding.

Jenny Hyatt - Jun 26, 2006 1:10 am (#8 Total: 15)
Director, The Development School (London)

I am writing from Belgrade after yet another extraordinary weekend of working with the Balkan Community Initiatives Fund. This weekend reminded me of how important it is for donors to make time to really listen to grantees.BCIF has a few of those sorts of donors and we were discussing this week just how their ability to accompany the foundation - through highs and lows - has transformed BCIF's confidence and ability to engage donors in critical issues that emerge from very local community initiatives. Ultimately, this is the joint concern of us all - to truly empower local actors to lead the processes of change that will bring lasting benefits to their communities. And it reminded me how THe Development School got its very first grant - when i was alone in an apartment in Kosovo just after the NATO bombing - at night time. There was a power failure and a lot of panic on the stairs of the block outside. It was such a darkness that i could not see my hand in front of my face. I took the risk of opening the door (which those of you who have lived in emergency situations will know) and called for a light - at that moment the phone rang. I picked it up - and heard in the very same moment that someone passed me a candle from the stairs that we had received our very first grant from Rockefeller Brothers FUnd - after some months of meaningful conversation about what we are trying to achieve. SInce then, for me that light has symbolised the potential that all donors have to bring light if they are open to listening and learning. I urge that all donors pick up the Olympic Torch of learning.

tutormentor - Jun 26, 2006 12:56 pm (#9 Total: 15)
Cabrini Connections Tutor/Mentor Connection


I'm sure everyone has read how Warren Buffet has donated about $30 billion to the Bill and Melinda Gates Foundation. When you're as larege as they are, how effective are they as a learning organization? How much do they really have their ear to the ground so that the small voices with big ideas might be heard?

Any comments?

David Bonbright - Jun 26, 2006 10:35 pm (#10 Total: 15)
Managing Partner, Keystone


Like Gordon Whitaker, my organization promotes learning through an accountability lens. We also work from formalized understandings about roles and responsibilities between the agents of change and those who are meant to benefit, the so-called beneficiaries. We call them "agreements of honor" and they typically cover similar areas to those laid out by Gordon. Nice to see this convergence of methodology!

We recently conducted an online survey on CSO and Donor practices with respect to accountability to beneficiaries. I previewed the findings in a short article in the featured issue of Alliance -- "Not Learning from Beneficiaries". I attach it here. The full report on the survey will be available on our website later this week -- www.keystonereporting.org.

The headline from the survey is that there is a much greater recognition of the importance of engaging with, learning from and being accountable to 'beneficiaries' then there are practices in place to do it. We take this as an opportunity to close the gap.

Attachments:

not learning from beneficiaries.pdf (49 KB)

Caroline Hartnell - Jun 30, 2006 12:58 am (#11 Total: 15)
Alliance Magazine

The last three posts have all talked about the importance of donors listening to/engaging with others 'on the ground' - grantees, beneficiary communities and potential beneficiaries. I'd like to take this opportunity to bring together two aspects of this discussion we've been having both here on Social Edge and in the June issue of Alliance.

In their Alliance overview article (www.allavida.org/cgi-bin/click/click.cgi?id=139), Jenny and Al dwelt on the qualities of the 'learning organization' - the openness of the donor to be aware of itself as an organization and to reflect continually on what it is doing and what role it plays in the world. In her post above, Jenny talks of the need for donors 'to make time to really listen to grantees'.

Superficially, these might look like different emphases, on the one hand the donor looking inward, on the other listening to those outside, 'on the ground' - though I'm not suggesting Jenny and Al ever separated them in this way. Where they come together clearly is in answering the question 'What do you do with what you hear?' A donor organization can engage with grantees, beneficiaries, the 'small voices' as much as it likes, but unless it is truly open to arriving at a different understanding of the situation it is working in and re-evaluating what it's doing and changing course if necessary, none of it will do any good.

 

tutormentor - Jun 30, 2006 8:20 am (#12 Total: 15)
Cabrini Connections Tutor/Mentor Connection

Caroline,

I feel that you're right on target. I don't feel that foundation leaders are the only ones infected with the "not invented here" and "In love with what I'm already doing" virus. This is what separates good from great organizations, and can mean the difference between evolution and constant improvement and extenction for busineses and non profits.

Changing habits is not easy. Thus, I feel we need to think further to the future in dveloping a new generation of leaders who use learning and innovation as habitually as others use iPods and junk food.

I believe a starting point is the aggregation of information related to specific issues. If someone has a web site with examples of how some people may be solving a certain problem, or learning about a certain issue, then others can point to that in efforts to budge people from their entrenched thinking by showing how similar groups in different places may be acting differently and getting better results.

This is what I'm trying to do at http://www.tutormentorconnection.org but what I feel can be done even better if we can get some people in universities involved in the process of collecting, mataining and facilitating the understanding of this information.

Alexia Latortue - Jun 30, 2006 9:01 am (#13 Total: 15)

CGAP is a resource centre for the entire microfinance industry where it incubates and supports new ideas, innovative products, cutting-edge technology, novel mechanisms for delivering financial services, and concrete solutions to the challenges of expanding microfinance. Since 2002, CGAP has also focused on aid effectiveness, using microfinance as a test case for concretely improving how development agencies work. CGAP’s joint work with its member donors (bi-and multi-lateral agencies, regional development banks, and private foundations) has shown that effectiveness and harmonization can be put into practice. 

 

Between 2002 and 2004, seventeen development agencies received Microfinance Donor Peer Reviews and have taken tough decisions to improve their operations. Some have commissioned portfolio reviews and instituted new policies to rectify weaknesses. See details on the Peer Reviews on www.cgap.org/projects/donor_peer_reviews.html

  

 

Five core elements of effectiveness emerged from the 17 Microfinance Donor Peer Reviews. These elements, while not exhaustive, are key to improving aid effectiveness at the individual agency level. These same elements also help determine an agency's comparative advantage in microfinance vis-à-vis other donors when supporting financial services for the poor.

 

  

See the Aid effectiveness star attached to this message.

 

  

1. Strategic Clarity and Coherence: The extent to which an agency-wide vision of microfinance exists and whether this vision and agency policies are in line with accepted good practice.

 

2. Strong Staff Capacity: Whether the microfinance focal unit has sufficient capacity and resources to provide skilled technical support to operational colleagues. Also, whether the overall level of technical capacity is adequate to ensure quality operations.

 

3. Accountability for Results: The level of knowledge of the microfinance portfolio (e.g., whether it is "visible" to the agency) and transparency on portfolio performance.

 

4. Relevant Knowledge Management: How well the agency learns from its own and others' experience through the creation, dissemination and use of practical, user-friendly knowledge.

 

5. Appropriate Instruments: Whether an agency has instruments that allow it to work directly with the private sector — a critical pre-condition for effectiveness in microfinance. The quality, range and flexibility of instruments are also crucial.

  

 

To take its aid effectiveness work one step closer to field operations, CGAP launched a series of Country Level Effectiveness and Accountability Reviews (CLEARs) in 2004.  The CLEARs combine a quick financial systems gap analysis with an in-depth assessment of donors’ and investors’ contributions to helping build financial systems. These country reviews seek to spark a process that will lead funding agencies to make changes to their internal systems and procedures so that they can design better interventions that build on their comparative advantage and take into account the work of others. For the reports of the country reviews conducted in five countries, please see www.cgap.org/clear.

 

  

All of this work has been an incredible exercise in learning how development agencies can improve the way they work to better serve their ultimate clients—poor people in developing countries.

 

Attachments:

AidEffectivenessStar.pdf (50 KB)

Caroline Hartnell - Jul 3, 2006 3:45 pm (#14 Total: 15)
Alliance Magazine

We've talked a good bit about learning from beneficiaries/constituents/grantees, but interestingly the last two posts (tutormentor and Alexia Latortue) have focused on donors learning from other other.

'There's nothing wrong with making mistakes,' I remember hearing someone say. 'In fact, if you never make any mistakes, you're not taking enough risks. But what is wrong is making the same mistakes that others have already made.' This sums up for me one key aspect of learning that seems to be little talked about - donors sharing their experiences and learning from each other. Even where donor organizations are open to listening to their beneficiaries and reflecting on what they hear and making changes in their policies and practices where needed, they will surely be missing the biggest trick of all if what is learned is not shared with other donors.