Renovate Your Philanthropy

Help a Nonprofit Spruce Up Its Work!

Many funders are exploring ways they can have a greater impact on their nonprofit partners.  Donors who think beyond the check and who look for additional ways to engage with organizations find themselves enjoying a much more productive and satisfying relationship with those groups they support.  These donors are using their influence, networks and other resources to help nonprofits build capacity to fulfill their mission.

The July 2017 Chronicle of Philanthropy’s cover article “Renovation Nation” explored the makeover of three large, established charities.  The major turnaround undertaken by each organization was the result of considerable culture shifts, new perspectives, and risky moves. Author Heather Joslyn included in each profile “makeover tips” based on the lessons learned by these organization’s leaders.  They included helpful and provocative suggestions such as “rethinking everything” about how you operate, “spiffing up” old programs, widening the net to find new supporters, and trimming the elevator speech down to 140 characters!   A few of the tips stood out to me, especially ones that focused on messaging, storytelling, evaluation and leadership.   

Does your philanthropy need a little renovation?  Do your nonprofit partners need a bit of sprucing up?

Consider all of the possible ways you could help the nonprofit organizations you support.  Beyond financial resources, you bring a wealth of other connections and knowledge that can be effectively leveraged to support their work.  I think that these “makeover tips” provide donors an opportunity to explore additional ways to make a difference. 

One of the “makeover tips” that caught my attention focused on “telling the story.”  It emphasized not just the organization’s story, but also the stories of those helped by the organization.  Being able tell their story in a clear and compelling way is essential.  Storytelling and messaging support effective fundraising, community engagement, staff retention, strategic planning and more.  Consider what you could do to help your nonprofit partners tell their story:

  • Connect the nonprofit to media or public relations professionals; expand their network of people who can spread the word about their work.
  • Provide funding for a refresh of the nonprofit’s collateral material and/or website, or fund media training for staff and board.
  • Host gatherings (at your home or place of business) at which program participants and staff can tell and hear each other’s stories.

Other tips focused on active listening, and they included such recommendations as “know your audience,” listening to program participants, and “seeking feedback.”  Smart organizations are always listening, fostering a culture of learning where everything is tracked, measured and assessed.  Everyone they reach is engaged and involved.  Organizations that understand their audience and that seek sustained feedback on the effectiveness of their programs can tailor their work to the needs of the community as well as pivot when situations inevitably change.  There are many ways you could help a nonprofit to be an active listener:

  • Encourage nonprofits when they allocate budget resources for surveys, evaluation initiatives, and audience feedback. They are core operational components, not fancy extras.
  • Provide funding for an outside evaluation specialist to review and assess their current programs.
  • Connect them with business professionals who can help the nonprofit to better understand how they can gather and use data more effectively.

The last notable tip was “speak out on issues,” encouraging nonprofits to serve thought leaders. High-impact organizations focus as much on leading movements as they do on delivering effective programs.  They address big-picture issues that affect their operating environment and the lives of their clients/patrons/participants.  When you support a nonprofit organization, you can be a part of enabling them to “speak out” and serve as a leader for their cause.

  • If you provide support to multiple organizations in the same community, consider hosting a gathering at which you can all discuss common interests, challenges and opportunities.
  • Provide funding for a solid professional development budget at the organization; enable staff at all levels to be active in their cause by attending conferences and seminars.  Support a nonprofit’s membership in professional organizations that connect them to peers and allies.
  • Take the time to educate yourself.  If you are interested in supporting organizations that focus on a particular topic, issue, cause or community, take the time to do your homework; learn about trends and the latest thinking, or understand the research that’s guiding current initiatives.

Smart, effective philanthropy is hard.  It’s more than writing a check to your favorite charities each December.   It’s an opportunity for you as a donor to effect real change in a community.  It’s an opportunity for you to leverage and deploy all your resources – financial, connections, expertise, and enthusiasm – in ways that enable your nonprofit partners to be successful and sustainable.

Tending to these “makeover” tasks is equally as important as tending to the direct services an organization provides each day.  When working with your nonprofit partners, be open to talking about issues such as listening, leadership or storytelling.  Encourage them to use tactics such as surveys, community conversations, media training or program evaluations.  Respond positively when nonprofits ask for funding to support these and similar efforts.

In helping your nonprofit partners to “spruce up” their programs and operations, you are strengthening the investment you make as a donor. And in turn, it’s helping you to make an even deeper impact on the community.

Marshall H. Ginn, CFRE

Are We Talking About the Weather?

Starting Real Conversations Between Funders and Grantees

Marshall H. Ginn, CFRE

July 2017

Ever been in an awkward situation?  Ever run into to a potential romantic interest at a coffee shop?  Ever been seated right across the table from a senior executive at a corporate dinner at a conference?  You probably weren’t entirely sure how to handle the conversation, were you?  What, if anything, did you talk about?  The food or the coffee?  The latest sports news? The weather?

The next day, was your mind filled with all those things that you wish you had said?  The clever conversation starters, the insightful observations, the handy language that can draw them in?  Are you worried that it was an opportunity lost, when all you could say was, “Whew, sure has been hot this week, hasn’t it!”

The conversation between grantmakers and their nonprofit partners can be just as awkward.

Increasingly, funders, as well as the nonprofits they support, are being told that they need to transform that conversation.   Philanthropy is about relationship building; it’s not merely a paper exchange.  And good relationships require personal interaction.  And that means we need to talk to each other!  But if we’re not paying attention and neglect these important conversations, we run the risk of missing opportunities to strengthen those relationships, drive impact and make a difference in our communities.

Fortunately, along with that advice to transform those conversations, leaders in the field are offering tools and tactics that can help get those conversations going in the right direction.  They are providing us ways to avoid talking about the weather and address real issues and opportunities.  

The “Grantmaking Pyramid” was described by Michael Etzel and Hilary Pennington in their June 27, 2017 Stanford Social Innovation Review article “Time to Reboot Grantmaking.”  It provides a framework through which funders and grantees can think about organizational growth in new ways.  By focusing first on “foundational capabilities” and then “organizational resilience,” funders and their nonprofit partners can more effectively talk about essential elements that must be addressed to increase impact.  It creates a space for mutual learning as organizations openly discuss what it takes to achieve their mission.

The Performance Imperative Organizational Self Assessment (PIOSA) is another tool that’s receiving a lot of attention.  Developed by the Leap of Reason Ambassadors Community, the PIOSA provides an in-depth and thought-provoking structure for organizational discernment. It enables leaders to explore how their organization can achieve high performance and make a meaningful difference in the causes and communities they serve. 

In a report from last fall prepared by Leap of Reason “Funding Performance – How Donors Can Do More Good,” we see what nonprofits committed to this practice can achieve, especially when they partner with creative funders. The PIOSA establishes a way through which nonprofits, as well as grantmakers, can exchange ideas, openly discuss the essentials of performance, and foster continuous learning.

Ask for it

If you are a nonprofit and you long to have such frank, engaging conversations with your donors and funders, ask for it.  Don’t sit back and wait for them to make the first move.  Tell them you are eager to strengthen your relationship, and you are interested in exploring how the two of you can truly move the needle and impact your cause or issue.  And keep in mind, you’re just asking for a conversation.

Funders, you understand what it’s like when nonprofits treat you like a partner, and not just an ATM.  Make sure you’re not accidently acting like an ATM with an approach that’s less personal and more transactional.  Step out of your comfort zone - perhaps out of your old procedures - and go talk to your grantees.  You’ll likely find you are equally eager to strengthen the relationship.  And keep in mind, you’re just committing to a conversation.

Don’t be shy, be strategic

To make those conversations fruitful, however, you need to be prepared.  Whether you’re the nonprofit or the funder, you should go into such encounters with a strategy, or at least an outline of how you wish to approach the discussion.    You can use the Grantmaking Pyramid or the PIOSA as a way to start, framing the conversation around common language.  You could also lay out a few big-picture ideas on how supporting each other’s objectives can lead to a better, more productive partnership.

  • Avoid complexity, keep it simple -- Go into such conversation with a clear sense of what the other can learn about you, your work or your process.  If you’re a funder, help the nonprofit to clearly understand what you essentially need to know in order to make the best giving decision possible.  In a conversation like this, don’t get mired down in complex minutia that can distract everyone from what really needs to be said.  What’s at the core of your philanthropic objectives?  What drives your decisions?

For nonprofits, are there fundamental components of your work that you want your funding partners to understand?  Have there been some important shifts in the field or the issue, and you need to share perspective on how that might necessitate a new approach?  You might feel driven to discuss the changing costs of occupancy, office supplies or credit card fees, but don’t.  Keep this conversation simple and focused on the big picture. 

  • Explore issues of timing and time frame -- The issues and causes we address in philanthropy are typically not small.  They often address topics that seem almost impossible to solve, confronting profound social wrongs and problems.   Addressing these issues is not going to happen overnight, some are going to take years.   In many cases, they require a broad, system-wide approach that targets the very conditions out of which the problems arose.  It’s no easy task.

Whether you’re the funder or the funded, take the time to explore this reality.  What you’re doing takes time, and what you’re hoping to achieve is going to take a lot of work over the long haul.  Funders have big visions, and so do nonprofits.  But those visions should be grounded in the practical reality of what has to be done and in what order. 

Discuss how timing plays into this.  If a nonprofit is taking on system-wide change, perhaps multi-year funding is a more effective response, as compared to one-year grants that must be constantly renewed.  Funders and nonprofits both have their own operating rhythms and cycles.  So even if they have the same fiscal year, their yearly calendars can be quite different, and understanding this can help to avoid confusion or frustration when waiting for a giving decision or seeing service delivery outcomes.

  • Understand and own what it takes - There is still much for funders to understand regarding what it takes to effectively operate and manage a nonprofit organization.  And nonprofits have been pressured by the public to avoid talking about the basic costs of getting the job done day after day.  As stated above, nonprofits are addressing complex and difficult issues.  And they are being forced to transform the world on a shoestring budget or by leading communities to think that their work springs out of thin air, costing nothing.

Funders and grantees need to have honest conversations about what it really takes to achieve impact today.  They need to own and be upfront that entire organizations – not just discrete programs – need sustained investment.  We need to explore how to articulate outcomes and measurements that are indicative of a successful nonprofit, not just the metrics of successful projects.  These conversations are a chance to learn and strategize in ways that will strengthen the funder/grantee relationship.  


Don’t make life harder, help each other out

Earlier this month, global philanthropy advisor Kris Putnam-Walkerly shared some valuable perspective in a Forbes magazine piece, “How Grantmakers Unwittingly Make Life Harder for Nonprofits.” She talks about the unintended consequences when funders don’t pay attention to how their practices and approaches might actually hinder - rather than facilitate - effective philanthropy.  (In fact her article inspired me to write this piece!) Solving social problems is challenging enough without funders and nonprofits getting in each other’s way and making it that much more difficult.

Most of the problems and issues between grantmakers and grantees can be addressed through conversation and relationship building.  Each has so much to learn from the other.  And each has valuable lessons that can be shared as well.  There’s no reason that such conversations should be awkward or painful.   Make a move and reach out to your partners.  Start from a shared goal of achieving greater impact and talk about your needs as well as your aspirations.  Talk about how by working even more closely you can make big changes.

Don’t just talk about the weather.


It’s been a year, have you moved your organization “Beyond Fundraising?”

It’s been nearly a year since the Evelyn & Walter Haas Jr. Fund released “Beyond Fundraising: What Does It Mean to Build a Culture of Philanthropy?” by Cynthia Gibson.  Designed specifically as one of the follow-up responses to the “Underdeveloped” research report from 2013, this excellent and comprehensive report explores in useful detail how nonprofits have been attempting to address the important issues raised in the 2013 report. 

Gibson reviews the forces that are driving the increasingly widespread shift to a culture of philanthropy (such as changes in the nonprofit ecosystem and the increased competition for resources,) and she articulates four distinct core components that comprise such a culture.  They are 1) Shared Responsibility for Development, 2) Integration and Alignment with Mission, 3) A Focus on Fundraising as Engagement, and 4) Strong Donor Relationships.  “Beyond Fundraising” is an outstanding report, and I highly recommend that if you haven’t already done so, check it out, download it, and immediately share it with as many colleagues as you can.

Gibson also provides a series of highly useful tools and guidelines for how any organization can jumpstart an effort to establish a culture of philanthropy. She poses some highly thought-provoking questions that can be used to create a framework for discussing these critical issues.  Of those, two of my favorite are “How can we get the board to become champions of a culture of philanthropy,” and “Does everyone in the organization understand philanthropy’s role in advancing the organization’s mission and values and have opportunities to participate in development activities?”

The board’s role in creating the success conditions for a solid, sustainable fund development program is essential.  They must both drive and model the values, attitude and commitment inherent in a culture of philanthropy.  They play a critical role in serving as ambassadors for the organization in the community.  In fact, I have often used the concept of “ambassador” as an easy entry-point for board members to discuss and ultimately embrace solid development practices.  It is also essential that board members are provided with opportunities to learn about why and how philanthropy works.  I feel that we do our board members a disservice when we focus fundraising training solely on the solicitation, rather than on the broader concept of resource development and donor engagement.   They must be shown exactly how philanthropy makes the organization’s work possible in ways that both enable them to effectively communicate this to the community, as well as to make sound, information-based decisions that affect the resource development program itself.

See Supporting the Fundraising Program – a tool for enabling board members – and staff – to fulfill these special roles.

“Beyond Fundraising” concludes with a discussion of the need for consistent and widely held indicators that can enable organizations to assess their progress toward establishing a true culture of philanthropy.  Gibson acknowledged that many people she interviewed in preparing this report agreed that developing such indicators should be a top priority for the future.  She helped to kick such an effort off by sharing suggestions of a wide range of potential powerful indicators.  It is an excellent list and merits thoughtful review and consideration.  I will highlight a few that are my favorites:

Selected Indicators from Cynthia Gibson’s “Beyond Fundraising:"

  • Executive Director/CEO – The executive director’s expectation of development staff isn’t solely to raise more money, but to help build a better understanding of the role philanthropy plays in the organization.
  • Staff – All staff – from the top to the bottom and regardless of position – see themselves as ambassadors for the organization and its philanthropic goals; they value the role of philanthropy, talk about its impact and are involved in fund development.
  • Organization – There are many opportunities for staff, board, donors and others to learn and talk about philanthropy and its impact on the organization’s mission.
  • Development Staff – The development director reports directly to the CEO, is a peer on the executive team, and attends and presents at board meetings.
  • Board – The board is committed to and involved in fund development; they are ambassadors, not bystanders.
  • Donors – The number of new, retained and upgraded donors improves each year.
  • Internal Systems – The organization invests money in strengthening its development/fundraising infrastructure, including professional development, training and technology.

Are any of these in place at your organization?  If so, what factors have led to their successful adoption?  If not, what barriers are impeding progress?  These issues should be discussed at the staff and board level on a routine basis.  They are essential to an organization’s long-term viability.

If you are a funder, are you looking for these and other similar indicators when you assess a potential grantee?   Are you being sufficiently engaged by the nonprofits you support?  Have you communicated to these organizations your needs and expectations in ways that facilitate a true, thriving philanthropic partnership?

The communities and constituents served by nonprofits organizations are counting on the services, programs, advocacy and initiatives they undertake every day.  Organizations – large and small – owe to them to make every effort to ensure that their work is sustained and supported.  Only then can nonprofits feel the most confident that they are doing what they can to make a lasting impact.

It is never too late to start building a culture of philanthropy.

What Will Our 2017 Top 10 List Look Like?

Over the past few days my In Box has been filled with a variety of “2016 Top 10” lists from the leading publications addressing the nonprofit sector.  I took the time to review the lists from The Chronicle of Philanthropy, Nonprofit Quarterly and the Stanford Social Innovation Review (SSIR.)

And as I considered these lists, and the issues and topics they address, I am already thinking about the future.  A year from now, when we are looking back on 2017, what will our “Top 10” list look like?  What will have been the sector’s most notable accomplishments?  What issues will have occupied the minds of business leaders, donors, foundations, fundraisers and chief executives?  Will there have been missed opportunities, or will we surprise ourselves as a sector?

The fact is that these “Top 10” lists for 2016 are already placing a daunting agenda in front of the sector.  Even without the challenges and changes anticipated to affect nonprofits and philanthropy because of the presidential election, there are numerous big issues that the sector needs to address right away.  These must be confronted head-on if we are to transform the sector in meaningful ways.  Three in particular come to mind:

Change the Conversation

Nonprofit organizations must adjust their fundraising and donor engagement tactics immediately.  Donors are tired of jargon, and they are increasingly thirsty for concrete examples of what their investments are making possible.  Both the Chronicle and SSIR’s lists prominently featured articles that focused on jargon, terminology and clarity of message.  John Hennessy, Stanford University’s outgoing president and driver of its $12 Billion campaign, says, “In the end, [donors] want to know what their gift is going to do.”  In fact, the more he shifted away from talking about the actual dollar goals, the more successful the campaign became.  He said, “Donors are smart, and they talk.”  It’s an excellent point, one that bears strong consideration.  How are we enabling donors to tell our story to their peers?

Organizations must transform the conversation they routinely have with donors, investors, government leaders and the wider public.  It places greater emphasis on the importance of good storytelling. Such an approach also means that nonprofits should adopt an even greater commitment to transparency and openness.  This new conversation must be focused on results, impact and social change, rather than budgets and data. It must connect the nonprofit, the cause and the donor in ways that are relevant, relatable and free of jargon and terms that do more to put off donors rather than draw them in.

Shift the Model

Social impact investing is here to stay. Nonprofit organizations must examine and shift their revenue structure and business models to make way for this type of capital. Paul Klein, CEO of Impakt (a B Corp that helps nonprofits and companies benefit from social change) in an SSIR article asserts that there is still work to be done before we see real results from these efforts.  Of the lessons he learned while creating a job-placement program for formerly homeless youth, was a realization that social organizations often lack the capacity to engage in this type of work.  They are limited in what they can accomplish.  Nonprofit leaders must be ready to operate in this new funding landscape.

Laura Callahan, founder of Upstart Co-lab, which targets impact investing on the “non-traditional audience” of artists and creative professionals was very clear in saying that nonprofits must be ready to embrace innovative approaches.  In the article profiling her work in the Chronicle, “A sector that cannot accept investment capital is going to really get left behind,” she says.  Grant making and investing are become increasingly blended and less distinct.   Nonprofits that cannot shift their thinking to incorporate an openness to new forms of capital will miss opportunities that could transform their work.

Challenge the Assumptions

Nonprofits and funders make a lot of assumptions, many of which are holding the sector back in significant ways.  Donors assume that high so-called overhead automatically means that an organization is being inefficient, and so much of their funding reflects that viewpoint, to the great frustration of nonprofit leaders.  The development profession still subconsciously assumes that most households are headed up by men who are the top earners, therefore everything from materials, phone scripts and databases continue to ignore the role of women as equal players in philanthropy.  Board members assume that elaborate fundraising galas are the only and best way to raise big dollars, and so they resist the seemingly risky idea of scrapping a venerable event that’s been in place for years.  Leaders across the sector assume that nonprofit staff will be satisfied with low wages for the good of the cause, and yet these same leaders look puzzled when employees burn out and abandon the sector.

These are not hypothetical situations created for an ethics quiz.  These are all actual issues that were explore in various articles in the Chronicle, SSIR and the Nonprofit Quarterly throughout 2016.  These assumptions are stumbling blocks to the nonprofit sector’s ability to truly transform both themselves as well as society at large.  What is needed now is bold leadership from funders, businesses, board members and staff.  The sector cannot be afraid of risky and challenging conversations.  It must confront these and many other conventions that shape decisions small and large.

Looking Forward to 2017’s Tough Tasks

The Chronicle of Philanthropy’s 2016 Year in Review highlighted the stories of several nonprofit leaders who were not afraid to take on some very tough tasks.  They tackled big challenges, and in doing so transformed their organizations, their causes and their communities.  When we look back at 2017, what will be the big challenges that we tackled as a sector?  So many in the sector are already mentally gearing up to confront potential changes as a new administration takes office.  We know that some big things are likely to happen in and to the nonprofit sector in 2017.  What accomplishments or achievements will make us most proud a year from now? There are so many that can be considered, but from my perspective, here are a few that I would like to see in a 2017 “Top 10” list:

Nonprofits made strides in changing the conversations with donors, partners and the public, with such efforts increasing the understanding of and appreciation for what this sector accomplishes on behalf society.  

Organizations used these revamped conversations to pave the way for new investments in their work.

Nonprofits built a true capacity to manage the funding of the future, engaging boards, staff, funders, businesses and community leaders in bold collaborative efforts that are exploring new approaches to many of society’s critical problems.

Nonprofit leaders took risks, and addressed assumptions and biases in ways that created wide ranging opportunities, facilitated creativity, included diverse participants, and expanded possibilities. 

Organizations made thoughtful, smart moves to transform funding, hiring, engagement, and planning strategies and practices that benefited the entire sector.

The list could go on, but this should get us started.  What would be on your list?

Here's to a successful and productive 2017 for the nonprofit sector!  Happy New Year.


The links for the various Top 10 and Best of 2016 lists:







Fundraising Lessons from Philanthropy Lessons

I’ve always said that nonprofits could learn a lot about good fundraising just by reading some of the advice and guidance that’s being given to funders.  Whether it’s Charity Navigator’s “Tips for Donors” or “Giving Guidance and Tips” from the Wise Giving Alliance, there are plenty of excellent roadmaps showing donors how to give, how to choose a nonprofit partner, and how to spot organizations that are doing well, as well as those who are not making much of an impact.

Each of these tips and guiding principles can be easily turned around and shaped into sound advice for nonprofit leaders.  For example, when the Wise Giving Alliance tells donors to “resist being pressured,” nonprofits should take note of this advice and make sure that appeals – whether by phone or in person – respect the prospect’s right (and need) to make a thoughtful decision.  Or when Charity Navigator advises donors to “start a dialogue” regarding programmatic results, nonprofits should be prepared, and have on hand compelling (and understandable) information describing the impact their initiatives are having on the issue or cause they address.

I mentioned Exponent Philanthropy in my previous post.  They are currently in the midst of their annual conference in Chicago, and I’ve been getting daily highlights of the conference’s proceedings.  In today’s email, I was pointed toward their Philanthropy Lessons website.  Supported by the Fund for Shared Insight and released in partnership with The Chronicle, Philanthropy Lessons features real stories of giving in action from funders and grantees from all across the country.  The lessons are shared both as short videos as well as blog posts.

The videos contain fantastic advice that, while intended for donors and funders, provide extremely useful insight for nonprofit leaders.  A few things stood out as I listened:

  • Funders are being told to “get out of the office” and see their grantees in person. (Fundraisers are being told the same thing all the time!)  Reach out to your donors and invite them over to come and see you!
  • Many donors interviewed in the video spoke passionately about the “experiential” nature of interactions they have with nonprofits and the community being served.  Funders are looking for that authentic experience, not the perfect performance.  (So it’s alright if the kids are making lots of noise or the clinic is bit chaotic.  That’s your reality.)
  • While funders might enjoy site visits, some were clear that overly structured site visits, where the executive director pulls out a very formal agenda, are a bit of a turn-off.  So that well-rehearsed “dog and pony show” might not be the best approach.
  • Empathy goes a long way in any relationship, and relationship building is a critical component of both sides of the philanthropic equation.  Funders need to remind themselves that it’s hard for a nonprofit when funding has to be scaled back or eliminated for various reasons.  But nonprofits must realize that these are hard decisions for the funders too.  They don’t want turn away from a favorite nonprofit partner, but sometimes they have to make tough decisions, just like nonprofits do.

These are just a few of the insights I gained in reading through the posts and watching the videos.   I am sure more will come as I check out the remaining videos. 

Take a look at these and other advice being given to donors.  Think about how your nonprofit can help its current and potential donors to have the best possible experience.  Talk openly about the type of relationship you want to build with each other. Demonstrate that you are ready to (and are eager to) engage with them as an active partner.   As one of the funders said, “When they let us in, then the work begins.”  Share your visions for how each of you can have an impact on your community, issue or cause.   



Investing in Nonprofit Leaders - Modeling Behavior for Funders

Exponent Philanthropy (the national organization for foundations with few or no staff, philanthropic families and individual donors) recently released an updated version of their informational piece on “Investing in Nonprofit Leaders.”  It lays out the case for why and how grantmakers should make an effort to provide nonprofit grantees with resources to foster and strengthen this critical component of nonprofit management.  It recommends ways to adjust grantmaking practices, and suggests specific funding and support opportunities that can help individual leaders as well as broadly foster leadership throughout an organization. 

From my perspective, one of the most critical elements of this primer’s guidance focuses on the interaction between grantees and their funders.  “Building trust,” “beginning the conversation,” and “talking about red flags” form a framework for honest discussions, which the author asserts can lead to a funder’s ability to clearly understand a nonprofit’s needs when it comes to leadership development.  On paper, it looks like sound guidance and an easy roadmap toward a solution, but we know that it is still a real challenge for nonprofits and funders to have such frank exchanges.  I don’t want to suggest that this is always the case, but too often it is the reality of the dynamic between grantmakers and grantees.

Perhaps one way to open the door to such conversations is for your nonprofit’s own board to “model” the behavior it might like to see from its funders when it comes to leadership development.  If even in small ways, I think there are steps any board can make which can demonstrate a commitment to leadership within their own nonprofit.  Here are some examples:

Supporting Individual Leaders – The Exponent primer suggest ways that funders can support individual leaders through such moves as sabbaticals or coaching, or by funding staff retreats and other team-building exercises.  Your board can make some moves of its own in this area.  When it comes to budget planning time, make sure you invest in your staff.  Even a modest professional development budget, or a few dollars set aside for the Executive Director to use for personal coaching or support can go a long way toward demonstrating your commitment to strong leadership.

Networking and Training in the Community – Funders often can have a broad, sweeping impact when they fund or create training and networking opportunities that are available to the entire community.  Peer networking and learning is critical to strengthening the sector and skills building.  On your own board, you should encourage efforts by staff to engage in the wider community.  You should recognize, not discourage, staff who are active in networks, organizations and forums that can promote your nonprofit and advance your cause.

Cultivating the Next Generation of Leaders - We all know that building and strengthening the pipeline of future leaders is essential. Funders are being encouraged from all angles to address this head on.  But what can a board do right now?  Your board can make immediate moves to support that next generation, many of which cost little to no financial resources.  For example, consider establishing a position on your board for a young leader, which can provide an opportunity for someone to learn about board service.   (Make sure to provide that person with appropriate mentoring!)  You can encourage senior staff to provide skills building to junior staff through job shadowing or “lunch and learn” gatherings, anything that promotes the sharing of expertise and experience.

With these small moves, I believe a nonprofit can position itself well to start that frank, honest conversation with its funders.  Even if you’re struggling to fully realize some of the steps suggested above, you can clearly demonstrate a commitment to leadership development at your nonprofit. You will promote leadership development as a true organizational value.  You will model the behavior you hope to see from your funders. You will be doing your part even while engaging funders to do theirs.

Explore these ideas.  Take some initial steps.  Demonstrate your commitment.  Then turn to your funders and say, “We’ve started this, now we need you to join us.  We can all agree that strong leadership is essential to our fulfilling our mission.  We need your help to take it to the next level.”




Start a Conversation with Funders; Nonprofits are Getting Squeezed

Pay-What-It-Takes Philanthropy published this month in the Stanford Social Innovation Review is the latest phrase in a conversation that's slowly picking up momentum, but which also has a long long way to go.  

It is yet another article on how funders need to rethink their practices regarding how so-called "overhead" expenses are funded.  It adds to the growing pile of research, op/ed statements, and case studies that point to a basic truth - nonprofit organizations of different scales addressing a diversity of issues are necessarily going to have an equal level of variation in their economic models and funding structure.  And that funders continue to use a flat one-size-fits-all approach to addressing the issue of overhead or indirect costs flies directly in the face of that basic reality.

This isn't new stuff. The idea of the "Nonprofit Starvation Cycle" has been around since 2009. GuideStar, Charity Navigator and the BBB Wise Giving Alliance teamed up to write "The Overhead Myth" letter back in 2013.  They (and many others) all say the same thing: funders need to better understand what it truly costs to manage different types of nonprofit organizations, and nonprofits need to have a clearer understanding of how their real costs connect to desired impact.  And all of these articles and postings have agreed that while the nonprofits have a role in finding a solution to this situation, the funders are the ones who can and should take the first step.

Funders have to start addressing this with their nonprofit partners.  Nonprofits must work with their supporters in ways that lead to greater understanding and a more useful financing of their missions.

The trick is to make this happen in ways that are real.  The big foundations - Ford, Irvine and the like - are taking some first, important steps.  And research is continuing to be developed (led in part by the article's authors from The Bridgespan Group) to help craft better language, benchmarking data and tools through which conversations can happen using shared terminology and context.  But philanthropy can't wait.  The people and causes being served by nonprofits can't wait. There are steps to be taken now.  And if funders appear reluctant to take them, then it's up to nonprofits to be brave and make the first move.

Nonprofits: it's time to seek out one of your funders and start a dialog that raises such tough issues.  These conversations do not have to be confrontational or argumentative.  They should be framed as ways that you both can collaborate more closely to achieve the impact that everybody wants to achieve.  

Go into such meetings with a plan; know what message you want to relay to your targeted funder.  Have a clear objective for the engagement that relates to mission impact.  If it's useful, bring along a neutral party - your accountant, a consultant or academic.  Such a person can serve as an "honest broker" to help facilitate the conversation.   Have available resource documents that provide data and perspective from other funders.  Help increase your funder's understanding by adding to their body of knowledge.

I do not want to suggest that this is a simple or easy step. But I do think that it is one that every nonprofit can take with at least one of their funders.

The potential: better, more effective philanthropy.  And that will lead to stronger funding for your mission.