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 →

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.

The Roadblock

I recently participated in a regional health care panel with a group of field experts. Our task, over seven meetings, was developing a strategy for health care improvement in our region. As you’d expect, we began by identifying some major health care problems; then, we isolated several broad goals. Soon, we were discussing solutions and moving ahead like wildfire.

Until we hit the roadblock.

“All we have to do is figure out how to fix it. Paying for it is their problem.”

“Whose problem?”

“The big boys’ and girls’ problem!”

Unfortunately, quotes like this are all too common when solutions are being developed. Somehow, it’s always someone else’s job to figure out how to make all of the pieces — program, finance, and policy — work together.

What could be considered instead is that sustainable solutions require everyone to speak all three different languages. Delineations are quickly becoming blurred between the nonprofit, for-profit, and policy arenas, and those fuzzy edges can be beneficial — assuming the ability to identify with each unique perspective.

The Equation for Success

With that thought in mind, let’s suggest there’s a simple equation for sustainable social improvements:

money + public influence + programmatic excellence = change

If true, then sustainable solutions can only be achieved if there is an end to compartmentalizing the way programs are developed. By understanding and incorporating economic and political factors into how solutions are created, richer programs can be developed that are wholly supported and championed by for-profit and public representatives.

With these three sectors working in tandem, obstacles are virtually eliminated.

What it Could Look Like

Back to my health care group from the first paragraph. Ideally, my colleague wouldn’t be expecting that our group determine solutions while suggesting that it’s the job of a hypothetical group of financiers and public officials to figure out how to pay for those solutions.

Ideally, that conversation would have progressed with our group identifying not only the programmatic solutions to our health care issues, but also the payment models and incentives that would ensure buy-in to the program from for-profit payers and physicians, and the cost-reducing and quality-enhancing care models that would entice public officials to endorse the program.

Truly understanding the costs and benefits to all sectors — even when it seems like we’re all speaking different languages — will help to lay the groundwork for successful social innovations.

Philanthropy’s Role — Collaboration

So how does Philanthropy fit into all of this? It might be able to act as mortar. Those in the field of Philanthropy are tied to all three sectors as either financial supporters or colleagues; as such, their role may be as a connector and instigator of collaboration — a translator.

This will all be facilitated if Philanthropy learns to speak the individual “language” of each sector; understanding not only the lexicon, but also the goals, challenges, and motivational drivers. Only then can the best and most strategic connections between the sectors be made.

These questions may lay some groundwork for how to think about each sector’s concerns:

  1. Understanding and leveraging current and potential economic considerations: Who are the payers, and how can we build in benefit to them? How can economic incentives be used effectively? Could there be a market strategy? Is there a way for this program to produce not only social benefits, but also revenue?
  2. Understanding and leveraging current and potential public relations and policy considerations: Does/Will this have the backing of local, state, and federal government? Will an advocacy-based approach provide for the sustainability of this program? Is this complimentary to current or potential legislative items? Are there potential collaborations we can build that would affect how we develop this program? How will this be perceived in the public eye; will it demand public attention?
  3. Understanding and leveraging programmatic considerations: Does the program produce consistent, measureable results? Does the program have enough financial support to not only make ends meet, but to scale up to capacity — whether that’s local, regional, or national? Does the program have a strong management and governance base? Does the program have enough support from the public and government sectors to thrive should legislation development be called for?

Sectors aren’t quite as distinct today as they used to be, and many social innovators have proven that the closer we all work together to solve global problems, the closer we get to sustainable solutions. While we all have different incentives and motivations, taking them all  into consideration dissolves roadblocks and allows even broader answers to develop.