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The field of philanthropy is a bit like an uncharted wilderness. Unlike most 100+ year old fields, there is no real set of “best practices” in philanthropy. There is no agreed upon way to evaluate a charity. Most donors have never even heard of some of the basic tools of giving like charitable trusts and donor advised funds. Recently I’ve been discussing with a pretty esteemed group of philanthropic leaders what “strategic philanthropy” even means and how we can tell if someone is practicing it. As a field we still have an aversion to admitting that philanthropy ever fails at anything. But as everyone knows, admitting a problem is the first step to fixing it.

Personally, I’m still in the thick of learning about philanthropy. I have a large stack of books about philanthropy next to my desk that I have yet to read and another large stack of those I have. But with One-Click ordering from Amazon, it seems that my “To Read” pile grows faster than I can keep up.

So let’s be ambitious and work hard to build a new and better philanthropy. But let’s also be humble and realize that we all have so much to learn. Philanthropy as a field of practice is still in its infancy. So rather than resolve that next year we will do more, do better, do faster. Let us humbly resolve that in 2009 we will make better mistakes than we did in 2008. Let’s make mistakes that are the result of daring, well informed risks. Mistakes that demonstrate our willingness to embrace the unknown and try things that other people tell us can’t be done. Let’s make mistakes that we can be proud of, the kind of mistakes that we brag about over a drink with friends, “Remember that time when we…?!”

And who knows. Maybe we’ll create something wonderful.

Sean Stannard-Stockton is a principal and director of Tactical Philanthropy at Ensemble Capital Management. Ensemble Capital provides families both traditional investment management and philanthropic planning. He is the author of the blog Tactical Philanthropy and writes the column On Philanthropy for the Financial Times.

Schools can raise extra money through selling fundraising products and holding special events for students and their families.

There are many issues to consider when choosing a product for a school fundraiser. Price, variety, quality, competition, need and appeal are all significant factors.

America's primary and secondary education lags behind other advanced countries. To improve education levels even to the average of advanced nations would generate enough economic growth to pay for the entire education system. Catching up will require cooperation, national standards, better incentives for teachers, and accountability. In this panel discussion hosted by the New Republic, several experts discuss the way to educational excellence.

Schools, churches, social clubs and other nonprofit groups have profited greatly from a popular type of fund raiser known as a silent auction. Find out how to plan one.

Successful fundraising campaigns are not just about money. Rather, successful fundraising arises from building strong, lasting relationships with donors.

It's nice to think that businesses will donate to your cause just because it's worthy, but it's important to highlight why your silent auction is a good marketing choice.

Successful silent auctions have hundreds of items that need enough variety to be interesting to guests with diverse interests - so where do these items come from?

Adding items and packages to your silent auction that are specific to your organization or targeted to your attendees will make your auction memorable and generate higher

When planning a silent auction, finding creative, out-of-the-box donations will grow your auction and appeal to more event guests.

In most general silent auctions, there are basic items that your guests will expect and will provide the reliable core for your auction fundraising.

A silent auction is a great way to add revenue to a fundraising event, but does require a substantial amount work and time for staff and/or volunteers.

While a silent auction may seem like an obvious and easy way to add to your fundraising, it may not be right for every group or event.

A silent auction is a great, low-cost way to increase the income and return-on-investment for a non-profit fundraising event.

As many as 100,000 nonprofits could go under in coming months due to the slowing economy, says nonprofit management expert Paul Light, a professor at New York University’s Robert F. Wagner School of Public Service. In an interview today, Light, a governance and nonprofit effectiveness expert, says he thinks the most vulnerable are small-to-midsized arts and social service organizations that consistently operate at the margins. Light’s prediction comes as the Center on Philanthropy at Indiana University today released a new study showing that nonprofits think they’re facing the worst fundraising climate since 1998. The center’s Philanthropic Giving Index, similar to a Consumer Confidence Index for charitable giving, is now 64.8, a 21.7 percent drop from just six months ago and a 27 percent decrease since December 2007. “Winnowing is going to occur [in the ranks of nonprofits],” says Light, “but the question is this: is this a random shooting or deliberate? Is most money now going to stronger institutions, the ones that don’t really need it as much?”

I caught up with Light today to discuss these trends as well as his new book, The Search for Social Entrepreneurship, about the traits that distinguish social entrepreneurs. Light says social entrepreneurs tend to be more optimistic than others but urges those in the sector to start focusing less on its charismatic personalities and more on which ideas work—and which don’t. “You don’t find and there hasn’t been a good investigation of failure,” he says. What follows is an edited version of that conversation:

Q: Why did you write this book?

A: I’ve been monitoring management reform in nonprofits and government for some years now and the concept of social entrepreneurship is pretty visible through organizations such as Ashoka and Echoing Green; more and more of our students at the Wagner School are interested in starting their own nonprofits and solving big problems rather than ameliorating them. So the more I looked at it and listened, the more interested I became in describing this movement towards problem-solving and audacious goals by nonprofits, private firms, blended organizations, and cross sector organizations. I started looking at it in 2004/05 and wrote an article about it for the Stanford Social Innovation Review, published in 2006, that said there appeared to be a cult of personality surrounding the concept and that we have become fascinated with these individual heroes and put the focus on finding these sparkly charismatic leaders and funding them to pursue pattern-breaking change. I wrote that it’s not the hero, it’s the heroism and that social entrepreneurship can come from existing organizations, big old organizations, fresh startups and you-name-it and that provoked a pretty instant response from the field. I continued to do research about it in 2007 and 2008 and then wrote a book to summarize what I was seeing.

Q: What did you find?

A: The more I read, the more was I able to unpack the underlying broad assumptions that define social entrepreneurship as an effort to solve a tough social problem through innovative or pattern-breaking ideas. It turns out that people who act as social entrepreneurs behave differently from other high achievers, so I have come to agree that there is something different about the social entrepreneur. But I also found plenty of examples suggesting that social entrepreneurship is not a singular—but a plural. By that I mean that many organizations pursue social entrepreneurship through partnerships and teams and through networks, and our tendency in conferences and fellowship programs is to reward the individual when, in fact, we might be better off rewarding the idea or the organization along with the individual. In fact, the lone wolf entrepreneur is fairly rare and they’re often less successful in bringing their ideas to fruition than groups and networks and even communities of individuals. At the same time, I no longer feel there’s this cult of personality. There really are individuals out there who pursue pattern-breaking change against the odds and we should look for both types of entrepreneurs.

Q: You say that social entrepreneurs behave differently than other high achievers.

A: There’s this prevailing notion that they’re more risk tolerant, which does not appear to be true. What they are is extremely optimistic about their chances of success. And that goes for the lone wolves as well as for the socially entrepreneurial teams and networks. They all have very high confidence that they will succeed and they often ignore evidence to the contrary because they believe so strongly that they’ll succeed. We don’t have many stories about failed social entrepreneurs. The field as a whole has focused almost exclusively on success stories and perhaps that’s the way it is at the beginning of an expansion of any field. The focus on the entrepreneurial individual dates back to the early 1980s with Bill Drayton and Ashoka but it turns out that optimism and confidence are what drive the perseverance that produces this kind of constant focus on driving forward with change. It’s not that these people have a gene that can be identified as social entrepreneurship. It’s that they really see the world in very optimistic terms. Additionally, they’re not more likely to take risks than others but they do tend through their optimism to stick with it, and when they are told they are going to fail, they actually invest even more energy; they rebel against messages that suggest they’re somehow on the wrong track. This optimism can shift into overconfidence and entrepreneurs of all types need to be careful about that. They need to fine-tune and listen to what the “market” is saying to them about their idea. They also need to be aware that they do see the world in very optimistic terms and therefore need to check themselves from time to time and challenge their own assumptions about their ideas.

Q: What have been some of the key failures?

A: Honestly? You don’t find them and there hasn’t been a good investigation of failure. We just don’t know. We’re so focused on success that I can’t point to any failures. The failures just disappear. We know that a very high proportion of business entrepreneurs do fail. If you look at business entrepreneurship or define it as plain old survival, then you’ve got a very high failure rate among small business owners and new business ideas. The most recent example is the failure of HD-DVD to take control of the market. It’s Blue Ray now. You can study why HD-DVD failed to claim market share and understand what the sources of failure and success might be, but we don’t have that kind of research base in the social entrepreneurship field. There’s so much enthusiasm for the idea of social entrepreneurship that we are not taking careful inventories of where success occurs and where failure might reside. We’re lacking an entire branch of research that would be very useful for instructing nascent social entrepreneurs on what they can do to avoid failure. That’s a problem in the field right now and one of the threats to developing the field so it’s useful to people who want to launch a change effort.

Q: What kinds of research would be most useful in your view?

A: There are sweeping studies about success and failure in the field of business entrepreneurship. Is the organization still alive? Is its market share increasing? Is it profitable? Yet when we go to blended organizations or nonprofits, we just don’t have those indicators. Ashoka uses some reasonable indicators to get the dialogue started, like; to what extent do their fellows affect policy change? To what extent are their ideas still alive? But we need better measures of outcomes if we’re going to start separating the wheat from the chaff in social entrepreneurship, and we just don’t have those yet.

There’s also a lot of argument over what constitutes success. Do you have to change the world or can you change a piece of the world? Does it have to be changing an entire policy regime within a country or within a region or even a continent, or can it be changing a city block and diffusing the idea so that others can pick up the change effort for their city blocks and eventually you have a cascading affect? There’s a lot of confusion in the field right now.

The general goal of social entrepreneurship is quite noble and I’ve become more and more impressed with what social entrepreneurs are trying to do but there are a lot of question marks still in the field. A lot of the investing in social entrepreneurship is really gut-level, intuitive investing—rather like a venture capitalist—versus a very careful rate of return investment based on the actual impact of a given idea on changing the status quo. To me the idea is the important component of social entrepreneurship. We have to be careful not to neglect the possibility that it’s not so much the individual leader but the power of the idea to create a market and to create change that is most significant.

Marcia Stepanek is Founding Editor-in-Chief and President, News and Information, for Contribute Media, a New York-based magazine, Web site, and conference series about the new people and ideas of giving. She is the publisher of Cause Global, an acclaimed new blog about the use of digital media for social change. She also serves as moderator and producer of New Conversations for Change, Contribute’s forum series highlighting social entrepreneurs and new trends in philanthropy.

Every day brings another idea for the new administration--today, a group of ex-secretaries of state and defense suggested creating an office against genocide in the White House, certainly a creditable idea but not necessarily more entitled to immediate attention than the notion that President Obama should endorse the use of Esperanto. Still, rather than be left out of this season’s most fashionable parlor game, the Nonprofiteer offers her version of How Everything Would Be Much Better If People Would Only Run the Government My Way.

Here’s the idea:

This country’s most important work is done by amateurs—which is another way of saying that we have nonprofits, governed by volunteers, provide most of our social services, education, arts, and health care. If we’re going to continue to do this (and there are good social-capital reasons why we should), let’s give those amateurs the same tools the Small Business Administration gives entrepreneurs, namely expert advice and access to money.

Creating a “nonprofit business administration” would be a very low-cost way to capitalize on the spirit of service and volunteerism the President-elect created through his campaign and evokes repeatedly in his speeches. Volunteer effort is too valuable a resource to be wasted, as it is every time a nonprofit board has to reinvent the fundraising wheel. And the work of charities is too important to be stymied by a financial system which won’t give them access to working capital unless they beg for it—and sometimes not even then.

The Aspen Institute, a leading think tank on issues related to charity, recommended creating such an agency back in June, an idea which the Nonprofiteer dutifully reported as though she hadn’t had it herself in 1992.

Kelly Kleiman, who blogs as The Nonprofiteer, is a lawyer and freelance journalist whose reportage and essays about the arts, philanthropy and women’s issues have appeared in The Wall Street Journal, Washington Post, Christian Science Monitor and other dailies; in magazines including In These Times and Chicago Philanthropy; and on websites including Aislesay.com and Artscope.net.

Foundations just do not get it.

With nonprofits and the communities they serve trying to cope with the worst economic crisis in the U.S. since the Great Depression, many foundations still act as if they are the only ones suffering.

A new effort known as the Philanthropic Collaborative says it wants to defend the giving sector from any federal policies that might emerge to address the recession.

But the effort simply continues the war big foundations have been waging for years against efforts to require they give more and disclose more about who they are and how they operate.

A report prepared for the Philanthropic Collaborative estimates the average return on every dollar in grants and support from private and community foundations totals $8.58 in direct, economic-welfare benefits, or a return of $367.9 billion on $42.9 billion in grants and other support in 2007.

While that sounds like a great return on investment, foundations could do a lot more and have an even greater impact.

A separate report prepared for Grantmakers for Effective Organizations says foundations have failed to practice what they preach.

Grantmakers themselves, along with nonprofit leaders, agree foundations should improve the type of financial support they provide, including support for nonprofit operations and multi-year support, and should improve their relationships with nonprofits.

But the report says grantmakers are giving a median of only 20 percent of annual grants to general operating support, and that only 36 percent of foundations surveyed solicit feedback from grantees.

“The study seems to suggest that most grantmakers see themselves as an island,” says Beth Bruner, board chair for Grantmakers for Effective Organizations. “The sense of reaching beyond the intellectual and operational corpus of the foundation is rarely there.”

Charitable foundations and corporate-giving programs are quick to tout their generosity and preach to nonprofits about the need to be more effective, collaborative, strategic and transparent.

Yet a top priority for foundations has been their fierce fight against efforts to require they be more open about their own operations and increase to 6 percent from 5 percent the share of assets they must pay out each year in grants and overhead.

That fight, in which they have invested millions of dollars, argues they can police themselves and that increasing the payout rate would deplete their assets over time and force them out of business.

And now, with the value of their assets plunging, foundations have stepped up their whining.

But now is precisely when foundations should be making good on the investment taxpayers have made in the form of the tax-exempt benefits foundations and their donors enjoy.

Foundations need to pull their collective head out of the sand and take a good hard look at themselves and the needs of nonprofits, and start working harder to improve the operations and impact of the giving sector on the urgent needs our communities face.

Todd Cohen, a veteran news reporter and editor, is editor and publisher of Philanthropy Journal, an online newspaper published by the A.J. Fletcher Foundation in Raleigh, N.C. Cohen has taught nonprofit reporting and media relations at the University of North Carolina at Chapel Hill and at Duke University, and regularly speaks on the topics of nonprofit media relations and trends in the charitable world.

How One Foundation Found a Way to Ethically Support Collaboration Strategies for Nonprofits

In my recent Internet wanderings, I came across the work of a fascinating foundation which devotes much of its giving to support nonprofit mergers and partnerships. It’s called the Lodestar Foundation, and its president, Lois Savage, kindly agreed to be interviewed for this blog posting.

Mission Plus Strategy: How did the Lodestar Foundation decide to support nonprofit collaborations, mergers, and other cooperative activities as a major strategy for your philanthropy?

Lois Savage: Since Lodestar’s inception 10 years ago, our mission has been to support and leverage the growth of philanthropy in two ways:

1. Through capacity-building of organizations directly promoting philanthropy, volunteerism and public service (community foundations, venture philanthropy groups, volunteer centers, etc.)
2. By maximizing the efficiency and effectiveness of grant funds. Because Lodestar’s chairman, Jerry Hirsch, and I had had personal experience with nonprofit inefficiencies and ineffectiveness stemming from overlapping missions and duplication of efforts, we adopted the strategy of supporting long-term collaborations as a way to maximize the impact of our grants in furtherance of our second objective.

Mission Plus Strategy: Do you feel that this strategy has proven out over time? How many grants have you made and what is the range of your grants?

Lois Savage: We have numerous examples of the synergistic value of collaboration (nonprofits being able to achieve more impact through collaboration), the efficiencies achieved through collaboration, and the leverage we have achieved by funding collaborations. As for some general conclusions, we have learned that the most durable collaborations are initiated from the ground-up, not top-down, and that while investment in this strategy is risk capital—not all collaborations will survive—there are good lessons to be learned from each project. We have funded approximately 30 collaborations and mergers. About 15 percent have either dissolved when funding stopped or not progressed to a full-fledged collaboration. The range of our grants has been from $5,000 (for a consultant to determine whether a nonprofit should merge or go out of business) to $3,000,000 (for a consolidation of homeless-serving agencies in a one-stop-shop campus). Most of the grants are in the $10,000 to $40,000 range.

Mission Plus Strategy: I am very excited about your newest initiative, The Collaboration Prize, a $250,000 cash prize for the best nonprofit collaboration in the U.S. Can you tell us more about it?

Lois Savage: In the spring of 2008, we launched “The Collaboration Prize” as a means to uncover successful collaboration models and blueprints that can be utilized to inform and educate the sector. We received a total of 644 nominations and uncovered a rich treasure trove of information that we are in the process of analyzing and categorizing, with the goal of making it easily available to the public. At this point in time, the 644 nominations have been pared down to 30 semi-finalists (listed at www.thecollaborationprize.org). A distinguished Final Selection Panel is in the process of selecting the eight finalists. The winner of the prize will be announced on March 5, 2009, during a collaboration conference in Phoenix, sponsored by the Association of Small Foundations. At that time, the 120 quarter-finalists will be named as well.

Mission Plus Strategy: The response to The Collaboration Prize is great, but it still seems that despite the benefits of collaboration strategies, they receive little notice in the nonprofit sector. Why is that?

Lois Savage: First, I think the response to the prize shows there is more of this going on than we realize. Second, collaboration is not easy—it takes time, utilizes already scarce resources, needs leadership, and requires resolving numerous challenges. Third, while the business world has voluminous scholarship on mergers and other restructuring models, there is no counterpart body of knowledge in the nonprofit sector, so models, blueprints, and guidance are extremely limited. Fourth, there is no secure network or marketplace (no “dating service”) where nonprofits can meet prospective partners or otherwise discuss collaboration issues with each other. Finally, almost no funding is available to assist nonprofits in facilitating the collaboration process. 

Mission Plus Strategy: To your last point, donors sometimes worry that if they create a specific fund for collaborations, then nonprofits will be driven by the funding opportunity to try collaborations. Has that been your experience?

Lois Savage: There is a big difference between program grants that require collaboration as a condition and capacity-building grants that facilitate collaboration. The former grants are funder-mandated and can drive the collaboration process; however, our grants are capacity-building grants, not program grants. We fund only collaborations that already are forming at the grassroots—our funding helps them complete the collaboration. The funder-driven collaborations generally are tied to a specific program area (“we will fund your project only if you do it in partnership with another nonprofit”). 

Because the collaboration process is difficult and because our funding is tied only to facilitating the collaboration, I never have encountered, nor would I anticipate encountering, parties collaborating just because the funding for the process of collaboration is there. As noted above, what drives nonprofits is funding for their programs and services—program grants that are conditioned on collaboration can be coercive. Our grants, which facilitate the process of collaboration, would not be a driver.

Mission Plus Strategy: What advice would you give to a foundation that would like to start doing so?

Lois Savage: I think there are several ways a philanthropic community can create an environment that encourages nonprofit collaboration:

1. Provide funds for convening, on an ongoing basis, nonprofits working in the same area
2. Provide technical assistance grants to nonprofits exploring a collaboration option
3. Sponsor workshops that can provide nonprofits with tools to facilitate collaboration
4. Support programs that bring funders, government, and nonprofits together to focus on cooperatively addressing difficult community issues.

Mission Plus Strategy: When will your database on collaborations be ready for the public?

Lois Savage: Currently, we are in the process of identifying a team to organize and categorize the prize data and design a Web site that will make the information easily accessible. We are hoping to have the site operational by March, 2009.

Mission Plus Strategy: Thank you Lois, for sharing your thoughts on the subject of nonprofit collaborations. Readers who would like to find out more about the Lodestar Foundation or the Collaboration Prize, can go to:http://www.lodestarfoundation.org/index.html.

Jean Butzen, Mission Plus Strategy consulting, specializes in mergers and alliances in the Chicago area.

Companies that think about the environment as a social responsibility rather than a business imperative are living in the dark ages, says Carter Roberts, president and CEO of the World Wildlife Fund. In this Stanford Center for Social Innovation talk, Roberts underscores solid business reasons why sustainability is no longer just a nice thing to do, how conservation protects business, and how his organization is addressing the economics, science, and politics of conservation around the world.

Most nonprofit CEOs would love to have a person like Jim working for them. Jim has 13 years of financial experience at General Electric Co. and 28 years at J.P. Morgan, and he currently works for the March of Dimes Foundation doing strategic planning, marketing, information technology, training, and research. Jim is not, however, a full-time employee. Rather, Jim is a 77-year-old volunteer.1 Jim enjoyed his volunteer work at the March of Dimes so much that his wife, Sari, joined him. Her volunteer position includes recruiting other volunteers—and she’s pretty good at it. In 2007, she helped recruit 42 volunteers who donated a total of more than 11,000 hours (valued at an estimated $200,000 of in-kind services).2 In addition to volunteering, Jim and Sari are donors—members of the March of Dimes’ President’s Society—and have convinced the rest of their family to participate. Their daughter, Beth, raised $3,000 over two years through the March of Dimes’ March for Babies walkathon, and Beth’s 12-year-old son is now forming his own walking team. Already into their third year of service, Jim and his family are creating a large amount of…