The Path to Effective Philanthropy: Honest Conversations

February 27, 2014

It was a treat this week for MCF and our members to host a conversation with Phil Buchanan, president of the The Center for Effective Philanthropy (CEP).

Our exchange was energetic, provocative, fun and sometimes funny.  I was struck by how often we circled back to core concepts and philanthropic fundamentals.

The discussion aligned serendipitously with MCF’s Principles for Grantmakers.  Here are a few snippets that illustrate the challenges — and opportunities — of putting principles into practice.

Effective Governance
According to MCF’s Effective Governance Principle, grantmakers are expected to be good stewards of assets, to fulfill donor intent, to make sound decisions and to perform all fiduciary responsibilities.

Buchanan called for foundation boards to govern effectively by not rubber stamping staff members’ grant recommendations.  “If the board is approving every grant, they’re not taking time to see what it all adds up to and they’re not asking the hard questions.”

And he challenged foundation CEOs to practice “radical openness” with their boards – i.e., to say everything they’re thinking and to spark “messy conversations.”  Good governance doesn’t emerge from perfectly scripted board meetings at which “the most spontaneous thing that happens is when someone gets up to get a cup of coffee.”  (Yes, it’s okay to laugh at ourselves.)

Engaged Learning
The MCF Engaged Learning Principle calls for continuous learning and reflection by engaging board members, staff, grantees and donors in thoughtful dialogue and education.

Of course, learning and continuous improvement through performance assessment is at the heart of CEP’s mission.  (Buchanan readily acknowledged that he is not the expert in philanthropy . . . and he cautioned us to be wary of those who say they are.)

Because philanthropy is “wicked tough,” funding programs on theory alone is not enough.  It’s vital that grantmakers establish performance indicators and are data driven.

And they sometimes need to follow, not lead.  By replicating proven programs, foundations can learn from others and succeed.  (For more on shared goals, read Buchanan’s opinion piece in this week’s Chronicle of Philanthropy.)

Transparency
Through MCF’s Transparency Principle grantmakers strive to build healthy relationships with the public, applicants, grantees and donors by using clear, consistent and timely communications.

Being transparent includes sharing the so-called “failures.” (Our host Kate Wolford of The McKnight Foundation noted that we might be more apt to learn from our missteps by reframing them in more positive, multi-dimensional terms.)

Buchanan reported that it’s up to foundations to share the results of CEP assessments.  Some don’t share at all, some partially share with grantees (and sometimes add a positive spin!), and some share widely, warts and all.

He noted that foundations that are truly transparent are viewed as trustworthy and credible.  For example, Robert Wood Johnson Foundation is fully committed to evaluation and transparency, making it all the stronger.

Cynics may say that foundations don’t need to be accountable to anybody.  But as Buchanan reminded everyone, if grantmakers aren’t honest and don’t cultivate positive relationships with their grantees, how can they obtain the candid information they need to improve philanthropy . . . and improve lives?

More to Come
Keep watching our Philanthropy Potluck Blog for future postings about philanthropic effectiveness, including video conversations with MCF President Trista Harris, Buchanan and other big thinkers.

Like our grantmaker members, MCF is committed to hosting robust conversations within and across sectors . . . because leadership for the 21st century requires honest, provocative discussion.

– Wendy Wehr, MCF vice president of communications and information services


Mission Investing Gaining Minnesota Momentum

February 12, 2014

mieEvery seat was filled at Northwest Area Foundation on Tuesday at a grantmaker “think tank” on mission investing.

What is mission investing? According to Mission Investors Exchange:

Mission investments cover two distinct categories: market-rate mission-related investments (MRIs) that have a positive social impact while contributing to the foundation’s long-term financial stability and growth; and program-related investments (PRIs) that are designed to achieve specific program objectives while earning a below-market rate return.

In other words, it’s about  using the so-called “other 95%” (beyond the 5% annual grants payout) to achieve mission.

According to MCF’s latest Giving in Minnesota report, Minnesota grantmakers grant approximately $1.7 billion annually and hold almost $18 billion in foundation assets. Through mission investing strategies they can leverage a portion of that $18 billion for social good. (For more on mission investing, also check out NCRP’s Winter 2013-2014 edition of Responsive Philanthropy.)

The Minnesota Experience
Prior to Tuesday’s event, some Minnesota grantmakers completed an informal survey about their experiences related to mission investing. Highlights of the responses included:

  • Program-related investments (PRIs) as loans are a commonly used tool and are often directed to economic development for low-income neighborhoods and job creation.
  • Growth of mission investing is hampered by lack of staff expertise and capacity, as well as a dearth of effective and experienced investment and legal advisors who understand and embrace the concept.
  • Finding investments with a strong financial and social return and measuring results can be challenging.
  • Despite challenges, foundations are intentionally pursuing mission investing and even setting targets for percentage of invested assets.
  • Community foundations have a growing interest  in mission investing among donor advisors.

Also discussed during the “think tank” were increased opportunities to engage in mission investing outside of the nonprofit sphere, such as with social enterprises and for-profit businesses.

For instance, philanthropy could seed investments in green technology or otherwise put dollars behind ideas that will influence the marketplace for good.

Learn More
Several intermediaries and other organizations are already working in the mission-investing space in Minnesota, including Nonprofits Assistance Fund, Community Reinvestment Fund, MEDA, WomenVenture and others.

At the meeting, Peter Berliner and his colleagues from Seattle-based Mission Investors Exchange also offered their knowledge, expertise and connections. To meet local and national peers, grantmakers can sign up for the Mission Investors Exchange 2014 National Conference to be held in Minneapolis from May 13 to 15. (Early bird registration ends February 28!)

To connect with other Minnesota grantmakers who are pursuing mission-investing strategies, contact MCF at info@mcf.org.

As event organizers Brad Brown, former head of Social Venture Partners Minnesota, and Susan Hammel, executive director of the Delta Dental of Minnesota Foundation, noted, mission investing is a lot less risky than perceived.  And a planned approach with full board engagement can really pay off – in social impact and financial rewards.

– Wendy Wehr, MCF vice president of communications and information services


What Are Real Barriers to 21st Century Grantmaking?

January 24, 2014

While listening to some research highlights about Native American philanthropy yesterday, I got to wondering: Why have grantmaking methods changed so little since the 20th century? What are the invisible roadblocks that are preventing us from adopting 21st-century grantmaking practices?

In the Native Voices Rising report are 17 recommendations to increase grantmaking effectiveness and impact. Although written from a Native perspective, these suggested changes could be adapted for nearly any cultural or issue-based group:

  1. Provide increased funding for Native organizing.
  2. Provide more general operating and capacity-building support.
  3. Make long-term multi-year funding commitments.
  4. Fund grassroots Native organizations directly.
  5. Invest in leadership development.
  6. Support Native intermediaries that are solidly grounded in Native movements.
  7. Support income-generating activities such as social enterprises.
  8. Support development of the telecommunications/media infrastructure.
  9. Provide on-going operating support to voter engagement organizations beyond national election cycles in order to sustain progress and momentum.
  10. Incorporate interdisciplinary grant approaches that draw funds from multiple foundation program categories to support organizations and projects conducting work at the intersection of those programs, e.g., culture and environment.
  11. Listen and learn about Native communities, including issues, needs, and aspirations.
  12. Be more responsive than directive; find common interests.
  13. Communicate information about grant programs more broadly in the Native world.
  14. Conduct research on needs in the field in partnership with Native organizations.
  15. Look beyond the small population numbers as compared to other racial/ethnic groups.
  16. Bring Natives into the foundation as staff, board members and resource people, involving them in shaping and implementing foundation programs.
  17. Pool funds from small grant funders to streamline the grants application process and reporting requirements.

If you are a grantmaker, or if you work anywhere in the independent sector, I expect you’ve seen versions of these recommendations many times before. So what is hindering our adoption of these 21st-century grantmaking practices? I confess I don’t have the answers, but I bet you do.

Join the Conversation
Grantmakers, which of these recommendations have you already incorporated in your work? Which new practices would make the greatest difference to your grantees’ success? And which would dramatically improve your grantmaking effectiveness?

Please share your experiences. Together we can identify and break down the barriers to change.

– Wendy Wehr, v.p. of communications and information services


New Year’s Resolution: Unburden Your Grantees

January 3, 2014

resolveIs being more productive near the top of your list of New Year’s resolutions?  And do you want to make your resolution stick all year long?

If so, take the advice of our friends at Project Streamline, and you’ll soon be saving precious time and money  – for you and your grant applicants.  Here are three easy changes to make today so you all can focus more energy and resources on your missions:

  • Shift to using a Letter of Inquiry (LOI).  Why make potential grantees prepare a full grant proposal (and why take time to read it?) when they may not be a fit with your guidelines?  Let them pick up the phone or send an email to verify your interest.
  • Pull information you need from existing sources.  Why ask grantees to reformat and send financial information that’s already available from public sources?  For instance, use the wealth of data in their IRS 990s on Guidestar.
  • Ask only for information you’ll read and use.  And while you’re at it, accept the information in a common grant or common report form.

More Easy-to-Implement Changes
These are just a few of many excellent and doable suggestions from Project Streamline, the collaborative initiative of the Grants Managers Network and other effectiveness-minded organizations in the philanthropic and nonprofit spheres.

For an overview of Project Streamline’s latest Practices that Matter report (pdf), read my colleague Susan Stehling’s Philanthropy Potluck blog post from last summer.

Then check out all the excellent resources on the Project Streamline website, including the four core principles and practices,  the grantmaker assessment tool, and the Ask Dr. Streamline blog.

Your Resolution is a Yearlong Gift
Why do we make New Year’s resolutions?  Because we want to align our values and our actions.  (For MCF members, that means putting our Principles for Grantmakers into practice.)

There’s no better way to fulfill your New Year’s resolution than to adopt Project Streamline’s good grantmaking guidelines.

You’ll lighten the load on yourself and your grant applicants, demonstrate your respect for our hard-working nonprofits, boost your productivity and efficiency, and free up more money for mission throughout 2014 and beyond.

– Wendy Wehr, MCF v.p. of communications and information services

Photo cc BazaarBizarreSF


Fundamentals and Accelerators of Corporate Citizenship

June 28, 2013

No doubt about it, Minnesota is a leader in corporate philanthropy.

Across our business community — from our 19 Fortune 500 companies (more per capita than in all but one other state) to countless others of every size — is a wide-held belief that community engagement is essential to the vitality of our region.

But effective corporate citizenship — like any aspect of a business enterprise — requires discipline. According to Tom Knowlton and Nadia Gomes of TCC Group, successful citizenship requires: organization-wide strategy, integration throughout the organizational structure, engaged leadership, and a culture that values community engagement.

Knowlton and Gomes shared their latest thinking on this topic at a recent gathering of MCF’s corporate members. (Our members are constantly engaged in learning — that’s one of MCF’s Principles for Grantmakers.)

TCC Group’s model links integration and strategy together as fundamentals. Without this base, smart execution and meaningful impact are difficult. Engaged leadership and culture are the accelerators. Senior-level support and engagement of all stakeholders gives the credibility and oomph that leads to success.

Balancing fundamentals and accelerators is key. At the MCF session, Medtronic Foundation’s Ginny Cassidy shared her company’s evolving “Corporate Citizenship 2.0″ initiative. See the 2012 Corporate Citizenship Report (PDF) for a description of the company’s strategic pillars: global leadership in addressing chronic disease, collaborative culture of innovation, responsibility in the marketplace, total employee engagement and progressive environmental stewardship.

You can also read more about Knowlton’s and Gomes’ work in their recent posts on the CSRwire blog.

And in a few weeks we’ll release the summer issue of Giving Forum, which will include lots more examples of effective corporate citizenship in Minnesota. Visit our website to sign up for this useful publication.

- Wendy Wehr, MCF vice president of communications and information services


Streamlining Grantmaking: Perception vs. Reality?

May 20, 2013

TakingStockReportcoverGrants should facilitate the mission-critical work of nonprofits, but sometimes that’s not exactly how it works.

A new report by Grants Managers Network and the Project Streamline collaborative reveals that after five years of promoting effective ways to improve grant requirements, many nonprofits continue to feel burdened.

More than 700 grantmakers and grantseekers participated in a survey that revealed a continuing gap between grantmakers — who say they have streamlined — and grantseekers — who continue to find processes too unwieldy. Here’s a quick summary of the findings from the new report, Practices That Matter.

Project Streamline Principles Widely Recognized
Project Streamline’s principles are widely recognized in the grantmaking community. Almost all grantmakers say they have made or are planning streamlining changes. Here’s what else they said:

  • 93% are familiar with the impact of grantmaking practice on nonprofits,
  • 90% are familiar with the principles of clear and straightforward grantmaking communications,
  • 87% are aware that taking a fresh look at application and reporting requirements is recommended,
  • 86% realize that reducing the burden on grantseekers is important,
  • 81% are familiar with “right-sizing” — where application and reporting requirements are in proportion to the grant size and type.

Unfortunately, it takes a long time for changes in individual practice to become true culture change. So, nonprofits still spend too much time meeting requirements that are poorly designed, redundant, inappropriately scaled or simply mystifying.

Continuing Issues for Grantmakers
The research showed some grantmaker progress and brought to light issues that remain.

1: Take a fresh look at information requirements.

  • More than 80% of grantmakers say they have revised application or reporting requirements to ask for only what they use in decision-making. But grantmakers still don’t like to accept information that’s not specifically developed for them.
  • In fact, 84% of grantseekers say grantmakers rarely or never accept common applications, and 62% rarely or never encounter a funder who accepts standard or no reports.

2: Right-size expectations.

  • Grantmakers say they are paying attention to the relationship between requirements and grant size and type; 55% say they have revised applications and 59% have revised reporting requirements to be appropriate to grant size.
  • But 72% of grantseekers say applications for small grants are rarely or never proportionate to the level of funding. The same number say they have rarely or never encountered a simplified application for repeat grants.

3: Reduce the burden.

  • 91% of grantmakers now use an online system or accept applications via email. With the shift toward electronic submission, 84% no longer require multiple copies of materials.
  • But going online doesn’t equal streamlining. Poorly designed and untested systems remain a big source of grantseeker aggravation. Grantseekers cite  system issues including:
    • forms in which data cannot be cut and pasted but must be input one item at a time,
    • forms with stringent character limits,
    • forms that don’t allow users to review all questions in advance, save work, or go back to previous responses,
    • and myriad other bugs.
  • Furthermore, 50% of grantseekers say paper systems are still prevalent among funders.

4: Provide clear and straightforward communications.

  • 91% of grantmakers say they have revised communication to make it clearer and more straightforward; 84% have made messages consistent across all platforms.
  • But getting clear guidance and reaching a person continue to be barriers for grantseekers, who report confusing, inconsistent and insufficient communication. Grantseekers say online systems too often stand in for direct communication, which builds an unintended barrier to relationship.

Read the entire Practices That Matter report. You can also take an interactive quiz to find out how “streamlining savvy” you are, download ​Making More Time for Mission, an overview of the report, and more.

How do you think grantmakers in Minnesota stack up against these national statistics? Let us know your experience.

- Susan Stehling, MCF communications associate


Cultural Competence in Site Visits and Life

May 2, 2013
guglielmoher

Rudy Guglielmo, Jr., of Youthprise and Lue Her of Otto Bremer Foundation

As part its ongoing Effective Grantmaking Series, MCF hosted Effective, Culturally Competent Site Visits.

Site visits are an excellent opportunity for foundations to connect with potential grantees and get a clearer picture of what applicants do and whom they serve. They are also a way to develop relationships, beyond the typical grantmaker/grantee dynamic.

Lissa Jones, MCF’s director of diversity, equity and inclusion, shared “Three Giant Steps to Cultural Competence.”

  1. Build your own awareness. Bias is often transferred unconsciously, so check in with yourself about your cultural biases. What, for example, did your grandfather say about the value of immigrants?  As we become aware of our biases, we can work to make more culturally-informed grantmaking decisions.
  2. Develop a way of knowing. Go to cultural events, read a community paper, check out opportunities in your neighborhood to learn about other cultures. It’s all around if you look for it!
  3. Practice, practice, practice. Develop relationships, engage in the community and realize this is a lifelong endeavor. You’ll never say, “OK, I’m done. I’ve learned it all, and now I’m culturally competent!”

Panelists for the session were program officers Rudy Guglielmo, Jr., Youthprise, and Lue Her, Otto Bremer Foundation.

youthprise

Youthprise Site Visits: Guglielmo gave examples of how to look at the sector, organizational capacity and program effectiveness with a cultural lens (put yourself in the applicant’s shoes), rather than a traditional foundation lens (develop a rationale for an investment).

A traditional lens values information veracity, research accuracy, alignment of the grantee with foundation guidelines and may involve less transparent decision-making.

A cultural lens puts cultural identity at the center of the conversation and allows for an asset-based approach with an open-ended conversation between foundation and applicant. Use of a cultural lens is not a substitute for due diligence, but it is a way to learn about an applicant in a community context. It can be an effective way to evaluate requests in areas that are traditionally hard to quantify (leadership, community organizing, youth development) and provide an opportunity to establish an ongoing relationship with a potential grantee.

Guglielmo closed with a list of learning strategies: accompany an experienced funder into the field, commit to regular visits to an organization and use the foundation’s capacity to convene and allow for peer learning. The biggest barrier to culturally competent site visits is the need to build relationships.

obf

Otto Bremer Foundation Site Visits: Her says site visits are the backbone of the Otto Bremer Foundation and a principle tenant of its work. Each visit is important in establishing or maintaining a relationship, learning about community and doing due diligence.

On Her’s first site visit with Bremer, he accompanied another program officer to “learn the ropes.” During the visit, proposal-related questions were not asked, instead the conversation focused on what was going on in the community. Trust was established and the relationship grew from there.

Culturally competent site visits are not done in isolation; they are one piece of the puzzle. Before a visit, research is done, conversations held and trust established. You have to make time to build relationships, as there is no crash course in culture.

Her ended by saying the road to cultural competence starts with one relationship, and you’re becoming culturally competent when you don’t have to think about it so much.

- Megan Sullivan, MCF operations and publications coordinator


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