Puppy Love and the Power of Money

One constant topic of discussion with both funders and charities is the fundamental power imbalance between the two sides. However we try to minimize it, there is a basic reality that charities need resources that funders can provide. While I appreciate the outstanding efforts of many charities to develop mutual value in the interaction the tension remains. Charities have to try to satisfy funders and the relationship can be challenging and complex. I've written about this before.

A good conversation today with Lise Struthers at Opportunity International (in my experience, one of the most advanced charities in terms of working with donors)helped me think of this in a strangely different way...

I spent almost 25 years of my life either being or working with teenagers and one of the dominant themes of those years was the challenge of romance, especially that weird "just friends" stage. I can't count the number of times I sat with someone and talked about the need for a DTR - Define The Relationship. A lot of angst and confusion was abated when the two involved finally worked up the courage to say what they were feeling and decide together how to proceed.

The same is true for funders and charities. The power imbalance is most dangerous when there are unclear and unspoken expectations of the way things will be. Someone has to break the ice and start talking about things like:
-What kinds of communication will be exchanged? Through what channels? With what frequency?
-How much influence will donors on the use of their funds and the charity as a whole?
-Are there donation thresholds that change the relationship?
-How can donors understand the fieldwork of the charity without interfering?
-Are donors expected to be involved in promoting the charity? In what ways?
-Which people at the charity do donors access?
-What are the options for a donor to be involved outside finances? (board member, site visit, write for promotional materials, in kind or expertise contributions, etc.)
-What kind of access does the charity have to the donor?
-What should happen if the circumstances surrounding the pledge or donation change on either side?
-How can either side end the partnership appropriately?
-What will be done if anyone on either side is unsatisfied with things?

Instant Strategy

On my 2009 to do list is to start reading things by Malcolm Gladwell. All the more after reading this article by Fred Smith. He takes off on Gladwell's book Blink and describes how there are philanthropists who have the innate ability to ascertain the value of applicants with remarkable intuition and speed. As most of us become more and more involved in increasingly detailed analysis, there is something very appealing about the possibility of a more informal and accurate approach.

I would love to know more about this. Does anyone have experience to add?

Cyber-Philanthropy

Making charitable giving more accessible and intimate is a great thing. Kiva has been standard bearer for changing the way we give. In recent months I've seen some family members become enthusiastic about being able to connect much more directly with people and issues. It may well be that start of a revolution in charity.

Over the holidays one of my best sources for interesting content, Fred Smith of The Gathering, posted a fascinating article about this new development. It leads me to a few questions: (and I'd love to see your thoughts as comments)

-How convenient should philanthropy be? What obligation is there for givers to take the time to understand charities more deeply?

-What will the impact of new technology options be on charity in the next decade? IS there a risk that flashy tools will outweigh quality work?

-How can (or should) "professional philanthropists" use our increased time, experience, and insight to help inform common givers? Should we post both positive and negative reviews of those we've worked with?

-What organizations are already exemplary in their use of technology to maintain connection with donors?

-What qualifies as a "major donor" in the future and what additional information or contact should they expect?

-How does this impact the power imbalance inherent in the donor/charity relationship?

A Preferred Future

Nonprofit guru Peter Brinckerhoff just posted his thoughts on what he hopes the future of nonprofits could hold. Here are a couple from him:

3. I want funders of all kinds (foundations, corporations, government, individuals) to accept the fact that when they fund nonprofits, they purchase services, they don't get to control the nonprofits in ways that don't benefit the mission. This means much less silly micromanagement.

4. I want everyone to be more transparent, both inside and outside their organizations. This means both nonprofits but also the funders.

5. I either want foundations and government to stop worrying about administrative percentages or start living by a 10-12% admin share themselves.

I haven't asked him, but I bet Mark Petersen would agree with these, even as he leads us in this direction through Bridgeway. Their commitment to transparency, like that of the gang at Maclellan in the US is exemplary.

Semantics of Partnership

I've always been something of a jargon junkie. When I enter a new subculture I quickly seek to understand and adopt the particular language that marks one as a member. That has also been true in Philanthropy.

The most difficult word to parse has been "Partner" as I blogged about months ago.

In our society the word is used to describe business arrangements, romantic relationships (same sex and straight), friendships, and numerous other aspects of human interaction with varying degrees of formality.

In philanthropy it seems to indicate the relationship between donor and charity, but this can have so many different aspects.

When we identify what we call Strategic Partners for Catalyst we intend that the relationship extend beyond the merely mechanical exchange of finances, but also incorporate something more involved. But it has been difficult to define what that involvement might be.

Here's a draft list of aspects that might become a part of a Strategic Partnership Agreement as we continue forward:
1. Site Visit by Catalyst staff or principals to field work of the organization.
2. Informal Consulting between organization’s leadership and Catalyst
3. Promotion of partner through Catalyst website, blog, newsletter, and other materials, as well as personal advocacy
4. Annual Leadership Event with other Catalyst contacts
5. Catalyst Bonus Awards applications available to reward superior performance by staff
6. Catalyst Mentoring Program made available for a small cohort of staff and/or volunteers at no cost
7. Board Consideration for Catalyst director or principals to join partner’s board of directors
8. Strive/CCCC/Catalyst board development teleseminars could be made available
9. Referrals through the developing Catalyst menu of leadership development opportunities
10. Volunteer Involvement by Catalyst at programs or events
11. Fund Raiser participation/promotion through Catalyst channels

What could you add to the list? Where are the landmines?

Microfinance and Me?

As the world of small scale loans to developing world entrepreneurs continues to seek increasingly effective ways to engage new donors and take advantage of the potential of the internet and the decentralized nature of a digital world there continue to be new possibilities opening up.

Thanks to Mark Petersen at Bridgeway I can let you know that the relatively intimate and immediate philanthropy that Kiva has pioneered has now been adopted by my favourite microfinance organization.

Check this out, and opt in.

Well done Opportunity!

Managing Expectations

Years ago I interviewed for a job and during the process I was told the salary was based on the pay grid of school teachers in the region. That was quite appealing, but the actual salary offered was quite a bit less. It seems the salary grid was a basis only in terms of being something they looked at, cut down by 25%, and then modified by several other factors. It was a disappointing aspect of an otherwise very exciting opportunity.

In the years since that event I have encouraged many young adults when they pursue work in nonprofit and ministry roles that the taboo discussion about compensation should be surfaced very early in the process and with frank openness. Not doing that creates the potential for people to invest significant time and energy in a recruiting process that ultimately becomes pointless and frustrating when something so simple as dollars is finally revealed.

One of the causes is a cultural expectation in church circles that is someone is "called" to a role they will trust God to provide for them. To even ask the salary is somehow inappropriate and unspiritual. After all, we don't do this kind of work for the money...

Just once I'd love to hear a candidate turn that around and ask the search committee if they are willing to be the ones to act in faith and place a generous full year's salary in a designated account because they trust God to provide the needed resources.

This does relate to Catalyst. When we are approached by leaders and organizations who are interested in applying for our funding there is some risk that I can give the impression that we are likely to offer support when we really are not. I realize that in our current funding cycle I may have done this inadvertently, simply because our strategies are becoming more apparent as we work through applications.

Today in a conversation with a new contact I was complimented for my honesty when I explained that I thought it unlikely that we would be interested in supporting the projects under discussion. Apparently it isn't common for donors to do this.

It should be.

Picking Favourites

We are partway through the process of evaluating our applicants from this funding cycle. It has been a large learning experience. In a few weeks I will post some of what we've learned in the hope of becoming better at it next time around.

One of the challenges at times in our discussions has been in explaining what it is about certain applications that appeals to us. There are obvious factors: people we know, those who have clearly done their homework on us, ones that presented their request effectively, those that are intuitively a fit for our strategy and direction...
But there's also something else, something that I couldn't easily explain around our table but that is more clear to me after reading an excellent article by Andy Crouch this afternoon. I am enthused about supporting and partnering with people who are engaging with our culture in ways that involve creating and cultivating.

I've had Andy's book on my shelf for a couple months at the urging of Mark Petersen, but haven't taken the time to read it yet. That will have to change. In trying to be strategic about the use of the finances at our disposal we need to be thinking about the issues raised here.

Why Charity Ultimately Fails

The word Catalyst gets used in several nonprofits and ministries. One that I can recommend is the Catalyst conference and all the ancillary elements they've added. I've enjoyed their podcasts for a couple years and am disappointed that I won't be available to accompany a group from our area to Atlanta next month to see it all live. It's definitely on my hit list for 2009.

One of the founders of our foundation sent me this article from the Catalyst website that explains with clear and simple illustrations why we're becoming involved with microfinance in our efforts to support relief and development for the world's poor, rather than traditional charitable efforts. We realize there are times and situations where immediate needs require free donations, but by and large we are more and more convinced that there are better ways to help in the long run.
we also hope that the time we spend researching and understanding options and strategies can help others to begin to explore some of the organizations we're enthusiastic about.

Worth Reading

A quick list of websites and blogs that I find helpful:
Strive! is the best organization I've come across for helping boards learn to function in ways that don't drive themselves, staff, volunteers, donors, and clientele to desperate frustration. You should subscribe to their monthly GEMs and buy Jim Brown's book.


Mission Based Management by Peter Brinckerhoff keeps me thinking about how nonprofits can keep their focus in the midst of the daily realities of work.

Seth Godin's blog is updated pretty much daily and offers some innovative ideas about marketing that have the ring of both genius and common sense.

Open Hands is the blog of Mark Petersen from Bridgeway Foundation. Mark has been unfailingly helpful as we're getting Catalyst underway and he knows everybody.

I could give several more but this is a good start. And since it is hard to keep up with all of these I highly recommend Google Reader or some other tool that keeps you aware of updates.

Philanthropy Monopoly??

This from Fred Smith (who posts a lot of interesting articles on Facebook).
It raises some excellent questions about the role of foundations relative to those we desire to help. Obviously there is bound to be some question about the quality of the work done by the Gates Foundation. Just as there is criticism of Bono's work.
Regardless of scale all philanthropists need to consider how we use our leverage of research and resources wisely.
In one of my former roles, as a youth pastor, I used to tell the parents of the teens I worked with that I expected them to know their own child better than I did (which was true more often than not); but I was generally more knowledgeable about teens in general than most parents were (also usually the case).
The same may be true in this world. Over time I expect to become quite informed about the issues of nonprofits, relief and development, and particularly the role of leaders and leadership in those organizations. But I will never be more aware of the specifics of any of our resources or partners than they are. I need to bear that in mind.

Telemarketing and Guilt (not what you think)

A telemarketing call made me feel guilty last night.

About 8:20pm yesterday Kristen was finishing up bedtime with my sons and I was tidying up the kitchen when the phone rang. I grabbed it quick (don't disturb bedtime) and was greeted by a friendly voice who identified herself as from the Cerebral Palsy foundation, calling to see if we had anything to donate for their next local pick up sometime next week. Like most of you, I am generally annoyed by telemarketing, but this was different. For one thing there was no pseudo-survey or other strategy to catch me off guard. The request was brief, specific, and right at the start of the call. The caller was bright and spoke clearly, and seemed sincere in asking for our help, but neither rushed or trying to engage me in unnecessary conversation. And I know that we have given to this cause before (which I believe is why we're on their list). It was actually a pleasant experience and I said "yes" happily, confirmed our address, and hung up the phone.

Then the guilt set in. Not because the caller made any effort to make me feel guilty, but because I suddenly remembered that I am a board member for another organization that also gathers clothing donations, and I rarely think to bring a bag of stuff there.

It got me thinking about how our giving, even to causes we genuinely support, often needs a little prompting. I like having the little envelopes from our church in my drawer to remind me to give weekly. Simple nudges that get my attention briefly are quite appreciated; and a lot more effective than a fridge magnet or coaster that quickly blends into the landscape. It doesn't feel intrusive to be encouraged quickly to do something I sincerely want to do; that's why my laptop and iPhone buzz me when I need to prepare for my next meeting.

I'm curious. What kinds of reminders for giving do you appreciate? What seems intrusive or causes the wrong kind of guilt? How do you remember to do the good you've decided to do?

And, does anyone want me to come b.y and get some gently used clothing to take to my next board meeting to help me overcome my guilt?

Starting Young

I'm very proud of my son's friend Mackenzie. See why.

One of the challenges for many philanthropic families is in seeing the values of generosity extended to succeeding generations. It's not easy to do.

We are inviting the children of our principals to explore the things we are doing now at Catalyst, present us with new possibilities, and participate to the extent of their interest. They are much older than Mackenzie; hopefully they will share her heart.

Real Costs

Why can't the organizations I meet with each week tell me the real cost of their programming?

Time and time again I have conversations in which people who are hoping to receive support from Catalyst explain their desire to offset some of the fees required by their participants, but need to be prompted to explain the difference between those fees and the total cost of providing their services.

This is a problem for several reasons. While it is admirable to minimize the charge for helping people (though discerning the appropriate limits of that will be the subject of several future posts), it is often a path to unnecessary difficulties.

In our contemporary North American culture the value of most things is determined by the amount someone will pay for them. Charging less for a workshop or program than it actually costs to provide practically diminishes the worth. The examples of this are numerous. If we want people to respond to our efforts we are generally better off making them aware of the expense involved in providing them.

Fundraising is one of the most demanding and time consuming aspects of most nonprofits. Time, strategy, and effort invested in this area is exhaustive and frequently exhausting. Failure in this area can spell the untimely end of otherwise outstanding organizations. Dealing in the real costs of our programs is beneficial here.

When approaching possible funders, telling us your program charges (for example) $700/participant gives us that as a benchmark wheen we consider potential grants. If your real cost is $1000/participant you've potentially decreased the scale of your grant by 30%. (Please note: foundations also have operating and administration costs and like you we try to minimize them. We aren't surprised or offended when you acknowledge them as part of your needs).

The more difficult matter when it comes to fundraising is one of scale. Most effective nonprofits are in some way interested in growing. But if we are operating at a deficit for every participant than every bit of expansion creates a larger hole for funding to fill. That may be a legitimate approach, if it is acknowledged properly, but a failure to deal in real costs makes this more challenging.

Determining real costs can be quite simple. Dividing the organization's total operating budget by the total number of participants gives a workable figure.

None of this is to suggest that we must charge participants the full cost of the program. Our suggestion is to openly reference the real cost of providing our services and the amount that is being subsidized (regardless of whether that subsidy is through a direct sponsorship or through the fundraising efforts of the organization). Those who are able to pay the full cost of their program can do so, those requiring assistance can receive it. This is a strategy that may add an additional administrative loop, but may also provide additional funds through increased program funds.

Most importantly, dealing in real costs is simply honest. It allows all the stakeholders (funders, staff, participants, etc.) to know and respond to the full story of our work. There is great value in what we're providing to society, let's not be bashful about it.

"Partners"

Among the many areas in which we are trying to learn as much as we can as fast as we can is the nature of the relationship between Catalyst and the various organizations we support. The common term foundations seem to use is "Partner", which we have also adopted. The intent is that we develop an interactive relationship with these organizations and can offer them more than simply financial resources.
I've tried to reflect my developing understanding of this relationship before (here.
Through another very helpful post from Mark Petersen, whose blog has become essential reading for me, I came across an article by Tom David that challenges a lot of what I want to be true about partnerships.
Basically, Tom argues that their is and always will be a power imbalance between funders and NGOs. Our efforts to minimize that gap are only effective in complicating things.
I very much want to disagree with Tom. I believe it can be possible to work productively and closely with our partners, even serving as a board member in some cases, without being manipulative or exploitative. Still, there is a certain wisdom in maintaining an arms length relationship if we want things to remain crisp and clear. I've seen examples of closer involvement being deeply problematic.
I'd love to hear from some readers on both sides of the funder/NGO relationship on this. How close is too close? What are the advantages and disadvantages of more complex relationships?
One final thought: It seems to me that most charities (esp. churches) receive a bulk of their funding from people who are directly involved in what they are doing. So it must work sometimes...

Measurement: The great dilemma

A recurring theme in the last few months is the challenge and need for nonprofit and ministry organizations to find a decisive way to self-evaluate. By extension, Catalyst and other grantmakers need criteria to evaluate not only applications but also the outcomes of projects after they receive funding.

There are a few particular difficulties in this:
-Reluctance: Nonprofit leaders are largely involved in matters and issues that are driven by compassion rather than efficiency. Many times they are resistant to the "corporate" emphasis on numerical evaluation. In my years at camps I saw the anger that was prompted when someone from the board asked how many campers had made faith commitments during a particular program. Staff found that offensive and felt it diminished the nature of relationships to something merely transactional and manipulative.
-Ambiguity: Social services and spiritual projects are notoriously difficult to quantify. How do you measure the benefits of a relationship? Rarely is there a single point of emphasis and the people involved may all have different value and priority for the varied outcomes.
-Tools: Cultural change doesn't lend itself to a simple bar graph. There is a shortage of recognizable methods for identifying and communicating the kinds of outputs and outcomes we're interested in supporting.
-Objectivity: Nonprofit workers are almost always passionate about their work. (We wouldn't partner with any that aren't). Their clientele are understandably grateful for the most part for what is being accomplished. It is a lot to ask of either of those groups to provide a relatively unbiased perspective.
-Hope: As may be the case in other fields (but I suspect is exaggerated in these ones), nonprofit and ministry people are optimists. They look for the signs of life in even the most desperate situations. It's a necessary prerequisite of much off what they do, but when applied to evaluation is clearly distorted.
-Narrative: When numbers are hard to generate or interpret we rely on stories. Funding for charities has always been based more on tugging the heart strings than swaying the intellect. The traditional pitch of "a sob story and a slideshow" is deeply entrenched and typically effective. Anyone can come up with at least one compelling account of someone who's life is being bettered from their efforts.

Despite all of these impediments there are efforts being made widely to develop useful and relevant ways of measuring the results of nonprofits. As I wrote about previously, Jim Collins has produced a monograph of Good to Great aimed specifically at the social sector where he argues for the necessity of determining standards of evaluation that are measurable. It is a very live discussion among the professionals I met at the recent PIGS conference as well.

Prior to the start of Catalyst I was involved in starting a new church in our community. We were under the authority and support of the church where I had been staff for several years; and I reported to the leadership there. When after more than a year our new congregation wasn't significantly growing the leadership began to question the wisdom in continuing. Of course I resisted. I could see the sparks of potential and the impact we were having on the few people who were involved. Ultimately the decision was made to close the new church. It was difficult for all involved (new congregation, myself, and the leaders of the larger church), and was made all the more difficult because there was no standard of measure by which to evaluate what was happening.

I admit that I find the process of determining objective measurement criteria for matters of spirituality and social justice to be both daunting and dangerous. Obviously we don't want to reduce the efforts of our partners to spreadsheet entries. At the same time, I have become increasingly aware that with those criteria established and agreed upon there is a freedom to pursue a vision with greater confidence that you have defined your purpose and won't be dissuaded by the inevitable swings of energy and enthusiasm.

I am eager to work with our partners to figure out how to farily and helpfully evaluate their honourable efforts.

Over my head

I used to be a lifeguard.
Last night I stood with my toes in the ocean after a long day of amazing learning. I've lost track of the number of conversations I've been a part of in the last 40 hours about the world of philanthropy I've just come into. The sheer immensity and variety of the need in the world is so far beyond my comprehension it leaves me staggered. Added to that are the discussions about projects and strategies for trying to address some of those needs at individual, local, regional, national, continental, and even global levels.
Standing on the shoreline I reflected that my lifeguarding experience might make me an above average swimmer, but that ability is pretty much irrelevant compared to the size of the ocean. On my own I'd be lost in minutes.
Among the many things I'm noticing about other participants in this PIGS conference is how many of them came to their philanthropic roles in unusual ways and are now finding that God had uniquely prepared them for the work they are doing now. Several of the disparate tracks and themes in their lives have come together in fascinating ways to enable them to bring about good now.
I can only hope and trust that I will be the same.
It reveals another aspect of the shoreline experience. I am continually realizing that the God I love and try to serve is far beyond what I've understood so far. More than anything else, I desperately want to deeply know God. I'm going to take the risk of stepping into the waves.

Evaluating Outcomes

One of the challenges for our work is trying to figure out how to evaluate not only the proposals and opportunities we come across, but(even more difficult) evaluating organizations and projects that we are supporting. This is an ongoing challenge in this field, as I've commented on before.
In a couple weeks I'll be attending a conference for grant-making professionals that concludes with an afternoon discussion about "outcome based evaluation" and efforts to develop more consistent and reliable ways to determine value and success in fields that don't lend themselves easily to numeric criteria. I'm very interested to learn how others are working with this.
Last night I had an excellent reminder of this in my own life. Two years ago I left a job as a youth pastor where I'd been for six years. It was a job I loved, although it was demanding. I made my best efforts to help teenagers discover the truth and grace of Jesus and understand how to live out their identities as authentic followers of Jesus, not just good church people. Last night I got together with one of the guys who had been in that group and is now at university. Over the course of an excellent conversation (and some very good chicken wings) we caught up on our lives and I saw clearly in him some of the perspectives and character qualities I'd been trying to pass on for six years. It was extremely gratifying to recognise that in him. When he graduated a lot of that stuff wasn't very apparent.
It seems to me that when working with people the most meaningful changes often take a lot of time. Projects can be evaluated based on specific time bound criteria; but lives changed according to an imposed timeline. Leaders need to develop a long term mentality and understand that results may not be apparent until long after the opportunity for recognition has passed.

New Radicals

I recently read a very interesting book called We Are The New Radicals. The premise is that there are a large number of baby boomers who, still in their working years, have become disillusioned with their careers and are looking to do something more intrinsically fulfilling. This version of a mid-life crisis is leading many 50 year olds to look into moving into social sector and charitable causes. The problem is that there aren’t a lot of nonprofit organizations that are really prepared to welcome, train, and fund these established professionals.
We accept that there is a level of sacrifice that is innate to this kind of wrok. But too often the compensation is so meager it eliminates adults with families from consideration, which seriously limits the potential for benefitting from wisdom and experience that is often in short supply.
I’m a big booster for the enthusiasm of youth and the willingness to go above and beyond the expectations they offer. I’m actually quite biased in favour of young leaders, but this book has me thinking that there is a need to find a way to bring together these two demographics.
I wonder which group would find this more difficult: The young leaders who may well be intimidated by the experience and resume of mature newcomers and feel threatened in their leadership; or the New Radicals who must accept the insight to be gained from the specific experience of committed leaders who are the peers of their children?

Measuring Results

Almost everyone who gives their life to the benefit of others sometimes struggles with the matter of significance. Lives influenced are rarely definitive and the process is at least as full of heartbreak as it is with glory.
I'm just finishing watching Mr. Holland's Opus again. It is inspiring, even is it may be somewhat contrived at the end in a predictable Hollywood manner.
I love what this movie honours: long term commitment, investing in the dreams of others, leaving aside personal desires at times, relationships as more important than tangible outcomes, challenging authority with passion and wisdom... the list goes on.
I also appreciate that for the first 2/3 of the movie the lead character is obviously deeply flawed. He repeatedly chooses the encouragements of his work over the frustrations of his family. He's tempted to infidelity and crosses some lines he shouldn't. He's angry, sarcastic, and unfulfilled. I almost would have preferred if it hadn't all come together so completely later. It would have been more honest to the people I know who do wonderful things but remain imperfect themselves.
That's not to devalue life change. If we didn't believe in transformation most of us would go get "real" jobs. I just like the honesty of heroes with clay feet. It's quite Biblical.
Finally, there's the finale scene when Mr. Holland sees for the first time just how much his life has meant. Far too few of us receive recognition for our efforts, at least in the ways that we would most like. Perhaps that's for the best after all.
The desire for recognition, to be significant in the lives of others, can be a quiet but damaging temptation. It is a sobering moment when the minister realizes he is more interested in being the one helping than in seeing the person be helped.
This is why we take it by faith that it is not our calling to be successful, to change lives or get results; though we do acknowledge those as desirable. Somehow we strive to long for the simple words "Well done, good and faithful servant", spoken by one who knows our every frailty and loves us still.