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As we prepared our application for the federal Social Innovation Fund (SIF) there were times that I struggled with a hard-earned skepticism about the latest silver bullet solution to domestic social problems. I’ve spent 25 years trying to find ways to counter the destructive effects of chronic poverty. A $50 million federal program—a fraction of the resources needed—did not seem to merit the intense focus it attracted from the social sector.

But one remarkable thing about people is that hope springs eternal even in the most dire circumstances. Fanning that resilient and optimistic flame is at the center of the work of the social sector. And it’s at the heart of the success that sometimes comes to those we serve when they are offered half a chance.

Given the stakes, all of us at the Roberts Enterprise Development Fund (REDF) were elated to hear that we would be representing California as a member of the first group of federal Social Innovation Fund (SIF) grantees.

Here’s a brief look at what’s promising and fresh about the SIF—which hopes to accelerate widespread adoption of approaches that demonstrate greater impact than the status quo. To do so, it will test whether funding intermediaries and a focus on measurement of results together deliver better results.

While federal funding for “intermediaries” is controversial, my experience working in two of them over 18 years is that, done right, they can be powerful engines of positive change. These oddly-named entities put the pieces together and connect the dots. We support and aggregate the impact of multiple organizations to make a compelling case for change, and stick with it over time, helping build a healthy nonprofit sector that delivers results (for more on this topic see a great report here).

Funders are often reluctant to sustain intermediaries, viewing them as “overhead”—but the SIF, having the vision to see how intermediaries can expedite and facilitate change, has taken the risk to support us. Our challenge is to prove worthy by adding value. 

At REDF, we know what a heavy lift we have ahead with our plans to help nonprofits create businesses to employ people with major barriers across the State of California, and create a model that can be even more widely replicated. But there are few examples of real progress in this area, and the evidence shows that we’re on to something that works. This is the big chance to demonstrate it, and prove it can be done cost effectively. 

How will the SIF help? Federal support offers financial resources, greater credibility, and help facilitating policy change. SIF-funded groups will learn from one another.

Some critics also dismiss the SIF’s unprecedented focus on measurement and evaluation as “business as usual” and “not innovation” because subgrantees have to demonstrate a track record. I disagree because the focus on measurement (1) lays down a direct challenge to the kind of patronage that still influences expenditure of public resources; and (2) gives us a lever—objective data—that disruptive innovators can use to get a seat at the table with philanthropy, business, and government. For more on this topic see these blog posts.

With no public resources to spare now, and even less in the future, now is the time to make sure the public knows what results our investments achieve. What is success for REDF and the first “class” of SIF grantees? 

• Results! (documented, quantified, well-described, powerful, positive) for people in communities—at a reasonable cost.
• New knowledge and clarity about what works.
• A greater willingness by public and private funders to throw down with those groups that adopt proven practices, measure results, and constantly improve based on what they learn.

 

Carla Javits is the President of REDF, a San Francisco-based high-impact venture philanthropy organization dedicated to transforming lives through the creation of jobs and economic opportunity. Carla serves on the Board of Directors for The Philanthropic Initiative and Northern California Grantmakers. Read more from Carla on her blog, Fuel for the Field.

UNESCO’s 2010 Education for All Global Monitoring Report is sobering, particularly when it comes to statistics in Sub-Saharan Africa. Almost half of the global, out-of-school population is in this region and more than half of them are girls.

Education plays a pivotal role in building human capital and increasing productivity of the economy. In particular, secondary education is the pathway to higher learning or the workforce.

Yet, the reality is that Africa is failing to meet the demand for secondary education, which is fueled by the region’s rising youth population.  Already, governments are allocating a significant portion of their budgets towards education, but it has not translated into results.

According to the World Bank, African countries spend close to 18 percent of their budgets on education. Yet, less than 34 percent of African youth attend secondary school—the lowest level in the world—and less than 5 percent enter higher education.  Without change, a growing percentage of the future workforce will be limited, at best, to a primary-level education. This would hold Africa back.

There’s an urgency to find practical solutions to this perplexing challenge.  How do we create a productive link between investment in education and economic growth? How do we improve efficiency in mobilizing and utilizing funds to deliver higher levels of secondary education attainment?  Are scholarships and bursary programs sufficient to enable as many young people as possible to continue their education?

Perhaps, there is a need for more direct paths between the allocation of money to education and the actual payments to schools. One of our partners in Kenya, Equity Group Foundation, disburses funds directly to schools and into the hands of students. Their model is just one example of how transparent financing ensures targeted solutions for maximum impact.

What other innovations will enable broader access to education?  Our Foundation is seeking fresh approaches to ensure African youth are not left behind. I invite you to share your ideas and experiences.

Reeta Roy is president and CEO of The MasterCard Foundation, a private, independent foundation based in Toronto. Its global mandate is to enable people living in poverty, particularly youth, to improve their lives and the lives of their families and communities by expanding their access to microfinance and education.

In my last SSIR blog post, I mused about the potential for a Doing Good Better Initiative to find and nurture those positive-outlier nonprofits that are highly motivated to take the leap to managing to outcomes—and, over time, help make them the norm in our sector.

Here are some elements of what a “Doing Good Better” Initiative might look like:

1. Convene a good cross-section of top leaders. The first step is to bring together a great group of nonprofit, foundation, and private sector leaders, especially those at the leading/bleeding edge of what’s possible, to explore the possibilities. The group would need to be composed of those who “have been there, done that” or are clearly engaged and working actively to adopt outcomes-based management.
2. Gain clarity on goals. Once the group has the “right people on the bus,” it would then have to define what the Doing Good Better Initiative is trying to accomplish and to what end. In my view, the goals should be grounded in giving leaders the information they need to do their jobs and meet the needs of those they serve.
3. Identify the audience. The Doing Good Better Initiative must be rigorous about specifying whom it wants to influence. It should begin by segmenting the nonprofit sector to identify characteristics of early-adopter, “believer” organizations most likely to be ripe and ready for the culture of managing to outcomes. It would then want to identify the best channels to reach these target nonprofits, their boards, and funders.
4. Change the understanding of what’s possible. Once nonprofits and their key stakeholders get a glimpse at how the innovators at the periphery are using information to create greater impact for those they serve, they will have a hard time going back. There are many different ways to show nonprofits and funders what’s possible. For example, the group could commission a high-quality video with viral potential (e.g., the finalists in Tactical Philanthropy’s Fantastic Video Contest) to show what’s possible when nonprofits gain the power of information and what this means for the people they serve.
5. Build knowledge. In tandem with efforts to highlight successes, the initiative should build and make accessible the knowledge base on managing to outcomes. McKinsey’s Social Sector Office has already gotten the ball rolling with an impressive repository it calls Learning for Social Impact. The site includes tools, best practices, lessons learned, profiles, interviews, landscape analyses, and historical perspectives on outcomes assessment. The Doing Good Better initiative could build on this by offering open-source tools for unleashing the wisdom of crowds to build the knowledge base on managing to outcomes.
6. Develop common outcomes frameworks. The initiative should provide direct support for efforts to develop common frameworks in fields that best lend themselves to measurement and have enough “believers” that they could make real progress, such as early childhood development and community health.
7. Provide education and insight. To change practices and norms among nonprofit leaders, education and training must be a key component of any plan. Doing Good Better would need to address the types of education that are relevant for the nonprofit executives it would seek to reach—including graduate education, executive education, and web-based distance learning.
8. Provide strategic and tactical help. The number one barrier to managing outcomes is the dramatic cultural change it requires. But there is no reason an organization should have to take on this challenge alone. Over time, the sector will need to develop more consultants and foundation staff members with specialty knowledge who can help guide these major change efforts. In the meantime, it should not be difficult for the Doing Good Better Initiative to identify qualified consultants, increase transparency around their costs, enable clients to provide Amazon-like ratings of the value they add, and allow nonprofits to comparison shop more effectively than they do today.
9. Offer financial and other incentives. Few funders today provide the kind of general operating support that nonprofits need to advance the needed cultural change and develop the technology systems and human processes for managing to outcomes. That will have to change. There is no escaping the fact that funders will need to subsidize the hard work and outside expertise that’s required to move to managing to outcomes. In its first portfolio of investments, the philanthropic investing organization I chair, Venture Philanthropy Partners, had direct investments of nearly $3 million and provided substantial strategic assistance to directly support the cultural change and development of outcome-management systems. VPP expects to invest even more with its second portfolio of nonprofit investment partners. We have learned that it can take several years for organizations, even with the kind of intensive support VPP provides, to make the quantum jump from a place of little or anecdotal measurement to a place of rigorous outcomes-based management. Funders and others must be patient during these periods of culture and staff change and development. They should not expect instant answers or improvements.

Data Voracious
“The minute our staff got a taste of data and saw how it could make jobs easier, they were voracious—more so than my former colleagues at GE,” says Year Up National Capital Region’s Executive Director Tynesia Boyea Robinson. “They saw that data allowed them to make sure they were serving young people better.”

If done right, Going Good Better could help make Year Up’s experience the norm for nonprofit organizations and their staffs. That enormous cultural shift would mean the world to the millions of families for whom “outcomes” are not an abstraction but rather a living-wage job, quality childcare, a safe home, or a good school.

Mario Morino, a former software entrepreneur, is the chairman of Venture Philanthropy Partners, based in Washington, DC.

Literally years in the making, July 22, 2010 was a day of enthusiastic celebration for many across the social sector as the Obama Administration announced the eleven grantees of the new Social Innovation Fund (SIF). 

Established by the Edward M. Kennedy Serve America Act, SIF will support some of the nation’s most innovative and groundbreaking foundations and nonprofits.  As Commongood Careers and Talent Initiative are dedicated to supporting the growth and development of such organizations, we have watched with eager anticipation over the past year as this historic legislation was brought to life by the team administering the funds at the Corporation for National and Community Service.

Perhaps most exciting of all, however, is the paradigm shift that SIF represents in how the government thinks about investing in social change.  During the press conference to announce the SIF’s grantees, the Corporation’s CEO, Patrick Corvington, stated that, “Feeling good is not enough. Impact is what matters. Results are what matter.”

The SIF grantees are incredibly diverse in terms of their location, structure, and even mission focus.  Corvington explained the connection between these disparate groups in a press release by saying that, “They are all driven by the search for bold solutions and recognize that we must use evidence to target limited resources where they will have the greatest impact.” 

In our experience, SIF grantees can have the greatest impact by targeting their limited resources on “human capital.”  And by human capital, we mean that to fully leverage growth capital, nonprofits must be able to recruit sufficient numbers of talented staff and volunteers, utilize proven management systems, and shape their cultures in order to position talent for success, development, and retention.

Having worked for years with several of the SIF grantees, as well as the organizations that they support, we have witnessed first-hand the results that these foundations achieve when they bring financial capital together with human capital.

Although many traditional foundations have either overlooked human capital issues or focused only occasionally on piecemeal support, pioneering groups like New Profit Inc., Venture Philanthropy Partners, and the Edna McConnell Clark Foundation have excelled in supporting a more complete range of human capital needs across their grantees. 

Most of these foundations have senior staff dedicated specifically to advancing the human capital practices of their grantees.  They share information and resources with their portfolio, implement operationally-focused evaluation tools, and help ensure that the right leaders are in the right roles. 

The investment strategies of these funders have proven that optimizing human capital allows their grantees to increase revenue flows, decrease program costs, improve program outcomes, accelerate growth trajectories, create sustainable organizations, and achieve mission impact.

We strongly encourage all SIF grantees to consider the impact that human capital will have on their efforts, as well as the many ways that they can help to control those outcomes.  For example, when sub-granting funds to nonprofits, they can: ask about plans to expand leadership teams and management infrastructures; designate funding to support those investments; encourage diverse teams that include talent from constituent communities; provide resources for professional development; and collect and disseminate best-practices and knowledge.

As a fundamental determinant of social return on investment, human capital can either be an unanticipated barrier to success or an effective catalyst for achieving it.  The difference comes down to intent and strategy.

James Weinberg is the Founder & CEO of Commongood Careers , a retained search firm that enables innovative nonprofits across the country to recruit and hire outstanding talent at every organizational level.  He is also the Founder & CEO of Talent Initiative, a nonprofit consulting firm that is dedicated to enhancing the social sector’s perception, prioritization, and practice of human capital management.

 

October 15, 2010 is the new deadline that most small charities and nonprofit organizations have to file their annual returns with the IRS.

Non-profits can submit applications for thousands of grants which are available from federal government, state governments and private foundations.

Professional philanthropy, like all professions, has built a special language to describe its work. This sort of language can be used to more precisely discuss issues of importance to a field or it can be jargon that obscures meaning and serves to identify professionals to each other while excluding “outsiders”.

Most donors, regardless of the vocabulary they use, want their donations to produce results. What characterizes “results” may be very different to various donors. Sometimes the desire to see results can lead donors to seek indicators, like low overhead expense ratios, that are actually bad proxies for results. Sometimes the “result” a donor seeks might simply be public recognition. But believing that donors do not seek results is akin to believing that they would be just as happy throwing their money in the trash.

So I’d like to explain the three words that are used to describe the results of nonprofits; Outputs, Outcomes and Impact. Instead of being confusing jargon, outputs, outcomes and impact actual mimic very common sense approaches to achieving results in everyday personal efforts such as working out to improve your health (more on this later):

• Outputs: These are the activities done by the nonprofit. The meals served by a soup kitchen are outputs.
• Outcomes: These are the observed effects of the outputs on the beneficiaries of the nonprofit. The degree to which the meals served by the soup kitchen reduce hunger in the population served by the soup kitchen.
• Impact: This is the degree to which the outcomes observed by a nonprofit are attributable to its activities. The impact of the soup kitchen is the degree to which a reduction of hunger in the population they serve is attributable to its efforts. While a soup kitchen might serve a lot of meals and correctly observe that hunger is subsequently less prevalent in the population it serves, the reduction in hunger might simply be attributable to an improving economy, or a new school lunch program or some other activities that are not part of the soup kitchen’s efforts.

While outputs, outcomes and impact might sound like jargon, they are an extremely useful vocabulary for discussing the results of a nonprofit. They help illustrate the tradeoff between the difficulty of obtaining knowledge and the value of the knowledge.

• Outputs: Relatively easy to count. Are often selected based only on a theory about what is helpful. If the outputs counted do not lead to anything meaningful, the “results” are meaningless.
• Outcomes: More difficult to measure. Do measure the observed effects of the nonprofit’s activities. However, the observed outcomes may not actually be due to the nonprofit’s activities. If so, the “results” are meaningless.
• Impact: Very difficult to measure. Requires some form of analysis which attempts to hold static the effects of other influences. This is the gold standard because the results are proven.

A quick example to make all of this personal, practical and relevant: If you are trying to get in shape, you may well try to lose weight.

• Output: The amount of calories you consume minus the amount of calories you burn.
• Outcome: Your observed weight.
• Impact: The degree to which your level of health is improved by your weight loss.

Outputs are obviously a good place to start. You can’t legitimately argue that you are trying to lose weight if you pay no attention to the amount you eat and workout. Outcomes are better. You can directly observe your weight and know the degree to which your diet and exercise plan appears to be having an effect. Impact is best. You may be restricting calories, working out and observing a reduction in your weight. But only a rigorous evaluation can eliminate the potential effects of outside influences. Maybe your weight loss is due to a serious undiagnosed medical issue or some other influence that has nothing to do with your efforts. I can hear the urgent comment of a large group of readers already. “The outputs, outcomes and impact of our efforts are far more difficult than tracking what you eat and how much you weigh!” That’s 100 percent correct. No one is saying that measuring results is easy. But here’s the fantastic secret of tracking outputs, outcomes and impact. Rigorous studies have proven that simply attempting to track activities results in impact across many different fields. Just tracking calories consumed, results in weight loss that is attributable to the tracking itself, not the specifics of the diet and exercise regime followed. This is why it is so important that nonprofits that want to actual make a difference at least attempt to track their activities in some way. While the process can be difficult and only becomes more difficult as you move from counting inputs to proving impact, just the effort to begin the process will increase the measurable or immeasurable impact you are having. You can read Part II of this post here. Sean Stannard-Stockton is CEO of Tactical Philanthropy Advisors, a philanthropy advisory firm that serves individual and family philanthropists. Sean is the author of the Tactical Philanthropy blog and writes a monthly column for the Chronicle of Philanthropy. He is a member of the World Economic Forum’s Council on Philanthropy & Social Investing and has been quoted or referenced in The New York Times, Wall Street Journal, Washington Post, Financial Times and many other media outlets.

Managing nonprofis is never easy. Old Economy Village lost nearly all Pennsylvania funding. How has FOEV kept it open? Other states face the same issue

Grit, as defined by Webster’s Dictionary, is a “firmness of mind or spirit, unyielding courage in the face of hardship or danger”.  The nonprofit sector is great for many reasons, but one of the main reasons for its greatness is what I term, “Third Sector Grit” and it is lived out every day by those whose many stories tell of unyielding courage in the face of hardship.  It is a quality that is abundant and at times minimized in the face of “innovation”. 

Third Sector Grit is most times demonstrated not in the stories of the sector’s executive leaders; more often it applies to those community champions in each nonprofit who do not have the larger titles but who are individuals that the organization could not move forward without.  I would venture to say that the definition of Third Sector Grit are the individuals and stories in each nonprofit that showcase its most valuable asset, the ‘firmness of spirit and unyielding courage in the face of the hardship’directed toward fulfilling its mission.

In this regular series, I will highlight an individual who embodies the notion of Third Sector Grit.  In my search, I have received a large number of e-mails from around the world nominating individuals.  In our second Third Sector Grit profile, we highlight Donna Hill.  Donna Hill is Head of Media Relations for the Performing Arts Division (PAD) of the National Federation of the Blind (NFB), a volunteer position. Her title was insisted upon by the president of NFB and for two years Donna has donated this work from her home in Pennsylvania. 

Donna Hill is blind as a result of Retinitis Pigmentosa, a degenerative disease which she was born with.  Mainstreamed in public school in the 1950’s, she received little help and was subjected to bullying.  Donna says “teachers would either assume I was faking my vision problem, or they wouldn’t let me try anything.”  After graduating from college, she taught herself Braille and received her first of four guide dogs from the Guide Dog Foundation for the Blind.

After working as a welfare caseworker in Philadelphia, Donna began pursuing her childhood dream of supporting herself as a musician. Hill, who taught herself to play guitar, had been writing songs since she was fourteen. As regular street performer and her own agent, Donna became a popular Philadelphia area motivational speaker/singer.  Donna is also a two-time breast cancer survivor.  The financial and energy drain of overcoming this disease delayed her, but now Donna has come back stronger than ever. After moving to rural Susquehanna County, she mastered the use of a computer with a screen reader.

Through Donna’s efforts, PAD has found outlets to promote its work which have led to donations to the scholarship fund and purchases of “Sound in Sight”—a multi-genre collection of 18 original tracks and covers, donated by blind musicians. This month, PAD will award its first scholarship. Hill is motivated by the continued struggles of blind Americans to gain acceptance and opportunity—problems that persist despite legislative change, advances in technology and the extraordinary achievements of some blind individuals. Two thirds of working age, blind Americans are currently unemployed and many live in poverty. Only 10 percent of blind kids are taught Braille, despite strong Braille literacy/success links.

Issues affecting blind Americans rarely make mainstream news, and Donna believes helping blind entertainers gain the national spotlight will improve public acceptance and opportunity for all blind Americans.  “There hasn’t been a new, blind American superstar in decades,” says Hill, “And, Helen Keller, who died over fifty years ago, is still the only blind woman most people can name. I’m hoping our work at PAD will elevate a new generation of blind performers to the national stage.”

Donna is now 60 and has long since given up on her own music career, but she is dedicated to making the path easier for young blind people. One of her greatest passions is smoothing the path for the “not-yet-blind.” Most blind people grew up sighted and carry with them the misunderstandings of the general society—overcoming the negative beliefs about blindness is the hardest task for the newly blind. If they believed as sighted people that blindness has to be a devastating condition, that they won’t be able to do the things they love and they won’t be able to live independently, they succumb to those prejudices, which become self-fulfilling prophecies. Donna is very aware of the increase in blindness, and often points to the CDC’s 2008 predictions that diabetes-related blindness among working-age Americans will triple by 2050.

Donna continues to have energetic goals. She hopes to find a publisher for her first fantasy novel, which features a 14-year-old blind girl who is a songwriter. It is her hope that in reading an exciting adventure in which a blind girl plays a prominent role, people will be more inclined to view blind people as contributors to society instead of assuming they cannot live independent, productive, and happy lives. “Unfortunately,” Donna states, “Many of us are programmed to believe that the people who overcome obstacles are those who never doubt that they will and are never afraid. Most of us, however, stumble, fall and pick ourselves up again and again on our journey through life’s road-blocks.”

John Brothers the Principal of Cuidiu Consulting, a Senior Fellow in executive leadership with the Support Center for Nonprofit Management, and an adjunct professor at New York University’s Wagner School for Public Service. He is also a Visiting Fellow at the Hauser Center for Nonprofit Organizations at Harvard.

Okay, so you’re a change agent at a traditional nonprofit organization—or you’re a social entrepreneur who has just started a social enterprise. You’ve got your seed funding and a rock-solid business plan. Now what? How do you inspire people, from your CEO to rural farmers to consumers, to change their ways to do good (or at least better) for society?

Don’t laugh. How to get people to care more about “doing good” is one of the hottest new topics making the rounds of this season’s social innovation conferences. Referred to more clinically as “the neuroscience of change,” the topic popped up for the first time last spring, at the Skoll World Forum in Oxford, then again last month at the National Conference on Volunteering and Service, and then again this past week, at the annual Aspen Ideas Festival in Colorado.

Whether inspiring consumers toward fair trade, persuading corporate executives to care more deeply about labor practices, or empowering women in a rural village, the challenge to influence behavior is a tough one, indeed. Neuroscientists, including Chris Frith, a professor of neuropsychology at London’s University College, say that based on the circuitry of our brains and the emotional responses that direct our behavior, there is some practical knowledge that can be used by social innovators to be more effective in changing hearts and minds.

Here are four quick pointers to consider about the people you’re trying to influence (with apologies to conference presenters):

They/We Are Not Different.
Neuroscientists say our brains have an “us-versus-them” default; individuals have a tendency to think they are special, or different, than the people in need of help around them. We all stereotype others, whether we do it consciously or not, as a sort of primal safety mechanism. Humans have a tendency to frame the world in terms of people who belong to our “in group” and those who do not. Social entrepreneurs need to fight that human reflex by honing in on the similarities that unite them to their constituents. Key strategies include storytelling initiatives or strategic interactions that show donors and higher-ups that they’re not much different than the people your “do-good” efforts are attempting to serve.

They/We Have Choices.
Framing the challenges you are trying to ease is key in gaining support for your work. For example, 600 people are on a deserted island and are hit by a deadly flu. You have a life-saving vaccine. The catch? You can give people two options. Option 1: You have 200 doses of the vaccine and can give it to 200 people, guaranteeing their recovery. Option 2: You can try a new vaccine on all 600 people with only a one-third chance it will save them all. Most people will choose Option 1. But if you frame the dilemma differently—that Option 1 will kill 400 people and save only 200 lives, most people will opt for Option 2. Stress positive outcomes.

They/We Are Not Helpless.
Donors, people in need, and frustrated social entrepreneurs need to avoid confusing frustration with the feeling of helplessness—that sense that, in the face of challenge, nobody can really make a lasting difference. To avoid this, draw up clear goals along with a list of steps required to achieve them. Set deadlines. Start measuring your progress. Broadcast your accomplishments. Measuring incremental change sets up a continuous improvement loop. Also important? Invite the people you’re trying to serve to be part of the process. Train them how to measure results incrementally. As long as there is knowledge of impact, the “we are helpless” syndrome won’t stand a chance.

They/We Are Not Smarter.
Neuroscientists on recent panels described the stagnant thinking that tends to challenge donors and executives, who have self-wired their brains with data and categorizations. New thinking that challenges these categories tends to be dismissed or downplayed—not so much because it is bad or good, but rather because it falls outside the categories that most people have already built for themselves to cope with their everyday challenges and to compensate for what they think they do well or poorly. The antidote? Don’t ask people to take action. Instead, create situations in which people are expected to act in a certain way unless they take decisive action to behave otherwise. If they opt out, then rinse and repeat. (See the previous bullet point, “They/We Are Not Helpless.”)

These are just four quick tips from the pros. What might you add to the list?

Marcia Stepanek is Founding Editor-in-Chief of Contribute Media, a New York-based magazine, Web site, and conference series covering the new mass philanthropy movement. She also is publisher of Cause Global, an acclaimed new group blog about the use of digital media for social change, and teaches social media in advocacy at New York University. An award-winning journalist and author, Ms. Stepanek’s new book, Swarms, about the evolution of cause-wired groups, is due out early next year..

“A crisis is a terrible thing to waste,” as Paul Romer, Stanford economist, once said . Sadly, we may be wasting this one. 

To take just one data point, under the best likely scenario, it may take 5 years to get employment back to pre-crash levels.

Graph

To take another data point, consider the table and then ask whether we should extend unemployment benefits:

Graph

There should be no doubt that this is a crisis, no matter what you want to call it - “Great Recession”, “Great Reset”, or “Second Great Depression”. Our hair should be on fire, as UC Berkeley economist Brad DeLong has noted, yet it is odd how quiet things seem.  Aside from the Tea Party cacophony, there don’t seem to be the expected visible signs of panic.

This leads me to wonder, where will employment growth come from, and how will the nonprofit sector affect, and be affected by, these trends?

In “Offshoring: The Next Industrial Revolution?”, an influential Foreign Affairs article in 2006, Alan Blinder argues that globalization and the impending offshoring of millions of jobs is posing a “Third Industrial Revolution.”  The new wave of offshoring is hitting high-skill professional services that previously have been insulated—not just software programming, of course, but also accounting, law, and virtually any kind of data entry or analysis (X-rays, for example, can now be read by specialists in India).  This disruption will be massive, but can be managed, in Blinder’s view, so long as we recognize that the critical divide no longer will be between the traditional categories of “skilled” and “unskilled” labor, but between work that can be done at a distance (“impersonal services”), and work that must be done interpersonally (“personal services”), such as family law, child care, or nursing. 

So, not only may many of the jobs that we have lost never come back, in seeking to spur job growth, focusing on jobs that are difficult to offshore will be critical.

Richard Florida, in an Atlantic Monthly article titled “How the Crash Will Reshape America” and in a new book The Great Reset, foresees that future economic and job growth will be concentrated in mega-regions that have a confluence of strong technology and infrastructure, talented, highly educated and creative people, and tolerance. Florida thinks the Great Reset will be even more disruptive than was the Great Depression. “We are living through an even more powerful and fundamental economic shift, from an industrial system to an economy that is increasingly powered by knowledge, creativity, and ideas.” “Unemployment is ungodly high for blue-collar people and construction workers and more modest for people who work in professional jobs, technical jobs, creative jobs, or people who have a college degree.”

All of these impacts and reactions to globalization may make working for the public good even more central to our society and our economy.  While not immune to offshoring, most of the services provided by nonprofit workers—such as teaching, health services, counseling, advocacy—cannot be provided over a wire.  Furthermore, these are precisely the areas in which greater investment likely will be required to make workers in America more competitive. 

So where might the jobs we need come from?

It doesn’t seem like the market, on its own, is going to generate the job growth we need.

Last year’s stimulus bill prevented things from being much worse, but its impact is beginning to wane, and the prospects for further fiscal stimulus are very dim. Because most states are required by law to balance their budgets, in recessions they find that they must cut services and support, just at the time that both rising need, and economic theory, should lead them to increase spending.  That’s why some economists characterize them as “50 little Herbert Hoovers,” a reference to President Hoover’s austerity approach that inadvertently made the Great Depression longer and deeper.

The magnitude of the harm that will be done is so staggering, it should make clear that much of what preoccupies so many of us in the nonprofit field – social enterprise, data sharing, all the various forms of “(fill in the blank) philanthropy”—is just tinkering at the margins.

The trends Blinder and Florida outline indicate that employment in public benefit enterprises should grow, in my view, but that doesn’t mean it will. What things might the nonprofit sector push for that might help?

One good thing we could do would be forgive student loans for people moving into community service.  Better still, perhaps we can develop an ROTC-style program to commit to pay tuition for students committing to public service.

We also might look at some period of mandatory national service. Young people will be better off delaying graduation until the jobs picture improves anyway—research shows that graduates coming into a depressed job market suffer diminished earning power as much as 15 years later.

We also need to provide incentives and support for older adults to move to the encore careers that seemed a prime pathway before the crash.  There is talent and energy that we could be using, very affordably, to improve health care, child care, education, and a host of worthy goals.

Finally, it also seems like time for a massive jobs program in community service, along the lines of the Works Progress Administration and Civilian Conservation Corps from the 1930s.

Strategies like these would have measurable economic stimulus and anti-poverty effects, and they could be just as helpful as other strategies for the “helicopter drops of money” currently being considered by economists.

An increasing federal deficit is a very real problem, and programs like these would contribute to the deficit. However, in the current environment, when the federal government can essentially borrow at zero interest and there is such great need, forsaking the employment and community benefits—and the economic growth—that they would bring does not seem smart. 

The indirect effects of such a campaign may be even more valuable.  We went through the 9/11 crisis without really developing a sense of shared sacrifice and commitment (instead, we were encouraged to go shopping). We are limping through the current crisis again without a strong sense that we are all in it together.  (What benefits might we see over time if everyone spent their 19th year working side-by-side with people from very different socio-economic and cultural backgrounds?) 

For all these reasons, foundation and nonprofit leaders should be paying attention to how to increase employment in the sector as they have done to preserving the full deductibility of donations at the highest tax brackets, or to goals like the National and Community Solutions Act (HR 5533.IH), sponsored by Rep. Betty McCollum (MN -4).

What other things might nonprofit advocates and funders push that could help get people employed in improving their communities?

Peter Manzo is President & CEO of United Ways of California, which improves health, education and financial results for low income children and families by enhancing and coordinating the policy advocacy and community impact work of California’s 37 United Ways.

 

The term corporate social responsibility (CSR) has been widely used as a way to discuss and monitor a company’s social programs and behavior. There are socially responsible scorecards, socially responsible mutual funds, and corporate social responsibility annual reports, to name just a few. CSR has proven to be a useful way to describe a company’s behavior and programs, but it has been less useful as a tool to help executives manage their company’s operations in a responsible and long-term manner. Using more recycled materials or imposing more stringent labor standards on suppliers may be more socially responsible behavior, but is it always the best way for a company to lessen its impact on the environment or increase the welfare of its workers? To enable business leaders to answer these and similar questions and manage accordingly, a new term—signifying a new approach to the problem—is needed. Increasingly, business leaders are adopting the term sustainability as the best way to describe not only how to integrate social, environmental, and economic impacts into all corporate decisions, but also how to manage the company to achieve those same results. The important insight that sustainability brings is the recognition that business leaders must consider the…

A recent Fast Company article examines research by neuroeconomist Paul Zak that suggests social networking triggers the release of the generosity-trust chemical in our brains: oxytocin. Zak’s research combines economics with biology, neuroscience, and psychology as well as the relationship between empathy and generosity. Adam Penenberg, the author of the article, set out to investigate whether Zak’s research on oxytocin could be applied to social media.

More specifically, he wondered:

What explains the need of our BlackBerry-bearing, Twitter-tweeting Facebook friends for constant connectivity? Are we biologically hardwired to do it? Do our brains react to tweeting just as they do to our physical engagement with people we trust and enjoy?

As it turns out, they do. Penenberg participates in a Twitter experiment in Zak’s lab that tests his oxytocin levels while he tweets. The results are astounding. In just 10 minutes of tweeting, Penenberg’s oxytocin levels spiked 13.2 percent, equivalent to the hormonal spike experienced by a groom at a wedding! Penenberg’s stress hormones cortisol and ACTH also went down: 10.8 percent and 14.9 percent, respectively.

In short, Zak explains:

Your brain interpreted tweeting as if you were directly interacting with people you cared about or had empathy for. E-connection is processed in the brain like an in-person connection.

Now I get why I trust people like Hildy Gottlieb and Andre Blackman, people who I’ve never met in person. I would recommend them not only because of their expertise but because of the online relationship I have with them.

If Zak’s research is conclusive, then businesses have even more of a reason to invest in social media. Nonprofits have even more incentive to become networked. Given the emotional effects of social networking, organizations can leverage their efforts to build trust among their Twitter followers and Facebook friends in a way that makes them more likely to donate, volunteer and advocate on their behalf.

As Penenberg concludes,

As Zak and others deepen their study of oxytocin, we may better understand why people with friends live longer and get sick less, and why we are compelled to be social animals online and off. If these changes apply in the world of social media, the implications for business—for every brand, company, and marketer trying to understand the now intimately networked world—could be significant.

  Rosetta Thurman is a writer, speaker, professor and consultant working and living in the Washington, D.C. area.  She holds a Master’s degree in Nonprofit Management and blogs about nonprofits, leadership and social change at rosettathurman.com

 

Over the course of two and a half days last month, leaders from 36 organizations playing a role in the global philanthropic ecosystem—including GuideStar, CharityNavigator, GlobalGiving, and Network for Good, as well as GreatNonprofits—met at the New York City offices of the financial technology firm Liquidnet.

This diverse group came together to focus on how we might join forces to create greater social impact throughout the philanthropic ecosystem.

Over the course of this “Markets For Giving” workshop, a consensus view of how the philanthropic ecosystem should look in the future emerged.  A few key aspects of this future vision of the philanthropic ecosystem include:

• Beneficiaries at the center, with a cost-effective, scalable mechanism for obtaining beneficiary feedback
• Free flow of quality information throughout the ecosystem (that is standardized, commonly accepted, placed in human terms, with clear global standards)
• Nonprofits that use the information to improve their performance
• Resource providers that use the information to make more impactful donation decisions
• A global philanthropic “platform” that facilitates the collection, aggregation and exchange of information and resources

Interspersed throughout the workshop were speakers (either in person or via video) who offered their perspectives on how we might solve some of the challenges before us. 

Jacob Harold of the Hewlett Foundation challenged us to find opportunities to collaborate, since the current ecosystem—with too many players engaged in duplicative efforts chasing too few resources without essential scale—is not sustainable.  Paul Brest from Hewlett also shared his view on theories of change, especially in the philanthropic sector.

Liquidnet Founder and CEO Seth Merrin shared his entrepreneurial insight on how he started his company, which began with the premise that by leveraging technology and the power of collaboration, a broken marketplace comprised of disparate competitors could be transformed into a highly efficient and effective community.

Hope Neighbor presented her market research on the donor landscape so that we might improve the quality of giving.  One keen challenge presented was the challenge of transitioning the 85 percent of donors who say they care about nonprofit performance into actors who actually research nonprofit performance, a category currently comprised of only 21 percent of donors. 

Chris Hughes of Jumo shared his vision for a network that leverages the power of the social web to facilitate connections between individuals and organizations that are making an impact.

The workshop team was intentionally diverse but it wasn’t exhaustive, and the group will most likely evolve into new configurations as we move forward.  With a rough outline of an agreed upon vision for tomorrow, certain sub-sets of this group can work together to build the various components that will ultimately add up to the future vision we all helped create. 

Perla Ni, founder and former publisher of Stanford Social Innovation Review, is the founder and CEO of GreatNonprofits. She is also a co-founder of Grassroots.com.

Brian Walsh runs Liquidnet For Good, the corporate social engagement platform for Liquidnet, a global financial technology firm based in New York.  Since 2007, Liquidnet has devoted a portion of its annual revenues towards social causes, winning the 2009 Excellence Award from the Committee Encouraging Corporate Philanthropy for its signature partnership , a youth village for orphans in Rwanda.

Africa is being described as a new economic frontier, according to recent reports from McKinsey Global Institute and the Africa Progress Panel. The former assesses opportunities for business investment in Africa’s future growth trajectory, while the latter highlights social and developmental issues that need to be addressed to fuel progress. Both reports converge on a central question—what will sustain such growth?  The African Progress Panel underscores one driver often missed by economists, governments, and policy makers: the central role of women in the economy.

In spite of shouldering a disproportionate burden of the continent’s poverty and facing barriers to education, financial services, resources and property rights—the story about African women and girls is not only about vulnerabilities, but also about their agency.

Already, women and girls are at the helm of micro and macro activities that keep African economies churning—collecting water, planting and harvesting crops, as well as buying and selling goods. They spend about 70 percent of their unpaid time caring for family members and keeping the current labor force fed, clothed and healthy. In Africa, agriculture accounts for 24 percent of GDP and is the predominant source of livelihood for millions. Women produce up to 80 percent of all basic food products. Yet, they receive only 10 percent of credit given to farmers and less than 1 percent of total loans to agriculture.

Clearly much more needs to be done to harness women’s energy and skills and bring their capabilities to the forefront of economic agendas. It starts with education and empowerment.

The multiplier effects of educating girls and women are pervasive and transcend generations. One of our partners, Camfed, has demonstrated that educating girls sets in motion a virtuous cycle of change within families and communities. Camfed’s results show an educated African girl will be less likely to get HIV/AIDS, more likely to earn 10-20 percent more income, and have a smaller and healthier family. Perhaps the greatest evidence of the power of girls’ education is their philanthropic investment in other children. Former Camfed-supported girls have galvanized action to support the education of nearly 120,000 vulnerable children. They have contributed to whole communities through their independence, leadership, and status as role models for other girls and women.

Women are contributing to Africa’s growth surge. We cannot afford to overlook their potential and agency. Investing in them will significantly propel Africa towards a more sustainable economic and social future.

Reeta Roy is president and CEO of The MasterCard Foundation, a private, independent foundation based in Toronto. Its global mandate is to enable people living in poverty, particularly youth, to improve their lives and the lives of their families and communities by expanding their access to microfinance and education.

All this year, I have been writing a blue streak — here, here, and here — on the topic of “managing to outcomes.” In these articles:

• I’ve argued that all but the smallest nonprofits have a mission-critical need and responsibility to make collecting, analyzing, and using information a core management function;
• I’ve shared my fear that many current efforts to collect and use information “major on minors” — that is, leaders get bogged down in the details of measurement and metrics while losing sight of what they’re trying to accomplish for those they serve;
• And I’ve highlighted a handful of nonprofit innovators who are showing what is possible when organizations create a culture of information-based introspection and performance-management systems that allow them to use and apply the information they need on an ongoing basis.

Now, I want to offer some thoughts on what the nonprofit community and those that serve it can do to nurture and support the profound culture change that managing to outcomes requires.

In brief, I believe there are two overarching actions that the nonprofit community must take to change the norms in our sector. First, we must demonstrate the desirability of outcomes-based management to increase demand and acceptance. We can do this by showing what’s possible, illustrating how managing to outcomes helps nonprofits do what they do better, and rewarding successful adoption of outcomes-based management that leads to increased benefit for those served. A great example of this can be seen in the documentary “Saving Philanthropy,” now in production.

Second, we must enhance the feasibility of outcomes-based management. We can do this by providing financial incentives, strategic assistance to encourage leadership to engage, and the tactical help to make it easier for motivated nonprofits to invest the tremendous time and effort required to shift their culture to one that can rigorously manage to outcomes.

The Missionary Sell
Back when I was in the high-tech industry, we used the term “missionary sell” to describe the introduction of a new product or service that would require a change in process or culture, always extremely challenging. We focused our initial efforts on finding those organizations and catalytic leaders that were already “believers” or strongly predisposed to the new concept. We didn’t allow time and effort to be diluted by the “non-believers.” Instead, we concentrated our resources on helping the pioneers be successful in their implementation. Then, as Geoffrey Moore conveyed so well in his 1991 book Crossing the Chasm, we used this beachhead of demonstrated value to reach out to the more traditional institutions and to spread the word to larger markets for much broader acceptance.

I believe we need the same missionary-sell approach here. I urge a relentless focus on ferreting out, supporting, and sharing the results of those early adopters who are demonstrating the feasibility and desirability of outcomes-based management. This cadre of successful nonprofits and their catalytic leadership can then provide an invaluable asset from which to build a broader movement of nonprofits that want to do good better.

Doing Good Better
Building on the success of leaders like these, we could design an initiative — let’s call it Doing Good Better, to borrow an evocative (if overused) phrase — to develop the building blocks for making outcomes-based management the norm in our sector. Our motivation should not be the “elegance” of outcome metrics and management systems. We would do this for one reason only: to create meaningful, measurable, sustainable benefit for those served!

In my next SSIR blog post, I will offer some concrete thoughts on potential elements of a plan of action. If you don’t want to wait, click here to read an extended version of my thoughts on a Doing Good Better plan.

Mario Morino, a former software entrepreneur, is the chairman of Venture Philanthropy Partners, based in Washington, DC.

 

Water shortages? There’s a game for that now. Ditto world famine, the global oil market, and the struggle for Middle East peace. In fact, over the last couple of years, there has been a surge in the number of video game developers who would rather design for social problem solving than entertainment (think Grand Theft Auto meets the electric car).

That’s good news for the rest of us: video games have finally begun to shed their one-size-fits-all reputation for blood and bombast. Behavioral experts agree that so-called “games for good” can teach empathy to those who play them — a prerequisite for collaborative problem solving.

But the really good news here? Demand for such “social issues” games is rising, too — thanks in part to the federal government, which has started to commission hundreds of them across multiple agencies. According to Kumar Garg, of the White House Office of Science and Technology Policy, the demand is certain to continue, at least for the next couple of years. “Society is becoming more social given the social networking technologies before us,” Garg told people attending the recent 2010 Games for Change Festival in Manhattan. Says Games for Change Chairman Alan Gershenfeld , “When people are motivated, they can move mountains. When they aren’t, it takes mountains to move them. Games can build an incredible motivation to learn and to act. Games can be that bridge to more civic engagement.”

I caught up recently with Gershenfeld in New York. What follows is an edited transcript of our conversation:

You say that games can tie social networks to social action. What makes you so sure?

Games are unique as a medium in that they’re interactive and participatory. That separates games from linear media like film and television. Games let you step into other peoples’ shoes, take on roles, make decisions with agency and see the consequences. Again, that’s very unique. There’s a game called Peacemaker where you can play the Israeli leadership side or the Palestinian leadership side in the Middle East conflict. Nothing in game design is neutral and this game was really well reviewed; philanthropists on both sides of the conflict have released it. It’s intriguing and worthwhile to be able to step into somebody else’s shoes.

Games create a motivation to learn, and in some ways, I think, that is the most powerful thing. We live in a country where 30 percent of kids are dropping out of high school — in many cities the dropout rate is as high as 50 percent. And yet 97 percent of kids are playing games. If you can tap into this medium that has this incredible potential for learning, I do believe — if it’s really thoughtfully done and rigorously tested — game play can be a key piece of keeping kids motivated in school and wanting to learn. Games help foster peer to peer learning.

Can games in the digital space jump over and create behavior change in the real world in mass numbers?

Absolutely, but it’s not simple. Like film and radio, it takes hard work. It takes great craft.  There are, certainly, a lot of examples of people who have created games that have created behavior change in the real world. Have they scaled to millions or 10 millions? Not yet, but I am confident as we raise the sector, they will.

Today, almost every major foundation and major government agency is either funding games or looking at funding games. Additionally, the White House is sponsoring multiple game-based contests around childhood obesity and around STEM learning — science, technology, engineering, and mathematics.

We’re at a point where it’s less about convincing people that games are a social impact medium that should be looked at and more about this question: “How can we most effectively leverage this medium for the public good?” We have a Corporation for Public Broadcasting in this country. We have a National Public Radio. They’ve had an enormous impact on closing the gap between what the commercial TV and radio industries don’t accomplish and what each medium is capable of doing.  Why don’t we have a Corporation for Public Gaming?

Why not, indeed?

For a long time, people just looked at computer and videogames as frivolous at best, and at worst, things that have been really bad for you. Most of the public dialogue has been around the negative aspects. I think there is an important debate to be had about the role of computer and video games in society and their effect on children and adults. But there has been very little discussion, until recently, about how this incredibly powerful game medium could be harnessed for learning, health and social impact. In the last few years, the [games-for-social-change] sector has been growing by leaps and bounds because there is increasing amounts of research showing just how powerful the medium is.

Who’s behind this movement to formalize the games-for-good sector?

There are organizations now that specifically focus on games for change, games for health, and games for learning. There also are academic centers doing innovative stuff now around games — University of Southern California, Carnegie-Mellon University, MIT, University of Wisconsin, Georgia Tech, and so on. And there are government groups as well as major philanthropic foundations like the John D. & Catherine T. MacArthur Foundation, the Knight Foundation and the Bill & Melinda Gates Foundation that are looking hard at the games sector. There is also growing interest among game developers from the commercial side of the games industry. As the gaming industry has aged, the game makers have aged and have had kids of their own. A bunch of game makers are looking now to start their second careers, and society is starting to see more and more individuals within companies wanting to embrace these social-good games, as well.

What could a Corporation for Public Gaming achieve that government isn’t already or cannot?

The structure of how the government should engage in public interest gaming needs more thought and research. How might public games be similar or different from public television and public radio? Different countries have different models for public support of the media. In America, it’s a divided model; there is some public funding but also sponsorship and “viewers like you.” I think that’s a very powerful concept, that the viewers are a key part of the funding cycle for programming. In terms of funding and governance, there is some real thought and history to build upon. But even before we talk about funding — because, as we speak, there are hundreds if not thousands of games being made with taxpayer dollars across multiple government agencies — just insuring that those taxpayer dollars are being spent efficiently is another component.

Games are a young, constantly changing, very complex medium with many different platforms. I do think that another role, perhaps, for a Corporation for Public Gaming would be to ensure that the people who are coding games in the public interest have the right skills and tools to effectively make those games. They should also have a portfolio of games under their belts: the best-selling game franchises in the commercial business often have been built over many, many cycles — World of Warcraft, Call of Duty, Guitar Hero, the John Madden football franchise.

Government agencies and philanthropies also tend to award a lot of grants but they don’t necessarily have the skills to assess the people who apply for them. They don’t always know whether applicants have the right technology, design or management skills, and experience. Government agencies and philanthropies also don’t have the ability to troubleshoot if game projects go awry: games are very complex and the development of them often can go awry. Government agencies and philanthropies also don’t always think through the marketing, distribution, and outreach.  These are things that game publishers do. I sometimes call these philanthropic foundations and government agencies ‘accidental game publishers’ because they’ve taken on all of the responsibilities of a game publisher but they do not have the staff or the knowledge to do it. I think this is a clarion call for the creation of new public-private partnerships or perhaps some new entity within government that could provide the kind of scaffolding needed to take full advantage of the medium.

Why are games so powerful?

Besides being interactive and participatory, they’re also unique in that you can use them to fail in a safe environment. Failing in a virtual space is much safer than failing in the real world. For example, there’s a game being presented this year around climate change by a group in England called Red Redemption. They actually did a lot of research on this release. In the game, you can pay the failure state — where essentially, you melt down the entire planet. Red Redemption found that players who did that retained more of the learnings of the game than did those who saved the planet. You don’t have to put people down a literal path. You can use the medium in really inventive ways and test to see if the pedagogy and impact, the rewards and challenges, are really coming out.

What are some of the new trends in the space?

Social networking games like Farmville, the Zynga games, the virtual worlds. Social networking games are services, not products.  And what the successful games in this space do is pair the game designers with the heuristic experts, to scale the number of players. That same rigor of getting really talented game designers to sit down and work with really smart heuristic experts could and should be applied to social impact goals to scale participation and educational impact or health impact or social impact.

Not only are games highly interactive but some also allow players to build their own achievement levels. To build a game level, you have to build mastery around the subject matter. You can empower youth through game design. Designing a game is an incredibly complex process. You are designing a digital system for somebody else to use and one that has to be in balance. We live in a world of systems. So if you look at the emerging 21st century literacy skills, they involve things like creativity, collaboration, systems thinking, problem-solving, iterative design, and digital media literacies. These are skills that kids and grown-ups will need in the 21st century world. Designing games hits every one of those buttons.

Marcia Stepanek is Founding Editor-in-Chief of Contribute Media, a New York-based magazine, Web site, and conference series covering the new mass philanthropy movement. She also is publisher of Cause Global, an acclaimed new group blog about the use of digital media for social change, and teaches social media in advocacy at New York University. An award-winning journalist and author, Ms. Stepanek’s new book, Swarms, about the evolution of cause-wired groups, is due out early next year..

Mission ship charitable project: a London company is sponsoring the refit of Africa's oldest ship as a primary health care clinic on Lake Malawi

To ensure future sustainability, organizations must develop and implement a plan for transitioning from one CEO to the next. Three approaches are offered.

I recently returned from a trip to the London School of Economics, where I attended a week-long session on organizational decision making and negotiation.  Of the 34 attendees, I was the only individual representing the nonprofit sector.  As I became the “nonprofit guy” in the room, many corporate and HR executives from global companies approached me and stated that they have envisioned a time when they would retire from the corporate world and transition into an executive position in the nonprofit sector.  I praised them and said the nonprofit sector is always in need of great people.  I talked to them about programs in the U.S. where universities are helping transition business executives into the nonprofit world, leaving out some of my challenges with these efforts.  I also told them that many of the transitions that I have seen involving former business executives have had some road bumps.  Often the new nonprofit leader does not have an adequate understanding of both the culture of a nonprofit organization and when and where their business experience may or may not apply to the nonprofit organization.  I suggested that they begin thinking about this transition now by both volunteering with an organization and becoming an involved board member of an organization.  All agreed.  I then suggested that when they do make the plunge into the nonprofit world, they think about getting their feet wet in a middle-management position as a launching point.  The response to this idea was less than favorable.  Most believed they would immediately run an organization and looked at their management work in the corporate sector as more than enough to run a “lowly” nonprofit organization.  I was somewhat offended at this and at the ongoing notion that the nonprofit sector would be so graced by the presence of more corporate executives.

During lunch, I tossed a table of my colleagues a question.  I clarified and got agreement that all believed they could immediately begin running a nonprofit organization based on their experience working in the corporate arena.  I then asked “could a nonprofit executive also make the same transition into senior leadership in the corporate arena?”  All agreed that a nonprofit executive could not “make it” as a corporate executive and maybe could begin work in middle management.  We then discussed the attributes of strong corporate executives; all, in my opinion, were the same attributes of a strong nonprofit executive.  Essentially the defining difference was organizational size and the complexities of a corporation.  I stated that lately I have been reading how many executives in the corporate arena have often misread these complexities, and much of the current economic crisis could be blamed on corporate executives being too far removed from organizational challenges.  I conveyed my belief that sector experience did not matter.  We agreed to disagree but the question still lingered in my mind, can a nonprofit executive transfer over into the same position in the corporate arena?  Outside of understanding the culture and the sizes, what are the big differences?

There has been a great deal of writing on the attributes of successful corporate CEOs.  If you do a Google search on this topic and a number of links emerge.  The one of the best was a study by Steve Kaplan and Morten Sorensen of the University of Chicago’s Graduate School of Business entitled “Which CEO Characteristics and Abilities Matter?”  The 2007 study essentially assessed CEO candidates for companies involved in private equity transactions, including both buyout and venture capital deals. They studied how CEOs’ characteristics and abilities relate to hiring decisions, investment decisions, and subsequent performance. The candidates were assessed on more than forty individual characteristics in seven general areas — leadership, personal, intellectual, motivational, interpersonal, technical and specific technical understanding including areas like human resources, product development and managing growth.  In looking at the data, I found no real difference in the cited successful characteristics outlined in the study’s population in comparison to those of a successful nonprofit leader.  The data that I did find most interesting is that the characteristics of outside CEO candidates were more highly rated than incumbent CEO candidates, potentially supporting my idea that outside nonprofit executives might have a great deal to offer as corporate senior leaders. 

In fact, I think current nonprofit CEO’s might help bring a bright and potentially effective array of skills to a corporation.  In the area of fund development, I suppose the equivalent skill in the for-profit sector would be “sales” but these two functions have many differences.  Having worked in both sales and fundraising I know that evaluating best nonprofit executive that fundraises and the best corporate executive that sells and I would take the nonprofit executive every time. Reason?  Have the corporate executive try to sell the idea of giving to an animal shelter and have the nonprofit executive try to sell a copier.  I guarantee the nonprofit executive sells more copiers than the corporate executive gets donations.  This is part of the reason why many corporate board members have a hard time raising funds; it is easier to sell a copier than a cause.

The crossover into sectors should work both ways, although of course there are variations and the applicability is not cookie-cutter.  In fact, some may consider this idea asinine but I believe many of our corporate friends are hurting in more ways than just financial.  As a long-time human service practitioner, I immediately wonder what program can be created to assist the corporate sector?  One way might be for corporations to look for leaders outside of traditional routes.  Either that or I am going to get Donald Trump to have a nonprofit executive on the “Apprentice”, which would inevitably lead to a nonprofit executive victory and a surge in the idea of looking to the nonprofit sector to cure corporate sector blues.  Let the games begin!

John Brothers the Principal of Cuidiu Consulting, a Senior Fellow in executive leadership with the Support Center for Nonprofit Management, and an adjunct professor at New York University’s Wagner School for Public Service. He is also a Visiting Fellow at the Hauser Center for Nonprofit Organizations at Harvard.