I agree with the changes you identify, but think the broader context is very important. Yes, there are more foundations than ever before. But most foundations have always been small and hard to find. The Council on Foundations, Independent Sector and other affinity groups for foundations have never - collectively - accounted for more than 4-5% of all foundations - and thats being generous with market share estimates. The majority of US foundations have always been tiny and hard to find.

I'm also sure there are some new things that aren't mentioned in this post and that should be.

For example, donors have been flocking to donor advised funds in droves for over almost two decades now. There is now more than $19 billion in donor advised funds in the US;DAFs are available from every kind of vendor - Fidelity to Harvard to your local community foundation to your house of worship. These funds are very hard for NPOs to find.

Leadership change at large foundations does matter. In addition to Ford, other large foundations getting new leaders include Rockefeller (2 years ago),Surdna , Gates (remember, Bill goes full-time into philanthropy on July 1, 2008), MacArthur likely in a few years, Robert Wood Johnson's president is relatively new, and so on. These changes do matter, but not only for the reasons you might think. Historically, leadership change at large foundations has resulted - in the near term - in 1-2 year periods of internal direction setting and strategic planning. This often feels toNPOs as if the funders have shut the doors, drawn the shades and turned off the lights. So don't link "new president" with "new direction" right away. In the short term, "new leadership" is more likely to equal "everything is on hold." Lets hope that whoever the new leaders are for the foundations named change this pattern.

I still think the advantages of investing over giving is somewhat in the eye of the beholder. Having recently listened carefully to Carol Thompson Cole of Venture Philanthropy Partners (a leader in the practice and reflection on the practice) speak about their first five years of work, it is more clear to me than ever that there is good "investing" and "not good" investing.

The former takes a lot of work, more so than even the VPP folks thought it would. Unexpected factors affect whether or not the effort pays off. For example, VPP learned the value of being place-focused. If this is really a factor in good social investing than we will either need to see a lot of long-haul, dedicated, place-based venture investors develop (in order to be of use toNPOs broadly) or we will see this develop in pockets (DC, SF, Boston area) where the investors are - which won't do much for other communities.

You raise good questions and provide a start on answers but only your answer to question #2 (about new leadership) goes far enough. For questions number one and three, NPOs need to know (and go) beyond foundations. The very donors NPOs are looking for may be managing their giving through DAFs, giving circles, or from their kitchen tables. Looking for foundations - many of which are the equivalent of tax-exempt checkbooks - is hard, it needs to be done (FoundationSearch is a useful tool) - but its by no means enough. When thinking about these foundations, NPOs are well served to use the same strategies they use to find major individual donors. Most small foundations are the equivalent of a major donor - a single person, acting on their passion, following their heart or the information of friends, and getting hooked into "deal flow" through their existing networks.

How to find these folks? - lists of donors from like-NPOs; society pages; networking; LinkedIn; MySpace; SecondLife events, alumni mags - and every other tool ever available and now accelerated through technology.

Lucy, Excellent and very informative post. As you correctly surmised the events posted on social edge are designed as headlines to ignite converstations and draw out information, and I thank you for deepening the conversation considerably.

A number of points. While it is true that after senior staff changes at foundations there is a "dark" period, this is not always the case. When the Rockefeller's new president took over, there was an immediate review of existing grants, with many NGO's told that the next grant would be their last (I know because I was DoD of their largest recipient at the time and we had to scramble to develop a plan for a soft landing). But NGOs are well advised to track these changes and be ready for new guidelines at some point.

Thank you for pointing out the rise of DAF's. While my post focussed on philantropic foundations, DAF's have become exceptionally important to U.S. NPOs and difficult for non-US NPOs that raise money in the US. As you correctly note, many DAFs are essentially tax-exempt checkbooks and do not have the staff or exptertise to run the current government gauntlet involved in sending funds overseas. Some DAFs work with orgnizations like Tides which can do this, but many don't shutting out non-US NGO's , who must develop other strategies, such as partnering with US NPOs.

As you point out DAF's are generally invisible and are located by sophisticated and often personal search methods. For US NPOs the traditional house party is often an excellent tool to flush them out when they are invited by hosts or friends. Non US NGOs cannot make use of this tool; again, partnership with a US NPO is a good strategy. The RedPal group that works iwth Amazonian tribes in Peru has done this effectively.

Again, thank you for an excellent post.

Patrick

The challenge that DAFs pose to NGOs is important because it represents the same challenge posed by small, which is to say most, foundations. They're hidden. Often deliberately. Now, more than ever, according to planned giving research, donors have foundations AND DAFs AND checkbooks - and nonprofits need to learn how to navigate these options when approaching each. Recognize that if you "walk" through the door to a small foundation, the board members have other resources in other places that might also be deployed. Tides and community foundations have typically helped the donors "manage" these - and I use the term manage loosely.

Much more needs to be done, for both donors and nonprofits, to make sense of these "giving portfolios." Donors need to think about why they have each tool and how they complement each other. Nonprofits need to learn how to ask about each one, find access, and make a case that fits each pool of resources (or some of them). And vendors - e.g. Tides, community foundations, financial firms - need to help donors know what to use when and why.

Lucy

As I read your comments I'm visualizing an ant colony, where millions of ants are scurring around to find food. When a nugget is found, they all flock to it, in mass. It's quickly gone.

All of us looking for funds are like those ants. It's a huge waste of time and talent, and the process leads many great leaders to burn out and leave the field.

I feel that the Internet offers new ways to do business and that if we can get organizations in the same geography, or the same service sector, to work together to expand the number of donors, educate the donors to what the issues are, and to the ways their funding could have a greater long term impact, we can increase the number of donors and teach them to shop for where they get involved, based on where a service is needed, and what organizations provide service in those areas.

I realize I'm just a whisper in the wilderness on this, but I keep working to patch together a network of organizations, volunteers, donors and others who see volunteer involvement as a way to connect business people with inner city issues of poverty and poor schools. At http://tutormentor.blogspot.com you can see small steps toward building a network of bloggers, and at http://www.tutormentorconference.org you can see the next step in drawing people together for face to face events.

My act of posting this message is an example of how this invitation to connect reaches out through other channels to other networks. As more leaders of youth serving programs, or businesses that are concerned about future workforce quality, take this same role, we'll connect more people with each other, and build greater understanding of this sector, and ways donors can use their dollars to fuel the efforts of thousands of ants looking for dollars to fuel their efforts.

I think there are lots of reasons to keep pushing to organize - sectors, issues, donors. Finding ways to move the discussion and the funding to higher levels - away from foundation program silos, away from programmatic niches in npos - and to a level where systems thinking and systems points of leverage come into play is where the potential lies.

A TV host in Chicago uses the slogan, "If it is to be, it is up to me" as a motivational tool. I have adopted this in my own efforts, and you can see how I've put this into action if you browse my web sites.

However, my goal is that others take on the same sense of purpose, in a form of decentralized organization (a la, The Spider and the Starfish - http://www.starfishandspider.com/index.php?title=Community#PodCamp_was_a_lesson_in_this.)

I've started a tutor/mentor blog exchange at http://tutormentor.blogspot.com. It's aimed at furthering the goals of this Social Edge discussion, as well as the goals of building more and better tutor/mentor programs in high poverty areas of every major city in the US (or the world).

I hope you'll write about this in your own blog and add your blog to the blog exchange list at http://www.tutormentorexchange.net/Partner/CC/Conference/May2005/current.asp

Your analogy to ants is so true. I have seen it - and done - so many times. It seems that the NPO world is constantly hungry for new sources because the old (i.e., existing sources) are under so much competition. My analogy is more like a new freeway. It opens to reduce traffic, but then becomes a traffic jam itself. This is a simpltom of too many entrpreneurial dollars chasing too few grants. Which is why the time is right for social entrepreneurs to move into the private sector

At http://www.tutormentorconnection.org/TMLearningNetwork/LinksLibrary/tabid/560/rrcid/3/rrscid/84/rrpid/1/rrepp/20/Default.aspx I point to a variety of articles that illustrate the high costs of poverty and the negative impact on business caused by global competition for workers who can innovate, communmicate, solve problems, etc.

These are issues CEOs in big companies are concerned about. Thus, instead of me learning a way to sell widgets to fund my operations, why can't we find a way to teach CEOs to use some of their profits, or training and R&D money, to fund innovators who are creating solutions that might help solve these problems and produce better prepared workers.

Instead of 100, or 1000, tutor/mentor leaders reaching out to a big company for money, why don't they build a database, mapping process, and thoughtfully and strategically, distribute resources (time, talent, volunteers, dollars, technology, etc.) to hundreds of those places at the same time.

Pretty radical, but more beneficial. Lots more realistic than thinking that enough of us will figure ways to create business revenues that can support the good work we're trying to do.

Lucy Bernholz is onto something when she said, "Finding ways to move the discussion and the funding to higher levels - away from foundation program silos, away from programmatic niches in npos - and to a level where systems thinking and systems points of leverage come into play is where the potential lies." This potential may be in changing public attitudes, the political/policy agenda, and how the system works, in order to increase philanthropic ROI. The conservative movement has invested in influencing all of these factors very effectively to advance their positions over the past 30 years. As we've seen in recent years, their efforts have been form of economic "entrepreneurship", with economic payoffs represented by getting bigger political bang at lower cost by employing their messaging echo chamber and well-developed influence network.

Systems thinkers recognize that, at the same time, the conservative movement has made it much harder for those interested in helping the disadvantaged get ahead, ensuring public education, civil liberties, public health, and environmental protection to succeed, no matter how much they put into the game or how clever they try to be with "social entrepreneurship". They've raised the cost of entry into the market, created barriers for their ideological competitors, and tried to drive them out of business.

Look at the philanthropic ROI--what you get for what you put out--and you'll see that a certain amount of investment in public opinion, the policy agenda, and the system of rules and governance can pay off very handsomely. ROI should be measured not only in direct monetary intake by the new entrepreneurs (can they become financially self-sufficient), but in how much more they'll be able to get done if the system makes it easier for them to succeed. Successful for-profit businesses generally put a certain amount into marketing, sales, PR, lobbying, training, etc.--because they've learned it pays off. Anyone whose philanthropic goals--what they'd like to see happen in the world--fall in what's usually thought of as politically "moderate" or "progressive" would do well to invest in progressive idea-marketing, coordination, and communications infrastructure, as well.

You are absolutely right about the high ROI for public opinion investment, but there is a problem. The costs are focused and the benefits are spread. Plus they are hard to measure and take a while to be apparent. It is difficult to get this kind of investment (outside of the advertising industry where there are metrics tied to revenue and sales lift) because donors want to see results that are specific and time-bound.

DAniel Your plan makes perfect sense, if it did not deal with human beings. My suspicion is that no matter what kind of system you tried to put in place, it would be overwhelmed with grant seekers who did not share the common vision, and would be ignored by CEO's who really, did not share the common vision.