What is your favorite book on fundraising?
It's near the end of summer, so my reader must be finishing up a beach worn Grisham novel and realizing she has to get back to business. It's true that the fall is a critical time to gear back up, but that doesn't mean she has to read a book explicitly devoted to fundraising per se.
For my professional life, my favorite reading almost always comes from disciplines outside the nonprofit world. I believe one of the great benefits of books is that it opens you to entirely new worlds and new ways of seeing things. Since it is my job to bring such fresh perspectives to my clients, I try to read as widely as possible. In fact, I’ve argued elsewhere that when you are evaluating a consultant, one of the first things you should do is check out the consultant’s bookshelf.
In that vein, my favorite book about fundraising is a book that is ostensibly about baseball: Michael Lewis’ Moneyball. As is now well recognized, the book has wide applicability beyond the stadium walls. Many industries and disciplines have quickly adopted the book’s insights. It is widely lauded as one of the most important books (of any discipline) written in the last decade.But it is only slowly entering the discussion within the nonprofit community. Where the book has made an appearance, the conversants have been mostly on the giving - and not fundraising -- side of the equation. For a couple of good examples, see my friend Sean Stanndard-Stockton’s Tacitical Philanthropy piece here and the president of Charity Navigator Ken Berger’s blog here.
However, I believe the true spirit of the book resides more with those desperately lacking cash than those with extra to give. For the uninitiated, Lewis chronicles how Billy Beane, who is the general manager of the Oakland A’s and a particularly bright and scrappy leader, plays the hand he is dealt. The hand? Needing to succeed as a small franchise in a fiercely competitive environment, while only equipped with minimal financial resources compared to the big boys.
Sound familiar?
And the subtitle of the book gives you a clue about both its true message and its relevance to nonprofit fundraising: “The Art of Winning an Unfair Game.” That's your game he's talking about: you can’t hire a development staff, foundations are cutting back their grants, your board is telling you that you have to be up on Facebook and Twitter, there’s minimal money for marketing, and yes, you’ve got to raise another 10% over last year or you’re looking at layoffs.
I think Moneyball is a seminal enough book (it’s being made into a Hollywood move… starring Brad Pitt, for cryin’ out loud) that it should be translated for executive directors seeking to raise money but feeling like they face an uphill climb… which is to say it should be translated for all executive directors. So here’s one take on how the nonprofit leader playing this unfair game needs to learn to play Moneyball.
Change the formula
One of the ways that Moneyball was misunderstood by many in its immediate audience – the baseball community – was the notion that Lewis was advocating a particular formula for constructing a team. This missed Lewis’ bigger point: that the leader in the unfair but still competitive game has to always change the formula. In such a game, once a favorable formula has been discovered, other competitors – often larger and with more resources – will rush in to copy and erode the advantage.
When fundraising in our technological era, this dynamic is increasing in its pace. For those of you old enough, dial back to that wow factor when the first nonprofits started sending out appeals in Macintosh enabled page designs and laser printers. How about how your eyes jumped out at those first web sites that had Flash animation on the home page? Constant Contact e-newsletters? Online giving? Facebook campaigns?
Whatever cool new tool that some nonprofit used to differentiate itself in the crowded fundraising environment got quickly appropriated by the crowd. This is the nature of competition, and the reality that fundraising is a competitive game. Even if two agencies are in different fields and may not be going after the exact same funders, they are going after the same crowded “mind space” where they can stand out and be noticed.
Playing Moneyball means you can’t always be the late adopter. You have to constantly look for ideas that haven’t been tried yet – or at least by many others. There is just no substitute for this effort in any competitive game if you really want to stand out and succeed. Fortunately, however, the same technology that so quickly erodes first mover advantage also enables relatively inexpensive and rapid experimentation. Many of the most interesting innovations in donor development are absolutely free cash-wise.
In other words, what new formulas most require is the human talent to discover them.
Hiring outside the box
One of the ways that Billy Beane changed the formula was via unorthodox hiring practices. While his competitors would only hire seasoned baseball professionals who had already played or managed in the league, he deliberately recruited young recent graduates from Ivy League schools who had more quantitative backgrounds and never played an inning of professional baseball. With such unorthodox hiring pracitces, Beane gained two key competitive advantages: new skill sets (the math) but also a fresh set of eyes unencumbered by tradition and willing to question everything.
To play Moneyball, the nonprofit executive director will have to change the formula for hiring development staff. The typical director of development is 40-55, often a woman, and has held previous nonprofit positions in development. The competition for the classic, mature, and experienced development director of this profile is incredibly fierce. In the Bay Area, their salaries can rival the executive director's, and the average tenure is less than two years anyways. The latter stat means even if you win the recruiting battle for top talent, you’ll just be getting the same skill sets and perspectives that are circulating among all your competitors.
What could a Moneyball play look like? Well, here are three different ways to tinker with the recruitment formula:
1. Timeshare the job with 2-3 women in their 30’s who dropped out of marketing or sales jobs in the corporate world and are now stay at home moms. That is the formula for how I built my firm, Consulting Within Reach, and I can attest to the incredible untapped productivity of this demographic.
2. There are tons of 20-somethings who are now several years into their first jobs and are discovering how unsatisfying their work is and looking to make a more social impact. There is a lot of talent out there, talent that knows more how to harness the world social networking much better than someone not in that demographic. But they won’t necessarily be looking in the standard nonprofit job listings. And some of the especially talented ones may not even be aware that deep down they are looking. Go find them. Inspire them. Woo them. Here’s some more on how to do this.
3. I have never understood why there aren’t more retired, white, male business executives over 65 being recruited as first time development directors. Think about it: every organization wishes they were tapped into more networks of wealth. What do those networks look like? Why not hire someone from that world? Why not build in that perspective intimately into your fundraising operations at the ground floor.
When you recruit an experienced 45 year old female development professional, you can be sure that one thing you will NOT be getting is a ready to go pool of such donors. Whatever networks that person built previously are specific to those previous organizations. So getting a first development director who has years of networking among successful businessmen but hasn’t leveraged that network fully yet (except perhaps for some volunteer fundraising) is an incredible competitive advantage.In Moneyball, there's a classic scene where Billy Beane is arguing with more established scouts who write off an overweight prospect. I think executive directors have a similar tendency to see old, rich, white guys and think only "board member." I believe that's a formula worth challenging and changing up.
I know of a few old, financially successful, white guys who would actually feel honored to be recruited for a professional position (even if it is paying well less their career averages), to be told that they still have more to give, to be challenged to a new undertaking.
Could any of these plays actually work? I don't know and I'd love the thoughts of Expert Advice readers. I do know this, though: you won't find out by sitting on the bench.
I just returned from a two week trip to China. Among experiences such as re-awakening my childhood facility in Mandarin, hiking the Great Wall, and eating some of the most delicious dumplings of my life, I was also struck - as many Westerners are when they visit - of the incredible dynamism of the society.
I knew intellectually this truth before I visited, of course, but after being there, I was struck viscerally by the reality that what the world will look like in the 21st century depends a great deal on what Chinese society will look like. Thus, if one cares about the future of global social entrepreneurship, one has to ask this question:
What is the future of NGOs in China?
I didn't realize that Social Edge would be asking this very same question in its weekly discussion but I'll take advantage of the synchronicity and post my thoughts. Or more precisely, the thoughts of a friend of mine who has worked extensively in the NGO scene in China.
I asked him a number of questions on my mind after the trip. Due to his concern about what the Chinese government how might pick up his comments and respond (itself an indication of what the scene is like), I've changed his name to "Howard."
Here's a transcript of our conversation.
• What was your role in the NGO scene in China?
Howard: I lived and worked in China for five years. As marketing director for two different NGOs involved in Development, Relief and Humanitarian work, I engaged companies and foreigners to raise support for the rural and urban poor. Through this work I met many other NGOs and multi-lateral organizations as well as public and private sector leaders in China.
• How would you evaluate the current prospects of NGO there generally speaking?
Howard: The Government has a fundamental distrust of foreign NGOs. They view their work with suspicion and question the motivation of foreigners who work without a profit motive. There are understandable reasons for this as foreign governments have used NGOs as platforms for gathering intelligence, encouraging opposition to state policies etc. The Color revolutions that happened in the former soviet states of Ukraine, Georgia. Kyrgyzstan were closely watched by Chinese leaders, as well as how Russia and other former Commuist regimes relate to NGOs. Though the work that many NGOs do is appreciated by local government, the underlying lack of control over NGOs activities, governance and purpose makes the Chinese government at all levels uneasy. As with anything in China, the State plays a premindent role in the NGO/Civil Society Community.
• What kinds of NGOs operate there?
Howard: There are four different types of entities in the NGO world in China:
1. The GONGOs (Government Organized NGO's) - NGOs that were part of the Government and are now still psuedo Governmental organizations. These are usually large and have the authority to do public fund raising and marketing. Leadership is usually retired government officials.
2. The Grass Roots NGOs - There are millions of these small NGOs formed by citizens. Most are tiny, not registered and depend on the donations of family and friends. Even the ones that are registered cannot legally fund raise. A few register and work in partnership (or under the supervision) of the GONGOs. Many provinces have their own registration process that may differ from the central government. For those who are registerd it has been reported that contact with foreign donors has to be reported to their government counterparts.
3. The Foreign NGOs - These are not registered under any formal process. Some register as a business. This is permitted as business is a field that the Government is encouraging. As the work of the NGOs (for the most part) is appreciated, but the organization, leadership and motivation of the NGO is distrusted, the government has come up with a method of coexistence: non-registration. They are aware of what the NGOs are doing and work in partnership with many of them, however there is no legal or formal acknowledgement of their existence, so if thin go badly, they can be expelled from China without a legal battle. The smart NGOs steer clear of legal, political and social landmines and focus on quietly providing benefit to Chinese society. Independent fundraising is not an option for these organizations. Sometimes, they have done fundraising with GONGOs, but not on their own.
4. The Foundations - There has been a foundation regulation that had been signed into law, permitting the registration of Foundations to raise and fund philanthropic activities. The registration process has been difficult and follows the same hurdles as NGO registration - requiring a government bureau to 'sponsor' them. Most bureaus are unwilling to sponsor anyone because of the risk associated with dealing with an organization they have little control over. A few high visibility foundations have registerd, but it has not been a big change in the overall environment that civil society watchers had been hoping for.
In general the Government controls the registration process and any work done by NGOs is watched, if not coordinated or even approved by governmental authorities. Effective/long term NGO work can only be done in partnership and close coordination with Government at all levels. Most NGOs play in a murky world of operating without a legal status because registration is so difficult.
• How does funding work? Is there any Chinese based philanthropy?
Howard: There is great philanthropy in China, but are also many skeptics. During times of natural disaster, the government makes a 'call' for donations to professional and civic organizations and other parts of society. These funds are given over to GONGOs or government agencies to do the relief work. In some publicized cases millions of RMB have 'disappeared' and only a small fraction of the funds were used for the relief they were intended to provide. This makes the average citizen skeptical about donating to anybody. At the same time, many are very civic minded and want to give to something that they can see and touch. Many will give to causes they believe in, however the machinery for them to give to any organization other than a GONGO or those who have partnered with the GONGOs, there is no channel for donations to legally flow through to grassroots or foriegn NGOs.
• How do the Chinese culturally view the NGO?
Howard: It is a concept that is not that familiar to many Chinese. Many will ask - isn't the work you are doing something that the Government ought to do? In a centralized one-party rule system, people are expecting the Government to solve problems. Citizen self initiated organization to address social or humanitarian problems can be viewed as a criticism or acusation of failure of the state and therefore a risky venture.
• What do you imagine the future of NGO work in China looks like? Are there any new models that will be required, ones that differ from the Western one?
Howard: The future of NGO work in China is uncertain. Recent reports have indicated that the regulation and registration process is tightening and even more difficult than before. Until the NGOs gain government trust, they will continue to work in the gray world of doing their work without legal status and without formal recognition. This does not look like it will change much in the near future. You have to realize that until about 20 years ago, there were virtually no formal or recognized NGOs in China, so China will continue to slowly experiment with NGO regulation and policies until they find something they are comfortable with.
Quick quiz: Which name is most important to the future of philanthropy?
a) Gates
b) Buffett
c) Skoll
d) Lopez
Hispanics make up 37% of California’s residents and are expected to be the state’s majority by 2042. The social landscape of western states (especially Texas) and specific urban areas (especially New York City) across the country will be similarly reshaped.
The impact of this development is intensified when applied to the social sector because the immigrant inflow of this population means a disproportionate percentage of this growth will need social services. At the same time that the need will be rising, the potential for giving will also be increasing: we are already seeing the emergence of second generation Latinos who were the first in their family to be college educated and attain high paying professional jobs.
What this means is that the social sector is going to be shaped on all fronts by how Hispanics relate to the nonprofit community. And there is one particular issue that can’t be avoided much longer.
It is this: What is the future of white led nonprofits in an increasingly Hispanic society? While philanthropy blogs like to dispute au courant trends like venture philanthropy and impact measurement, this question is one that has been relatively unaddressed.
Nationally, Hispanics now hold only 3% of nonprofit board seats, despite making up over 15% of the population. From my own informal surveys, the disparity between board representation and local population is far greater here in Northern California, and I suspect that is true in other high density Hispanic communities as well. This disparity is getting worse and there are only a few small initiatives (see below) that are consciously trying to address it.
I don’t think this gap is going to be sustainable. Even now, when I receive an appeal from an NPO that claims to be “grassroots” and “represent the community,” I will glance at the list of the board and, in many cases, experience a disconnect between reality and rhetoric. The Hispanic community of the future -- newly emboldened politically and sensitive to the danger of non-representative bodies (see immigration in Arizona) -- will not tolerate it if agencies claim to speak for them but don’t reflect them in their leadership.
In the vast majority of cases, the disparity isn’t an issue of conscious intent. Most white executive directors want to have more Hispanics on the board, but lack access to networks in the community. Some of this no doubt is due to the fact that they themselves are white and come from outside the communities they serve. Whether they have the cultural competency – the average executive director in my region is overwhelmingly white women in their 50s – is a question I cannot answer but does need to be raised.
Features of the Hispanic community also make for a poor fit with the existing nonprofit models. I spoke with Ron Gonzales, former mayor of San Jose and currently CEO of the Hispanic Foundation of Silicon Valley, and he believes that many Hispanics need more education about the importance of nonprofits to their community and to be made aware of the opportunities to serve. His organization has piloted the Latino Board Leadership Academy to train professionals on assuming philanthropic leadership roles.
The Hispanic Foundation does make some grants, as does its sister foundations Hispanics in Philanthropy and the Latino Community Foundation. However, the collective amounts given are very small. Even more significantly, the funds are almost entirely raised from corporations and other larger and primarily white led foundations (like Packard and Hewlett). None of these foundations, in my opinion, have figured out how to mobilize local Hispanic giving to local NPOs.
This is not to say that the Hispanic community gives little. For instance, according to the most recent study of Silicon Valley giving by race, Hispanics give 3.9% of their annual household to “charity” – compared to 3.8% for whites and an embarrassing 1.8% for my own Asian American community. Nationally, 63% of Hispanic households give to charity, a figure only somewhat under national averages.
What is strikingly different is how and to what Hispanics give. According to surveys, much of their giving goes to the local church and “informal” donations to family and friends. Another huge and rapidly expanding type of charity is remittances to needier relatives back in their country of origin. This type of giving rose from $15B in 2001 to $45B in 2006. To put this huge amount in perspective, the United States government in 2005 only gave $1.8B in aid to Latin America.
Looked at it from this angle, Hispanics don’t give very much to local nonprofits because they are propping up US aid to an entire part of the world.
Do local nonprofits try to compete for those foreign aid dollars? Do they compete with the local Catholic churches that also are a key recipient? Can a local NPO focused on getting kids to college make the case to a local Hispanic businessman that they would do a better job at stewarding his dollars than if he just gave the money to the kid next door’s college savings fund? Can a 50 year old white ED who went to Berkeley, who now lives in the suburbs, and who doesn’t speak Spanish credibly recruit board members from the community?
I don’t have the answers and wouldn’t presume to play Benevolent Dictator here (see last post), but I believe these are questions that nonprofit leaders in my state and many others must face in the next decade.
What do you think?
When I was a child, I constantly played with my toy army set. I would move the pieces around in various formations, marshalling a contingent of infantry, artillery, and tanks to take some highly strategic object. Like the coffee table or the lamp stand.I’m reviving my childhood fantasy with a periodic feature on this blog called, “Benevolent Dictator.” In this game, I get to command the social sector for the good of the average executive director. The rules of this game are the same as they were in my childhood:
- There has to be a strategic objective.
- I can move around pieces as I will.
- The pieces have to be actual entities
- The actions have to be plausible (i.e. this is not “Benevolent Deity” where I can just snap my finger and command that all nonprofits get fully funded)
The impetus for reviving this game came when I attended CompassPoint’s Nonprofit Forum in Silicon Valley. CompassPoint is a leader in nonprofit services in the region, specializing in training, executive transitions, and research.
The conference smartly chose to begin with what I think is a critical subject in the field: impact measurement and evaluation. CompassPoint should be applauded for recognizing that the field has to advance on this front, both for the purposes of internal planning and external fund raising.
The opening talk was a fine overview of the subject matter, with the expert explaining logic models, planning cycles, data collection, and other aspects of the subject.
People listened attentively, took copious notes, asked good questions. The material will, I suspect, make a fine reference folder in many of the attendees’ files.
But I doubt it will make much practical difference because most of those in the room were leaders or staff in fairly small organizations, generally under $1M. I knew many of them individually or was familiar with their organizations. And the reality is that they simply do not have the organizational resources or time to execute what the expert was outlining, at least in the area of impact measurement.
Maybe the speaker, a consultant in the field, didn’t have enough time (although she was allotted over an hour), but the talk failed to translate her material into the practicalities of an executive director with maybe four staff under her and barely making budget this year. I would estimate at least 9 out of 10 could not afford to hire the speaker or any other expert. And funding for measurement is thin for organizations at this small level.
So how are small nonprofits supposed to take this hill? Well, it’s time to don my Benevolent Dictator outfit.The Strategy
It is already outlined here in a previous blog of mine.
Basically, I believe the social sector needs to leverage the resources of the academic world to serve small NPOs with limited resources. How do we get there? Here’s how I would move the pieces in my home turf, the Bay Area.
The Pieces
1. Key Funders. We do need them to create some center of gravity and initial funding. I’m rolling out the heavy artillery for this: Hewlett, Irvine, and Packard foundations. They’ve already cooperated together on other regional initiatives, their leadership grasps the significance of this issue (for instance, Hewlett has funded this creative approach to selection of top performing NPOs).
2. Service Learning Expertise. The crux of the strategy is to develop courses that get students (preferably graduate students, but undergraduates also) to execute impact measurement projects as part of their coursework. This is called “service-learning” and for expertise on this subject, I’m going to call on California Campus Compact (full disclosure: Campus Compact is a client of my firm).
The nice thing about this strategy is that it draws on a wider funding pool for this project and the cause of impact measurement as a whole. Campus Compact gets most of its funding from federal sources aimed at education which is distinct from the world of most nonprofits.
3. Universities. We want schools that already have the infrastructure in place: departments, courses, professors who are attuned to the social sector. Our offensive campaign is well stocked with Berkeley, Stanford, and Santa Clara lined up from San Francisco to San Jose. All three have graduate departments that are national leaders in producing social sector leadership.
4. Impact measurement expertise. I’ll go with two experts that I know and like: Social Edge’s own Sara Olsen and SeeChange’s Melanie Moore Kubo. What I like about both of them is that they are not purists. They recognize that their field will advance only to the extent that it becomes more accessible to the rank and file, even if it means developing more quick and dirty approaches.
The Tactical Plan
As for the tactical plan, we’d start by having the funders convening a working group comprised of Campus Compact, a professor from each university, and the impact experts. They would be charged with developing a standard curriculum that would enable groups of 3-4 students each to do impact measurement on a local NPO as part of the course on the subject matter. The funders would only cover the overhead of the project and curriculum development. Campus Compact would fund their portion of their work from federal funds.The foundations then would invite a select group of small NPOs to participate. The group should be representative of the diversity of mission, geography, and model. The NPOs would still have to cover the operational costs of the project, including very modest stipends for the students. The amounts should be small enough to be affordable but enough to keep everybody accountable and have some skin in the game.
The working group would evaluate each round and make adjustments as needed. Eventually, we would finish with an “impact measurement course and project guideline” in a box. California Campus Compact would be charged with distributing that to its 50 member colleges in the state and across the nation through the national Campus Compact.
And with that, Benevolent Dictator retires back to the command bunker, preparing the next big move.
Conference going is like balancing your checkbook. You’re expected to already know how to do it and you feel stupid asking for instruction from others. And if you don’t learn how to do it, you risk making mistakes and losing money.During the recent Social Enterprise Alliance conference, it struck me that there are a lot of young social entrepreneurs who have never been taught the art of conference going. They generally seemed to be more in “hang out” mode, checking the booths out, listening to presenters, talking to the people that sat at their lunch tables. There was a passive spirit to it all.
In contrast, the older crowd was generally much more proactive. At the lobbies of conferences like this one, one sees this crowd seeking each other out. At meal times, they were clustered together talking in a very serious manner. Most of them now occupy senior management positions and this is a natural occasion to discuss some business with each other.
In other words, the younger crowd was experiencing the conference as is, versus creating their conference experience, which is what the veterans were doing. The art of proactively creating your experience is an important one. There are a lot of conferences, some of them are truly important gathering points for your field, and they cost a lot in terms of money and time. So making the most of them is an important aspect of efficient resource allocation for a budding social entrepreneur.
Given that reality, I thought it would be helpful to give readers some basic principles on the art of conference going.
1. Know why you’re there
The first thing to realize is that you are not there primarily for the main content of the conference. Personally, I think all conferences should dispense with plenary sessions and even most seminars, and should be organized like the Opportunity Collaboration. What this conference recognizes is that the real value about conferences is the opportunity to make new connections.
You should realize that in this day and age, there are so many more efficient ways to increase intellectual capital: downloaded pdfs, live webinars, Flash based courses, and more. What those mediums lack is the ability to increase social capital. And social capital – who you know and their willingness to help you – is a far greater determinant of your success than almost any other form of capital (including financial capital).
So get this clear: you should be going to a conference to build your social capital first and foremost. Everything else is secondary.
2. Know who else is there
It follows from the first principle that the most important document about the conference is the attendee list. Any conference worth its fee should make that available beforehand.
Scan this list for the following:
- Are there parties doing something close to what you’re trying to do?
- Are there parties further along in doing what you’re doing?
- Are there thought leaders in your general field?
- Are there experts on some general activity (i.e. marketing, social media, policy, etc.) that may be important to you now… or down the road?
- Are there organizations represented that impact your field?
- Are there interesting smart people (who may not even be in your field) who could help sharpen your thinking?
Once you’ve identified these people, spend a bit of time researching them on the web. You may discover aspects that either raise or lower them in your priorities. It will also sharpen what you want to ask them or tell them. And if and when you do meet them, they will be impressed that you’ve done the research.
3. Figure out the strategy
In large conferences, you can’t expect to just run into people (especially people who might be sought after by others). You need a plan, and you need to be aggressive. Here are three strategies to consider:
Email the person ahead of time and ask for an appointment. This is the most effective – assuming the person is willing to reply. If the person doesn’t, you’ve at least laid the groundwork that if you do run into him, he may feel so guilty that he will make the time to talk with you.
Ask for an introduction. Chances are you already know some veterans in the field who are going to the conference. If there is a person X you especially want to meet, ask the vets if they know person X and would be willing to make an introduction. People generally are willing to help in this way. If you don’t know any such veteran connectors, go ahead and contact the conference organizer. A decent conference organizer generally understands that she is in the customer service business and may be willing to help.
Attend the workshop. If the person is giving a workshop, go early and introduce yourself. Sit in the workshop, look very attentive, and ask good questions. Then stay afterwards and ask some more good questions. At the end, inquire if you could follow up on something or the other. Decent workshop presenters know that they are there to be helpful so they generally will be very receptive.
Post conference email. If all of the above failed to make a connection, go ahead and email the person afterwards with something like “I was hoping to meet you at the conference and wasn’t able to. Would you be willing to take a brief 15 minute informational interview with me?” You’ll get varying reactions to this one, depending on how busy and generous the person is. But it’s worth a shot – you have nothing to lose.
Some final reminders that are obvious, but based on what I saw at the recent conference, still bear repeating.
- Dress professionally
- Carry your business cards at all time
- Have your elevator pitch down cold
- Introduce yourself to the person next to you at all times.
- Be persistent
If you have other tips and tricks for the art of conference going, please share them here. It’s an important skill for us all!
I’m writing from the 2010 Social Enterprise Alliance annual conference here in San Francisco. In terms of sheer numbers, it is the largest gathering of leaders of the social enterprise movement (more on what that term means below) and includes individuals from around the world. I came as a member of “the press” – I now am the proud owner of my first “press badge” – to cover the conference and provide you with some insight into the movement.
I’m a relative outsider to the movement and I decided to engage the conference deliberately with the eyes of a total novice. This post is meant to reflect that posture. The leaders of the movement (which have been unfailingly gracious and accomodating to me) may or may not dispute what follows as reflecting the reality on the inside. But what I’m trying to show is how the movement appears to those on the outside.
Defining the movement
When I asked various leaders to define “social enterprise” -- the very term that undergirds the organization and this conference -- 9 out of 10 times the answer began with a sheepish smile and the phrase, “Now, that’s a very good question…”
This response has nothing to do with my skills as a journalist and everything to do with the reality that this is a movement with a good deal of fuzziness.
The term “social enterprise” should not be confused with the term “social entrepreneur” which is the defining label here on the Social Edge. The latter label (which has quite a bit of fuzziness of its own) generally refers to someone starting any sort of new activity with social good in mind. “Social enterprise,” as best as I can summarize from interviews with leaders here, aims at a more restricted subset: it refers to formally organized operations that integrates social good with some sort of business oriented activity. "Mission meets marketplace" is the tagline.
Show me the money
Now, to the average person, the concept of the "marketplace" is rather meaningless if it is not about making money, and preferably more money than you spent. Regardless of what the IRS terms the enterprise, making a "profit" (whether it goes to private parties or just back to the enterprise) is the widely understood hallmark of a "marketplace" activity."But at the conference, there was curiously little about making money - much less a profit. If the attendee list of the signature event of this movement is any indicator of self definition, then the movement is still overwhelmingly non profit in identity. The programming was also heavily skewed to nonprofit issues. Almost all the booth displays were from the nonprofit sector. I didn't see a single display that was based on the appeal, "Let us help you make more money!" Nothing on sales or sales training.
Put it this way: take a random nonprofit executive from somewhere in the country, set her down in this conference and she would have felt right at home. Take a random business executive from somewhere and plop her down in this conference and she would have felt lost.
A good example of this was found in all the different seminars on marketing, of which I sampled almost every one. For a business person, marketing is the lifeblood of their operation; and it has one overarching aim: get people to buy your product. Yet at the conference, every marketing seminar was essentially about marketing one’s social cause, not one’s product. I didn’t hear anything about the key elements of business marketing: understanding the competitive landscape, positioning one’s product in terms of features and pricing, building brand equity, choosing the right distribution channels, and more.
Someone at one of the seminars said “our cause is our product.” But if the movement is defined by the absolute equation of cause=product, then it just about loses its defining quality as a “business oriented activity.” It becomes indistinguishable from nonprofit activity in general.
"Mission" showed up en masse, but "marketplace" seems to have skipped the meeting.
Why the movement's identity matters
There is a great deal of creativity and talent happening in the movement. But the movement has to resolve the question of its identity: is social enterprise really "mission meets the marketplace" or is it "mission... with a bit of marketplace on the side?"
Without this clarity, the movement is fuzzy and outsiders like policy makers, funders, and media members sporting their first press badge don't grasp just what is so special about it.
And that would be a great shame. Right now, it seems to me that the notion of "mission meets the marketplace" is getting shaped by the corporate world and its desire to demonstrate some positive social impact. That’s a desirable development. But it is incomplete because that movement is essentially corporations bolting on social impact to an already constructed commercial structure and motivation. Left to them, social enterprise is going to mean "marketplace... with a bit of mission on the side."
McDonalds developing more environmental packaging, Microsoft donating laptops, or Goldman Sachs traders building Habitat of Humanity homes wearing sackcloth - all fine and good. But the world will be missing the kinds of creative ideas that I know were present at the conference. Ideas to develop a business model from scratch with Rawandan orphans as a key part of the supply chain - and make it profitable as well. Ideas to run concession stands at major sports stadiums by hiring at risk youth and use it as the context to get them to college.
But without a more precise and disciplined public identity, these ideas are going to face doors closing to their vision. They are going to find themselves approaching a local mayor with a desire to start doing social enterprise in his city, and then having the mayor reply, "Oh, we're already working on that with nonprofit X or corporation Y."
We need the Social Enterprise Allaince to lead the way in demonstrating that it is a new and different movement: not just another nonprofit and not just another corporation. If it can mark out that space, I'd love to meet up there.
You’re out there doing good. So you believe. But how do you know? And how do you show (especially to your funders)?
The issue of impact measurement is a critical and inescapable one in our field. On Social Edge, we have an entire blog devoted to it. I’m not an expert in the intricacies involved (I hated Statistics 101 and I barely know what a regression is today), but I do know that when I work with my clients on strategic planning, marketing, and fundraising, the thing I always wish we had more of is good, solid data demonstrating that the program is actually accomplishing what we believe it is.
The issue has been a problematic one in the relationship between nonprofits and foundations. Funders understandably want to know that their investment is paying off and want their grantees to offer proof. But nonprofits – especially the smaller ones - often can’t afford to do the kind of impact measurement that carries statistical validity, leading them to grumble under their breath, “If you want it, why don’t you fund it?”Funding is required because obtaining statistically valid impact is so difficult to prove. Yes, you can say that your youth program had 30% of the participants go to college. But is that really more than would have been the case without your program? And if it’s more than the average in the wider population, how do we know that you’re not just cherry picking the best youth for your program? How do we know it’s your program that’s actually having the impact versus some other factor? Getting the control group right, running double blind experiments, and other stuff that Statistics 101 requires is complicated, time consuming, and expensive.
Which is why the vast majority of nonprofits never do it.
That’s a big problem for them – and not just because of funders. When social interventions go forth without good data, there is a huge potential for effort that is sub-optimal, wasteful, or even downright counter-productive. Anyone remotely familiar with reform in any field – education, international development, youth, etc. – knows how many expensive programs have been tried in history that have turned out to be utter failures. It is very, very easy to believe you are out there doing good, and be very, very wrong.
We need the data but we can’t afford to obtain it ourselves. So what’s the answer?
I believe this is where social entrepreneurs and foundations need to be much more proactive about establishing partnerships with the one sector that is ideally suited for data collections: academia. Social scientists are trained and motivated to measure and prove, and they are looking for interesting problems to address.
One example of this is the MIT’s Abdul Latif Jameel Poverty Action Lab (J-PAL). It is founded and led by the MacArthur Fellow (the “genius grant”) Esther Duflo (right). The lab specializes in measuring the impact of various programs in the field, and has made very influential contributions to the field. If you go to the Lab’s excellent site, you’ll see some conclusions that may even run counter to some of the assumptions behind the efforts of social entrepreneurs who write for our site! I won’t get into the specifics myself (the issues are obviously complex), but my point is that we have to take this issue of measurement very seriously. None of us wants to be doing work that is ineffective, and when we fly blind – even partially blind - we run a high risk.
Obviously, we can’t get a MacArthur Fellow to study our own particular program. But we can work at getting someone to do so. A social scientist just starting out, a grad student, even an undergraduate statistics class would all be good starts. Here, in the Bay Area, there are many academic institutions that would be receptive to some sort of project, but most nonprofit leaders just haven’t made a proactive effort to explore a partnership. If nothing else, nonprofit leaders should be familiar with the studies out there and be aligning your efforts accordingly.
We in the nonprofit sector need to take advantage of this openness. Leaders in our sector – especially those in foundations – should be establishing stronger links with the academic sector. This happens at the highest levels, where the Gates, Rockefeller, Ford foundations of the world sponsor sophisticated and expensive studies of large programs. But we need to develop solutions at the mid and small level as well. There is growing openness in academia for engaging in highly practical research of even small programs. Duflo’s lab studies very small interventions usually, and she just was awarded the John Bates Clark Medal, the most prestigious award given to young economists (and often a predictor of the Nobel Prize).
We have to try. The truth is out there.
I wanted to give a quick plug here for this very important conference. We can all be so busy with our own enterprises that we can be reluctant to invest the time and money to connect with others at conferences. But I suspect that this will be worth it.
Among others, keynote speakers will include:
• Peter Holbrook, President and CEO of the Social Enterprise Coalition, the voice
of social enterprise in the United Kingdom
• Dan Pallotta, author of the controversial best‐seller Uncharitable, which
challenges many of the prevailing assumptions about the nonprofit sector
• Rosanne Haggerty, President and Founder of Common Ground, an international
leader in developing community strategies to end homelessness
• Shari Berenbach, Executive Director of the Calvert Foundation, which raises
investment capital for nonprofits, microfinance institutions and social
enterprises in all 50 states and more than 100 countries
• Jay Harris, former publisher of Mother Jones magazine
• Alan Webber, founding editor of Fast Company. magazine
The theme of the Summit/World Forum is “New Approach, New Economy: Realizing the Potential of Social Enterprise.” More than 40 workshops will explore the keys to
entrepreneurial success, and five tours will visit 18 social enterprises in the Bay Area.
The workshops will be clustered into five tracks, each offering cross‐cutting themes that emphasize local, national and global opportunities:
• Finance and investment
• Models and strategies
• Public policy
• Leadership development
• Communications and storytelling
Attendees will include social enterprises from both the nonprofit and private sectors, plus social investors, academics and others. A large contingent of young people will participate as observers to capitalize on the surging interest in social enterprise among high school, college and graduate students.
For complete details about the Summit/World Forum, please visit the conference's website.
I'll be there so look me up!
When does my organization need to invest in a donor database?
I'm going to punt this question over to my firm's donor database and fundraising expert, Jason Rieckewald-Schmidt (picture right). Jason has done work for both very small startup nonprofits to large multi-million ones. What I especially appreciate about him is his willingness to patiently explain his work to our clients - so I thought it'd be a treat for you to experience some of that.
Here is his answer:
Keeping track of your donors should be simple. You segment your donors, mail or email them a campaign, enter their donation and send them a receipt. But what if all those processes are in separate applications, instead of one central database?
Most nonprofits have some system for keeping track of their donors. From Google Spreadsheets to online CRM databases, having relevant, up-to-date information is essential to successful fundraising. What is just as essential is making sure that all your donor data and interactions are managed in only one application.
When a recent client of ours wanted to track any donor action, it took reconciling between multiple applications. Their appeal mailing list was in an exported spreadsheet, where new donors and address changes were not being updated. Next, when a donor gave a gift, the donation was recorded in a database and then re-recorded in a separate pipeline spreadsheet. If the organization wanted to send out email newsletters, it did so in yet another separate online marketing client. By having duplicate information in multiple applications, it was wasting time, reducing accuracy and making it almost impossible to get a clear picture of fundraising performance. It also created a lot of work for a development associate.
After converting to a commerical product called Common Ground, built on top of the industry standard (and free to nonprfoits) Salesforce platform, our client was able to tack their potential donations in a pipeline and then segment donors for appeal mailing depending on specific parameters like last gift date. After the donation was received, they recorded it in Common Ground and tracked progress through a fundraising dashboard. Each email campaign was created in Common Ground and showed which donors opened the email in the donor record. This not only saved time and increased accuracy, but it gave the development team a clearer picture of how the organization was pursing their fundraising goals.
And in my experience working with nonprofits, it seems like our client’s multiple donor applications is more the sector norm, than the exception.
Here are three essential functions to a donor database.
1. Constituent Relationship Management
The key to effective fundraising is a Constituent Relationship Management [CRM] database. It is almost impossible to track grants, potential donors, input donations and report on donors in a spreadsheet. Investing in a solid database application will pay huge dividends in reaching your development goals. And making sure the development staff knows how to use it is just as important.
One of the benefits of cloud computing is having an online donor database. The Salesforce Foundation offers a free database to nonprofits and Convio’s Common Ground is a great way to get the power of Salesforce with your donor database.
2. Create a Pipeline for Donor Moves Management
Once all your donor information is in a database, the next step is to track prospects and grant applications. Instead of having dozens of to do tasks in Outlook or in a spreadsheet, using a prospect pipeline will help guide development staff through the donor cultivation and grant process.
From making the initial contact to sending the donor acknowledgment letter, all the different steps are set up with auto-reminders so you don’t miss an important deadline. This will take away all the double data entry and cross-checking to do items with donor responses.
3. Segmented Communications with Donors
Now that you have reliable donor information you can now send targeted, segmented communications to the donors in your database. Whether using an email marketing application like Vertical Response or mailing out your annual appeal, you will be able to segment what mailing gets sent based on their donor information.
So if all your annual fund addresses are currently in an Excel spreadsheet from two years ago or you manage donor interactions through Outlook or then transitioning to a new donor database might be the best way to improve your fundraising efforts.
A good litmus test is asking your development director “where are we at with this donor?” If the answer takes more than ten minutes, you might need a new database solution.
Not only will a central database solution save you time and improve your fundraising but your development staff will thank you for it.
I’m just getting started as a social entrepreneur. Do you have any advice for someone like me who plans on making a life long career in this field?
I’m going to seize on what I think are the most interesting phrases in the reader’s question: “life long career.”
There is a difference in the advice that I’d give to someone who is trying to make a particular new social innovation happen and the advice I’d offer someone who is pursuing a career as a social innovator. Put somewhat simplistically, the former is looking for clues on how to score big; the latter is looking for tips on staying in the game over the long haul – even after she has put some initial points on the board.
Both accomplishments are extremely difficult and rare. Scoring big takes an enormous amount of luck, timing, that one creative spark, raw entrepreneurial energy, and more. It especially takes a willingness to fail, as the truly big idea rarely emerges right away.
I think the other bloggers on this site are all folks in the midst of this social innovation process (out of the collection, only Kiva’s Matt Flannery could be called as someone who has actually “scored big”). In my opinion, that’s the beauty of this Social Edge blogging community: it’s comprised of folks who are trying to get on the scoreboard for the first time.
But the reader asked about a “life long career” as a social innovator. All of us on this site – myself included – are simply too young to give personal advice here.
“Life long career” implies one is succeeding at multiple ideas over time, and this is no easy thing even when the individual successes are modest ones. My home, Silicon Valley, is filled with entrepreneurs who have never been able to follow up on an initial hit with another one.
The question of what is involved in becoming a life long innovator is a meaningful one to me personally. That’s why I’ve been reading about Henry Ford.You would be hard pressed to name an innovator who made a greater social impact in the 20th century than Henry Ford. He of course was responsible for bringing the automobile into the hands of the average consumer. The central lever of all that impact was the Model T, the first mass produced automobile in history.
This innovation has profoundly changed how human beings interact with each other, with work, with leisure, with geography, with the built and the natural environment, and more. You really can’t score any bigger than the Model T.
However, one could also make the argument that despite the enormous scale of impact Henry Ford achieved with his innovation, he never actually developed a life long career as a social innovator.
One of the best books on the early history of the American auto industry is David Halberstam’s The Reckoning. According to the book, Henry Ford’s second half of his career was marked by his resistance to anything but more of the same. He insisted that the Model T was all Americans wanted or needed, long after competitors had introduced new features and styling. He circumvented innovative efforts by those within his own company, and set in motion decades of institutional behavior that resisted change and risk taking.
What does all this mean? It seems to me that it is a lot harder to pursue a life long career as an innovator than it is to just do it once, no matter how successful that one innovation was. Indeed, it may very well be that one’s success – especially the more outsized it is – actually blinds you to the traits needed to continue innovating.
I don’t have an extensive catalogue of those traits but judging by the Henry Ford example, it seems that humility is critical. The moment you feel like you’ve got a monopoly on the truth over and above everyone else is probably the moment your lifelong career as a innovator starts to end.
My organization is fairly new and I need a lot of professional services (especially in marketing and web development) that I can't afford. How do I get pro bono help?
How do I get more pro bono help?
To borrow the punch line of a hoary old joke, "Very carefully."
One obvious way to take care in pursuing pro bono assistance is to work with Taproot. Taproot Foundation recruits professionals from the for profit world and supervises them in nonprofit pro bono work. In my mind, they are a key asset in the social sector.
The advantage to Taproot over any other pro bono situation is that they have been doing this long enough that they have developed a good system for structuring the work and keeping quality at a consistent level across all the different individual professionals they recruit. However, this comes with the corresponding disadvantage that your needs have to fit within their parameters. There are strong limits to how much they can customize to fit your particularities.
But for nonprofits with some basic needs, Taproot provides very good value. So good that lots of organizations want them. Winning a Taproot project is a competitive and involved process. Taproot reports that the process may take six months.
Whatever volunteer help you do get, you need to realize that strictly speaking, there is no such thing as "pro bono" help. That Latin term means "for free" and the reality is that volunteer help is going to come at some cost, even if no checks are written.
You should go in with your eyes wide open and ready to properly manage those costs.
Here are three typical costs involved in seeking pro bono help.
1. Supervision
As relative outsiders, volunteers can need more direction and handholding. Also, call me cynical, but I would argue that all volunteers are seeking (often subconsciously) "payment" of some sort, whether the currency is gratitude, sense of meaning, relationship with you, or something else. You better be ready to detect what their version is and pay up.
So avoid any offers that come from individuals you don't already know, trust, and with whom you have a good rapport. You want to have a good sense of what the relational terms will be.
2. QualityAt its worst, receiving pro bono product can feel like receiving fruitcake at Christmas. You see the final website, the database, or the logo and say, "Gee, thanks, that's wonderful" while internally you're wondering "Now, what am I going to do with that?"
And you can't regift a website. In fact, if you don't use the product delivered, you risk offending the volunteer and generating bad word of mouth.
In my opinion, getting sub optimal results is the biggest potential cost of pro bono help. When someone is giving you something for free, it is psychologically difficult to push hard for exactly what you want. The Taproot process helps deal with this, but even they depend on clients to overcome this natural internal reluctance.
3. Delay
This cost is closely related to the quality one. Pro bono workers will slot their work for you in the "volunteer" portion of their lives. Generally, this portion is one of the first to get squeezed by work, health, or family situations. And again, you won't feel very empowered to press them to speed things up.
Depending on pro bono help for ongoing time sensitive work is courting disappointment. For instance, I frequently encounter clients whose website updates or newsletter production have been held hostage by an slow to respond volunteer.
Except in extraordinary situations, I recommend against depending on pro bono help for mission critical or time sensitive projects. Try to restrict pro bono to longer term, important but not urgent needs.
Done carefully, pro bono can be a good way certain organizational needs are met and individual supporters are engaged.
Just don't think it's free.
How do I get the agency to use online social media in our fundraising?
This question came in a phone conversation with a client of Consulting Within Reach. She’s the executive director of one of the county’s largest social service organizations. It’s an excellent nonprofit doing good work, but it definitely has a more “traditional” feel to its culture, and has had minimal to no online social media presence so far.
Since I knew the organization well, I realized that I needed to start by first framing the purpose and cultural context of this new media for a nonprofit like hers. To do this, I resorted to my favorite metaphor for the topic (courtesy of my friend Christine Egger at Social Actions): the cocktail party.
Imagine that your organization is holding your annual fundraising dinner. Before the guests are seated for their meal, there is customarily a cocktail party where everyone lingers in the lobby, sipping drinks and chatting.Now imagine the following behaviors on your part and how well each would go down with the crowd.
- You jump up to stand on the bar, grab a microphone, and proceed to lecture the crowd nonstop about your organization’s accomplishments.
- You circulate through all the small groups and hand to everyone a printed set of message points about your cause that you want covered in the conversation.
- You have your staff circulate through all the small groups with those old school manual credit card imprinters, asking for on the spot donations.
Each behavior would be gauche, wouldn’t it? Any executive director knows that those actions are inappropriate for the purpose and cultural context of the cocktail party.
Purpose and cultural context are critical to figuring out correct behavior. There are times when it is actually expected that you will grab the microphone and fill up the airspace with your organization’s achievements. But that happens in the designated program portion of the fundraising dinner.
There are times when it would be wise for the leader to make sure everyone is on message. But that should happen before the event and just with the staff team.
And there are times when you should ask for donation in an easy to give fashion. But that happens best at the end of the evening.
So how does an organization start using online social media for fundraising?
By first realizing that online social media is the cocktail party. It’s not the main program for the evening. It’s not a “messaging opportunity” to manage. And it’s not even really meant to be the fundraiser itself.
The key for an organization that doesn’t come naturally to online social media is to internalize the cocktail party metaphor and then adjust their behavior accordingly. And one specific adjustment is the need to converse, and not lecture.
Converse, don’t lecture.
This is the biggest shift for some leaders. They can become so accustomed to thinking of all media as broadcast channels that they don’t realize that the whole point of online social media is that it breaks up the traditional one way relationship between speaker and audience. The new media is designed to facilitate conversations: some of them between the speaker and the audience but even more between audience member and audience member.
One hint: if your organization’s Facebook page is starting to resemble a stripped down version of your web page, chances are that you’re doing the equivalent of jumping on the bar and grabbing the microphone. You should be using an online social media tool to do things that a website – more designed for broadcasting then conversing -- doesn’t do as well: like get feedback on events, quick polls, giving real time updates, and others.The nice thing about conversation is that you get more timely feedback than you do with lecture. Use this key advantage of the medium to learn more about your audience. The best conversationalists are always the ones who ask the best questions, so start your first attempts in the medium with what would be interesting questions for your audience.
Here are some examples:
- As an organization, we’re thinking about doing X this new year. What do you think?
- We’re launching this program in a few months but don’t have a name for it. What are your ideas?
- What other organizations do you support and why?
- We’re not sure we’re offering meaningful volunteer opportunities. What are you looking for?
Now, here’s the other key to cocktail party conversations: you have to genuinely want to know what your audience thinks about these questions. You have to want to know for the sake of knowing your audience, not just as a segue into fundraising.
People can tell when there is genuine interest. There’s nothing worse than that person at a party who asks, “So, how are you?” and then during your reply is constantly glancing over your shoulder for who else is present at the party. Or just as bad, who nods impatiently through your reply and interrupts to say, “What I really wanted to talk to you about was… “
Genuine interest doesn’t of course mean you will adopt their suggestions of course. But it will probably involve some sort of time and effort. Again, people can tell. Not every organization is ready to open itself to that kind of input. And not every leader is willing to devote organizational bandwidth to engaging in that kind of conversation.
That’s OK. You don’t have to. But it just means that you shouldn’t be throwing this particular party.
"How do I interest a big funder in my mission so I don’t have to spend so much time constantly finding new donors?"
What the questioner is seeking is what many executive directors put on their wish lists: “a sugar daddy.”
“A sugar daddy” – it could just as easily be a “sugar momma” these days – is a donor who comes along and funds you to such an extent that your need to fundraise is significantly alleviated. This can be an institutional funder – the Gates Foundation is playing “sugar daddy” to a large number of initiatives – or a wealthy individual who takes a particular interest in your work.A sugar daddy is certainly an alluring gift. Who wouldn’t want to be freed from having to locate new donors? Who wouldn’t want to concentrate more of your time on your primary work of serving your clients?
There’s no concrete strategy to getting one. It’s almost impossible to proactively acquire such a donor. Sugar daddies are those rare phenomenon that just plop into your lap. It could be a wealthy individual who has something in her background that makes her identify with your cause. Or it could be that a foundation’s new strategic priorities just happen to magically and perfectly align with your organization.
But if I can’t give much advice on how to fulfill your wish for a sugar daddy, then in this holiday season at least I can offer this consolation: sugar daddies usually aren’t very good for you.
At least a couple of my clients have something resembling a sugar daddy – either an individual or a foundation – and I notice a recurrent set of problems.
The first is that the organizations don’t feel the urgency to broaden their fundraising base. In both cases, the prmary funders communicated a wish that the organizations diversify their funding source over time. In both cases, there was minimal action taken on this until very late in the game. It’s human nature to act on what is most urgent. If funding is taken care of for the next year, then that urgency is going to get directed elsewhere.
This means the organization is regularly exposed to the huge risk of the sugar daddy going away suddenly. The number of organizations that got wiped out because their big donor lost money in the recent financial crises or scandals (the Madoff scam was particularly damaging to a set of small nonprofits in New York).
The second problem is even more dangerous and the one I most care about. I believe having a sugar daddy jeopardiazes not just funding for the mission, but the mission itself.
Most nonprofits exist to serve some aspect of society that is otherwise isolated, ignored, or neglected by key institutions. The homeless, the orphans, the immigrants, and others often are suffering because they aren’t properly integrated with the rest of society. The nonprofit’s mission is to help make that connection for their clients.
Fundraising forces you as the leader to engage with key social actors. It’s a mistake to think that fundraising is a distraction from your work with your clients. Rather fundraising is how you serve your clients in this critical function of connection.
Fundraising forces you to get out there and meet people, important people. Good fundraisers know they constantly have to hunt and gather, turn over rocks, sniff around. This means spending the time to seek out relationships with business people, philanthropic figures, government figures, community leaders, and more. Experienced nonprofit leaders will tell you about some helpful information they gained in fundraising that didn’t necessarily lead to a donation, but did lead to a strategic partnership, to learning about an important community development, to finding out about a new strategy, and more. All of that networking led to some favorable outcome for their clients that the clients, by themselves, could never have achieved.I can testify that this dynamic is true in my own line of work. For a consulting firm like mine, new business development is the equivalent of fundraising. And I’d be lying if I told you I didn’t sometimes get tired of going out there and pounding the pavement. I’ve wished for my own version of a “sugar daddy:” that one big client that would pay all the bills in one big project.
But the regular discipline of having to uncover leads, cultivate them, learn from them, and stay in touch means I am regularly in touch with what is happening in my sector on a wide variety of issues. And that helps me serve my clients. For instance, right now a potential client who works in youth development is asking me whether I can help him ascertain candidates for a merger. I know the candidates in the field pretty well, having met and talked with many of them. The only reason I developed that body of relationships and knowledge is because I had to hunt and gather in their space, looking for business. Because I didn’t have a sugar daddy.
Fundraising doesn’t just pay the bills so that we can serve our clients, fundraising itself is how we serve our clients.
So this holiday season, if you don’t find a sugar daddy in your stockings, be of good cheer. They’re bad for your teeth.
"What advice do you have for someone just starting out in the field? Do you think it's worthwhile to enroll in a formal academic program in social entrepreneurship?"
There are a growing number of academic programs specializing in social entrepreneurship. To name just a few examples from my own backyard, Stanford Business School Center for Social Innovation and UC Berkeley Haas School of Business's Center for Nonprofit and Public Leadership provide excellent offerings at the graduate level. At the undergraduate level, University of Pacific Global Center for Social Entrepreneurs is a new and highly innovative program.
I think that these academic programs can serve as fine routes for the aspiring social entrepreneur. But they also have their costs. The graduate programs I listed above aren’t cheap. And undergraduate programs assume that you will already know you want to pursue this career before you are twenty years old.
So to answer the reader’s question, I think it is more helpful to highlight one critical element that drives all successful academic programs of any sort: mentorship.
Most graduates who report a satisfying experience in their academic experience – at any level and on any topic – point to a relationship with a mentor. To become successful, everyone needs a coach who’s been there before, can point the way, will provide correction and encouragement, and will serve as a role model. That’s just how humans learn to do anything. And more than any other benefit, what academic programs provide are concrete opportunities for this mentor relationship. The best programs structure them so that they are readily available for all students. The best students are the ones who avidly seek them out.
But you can find mentors without being a formal student. In fact, the advantages of seeking mentorship outside the walls of academia are that you will have a wider range of options.
Look around. Ask yourself the following questions:
- Who has created or significantly grown an enterprise?
- Who has a proven track record?
- Who is respected in their field?
- Who has passion for their endeavor?
- Who seems to enjoy helping others?
Note that I did not include, “Who has an established career in social entrepreneurship?” I don’t think that most people, especially in the early stages, need someone with specific social sector expertise. The skills you need early on are more generally applicable.
In fact, a nonprofit background in a mentor can be a handicap. My most important mentor is a friend who had been a very successful Silicon Valley executive, but without any significant nonprofit expertise. This absence, in my opinion, was an advantage. He hadn’t been conditioned with the usual assumptions. He could entertain freely my budding thoughts without any “Well, that’s not the way things are done.” And he injected best practices from the corporate world that further stimulated my creativity.
There is any number of opening ways to find a mentor. It’s always easiest to start with your existing network. But don’t be afraid to cast your net wide: ask friends to recommend someone or to even cold call. You’re not getting married to a mentor: it isn’t a life long or monogamous relationship, so you can afford to try lots of people out.
Start by asking for a 30 minute informational interview and see if things click. And just like with a first date and marriage, don’t propose mentorship right away. At the end, if it goes well, ask if the person would be willing to meet with you again in the future – perhaps in a couple of months – if and when you have more questions.
And one of the best ways to make sure that the second date goes well and might lead to more is if you actually do something with the input you’ve just received. Mentors don’t have time or energy to mentor everyone. The best ones have the least time. So they are only interested in investing in people who will actually apply the lessons they’ve just delivered. Don’t ask for another time just so you can shoot the breeze. Come ready with something like “I tried what you suggested, and it led to some more questions…. .”
If this process leads to a more regular mentorship, there is one final point I’d like to emphasize: just because tuition isn’t involved doesn’t mean that it should be free. You’re absorbing valuable time and expertise. You need to signal that you recognize and value what’s being provided. This doesn’t have to happen right away, but at some point you should pay, or at least offer to pay.There is something about our sector that too often expects people should just give us stuff for free. Perhaps the constant necessity of fundraising reinforces this posture. But it is a bad habit to get into if you're starting out in this field. Unless you are off the charts charismatic or are living an off the charts morally compelling life like Mother Teresa, you won't get very far unless you are ready to pay for value.
This is why framing academic programs as a form of structured mentorship is helpful. We fully expect that we will pay tuititon for the mentoring time regularly spent with professors. The same expectation should apply to the mentoring time regularly spent with those outside academia.
Keep in mind that the form of payment doesn’t have to be financial, although it is probably cleanest when it is. The mentor I mentioned above started out doing it as a favor to me as a friend. We met maybe once a month when I was just conceiving of my firm. I always made it an explicit point to schedule our times over lunch and would pick up the tab. But as my business grew, I needed to talk to him more regularly. I had started to pay him for some of the actual project work he was doing for my clients, but it didn’t cover our mentoring sessions. In other words, I was demonstrating I valued him for what he did for others, but not necessarily for what he did for me. Eventually, we agreed that an hourly paid coaching arrangement made the most sense.
This has been the best for both of us. He doesn’t have to struggle with resenting my requests, and I don’t have to feel shy about asking for help when I really need it. Some people might feel strange about paying their friends, but I think the financial arrangement protects our friendship.
Do I think every mentor needs to be paid? No, but every mentor should be given the option. It's not that your mentors in most cases will need the money. It's that human beings need their efforts to be valued and appreciated. Offering money is simply the cleanest way to signal that value and appreciation. They may decline and continue to offer themselves freely, but they should get to choose. You proactively making that offer will demonstrate a maturity and wisdom that is worthy of mentorship.
If you don’t have money, think of what else you can offer. If you’re a student approaching a faculty member, offer to provide volunteer research assistance. That is an excellent way to learn the subject matter and have an excuse to spend a lot of time with the faculty member.
If you're not a student, think of the skills you have that could serve your mentor. Barter babysitting services or computer technical support, or some other skills. One of my friends who wanted regular coaching from me is a high end professional hair stylist, and she offered to pay me in the form of regular hair cuts. As a former patron of Super Cuts, I gladly accepted.
Show the mentor that you are… well, entrepreneurial.
“I am in the process of developing a network of artists, organizations, and corporations where the exchanges will benefit each other. How do I start creating an ecosystem along these lines?”
I like the way this questioner is thinking. Rather than just thinking about what his own nonprofit should do, he is also thinking about what the entire ecosystem should be like. Ecosystem thinking is critical: it factors in the relationships, dependencies, conflicts, and other key dynamics that affect everyone. Taken together, these relationships comprise the ocean in which everyone swims.
And you can save a lot more whales by saving the ocean – versus concentrating on just individual whales.
I also like the reader's question because it also gives me an excuse to go on about a pet topic of mine: namely, ecosystem mapping.This is an absolutely critical step in the change process the questioner hopes to initiate.
Before you start trying to create or even change an ecosystem, the first step is always to map the existing ecosystem. And you may discover in the mapping process that the most important creature isn’t the whale.
Let me mash into the aquatic metaphor yet another one drawn from sports.
One of my favorite basketball players is Shane Battier of the Houston Rockets. For the casual fan, this would seem like an odd selection. Measured by the most widely used stats to gauge player performance – points, rebounds, and assists – Battier isn’t found on any leader list.
Even on his own team.
Compared to Battier, nine other Rockets players score more points, four grab more rebounds, and five garner more assists.
Yet, according to a fascinating article in the New York Times, the Houston Rockets have demonstrated statistically that Shane Battier should be considered one of the most valuable players in the whole league. This is because the Rockets are fanatical about conceiving of their team as one ecosystem, not as a collection of individual talent. Almost alone in the NBA, the front office captures a whole set of data that map the different roles a player has in contributing to overall team success, and not just to their own individual stats.
It turns out that although Battier doesn’t score many points himself, he routinely guards the opposing team’s best scorer (like Kobe Bryant) and disrupts that player’s scoring efficiency almost more than anyone else can. He doesn’t grab many rebounds but he leads the team in strategically blocking out opponents so his teammates can do so. He doesn’t get assists because he’s regularly setting effective screens so Rockets guards can find the open man. All told, the Rockets believe they can demonstrate how Shane Battier impacts the outcomes of games more than all but a handful of NBA players.
These conclusions aren’t just artful and subjective judgments. The Rockets front office measures and records objectively how well each of their players occupy such team oriented roles. The players are graded, reported on, and financially rewarded accordingly. This statistical emphasis on measuring team contribution probably explains why the Rockets made it to the conference finals, pushing the supposedly much more talented Lakers team to seven games despite losing their two “best” (by standard metrics) players.
Different measurements will favor different types of players, highlighting some realities but also overlooking others. In the philanthropy world, as we evolve towards greater measurement, what we especially must guard against is overlooking the “Shane Battier” type of nonprofits. These are nonprofits that play an indispensable role in the ecosystem, even if their individual stats are pedestrian.
Suppose a funder is evaluating two nonprofits in San Jose (my hometown) that work with the unemployed in the low income population.
Kobe Agency serves 15,000 clients annually at a cost of $9,000 per client and a return of 60% employment achieved.
Shane Agency serves 5,000 clients annually at a cost of $13,000 per client and a return of 30% employment achieved.
Is Kobe Agency the better investment? By conventional metrics, it would seem so.What if we collected the following ecosystem data:
a. number of referrals from other agencies
b. nonprofit concentration within the area
c. types of funding sources
And suppose we discover that Kobe Agency gets hardly any clients via other agency referrals. But Shane Agency gets referrals from five different other employment agencies, including Kobe Agency. This is because Shane is the only agency in the entire region that has expertise in working with Vietnamese immigrants, and other agencies send such cases their way.
In a related fashion, we find that while Kobe Agency is better known (having a larger geographical reach covering downtown and the east side) there are nevertheless three other lesser known “competitive” agencies in its area. In contrast, Shane Agency is the only employment agency present in the south. In fact, there are very few nonprofits per capita in the Shane's area compared to Kobe’s area.
Finally, Kobe Agency gets 75% of its budget from government contracts, while Shane Agency gets only 20%, meaning it is much more dependent on private giving.
So, where will a philanthropic dollar have greatest impact?
It is of course not clear, even with the new data, that Shane is a better investment. And it certainly doesn't mean the money shouldn’t go to the Kobe Agency.
But the new data does make Shane Agency and those like it a much more plausible candidate than before. Even though it serves less clients with less favorable dollar/client ratios, the agency is nevertheless critical to the whole ecosystem. Take it out of the picture, and suddenly its absence impairs the operations of five other agencies which rely on it as a key referring destination. And the neighborhood also loses a community pillar.
Indeed, when looking at the whole ecosystem, one might even conclude that Kobe Agency is actually more replaceable, given the other agencies present in its geography.
Ultimately, though, it’s not an either-or between all stars or role players, between whales or plankton. On every social need, we’ll need both types for overall success. It really is a team effort. But if it is truly a team effort, we can’t just measure individual performance. We have to map the entire ecosystem.
So this is a call out to creative funders and social entrepreneurs, “Are you ready to get started?”
Telling the (sadly short) history of mapping nonprofit ecosystems will have to await another entry. But here are some initial pointers that are close to my home:
- My firm Consulting Within Reach recently partnered with the largest county government in Northern California and applied for federal stimulus funding to build a comprehensive, web based map of the county's nonprofit ecosystem. Like Kobe going to the hoop against Shane, we were rejected. But if you'd like to read our plan, you can download the ecosystem mapping project proposal here. I'd love your thoughts as to whether it would have been worth Uncle Sam spending .0000005 percent of what it spent on AIG.
- Sara Olsen, who co-authors the Social Edge blog SVT on Impact, has started a similar mapping effort. It's very early stage but definitely bears watching.
- Another good start is the Foundation Center's In/Sight mapping tool. It isn't open source and charges fees that will be prohibitive for many in the sector. Also, it just measures location and funding, not actual relationships with other agencies and service populations. But I'm nitpicking - it's a very impressive first effort.
- The for profit enterprise that I have been most struck by so far is Rhiza Labs. I haven't yet talked to anyone who has used their product but it looks interesting.
Here are some other links to mapping related content by Jill Finlayson and Lucy Bernholz:
- http://www.socialedge.org/blogs/the-edge/topic_images/SocialEntrepreneurshipMapJFinlayson.pdf
- http://www.socialedge.org/blogs/the-edge/socap-recap-gains-gaps-post-1-of-4-social-entrepreneur-api
- http://philanthropy.blogspot.com/2009/10/more-maps-of-sector.html
- http://philanthropy.blogspot.com/2009/10/more-maps-of-do-ers-and-donors-v-3.html
- http://philanthropy.blogspot.com/2009/10/do-ers-and-donors-v-2.html
- http://philanthropy.blogspot.com/2009/10/donors-and-do-ers.html
Do you have other leads and links to share? Post them below!