Nonprofit innovation depends on leadership

By Todd Cohen

A new way of doing business in the nonprofit sector is unfolding in Charlotte, N.C.

Known as Project Hope and designed to help people living in long poverty find affordable housing and build financial stability, the effort offers a glimpse of the kind of innovation and collaboration the charitable marketplace will need for the massive job of taking on both the symptoms and causes of complex social and global problems.

A partnership of four Charlotte agencies, Project Hope is housed at Crisis Assistance Ministry, which carved out existing office space and provides it for free along with back-office services.

While Project Hope is counting on such economies of scale, its greater value lies in its strategy of drawing on its partner agencies’ respective core services to better serve clients, or “leveraging organizations’ specific expertise to improve customer service,” says Carol Hardison, executive director of Crisis Assistance.

Project Hope clients get financial-management support for rent and utility assistance from Crisis Assistance, for example, and social-worker support from the Mecklenburg County Department of Social Services, another partner.

“Sometimes people make a mistake and try to grow an existing organization to add on these other functions that are not their core mission,” Hardison says. “We are going and finding organizations whose core mission meets the needs of the customer.”

Project Hope also represents precisely the kind of reengineering of the local nonprofit sector’s capacity that community leaders hope to stimulate and cultivate with strategic investments from a new $5 million “catalyst” fund they are creating.

What is unfolding in Charlotte reflects a new breed of nonprofit leadership that is starting to bubble up in communities throughout the state, and it offers some lessons nonprofits can use to cope with the recession and gear themselves for competing in a global marketplace in which competition only will get fiercer.

Project Hope is rooted in the idea that what matters most is how effectively clients are served.

So what drives the collaborative is how to play to the particular strengths of each partner agency to craft a suite of services that best meet all their clients’ needs.

In the process, the partners are able to achieve some back-office efficiencies and savings.

And as icing in the cake, their collaborative fashioning of new strategies that aim to better address the immediate and long-term needs of clients appeals to philanthropic funders.

Hit hard by the financial crisis, a growing number of nonprofits in the state are equipping themselves to work smarter and better serve clients, often with support from funders wanting to make a greater impact by boosting nonprofits’ operations and collaboration.

Also spurring the giving sector to remake itself has been the promise of greater investment from the Obama administration and Congress to promote and target volunteerism and civic enterprise to address urgent social and global problems.

Consider:

• Expanding local charitable giving in North Carolina’s 85 rural counties, particularly by finding new ways to grow and tap local assets, is the focus of an initiative spearheaded by the North Carolina Rural Center.

• “Giving circles” and other forms of non-traditional philanthropy have sprouted throughout the state, thanks to investment by NCGives and community foundations that are working to expand giving among communities of color, women and young people.

• Strengthening “social capital,” or civic connectedness, is the focus of collaborative initiatives in Charlotte, Greensboro and Winston-Salem spearheaded by local community foundations.

• Coalitions in Asheville, Greensboro and Wilmington are providing training and support for local nonprofits and nonprofit executives.

• Collaborative efforts have been formed to address a broad range of specific needs, including developing economic and environmental sustainability in a group of counties in Western North Carolina; producing better outcomes for kids in Wilmington neighborhoods with the highest crime rates; and addressing the needs of first-time mothers throughout the state.

Despite all those initiatives, however, retooling the nonprofit business model and mindset can be tough in a sector that, because it traditionally has been expected to do more with less, tends to see its glass as half empty and can be highly resistant to change.

Change is particularly challenging because, while the giving sector is large overall, it consists of organizations that mainly are small, stressed, overworked and under-appreciated.

While North Carolina’s 10,000 charitable nonprofits with annual revenues over $25,000 include big universities, foundations and service agencies, most are much smaller shops like homeless shelters and food pantries.

And those organizations struggle every day to address such basic organizational challenges as how to handle rising demand for services while meeting the payroll and paying the rent.

So reengineering the nonprofit business model may not seem like job one.

But individual nonprofits’ limited size and resources, particularly as the recession squeezes giving, also represents an opportunity for organizations to find new ways to work together.

And with the recession creating an urgent incentive for change, nonprofits and funders can seize that opportunity by putting their heads together and finding ways to work together to better serve clients.

That task is particularly critical because nonprofits must cope with a sector-wide failure to address critical long-term capacity problems, including:

• Filling leadership positions expected to become vacant as Baby Boomers retire and other executives quit because of job stress and the lack of support from their boards.

• Helping boards see that a big part of their job is to secure resources, think ahead and build an organizational culture that values flexibility, collaboration and continuous improvement.

• Taking strategic advantage of the surge in volunteerism by making sure organizations offer skill-based opportunities for volunteers who want to put their actual expertise to work.

• Developing a more integrated and strategic approach to fundraising, planned giving, staff development, planning, communications and the use of technology.

These are huge tasks that will require more than paying lip service to the importance of innovation and collaboration.

Change requires the investment of time, money and planning, as well as a commitment to find and truly work with partners to better serve clients.

Just as community leaders in Charlotte are raising money to create a $5 million fund to invest in nonprofit innovation, leaders in communities throughout the state could create local nonprofit innovation funds, possibly with challenge grants from local or statewide foundations or companies, or even with federal stimulus funding through the state.

Those innovation funds could help inspire creative thinking and planning, and invest in collaborative efforts to build the capacity of local communities to better address priority needs.

Change ultimately depends on leadership.

So meeting the challenge of innovation and collaboration leaves two big questions for the giving sector, not only in North Carolina, but throughout the U.S.:

• Will nonprofits, foundations, corporate-giving programs, government and individual givers make the investment needed to build the capacity of the giving sector to cope with change?

• Will leaders in all sectors step up and push their organizations and constituents to find better ways of working, and working together, to tackle both the symptoms and causes of the biggest problems facing our communities?

Real stories critical for giving

By Todd Cohen

In a world ravaged by poverty, hunger, poor health, violence and intolerance, philanthropy can change lives.

Just ask Ron Archer.

At the 2009 National Philanthropy Day luncheon sponsored by the Triangle chapter of the Association of Fundraising Professionals in North Carolina’s Raleigh-Durham region, the motivational speaker and former All-American middle linebacker smashed through the comfort zone that can insulate giving from the people it serves and the problems it addresses.

A one-time preacher who now runs an international economic-development network, Archer told a harrowing tale of a 10-year-old Cleveland kid who wanted to kill himself.

The boy was a “trick baby,” born to a teen girl who had become a prostitute at age 14 after her family plunged into poverty.

The boy’s childhood was a living nightmare.

With German and Caribbean grandparents, the biracial kid was an outsider who fit in nowhere and was shunned everywhere.

His teen mother was the victim of brutal physical and sexual abuse, abuse that Archer described graphically.

The boy stammered and was a chronic bed-wetter.

He himself was raped.

So at age 10, in possession of a gun, he wanted to end it all.

It was then, Archer told last week’s luncheon crowd, that philanthropy “found” that kid, who of course was Archer himself.

Somehow, some way, the often invisible world of social services discovered and connected with that lost child and helped him find and help himself.

Archer’s talk – it was more akin to a fire-and-brimstone sermon – stunned the crowd of roughly 270 fundraising professionals and donors at last week’s luncheon, held at Prestonwood Country Club in Cary.

And while Archer was swamped after the talk with well-wishers, a few of those in the audience privately voiced outrage at the blunt and disturbing details he shared about his life.

That reaction was unfortunate.

People working in the charitable marketplace, especially those whose job is to raise money from donors, often talk about philanthropy’s power to transform lives and fix urgent and horrific problems.

Professionals in the giving sector also emphasize the importance of telling stories that are authentic.

But real stories about real people and their real problems can make some philanthropy professionals uncomfortable.

The business of philanthropy is to heal and change lives, and the job of fundraising professionals is to engage givers and secure the resources their organizations need to be change agents.

A powerful tool to engage givers is storytelling – telling stories about people, the problems they face, and the role philanthropy can play in addressing the symptoms and causes of those problems.

Two of the organizations honored last week by the Triangle chapter of the Association of Fundraising Professionals were InterAct, an agency that supports victims of domestic violence, and Planned Parenthood of Central North Carolina – agencies that offer precisely the kinds of services that can change the lives of people like Ron Archer and his mother.

Their stories, and those of others like them, need to be told, and told again, so that more givers get involved in making a difference.

Rural giving needs to grow

By Todd Cohen

Rural America faces huge challenges, yet it seems to be off the radar of much of organized philanthropy.

While a 2005 study by the Forum of Regional Associations of Grantmakers reported a “rapid rise in rural philanthropy,” a study two years later by the National Committee for Responsive Philanthropy concluded grantmaking behavior and trends were “skewed heavily toward support for urban-based or urban-focused programs.”

And last summer, at a Council on Foundations conference on rural philanthropy, former President Bill Clinton said “foundation activity in rural American has been woefully inadequate.”

So depending on one’s perspective, the rural-philanthropy glass may be half full or half empty.

Either way, it is not nearly big enough.

While home to an estimated one-fourth of the U.S. population of over 300 million people, rural America lags urban and suburban America in investment in the infrastructure that is critical for success in a fiercely competitive global marketplace.

The good news is that efforts are underway to try to change that.

Rural America itself “needs to change the way we are viewed,” Sherece West, president of the Winthrop Rockefeller Foundation in Little Rock, Ark., told nearly 600 people attending the annual conference hosted in Raleigh last week by the North Carolina Rural Center.

“We need to dispel misconceptions among national funders about rural America,” West said.

Rural groups, for example, should push for more equitable distribution of charitable and taxpayer dollars so that rural America is not treated as an afterthought by lawmakers and grantmakers, she said.

She called on foundations to be stronger “advocates, activists and accelerants” for rural philanthropy.

And she urged rural groups and local and statewide foundations to push their national counterparts to better understand and support the needs of rural America, she said.

At last week’s conference, the Rural Center released a new study that says local communities themselves represent a “potent sources of funding that often goes unrecognized.”

In particular, the study says, community foundations can “help lead the transformation of rural places to economic sustainability and cultural vibrancy.”

To do that, the study says, community foundations “will need to more aggressively build their assets and form partnerships with community development leaders.”

Also key to “capturing rural assets,” the study says, is “increasing knowledge about complex issues surrounding donations and bequests of real property, particularly land and timber resources.”

That, in turn, will involve “expanding the current professional education for financial and legal advisers to include rural-specific issues and increasing the number of qualified advisers available to rural donors.”

Community foundations in the state also “need to become increasingly inclusive and broad-based through their governance outreach to donors, community-engagement processes and programs.”

Private foundations can help, making grants to help community foundations, for example, increase their capacity to engage local givers and retain philanthropic assets in their communities.

To strengthen America overall, foundations need to wake up to the needs and economic potential of rural America and invest more time and attention to building its philanthropic capacity.

Volunteers, part 2: Obama targets impact, innovation

By Todd Cohen

With a lot more Americans giving their time and know-how, volunteerism is going through big changes.

Government is working to better match federally-funded public service with priority social needs.

And nonprofits face the challenge of better equipping themselves to handle more volunteers who want to put their skills to more productive use.

A new collaborative effort known as “Reimagining Service,” for example, aims to turn “good intentions into good impact,” says Michelle Nunn, CEO of the Points of Light Institute, a collaborative member created in 1989 by former President George H.W. Bush to promote volunteerism.

“Part of that is doing a better job of matching skills of volunteers with needs of nonprofits,” Nunn says.

One approach, she says, is for nonprofits to build the management of volunteers into their organizational strategy and then allocate “appropriate resources to leverage volunteers.”

And nonprofits can recruit volunteers as leaders to recruit and manage other volunteers.

The idea, she says, is to apply human-resource lessons from the business sector to engage human capital in the nonprofit sector.

Generally, nonprofits should undertake a strategic review of what they need to achieve their mission, and then “think creatively about how they can use volunteers, human capital, to meet those needs,” Nunn says. “What do we actually need people to do to achieve our mission?”

The challenge, she says, is to “create roles that are specific enough to achieve the organization’s mission and truly engage volunteers.”

Throughout the sector, for example, nonprofits also could create a “fast pass” for volunteering that would lessen the need for volunteers to undergo multiple security background checks to work at different nonprofits.

And employers could designate a “service leader,” either an employee or volunteer, to recruit, manage and engage employees in volunteer work, while colleges, universities and schools could designate a “service coach” responsible for developing and coordinating service-learning activities.

Government also can play a big role in service work, Nunn says.

Presidents George H.W. Bush, Bill Clinton and George W. Bush all focused on federal investment to support “stipended” service through programs like AmeriCorps, Nunn says.

Building on that legacy, she says, President Barack Obama aims to “drive concrete tangible impact” on national priority needs through a “broad call to service and innovation.”

On Oct. 16 at Texas A&M University, at a 20th anniversary celebration for the Points of Light Institute, George H.W. Bush characterized service as a “defining characteristic of a successful life,” Nunn says.

At the same event, she says, Obama talked about the need to make service “essential to our national priorities.”

At its best, she says, service should “empower local, organic grassroots work,” providing “support for local organizations and uniquely responding to local community needs.”

And while federal investment in service should promote “service leaders,” Nunn says, it also should spur volunteering throughout the population.

AmeriCorps, for example, has graduated over 500,000 members in the past 20 years who have “done extraordinary things with a huge impact and leveraged more volunteers,” she says.

Yet those AmeriCorps members represent only a small fraction of the total of over 60 million Americans who volunteered in 2008 alone, Nunn says.

The goal is to “channel service and the extraordinary civic spirit of America to the most important challenges of our day,” she says. “That’s the next chapter of the service movement.”