What Nonprofits Need from Philanthropy Right Now
Nonprofits urgently need help from philanthropy, and while money nears the top of the list, philanthropists and foundations also need to stop perseverating, be fearless advocates, engage nonprofits as equal partners, and give up control.
In my last article, I finished a series about the need for nonprofits to courageously prepare for the disruptive changes ahead. I summarized the takeaway lessons in a 20-page toolkit “Nonprofit Strategies for a Changing Environment” (download here). As a postscript to that series, I recently read an article with the foreboding title “Connecticut budget deficit could hurt nonprofits.” The article outlined the impact of potential cuts in state funding for nonprofits and illustrated the damage by profiling the work of FISH of Northwestern Connecticut. FISH is an anchor social service agency serving rural communities and provides, among other services: emergency food, a family homeless shelter, utility assistance, and services for homeless veterans. In the article, FISH’s Executive Director was blunt about the impact of the potential state budget cuts, “it will really put our shelter in jeopardy” (of course, you can help).
Unfortunately, Connecticut’s budget woes (more here) are shared by many other states across the nation. Estimates suggest that more than half of the states are facing budget shortfalls (see here & here). In this context, I want to offer my perspective on what help nonprofits need from philanthropy at this point time.
Many nonprofits are working hard planning for an uncertain future while at the same time, some foundations are still paying consultants to produce insipid reports and articles like a recently published work in the Stanford Social Innovation Review outlining a “new” model of philanthropy called the “Grantmaking Pyramid.” The model suggests that grantmakers should focus their funding first, on helping to build the foundational capacity of nonprofits, then help nonprofits build resiliency, and only after that, focus funding on the impact of nonprofits. Hello? What year is this? I guess it takes a large foundation paying a national consulting firm a lot of money to state the obvious as an “innovation.” The reality is that this “new model” should have been checked off the philanthropic best practice list at the dawn of venture philanthropy. Like, back in the 1990’s?
Further, Jeff Bezos caused a bit of a stir by pondering aloud about whether a short-term charity approach to giving is more important than investing in larger and long-term philanthropic initiatives (see here). Huh? For a guy that has just been catapulted to “second place in Forbes’s rankings of the world’s billionaires,” that’s a pretty shallow and over simplistic view of philanthropy.
So, let’s cut to the chase. Philanthropists and foundations need to help nonprofits by doing five things.
1. Stop Perseverating and Pontificating: First and foremost, we don’t need another finger wagging report to tell nonprofits that they need to be more diverse, or that they need to track outcomes better, or that their revenue models are not entrepreneurial enough. The Foundation Center’s IssueLab already has over 22,000 reports on what challenges nonprofits, detailing cutting edge “new models,” presenting data to underscore unaddressed social needs and reporting on the incremental progress of foundation-funded initiatives. So, stop it. We don’t need more reports. While you are at it, you can also cut your talking-head webinars and grantee convenings in half too. Nonprofits don’t need you to spend $200 a night for hotel rooms and $5,000 for conference speakers to present PowerPoint slides about the topic of the day (unless, of course, you ask me to speak). Nonprofits on the leading edge can keep up with strategy and trends at a click of a mouse.
2. Be Fearless Advocates: Nonprofits need philanthropists and foundations to be fearless advocates. Until you do, the social sector will continue to struggle. Let me give an example. We all know that the Ford Foundation announced a “game-changing strategy” of committing $1 billion of their endowment, to be phased in over ten years, for mission-related investments (MRIs). No criticism from me but consider that in the FY 2018 Federal Budget, the Trump Administration is proposing cutting the Department of Health and Human Services’ budget by $15.1 billion, the Education Department budget by $9.2 billion, and the Department of Housing and Urban Development budget by $6.2 billion. These three cuts (in one year) outweigh the ten-year Ford Foundation transformative strategy by a factor of over 30 times. Nonprofits will not be able to cope with cuts of that magnitude. Nonprofits need philanthropists and foundations to condemn, without fear, the proposed cuts and to use their political heft to advocate for the government to maintain and advance its social contract with America. Aggressive advocacy is as important as money is at this time. Not just funding advocacy but engaging in it. Power must speak truth to power.
3. Engage Nonprofits as Equal Partners: Philanthropy needs to listen and engage nonprofits as equals. You might think you’re listening, but many of you are not. Referencing back to the “grantmaking pyramid” –well, I am just saying that I would be embarrassed to publish it. Presenting the pyramid as a new model demonstrates how hopelessly out of touch your foundation strategy is. Any competent nonprofit leader has been advocating for a “capacity-resiliency approach” to philanthropic funding for decades. Related, you might also think that imposing “collective impact models,” “learning cohorts,” and “narrow-scope initiatives” are models of partnership but more often than not, they are under-funded or unfunded mandates that redirect valuable time and staff resources. Engagement is convening with no strings attached, and nonprofits desperately need it. Fund the convening of coalitions and groups and then let nonprofits lead the strategy development. Don’t tell nonprofits what collaboration looks like or what essential elements must be included in strategy because, too often, foundations and philanthropists are not close enough to the work. Period.
4. Give Up Control: Nonprofits, like FISH in the opening of this article, are managed by highly capable leaders. They are smart, connected, politically savvy, and nimble. Many nonprofit leaders are ferocious when unleashed. But when your $5,000 grant comes with the expectation of quarterly reports, a preoccupation with data outcomes, and required grantee meetings, it not only leashes many nonprofit leaders, but your control can be a barbaric choke chain. Many nonprofit leaders will be facing the dual adversities of managing State and Federal budget cuts. They need you to loosen your control so they can focus on the challenges ahead.
5. Don’t Stop Giving Money: Of course, nonprofits need philanthropists and foundations to keep giving and, quite frankly, give more. In the darkest moments of the last recession, many foundations stepped up their giving in reaction to the crisis. Now, nonprofits need you to step up and proactively follow your leading-edge, philanthropic peers who are already increasing investments (see here). The nonprofit community needs an influx of cash –today, to help them manage the challenges ahead.
Okay, this post is a little long and perhaps a bit of a rant. Admittedly, it is a bit in-your-face but the message is clear. We are entering a period when nonprofits cannot afford to pursue “business as usual.” At the same time, philanthropists and foundations do not have the luxury of “business as usual” either. The challenges ahead are beyond the scope of nonprofits and philanthropy to manage as actors and directors. If we are to continue to build the social infrastructure across all of the communities in our nation, we must work together with a sense of urgency and trust. Nonprofits are challenged and it is time for philanthropists and foundations to step up to a new model of partnership.
As always, your thoughts are welcome.
Photo Credit: wiggijo