return on investment2

With a background in fundraising and philanthropy, I’ve been on both sides of the fence. I’ve thought about how to convince people to trust me and my organization with their money, and I’ve thought about how to determine whether an organization could be trusted with money I was stewarding.

If you’re finding yourself in a situation where you’ve got cash you’d like to see working for you in a way that will make the world around you a better place, think about these three criteria before you decide:

Return on Investment
It’s true that money donated to a philanthropic cause isn’t an investment in terms of bringing cash flow and/or assets back to you (unless you’re considering a loan situation like Kiva.org), but it can be an investment in making changes that you think need to be made.

When checking out a new organization for a potential donation, consider what they’ve delivered in the past month, year, and decade. Take the time to look at their Guidestar.com profile and at their past 990 forms. Read their annual reports, their websites, and their social media streams. If you can, sit down with their executive director or Board chairman. Speak with other donors to the organization.

Overall, learn how your money will be used, and determine whether you consider their track record to be a good investment.

How Can You Get Involved?
A great way to see how well an organization is doing is to become a part of it in some small or large way. Consider becoming a volunteer or taking a seat on the Board of Directors. If you have particular expertise in Continue reading →

November 13, 2010

Trends

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impact

The Economist had a great piece recently about the fragility of the public’s trust in non-profits at home and internationally. The problem? They want to believe in non-profits and their work, but they really don’t understand what it is non-profits do or how they do it. What they do know is that many non-profits have been called out recently due to missteps like inappropriate use of donated funds. So what’s potential contributor to do?

Enter terms like “transparency” and “impact” — the (not necessarily new, but definitely being revived) buzzwords of a philanthropy and non-profit sector completely plugged into a 24-hour social media machine. These days, potential donors are being warned to Continue reading →

Pepsi Refresh EverythingAll right, philanthropy fans — what’s Pepsi been doing these days? Taking Crowdsourcing Philanthropy mainstream, that’s what.

Do the folks who are submitting ideas and voting for their favorites over on RefreshEverything.comknow that they’re taking part in one of the most forward-thinking forms of philanthropy currently being practiced or that they’re taking part in an experiment that many nationally branded companies would find extremely risky? Who knows. What we do know is that America loves voting for things, and they’re jumping in with both feet on this one.

Premise

The basics of the program are the following: Pepsi is accepting up to 1,000 wannabe grant projects each month throughout 2010 via online submission. Submissions are accepted between the 1st and the 15th of each month. Voting on each month’s submissions takes place in the subsequent month. For example, you can vote on April submissions in May. Continue reading →

blueprint2010Lucy Bernholz (who writes the rockin’ Philanthropy 2173 blog) and her company, Blueprint Research and Design, have recently released their Blueprint 2010 for Philanthropy and Social Investing.

Think of this as a 44-page road map anticipating those events, issues, and trends that are most likely to impact what happens to your social investment this year. A few of the topics included:

  • Which innovations should I understand and which are just buzzwords?
  • What are the key policy issues that might influence philanthropy?
  • What wildcard events will matter and what should I look out for?

You can buy other books about philanthropy trends, but by the time you get them, they’re dusty inside and out. Lucy’s pretty smart. I’m running to get my copy.

social mediaCreating an online presence isn’t a fast process; it takes time, work, and attention. Whether you’re a social entrepreneur, a nonprofit, or a grant-making foundation, getting online is a critical and money-saving step to significantly increase your promotional efforts and public relations profile.

But How Do I Get Good at Social Marketing?
Social marketing is best done by employing copious amounts of extroversion and diligence! That said, here are a few tips for those starting out (and a few reminders for those who are already in the mix).

  • Dedicate Resources: Even though there are enough anecdotal statistics these days showing that an online presence is worth spending time and money to create, many nonprofits and foundations are unwilling to dedicate resources to continued online efforts.

    Guess what. You have to. It’s not a question of whether you need to get online, it’s a question of how soon you’ll be left behind. Some of the greatest available wealth is sitting in the pockets of a very young generation — and this generation is looking online to figure out where to distribute that wealth. Any resources you give to creating an online presence for your organization or product will be paid back in spades — financially and/or via public relations — in the next 10 years.

    Find someone on staff who’s energetic, outgoing, able to maintain and monitor relationships, and knows his or her way around a computer. Carve out 50% of this person’s time and dedicate it to building and maintaining an online presence.

  • Figure Out An Online Message: Spend a week figuring out what your main online message will be. Your mission statement is fine, but you can’t fit it into 140 characters on twitter. Continue reading →

There are three truths when it comes to the grantmaking process:

Fact #1: Funders get bogged down in due diligence, report review, and grant follow-up when they could be developing more effective and efficient funding strategies.

Fact #2: Nonprofits spend too much time and money meeting specific funder requirements for application and reporting.

Fact #3: Due diligence, grant applications, and reporting have to happen.

Can we make all of this waste less time?

Well, the answer is…maybe. There have been a few efforts to streamline grant processes regionally, and even a large effort nationally. The jury is still out as to whether or not these efforts are the silver bullet.

Local Efforts
Many local grantmaking associations, like Philanthropy New York (formerly the New York Regional Association of Grantmakers), have been streamlining their process for years. This means that the funders aligned with Philanthropy New York agree to accept a standard grant application from nonprofit agencies and a standard reporting format from nonprofit agencies, ensuring that agencies with programs funded by association members don’t have to write different reports for each funder — they only have to write one.

While this is happening in several regional areas, there are still many funders in those regions who decline to jump on board.

projectstreamlineNational Efforts
Managed by Grants Managers Network, Project Streamline is a national initiative developed by the following partner agencies:

• Grants Managers Network (GMN)
• Association of Fundraising Professionals (AFP)
• Association of Small Foundations (ASF)
• Council on Foundations (CoF)
• Forum of Regional Associations of Grantmakers (Forum)
• Foundation Center
• Grantmakers for Effective Organizations (GEO)
• National Council of Nonprofits (NCN)

Currently in Phase II of a three-phase campaign, Project Streamline focuses on four core principles: Take a fresh look at reporting and application requirements, Right-size grant expectations, Relieve the burden on grantees, and Make communication and grantmaking process clear and straightforward.

To date, the initiative has picked up some heavy-hitting sponsors, including the Gates, Hewlett, Ford, Robert Wood Johnson, and Packard Foundations.

Analysis
While regional efforts have had lukewarm results, I’m very interested to see how these theories work in practice nationally. This isn’t a new problem, and it’s been exacerbated over the years by resistance to change, a lack of trust between funder and grant recipient, and even a lack of trust within the funding community.

Institutional funders spend time and money developing targeted grantmaking strategies, and there’s a concern that standardizing processes might lessen the control currently held by foundations over what outcomes are being measured, reported, and publicized by individual agencies. If there is any Continue reading →

Blogger’s Note: This is the first in what will be a series of posts looking at what’s been called Longtail Philanthropy or Network Philanthropy — aggregating smaller efforts to produce larger impact.

meetupBeen to a “meetup” lately? Even if you haven’t, you’ve likely at least heard about Meetup.com — a social networking website that helps bring together people who have similar interests and happen to live near one another. The site is useful if you want to find a hiking group, a book club, or a wine-tasting event; but we’re also seeing more and more groups coming together not just for social networking, but for social good.

The Whole Can Be Greater...

The Whole Can Be Greater...

Head to Meetup.com and search for Philanthropy: there are 76 already-formed meetup groups in 60 cities and 3 countries. These run the gamut from groups who get together to volunteer for charity, groups who pool their cash to give larger amounts to charity (these are commonly called “giving circles,” and we’ll talk about them at a later date), groups that like to talk about social entrepreneurship and venture philanthropy, groups of non-profit workers who get together to discuss fund raising, etc.

So, if you’re new to philanthropy — or are trying to figure out how your $10 per month or 3 hours per week can make a difference in your community, city, state, or country — consider finding a meetup in your area with like-minded folks. You might be surprised what happens when the whole is more than the sum of its parts.

Photo Credit: aigarius

The Philanthropy411 blog posted yesterday twitter links to 90 Foundations that Tweet, along with 16 philanthropy professionals who have their own twitter accounts.

This is a great resource for any philanthropist or non-profit entity — whether solo or part of a larger organization — as reading tweets gives rare insight into real-time discussions and foci in those organizations. It also offers an unparalleled opportunity to learn from and collaborate with one another — something that happens too little in the philanthropy arena but is beginning to be recognized as a benefit to both foundation and grantee.

Here’s why tweeting is a mode of community communication you’re going to have to get on board with, at least for a while:

1. Tweeting is informal. One of the greatest breakdowns between a non-profit entity and a philanthropic body is cultural inequality. With twitter, everyone (more or less) is on the same class-level.

2. Tweeting is broadcasting. You never know who could be reading, so tweets need to be comprehensible to anyone and everyone. This means there’s very little room for specific audience manipulation.

3. Tweeting is non-committal. Twitter is a forum for discussion. People tend to finalize deals over more traditional communication streams like email, snail mail, phone, and face-to-face meetings. Whereas twitter is considered a place where you can show interest without committing yourself to a deal. This is the place to learn more, ask questions, and then take it to the next level (usually email) if necessary.

4. (At least for now) Tweeting circumvents bureaucratic barriers like calendar scheduling and gatekeepers. If you have a good idea, tweet it @ the person you think would find it interesting; no need to get time on their calendar. I strongly believe that, as the service becomes more widely used, VIPs will continue to institute stronger barricades. But, while it’s new and fun, you can often reach them directly.

Twitter remains a means to an end, but it can be a mode of conversation providing exposure to new ideas and connections without the weight of commitment.

I received comments via twitter suggesting numerous other ways philanthropy is using/funding crowdsourcing. While the jury is still out on whether crowdsourcing will provide true benefit as a new funding model, the experimentation going on is garnering lots of discussion. I’ve distilled a few of the arguments here:

Potential Pros: Crowdsourcing exposes more “real people” to philanthropy — and the organizations working to provide needed goods and services — and the concept of weighing which organizations are doing the best and most beneficial work. Also, the majority voting together will discover the greatest need (a bell curve theory).

Potential Cons: A danger that crowdsourcing will lead to popularity contests, giving an edge to organizations who are savvy with marketing or who have full coffers for influence. Also, a fear that the masses will agree on philanthropic risktaking, which some philanthropists deem necessary for the development of truly innovative ideas.

More Examples

And here are a few more examples of philanthropic crowdsourcing — let me know your thoughts:

John S. and James L. Knight Foundation
Through the Knight News Challenge, the Knight Foundation is crowdsourcing ideas for funding. In this initiative, the foundation planned to “invest at least $25 million over five years in the search for bold community news and social media experiments.”

Target projects are “innovations that use new or available technology to distribute content in local communities,” with the following parameters:
1. Use digital, open-source technology.
2. Distribute news in the public interest.
3. Test your project in a local community.

To date, three years of funding has been awarded. And while the initiative itself is an example of crowdsourcing funding ideas, several of the funded projects involve crowdsourcing.

One example is Ushahidi, an organization that seeks to expand an initiative to crowdsource crisis information. The strategy is to develop a free web map and timeline that journalists and citizens can use to contribute multiple reports of large news events. By allowing anyone to contribute news stories, the service would broaden information distribution even in places too dangerous for or inaccessible to mainstream media. Imagine the difference in news coverage of the recent demonstrations and uprisings worldwide had this been in place.

The British Government
Just this week, Britain suggested it was time to begin dabbling in crowdsourced giving, reports The Independent.

The Chronicle of Philanthropy gave the details stating, “Under the proposal, Britain’s Department for International Development would set aside about $65-million that the public would control by voting online between 10 aid projects in Africa and elsewhere.”

Everyone’s Doing It?

Small to Large; Corporate and Foundation; Open and Controlled. A breadth of organizations including the Case Foundation, NetSqaured, and American Express have tested their theories of crowdsourcing in philanthropy, including:

  • Controlled experiments, wherein foundations maintain the role of determining grantees, but the public is sourced for suggestions and input, and
  • Open experiments, which more resemble “contests”

You can read more about these foundations and their crowdsourcing programs at The Chronicle of Philanthropy.

By now, you’ve likely heard of Gmail and Google AdSense creator Paul Buchheit’s blog post titled Collaborative Charity. In it, he declares,

“I’m going to donate a bunch of money, but I want random people on the Internet to decide where it goes.”

This is crowdsourced philanthropy. You remember crowdsourcing from Who Wants to be a Millionaire. That lifeline — “ask the audience” — was the perfect example: asking a large group of people to offer their ideas on a solution to a problem. Wikipedia is another great example.

But why would we try this with philanthropy?

Well, it’s a simple case of market majority. While a lone philanthropist doesn’t necessarily have the breadth of knowledge to determine the best grant recipient, the market majority — the crowd — will most likely be able to shake out the highest priority need.

And one of crowdsourcing’s biggest benefits in the philanthropic field may be transparency. Making decisions based significantly on the suggestion of public majority means less chance of ethics or bias being called into question. And making your values and conditions clear to your “crowd” simply demands greater public transparency in order to ensure an informed decision.

There are still many unanswered questions about crowdsourced philanthropy: Will it be successful? Will it become a trend or a viable model for giving? Who exactly is the audience? Perhaps Paul Buchheit’s experiment will help us begin to understand the answers to those questions, but many more experiments will be needed to label this a success.

And one thing is certain — philanthropy will need to master technology in order to get the most benefit out of this, and most other, field trends.

Good Examples of How Philanthropy Can Use Crowdsourcing

Philanthropy Enabling Crowdsourced Solution: This is an old example, but a good one. In it, the Rockefeller Foundation funded an opportunity for a non-profit in India to generate solutions to a problem via crowdsourcing.

Philanthropy Using Crowdsourcing for Strategic Planning: The Peery Foundation is currently using a twitter hashtag notation stream to publicly discuss some significant strategic planning questions. The hashtag — #PFWhiteboard — suggests that foundation representatives, and anyone else who has a thought or good suggestion toward their progress, are “whiteboarding” solutions via twitter stream. In my experience, hashtag conversations have been a bit clunky to follow, and you don’t necessarily get a broad market spectrum of input; but the Peery Foundation is experimenting in public transparency, crowdsourcing ideas toward their strategic planning process, and taking full advantage of available technology in this process. I look forward to following the conversation and to getting great ideas from their brainstorming.

These are just a couple of examples of how philanthropy can use crowdsourcing in rather low-risk ways. And while they’re no doubt just our “first steps” toward experimenting with this idea, they offer springboards for more complex ideas in the future. You don’t have to put yourself out there like Mr. Buchheit, but you can use this age-old technique to create opportunities, define solutions, or narrow down choices.