Can grantmakers and nonprofits work together?

Posted on June 28, 2011 by

If there really were a growing trend of partnership between nonprofits and grantmaking foundations, what would we notice?  A partial list includes:

  • More cooperation between those with money to fund good work and those with the muscle, spirit, and willingness to do it.
  • More development and affirmation of common purposes, less on finger-pointing or distancing.
  • More demand for fairness and equity as commodities that our public systems and private markets and philanthropy must produce, compared to just settling.
  • More communication of real progress and real problems, less on “community relations.”
  • More support for sustained effort and helpful assistance, less on shutting down efforts that don’t pan out immediately.
  • More funding to go deeper, less for one-shot skin-deep or nice ephemera.
  • More space to think creatively, less enforcement of the dysfunctional business model.
  • More spine from philanthropic funders, less self-protection and less avoidance of real opportunities to serve the greater good.
  • More spine from philanthropic nonprofits, less self-protection and less avoidance of real opportunities to serve the greater good.
  • More support of growing nonprofits’ capabilities, less on non-growth strategies.
  • More resources to educate the community and engage it in a kind of activism that can energize even while it’s reeling from the effects of a hostile recession and unhelpful bureaucracies.
  • More intention to fix our social systems, with support for the R&D, policy development, advocacy, community organizing, resource development, and action needed to “move the needle” in those arenas that are clearly not working.
  • More support for generosity, inclusion, and engagement.

Steven E. Mayer, Ph.D. / June 28, 2011

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Power dynamics in the philanthropic sector?

Posted on June 17, 2011 by

There has long been perceived a kind of class warfare between foundations who have the money, and nonprofits who beg for the money.  This is summed up by one of my favorite quotes, “Ah, philanthropy, it’s what allows a nonprofit to stand on its own two knees.”  There is a painful truth to this, acknowledged by both sides.

But the problem lies only partly with the dollar disparity.  There’s also the tendency to think in Us and Them terms, the Powerful and the Powerless, which happens at all levels up and down the philanthropic food chain.

A reader of an earlier post thought my intent of a Consumer Union for the philanthropic sector would be to protect nonprofits from the misbehavior, inattentiveness, or disappointing effectiveness of foundations.

But I don’t mean that – I think nonprofits and foundations are fundamentally allied, and that thinking of each other in Us and Them terms is dysfunctional and counterproductive to the overall effects of philanthropy, for those on the giving end and those on the receiving end.   Philanthropy is the work of both foundations and nonprofits, both with similar missions, both interested in benefiting the same people, both governed by IRS’ section 501 — and each needs the other.  Unfortunately, there’s misbehavior, inattentiveness, or disappointing effectiveness on “both sides” of the line.  [I'm curious how much of audience deserts me at this point.]

No, my point is to protect the public from unsubstantiated claims of all kinds of philanthropic organizations throughout the philanthropic sector – including foundations and nonprofits and the myriad of hybrids existing today — so that the public is better assured of getting a “safe and effective” product, with beneficial effects all around.   After all, we the public are all consumers some of the time, like when we use the educational, health, civic, or cultural services of a university, hospital, block club, or museum. What should those organizations do to earn our respect?

“But the foundations have the money,” I’m always told when I try to make the case that both foundations and nonprofits make up the larger class of philanthropic organizations, “and so there’s a power struggle, a class struggle, between the haves and have-nots.”  And there’s some truth to it, but… Plenty of nonprofits are bigger than foundations.  Plenty of nonprofits have more clout than foundations.  Disrespect, gaming, and ineffectiveness happens throughout the sector, without regard to “who has the money.” Disparities in power run throughout the sector.  And feelings of abuse or neglect by those with more happens throughout the sector; I wouldn’t say that nonprofits act any more nobly or ignobly than foundations.

Partnership is what’s needed throughout the sector, not displays of wealth and power and the hubris that goes with it.  What’s in short supply is r-e-s-p-e-c-t for the capabilities of potential partners, and respect for the opportunity of increasing the capabilities of others.  Respect is essential for partnerships, and partnerships are essential for philanthropic effectiveness in taking on large social issues.

Perhaps in denial somewhat, I would say that some of the wealth and power thing is illusory; when you’re on your knees, you naturally feel inferior, and when someone in front of you is on their knees, you naturally feel superior.  A helpful fact is that each philanthropic organization, whether nonprofit or foundation, gets its money from somewhere else.  More and more philanthropic organizations are in fact intermediaries, in function if not in name, receiving philanthropic assets (time, talent, and treasure) and distributing philanthropic assets elsewhere –also time, talent, and treasure but hopefully transformed in ways that help achieve a mission.   One can imagine the staffs of the Gates Foundation and the Anonymous Peoples Action Program as both givers and recipients, both recipients and givers, both givers and takers.  In other words, the grantmaker/grantseeker distinction is a less apt description of philanthropic entities these days, as most philanthropic organizations play both roles simultaneously.  The philanthropic food chain is a long and twisted one, with complex role differentiations.

But not in denial, it’s unfortunately the case that a big fly in the equity ointment is the ways traditional foundations, especially private foundations, are traditionally accountable to and governed by different interests, traditionally class-based, than traditional nonprofits are.  This hobbles the work of the sector as a whole, to say the least.  Wouldn’t it help if foundations and nonprofits really were allied, really could work in partnership?

Can we have another refrain of the r-e-s-p-e-c-t chorus?

Steven E. Mayer / June 17, 2011

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A Stakeholders Union for Philanthropic and Nonprofit Services

Posted on June 9, 2011 by

In developing our Stakeholders Union, an independent philanthropy testing service, we’ll need to develop a testing process.  But first we’ll need to decide what kind of philanthropic service we want to test – our neighborhood soup kitchen, its job training and employment center, our state’s coalition for or against your favorite cause, or our community foundation seeking donors for its discretionary grantmaking program.

And how would we test this philanthropic service?  Think cars – Consumer Reports includes ratings of Handling, Safety, Economy, Styling, Comfort.  They test their cars around a track, noting their performance in dozens of ways, question consumers on their experience, and report out using simple but informative tables and graphs.

We’ll start with a challenging example, let’s say our state’s coalition for/against (your cause here), which we’ll refer to as SCFAYCH.  What would  we look for in “testing” SCFAYCH?  What is it we want SCFAYCH to do really well?

Bottom line, we want it to contribute to re-shaped policies and practices that strongly influence my state’s indicator data on the status of My Cause.  In other words, we want The Problem to be reduced (or The Opportunity to be enhanced), as helped by the work of my State Coalition working on the problem.

Above the bottom line, there are many SCFAYTCH organizational activities to be supported and victories to be achieved, each requiring funding, and testing to be sure it’s being done well.  These are akin to handling, economy, styling, etc — elements of performance and quality that help make up the complete package.

We want SCFAYTCH to  push on key barriers or obstacles to re-shaping these policies and practices.

We want it to gain the support of enough people in key positions to make real changes.

We want it to promote solutions that make sense, seem feasible, and are ultimately acceptable to the growing base of support.

We want it to become big enough, strong enough, and smart enough to help make the key systems and markets make the necessary changes.

We want it to run the organization consistent with its goals and ideals.

For each of these performance dimensions, we still have to devise the tests that show us the evidence, reportable in Stakeholder Reports (the magazine of the Stakeholders Union), that this SCFAYCH produces the above results, and that an investment in this coalition, as opposed to others competing for my attention, is a good investment.

Next:  Am I serious?

Steven E. Mayer / June 10, 2011

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A Consumers Union for Philanthropy?

Posted on June 2, 2011 by

In response to a comment on the subject of “pay for performance in  the social services” I suggested that rather than have government workers police the cost  of outcomes, it would be useful to form a Social Services Consumers Union to test the quality of social services, similar to the way Consumers Union tests automobiles, toasters, insurance plans and such.

If we, in our roles as  consumers of social services undertook to spell out the criteria against which  social services should be tested, we could then test various providers, report out the results, and  pay for their services accordingly.

If you want a thorough evaluation of dish-washing soaps,  BBQ sauce, mowers and tractors, and telecom bundling services (all in the May 2011 edition of the Union’s magazine, Consumer Reports), you will learn a fascinating amount  about how well various products and brands work, the criteria on which they test these products, what earns a failing or passing grade, and what wins their recommendations. Consumers Union practically invented transparency in the commercial sector.  The magazine has consistently produced highly readable and informative consumer-oriented reports for decades.

Call me a professional evaluator, but I have enjoyed this magazine forever, and use its philosophy in evaluation workshops and consultations.

I have also appreciated its mission: “Consumers Union is an expert, independent, nonprofit organization whose mission is to work for a fair, just, and safe marketplace for all consumers and to empower consumers to protect themselves.” Earning the Consumer Reports Best Buy recommendation means something to consumers and producers alike.

Wouldn’t it be fun – fun being a big incentive these days — to extend the Consumers Union model into the philanthropic worlds of charity, development, and justice?  Wearing our consumer hats, we  could impartially and rigorously “test” our neighborhood soup kitchen, for example, and compare them with others.  We could do the same with our nearby job training and employment service.  And our state coalition for (or against) our favorite cause.

Instead of Consumers Union, we could have a Clients Union, or a Beneficiaries Union.  What about a Members Union?  Me, I’d like to be part of a Stakeholders Union.

And what would our magazine look like? This theme obviously links up with our Dashboards discussion, the Making a Difference theme, as well as this blog’s  underlying currents of Philanthropy, Evaluation, and Justice.

You’re welcome to leave a reply or comment below.

Steven E. Mayer / June 2, 2011

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Would “pay for performance” be good for the social services?

Posted on May 20, 2011 by

There is a certain allure in the many kinds of legislative proposals that link pay to performance in the social services.  Some are getting serious consideration at state and federal levels, but we should be very careful with them.

My concern is in the potentially corrupting effect that slavish devotion to a single bottom-line metric could have on the work of the social service provider, much as we’ve seen the corrupting effect that slavish devotion to the bottom line “quarterly profits” has had in the corporate sector.

And slavish devotion it would be if service providers’ salaries depended on how well their employer met their financial, er, service, goals.  We’d see all manner of shortcuts, like creaming, skimping on the service, workplace abuses, and simple garden variety misreporting.   I know the mantra these days is to make nonprofits operate more like business, but I’m a skeptic.

I’m not against “pay for performance” in principle, but it is essential that the right performance measures be chosen.  Frankly, I’m not sure it’s possible to do with the exactitude needed to prevent widespread dissatisfaction.  Also essential is assertive quality control to lessen the threat of mismanagement, and more important, to be assured that the outcomes obtained are quality, reasonable, meaningful outcomes.

outcomes ready for counting

Even with seemingly simple social services, like, for example, a nonprofit training and employment program with a mission to provide employers with skilled workers, a program where “job placement” might rule as the payoff metric, it’s the quality of the service—the curriculum, the mentoring, the follow-up — that drives the outcomes.  The search for bottom line payoff metrics is more difficult when the goals of the service are more complex, like affordable housing, public education, or community philanthropy.

This was made clear by W. Edwards Deming, the founder of the quality control movement.  Far being just a bean counter or numbers guy, he said business success is more about quality than quantity, and that businesses make their money and grow their market by making products and services that meet specifications of quality.

And BTW, it’s through specifying the qualities of excellent social service that the art of social service delivery will advance.  If the various social service industries were induced to focus more on their own principles of quality work, they could develop a more skilled workforce, reduce their costs, and improve the production of meaningful outcomes.

Steven E. Mayer / May 20, 2011

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A classic revived!

Posted on May 3, 2011 by

Now down-loadable in its entirety, my 1994 classic, the editor’s cut of “Building Community Capacity: The Potential of Community Foundations.”

This book is based on our experience evaluating the performance of 17 community foundations participating in the Ford/MacArthur Leadership Program for Community Foundations, during the years 1987-1995.

I still consider this initiative the best for strengthening the leadership roles and capacities of community foundations.  It was designed to help small and emerging CFs grow their discretionary assets as well as their community leadership skills, and succeeded admirably. The evaluation yielded major insights, still completely applicable.  Chapters are devoted to:

  • the nature and value of community capacity — that mix of community commitment, resources, and skills needed to address community issues;
  • the work of community foundations in the US, and their potential for building community capacity;
  • the four areas of organizational capacity tracked by our evaluation — areas for building organizational strength internally, needed to build up a community’s capacities externally;
  • the strategies used by participating CFs, each starting with $10 million or less in permanent endowment, to meet the demanding challenge of raising $1 million in new discretionary funds in just two years;
  • strategies they used to develop and implement a meaningful leadership initiative in their community — and their interplay with asset development;
  • an analysis of the features of the program that made it so successful — five years’ support, an active assistance and learning agenda, and the selection of good participants, every one of which succeeded grandly, each in its own locally-appropriate way.

Once found on the bookshelf of every community foundation in the U.S., thanks to the generosity of the Ford Foundation, which sponsored the initiative and our evaluation work, and only rarely available on Amazon, this book is now a collector’s item, though I’m pleased to say it still is in the possession of most CFs that I’m in touch with.

Would that the principles of healthy institutional growth and leadership discovered in this initiative were in wider practice, and better supported by private foundations interesting in developing the capacities of community foundations in their territory.

The complete book is now available, free, in a down-loadable PDF, from my Effective Communities website, here.  Admittedly, it’s not a great reproduction, but the best this little office can do at the moment.

Steven E. Mayer, Ph.D. / May 16, 2011

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Dashboards for philanthropy

Posted on April 21, 2011 by

You hear a lot from funders these days about their hunger for “dashboards” that display the latest information to guide their decision-making.

Dashboards have taken over the corporate sector as part of the “business intelligence” movement, so naturally the boards of foundations and nonprofits want to try them in the philanthropic sector.  Websites such as dashboards.org or dashboardzone.com have sprung up offering displays of dials and gauges and other cool displays of any old business metric you can think of, typically relating to finance.


The quest for “dashboards” to display organizational performance in the philanthropic sector is part of the clamor to apply metrics to everything, to quantify and monetize outcomes, and to hold grant recipients accountable for bottom-line results.

Unfortunately, most dashboards I’ve seen for philanthropic organizations don’t really do more than cram a bunch of info that’s already in the annual report into pretty graphs, pie charts, histograms, sparkling line graphs and such.  Yes, they can be visually engaging (though most cram too much into a single display just to show they can do it), and snappier than a bunch of boring paragraphs, and because they’re novel they look cool.

The idea is that they’re supposed to tell the organization “where it’s going,” just like, I’ve been told by several people, a car dashboard does.   But you know what?  A car dashboard doesn’t tell you where you’re going, or even where you are.

A car dashboard tells you the rate of speed you’re traveling, how many miles you’ve gone, and how much fuel remains.  There are a few “idiot lights” to let you know your car is about to explode, and an increasing number of entertainment gauges and comfort meters.  These are all useful, but there’s nothing at all about where you’re headed or even where you are.  Only recently has the car dashboard included a GPS, a genuine navigational aid that actually does tell you where you are in relation to a chosen destination; of course, it’s still up to you, the human driver, to punch in where you want to go, because it doesn’t know until you tell it.  Analogy, anyone?

What do we get on contemporary philanthropy dashboards?  The growth of assets over time, broken down by type.  The number and types of funds established, by year.  The number and amount of grants made, by year and type.  And a few other things, easily countable.

Conveying information graphically adds value to a report, no doubt, and communicates in ways that words or numbers alone cannot.  But do they tell anyone where you or your organization are headed?  No. The philanthropic dashboards I’ve seen are not navigational aids to the future as much as they are counters of the past.  And as with cars, there’s something missing: where are we going, what will it take, are we making progress, and where, exactly, are the ditches?

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