Philanthropy News Feed

Charles Lawton: Waterfront preserved as private gets public help | The Portland Press Herald / Maine Sunday Telegram

• Philanthrocapitalism » Betting on the Poor Matthew Bishop of the Economist weighs in on the SKS/Unitus story. (tags: philanthropy)
• With Credit Tight, Microlending Blossoms – NYTimes.com Microlending to US borrowers is on the rise. (tags: philanthropy)

When changing careers, avoid these missteps - chicagotribune.com

Recombinant Records on Huxley versus Orwell's vision of Dystopia. The piece is a short comic. And it's moral is that Huxley was right; we are amusing ourselves to death. Given my attention span, I would have prefered a tweet rather than a one page comic. But I did like the pictures.

I just got a call from Geoff Woolley, the person named to lead “Unitus 2.0” as they redirect their efforts away from microfinance and towards a new area of “maximum social impact”. Given certain legal issues around the SKS IPO, Geoff is unable to immediately take me up on my offer to have him guest post here on Tactical Philanthropy (an invitation I sent the day I first wrote about the story). However, Geoff very much wants to tell his side of the story (he’s been involved with Unitus since the very beginning) and is talking with his team about when he can send me his guest post.

I’ve talked to a lot of people about the Unitus situation. Everyone that I’ve talked to thinks the world of the Unitus team, including the founding board members. I continue to withhold any judgment because so much of this story is murky. I did reiterate to Geoff my opinion that Unitus blew an opportunity to really claim victory for completing their mission of “accelerating microfinance” and instead left many people with questions about Unitus and the field of microfinance which they are leaving behind.

As much as I urge philanthropy to work to move faster, I also greatly appreciate that unlike areas like finance and politics, philanthropy is able to avoid the 24-hour news cycle and let stories play out in full before passing judgment. I look forward to hearing more about this story and most importantly trying to figure out what we can learn from it.

This is a guest post from Tim Ogden. Tim is Editor-in-Chief of Philanthropy Action, a journal for donors, and Executive Partner of Sona Partners, a thought-leadership communications firm. Follow him on Twitter: @philaction and @timothyogden.

By Tim Ogden

Today, the world’s second microfinance IPO happened: SKS shares went on the market in India. All expectations are for a highly successful IPO similar to the blockbuster IPO of Compartamos in Mexico two years ago. Strangely tied into the SKS IPO is the demise of Unitus, a non-profit founded to help MFIs improve operations, grow faster and attract commercial capital. A few weeks ago, the board of Unitus declared “Mission Accomplished,“ announced it would be laying off its staff and examining a future direction for the organization focused on other poverty interventions. Unitus was a significant donor to and investor in SKS with both charitable and for-profit dollars.

The SKS IPO has produced largely the same rhetoric as the Compartamos IPO: Mohammed Yunus complains about profiting from the poor while polishing his halo and a few other experts point out that meeting the financial needs of the global poor requires access to commercial capital markets.

But that discussion is well worn and a distraction from the real issues that are raised by the SKS IPO and the Unitus shutdown. In the two organizations we are for the first time, I believe, seeing what the endgame for social entrepreneurship can look like.

Both SKS and Unitus majored on social entrepreneurship language: they explicitly targeted using commercial capital to meet social goals. This is somewhat distinct from Compartamos, whose founders tended to speak about pursuing commercial goals for their own sake, not primarily as a means to a social end. Just as important both organizations used the standard social entrepreneurship playbook, founding a nonprofit organization and funding themselves initially at least with charitable donations.

These charitable donations into the risky venture of microfinance have succeeded by most reasonable measures. SKS makes quality financial services available to a huge number of clients, while charging very reasonable interest rates given the cost of serving the clients it targets. Unitus was one of the first organizations to invest in MFIs to help them access commercial capital and to evangelize microfinance investments to the commercial capital markets. As the Unitus board noted in the announcement of its shutdown, a huge amount of commercial capital is now flowing to microfinance, some would argue too much.

That success in turn, as contemplated in the dreams of social entrepreneurs, has made it possible for the founders of Unitus and SKS to do well because they did good. But that’s where the story begins to get murky. That murkiness is based in a number of transactions that were necessary for SKS to take commercial capital and for Unitus to prove the commercial capital model. Along the way, the clients who owned 40 percent of SKS, have had their share diluted without it being clear exactly how they will benefit. Unitus, the non-profit, spun off the Unitus Equity Fund, a for-profit private equity fund, and seems to have given the for-profit some share of its investment in SKS. Members of the Unitus board who approved the creation of the for-profit fund spun out of the non-profit are almost certainly (though its difficult to determine for sure) investors in the Unitus Equity Fund who now stand to benefit from the SKS IPO.

Adding significantly to the murkiness is the strange tale of the Unitus shutdown. Seemingly announced in a way as to minimize attention, the story has gotten very convoluted. Apparently most donors and staff were utterly surprised by the move. The chairman of the Unitus board issued a statement trying to answer some of the very reasonable questions; several of his answers were almost immediately refuted by reporting done by Clay Holtzmann of the Puget Sound Business Journal.

That brings us to some big questions, that to date, many social entrepreneurs have been able to ignore. While we were all talking in theory about social entrepreneurship and using market mechanisms for social ends, and bringing capital and scale to poverty alleviation and other worthy goals, we could blithely ignore some thorny issues. After all, why worry about about the “doing well” part when no one had yet “done well?“ It’s happening now, though, and that’s why social entrepreneurs, their funders and policy makers need to be paying attention.

The three big questions that haven’t yet been answered in the SKS/Unitus situation are relevant to everyone in the space:

1) Who ultimately does well here?

2) What role did nonprofit funds have in enabling the people doing well to do so very very well?

3) And the biggest question of all: What responsibility do the people who took charitable funds have once they start personally doing well?

The social entrepreneurship space is still the wild west—everyone is making it up as they go along. I suspect that is going to change as the details about SKS and Unitus slowly trickle out.

To help you follow along, I’ve created this round-up of articles about the two organizations: A Guide to the Unitus/SKS Story.

• California Plan Your Giving Day California has officially declared October 1 "Plan Your Giving Day". The effort looks to build on the Gates/Buffett Giving Pledge. (tags: philanthropy)
• Prof Yunus to star in The Simpsons: The Daily Star This is hands down the best headline I've seen in a long time. Microfinance pioneer Muhammad Yunus is going to guest star in The Simpsons. (tags: philanthropy)
• Boy’s Latest Charitable Act Is Long Walk With Mom – NYTimes.com What an unusual and fantastic story. A 12-year-old "do-gooder prodigy". His mom's quote: "He’s just like every other kid, except he likes to do community service work for some odd reason. He likes doing it. It’s weird." (tags: philanthropy)
• The Case for $320,000 Kindergarten Teachers – NYTimes.com A reader recently argued that measuring nonprofit results wasn't as hard as picking what to measure. In this NY Times article, the author argues that test scores are the wrong outcomes to look at when measuring teaching results. Instead, we need to look at adult life outcomes and the data shows that better teaching leads to higher adult income for students. (tags: philanthropy)

Just because it falls on your property does not mean the rain water belongs to you. Before leaving an empty bucket outside, please check your local statutes. (A Public Service Announcement from the Wealth Bondage Public-Private Water Initiative.)

In the WSJ,If your children are competent they don't need a big inheritance, if they are not competent, the money may only hurt them.

Yes, but what if bluer blood, raised well, and bred up to the responsibilities of wealth, could help create a wiser, more cultured, and more urbane America? Don't we all need a class of dynasts, well educated in the best prep schools, and members of all the best clubs to run our country? Might they not be a good offset to the pushing vulgarians with their MBAs, and the grasping entrepreneurs with their tacky metrics? Those of us born to wealth and privilege can rise above self interest. Rather than pillaging the country and abusing the public trust, or devoting our lives to merely pecuniary considerations, we can and will act as stewards of the greater good. I am eternally grateful to Mummy, for her moral teaching, and to Great, Great Grandfather Minim, who invented canned dog food, for having the wisdom and foresight to leave the money in trust for all succeeding Minims, yours truly, of course included. That people take advice in parenting from the Wall Street Journal, is quite appalling. May Rupert Murdoch's children inherit enough so that they can be better educted, and more refined than their grotesque progenitor. It may take at least three generations of Murdochs to purify the taint of their mucky pelf. Dick Minim, Senator (D) MA. (Overheard in the Porcellian Club today, as he ate his crumpet and read the papers. I was there in my role as serving professional, Senior Bus Boy, my dayjob, as I see if my calling as Morals Tutor to America's Wealthiest Families works out as planned. Dick would be a good prospect. He has more money than God, but it is hard to segue from serving Mr. Minim's coffee to improving his morals, which judging by his tips are pretty crappy.)

I’ve gotten a ton of feedback and suggestions regarding the new Audacious Ideas guest blog series (you can read the first post in the series by Jim Canales here). I think this concept has legs, but I’ve also been convinced that it needs some changes. I’d like to get your ideas and help in deciding where to go from here.

First off, I think we need to establish a small Audacious review board. I’ve been deluged with inquires from people who want to submit an entry to the series. Frankly, my interest is in running truly audacious ideas. My thought here is to have interested parties send a short summary of their concept, maybe three bullet points and a paragraph of narrative, which the review board would then give a thumbs up or down.

Do readers agree with this approach? If so, who is audacious enough to be a member of the review board? I’d love your nominations.

Secondly, we need a new name. It turns out that there is an interesting blog called Audacious Ideas run by the Soros Foundation’s Open Society Institute in Baltimore. The blog runs weekly “audacious” guest posts with the goal of stimulating ideas and discussions about ways to improve the city of Baltimore. The Open Society Institute has asked that I changed the name of my series and I’ve agreed.

So I need your help on this too. What should the series be called?

• SIF Awards – Public Info Adin Miller is working on a public spreadsheet with info on the Social Innovation Fund grantees. (tags: philanthropy)
• Analysis of Social Innovation Fund Results | Adin Miller Consulting Excellent analysis of the Social Innovation Fund grants from a former employee of the Corporation for National & Community Service (which runs the SIF). (tags: philanthropy)

Doing well by doing good is my goal. With my mentor, the Happy Tutor, Dungeon Master to the Stars in Wealth Bondage, I, as a Morals Tutor to America's Wealthiest Families, will set up an Executive Moral Rehabilitation Center (Dungeon) to modify the behavior of those MBA's who, through weakness of the will, fail to keep the MBA Oath ("I will refrain from corruption....") These beatings  will give real meaning to the Oath, and will help keep the backsliding MBAs on the straight and narrow. Now, for the business model. For-profit? Or, nonprofit? Would a foundation pay for such a public service? Would Bill Gates fund it? Could we take up a collection from the general populace? Would many people give say $5 a year to have corrupt MBAs beaten half to death? I would. Were the spectacle public, we could charge admission, or go pay per view.

Social Actions,

...we're requesting formal Letters of Interest from those who have an interest in stewarding all or some of Social Actions' programs. We're posting that request here not just as an update but to encourage everyone to share it and chime in with ideas and proposals.

From a 2002 article by Robert Locke,

The first thing big business has in common with big government is managerialism. The technocratic manager, who deals in impersonal mass aggregates, organizes through bureaucracy, and rules through expertise without assuming personal responsibility, is common to both.

To that we might add that the first thing Gates, Ford, and Hewlett Foundations have in common is managerialism (called social venture philanthropy, or strategic philanthropy, or high impact philanthropy). The technocratic grantmater, who deals in impersonal mass aggregates, organizes through bureaucracy, and rules through expertise and metrics, without assuming personal responsibility, is common to all three - big business, big government, and big business funded big foundations.

A few weeks ago, I wrote a post titled Getting Results: Outputs, Outcomes & Impact, in which I explained the “jargon” of tracking results in the social sector and argued that these metrics were critically important. In a follow up post, I argued that tracking results in this way should not be seen as “finger wagging campaign by the funding side of the table,” but instead was the key to a nonprofit becoming a high performance organization.

One of the comments on the first post (which generated a lively discussion in the comments section) came from Isaac Castillo, head of evaluation at Latin American Youth Center. LAYC is known for their diligent efforts to track their performance (they even consult for other nonprofits) and was recently announced as one of the few pre-selected subgrantees of the Social Innovation Fund. Isaac wrote:

“I actually think measuring outputs, outcomes, and impact is fairly easy and straightforward. The truly difficult part is getting nonprofits to identify the specific things they want to track.”

This of course flies in the face of a lot of thinking about measuring results in the social sector. While I do think that measuring results conclusively can be difficult, it is possible to take a “fairly easy and straightforward” approach to results measurement.

So today I want to rerun a piece on measuring impact from the Mulago Foundation. When I first published this piece, Paul Brest, head of the Hewlett Foundation left a comment saying, “This is excellent. Should be bottled and distributed.” The piece popped up recently when it randomly re-circulated via Twitter.

The Mulago Foundation: how we think about impact

We measure impact because it’s the only way to know whether our money is doing any good. In fact, we don’t invest in organizations that don’t measure impact – they’re flying blind and we would be too. Those organizations that do measure impact perform better and evolve faster, and discussions around measuring impact almost always lead to new ideas about effectiveness and efficiency.

Everyone’s got their own definition of impact and here’s ours: Impact is a change in the state of the world brought about by an intervention. It’s the final result of behaviors (outcomes) that are generated by activities (outputs) that are driven by resources (inputs).

We’re a small shop, so we needed to develop an approach with enough rigor to be believable, but simple enough to be doable. When we work with organizations, we use these five steps to determine impact and calculate bang for the donor buck:

1. Figure out what you’re trying to accomplish: the real mission.

You can’t think about impact until you know what you’re setting out accomplish. Most mission statements don’t help that much. We re-formulate the mission in a phrase of ~8 words or less that includes 1) a target population (or setting), 2) a verb, and 3) an ultimate outcome that implies something to measure – like this:

• getting African one-acre farmers out of poverty
• preventing HIV infection in Brazil

If we can’t we can’t get to this kind of concise statement, we don’t go any further- either because they don’t really know what they’re trying to do or because we simply wouldn’t be able to know if they’re doing it.

2. Pick the right indicator

Try this: figure out the single best indicator that would demonstrate mission accomplished. Ignore the howls of protest, it’s a really useful exercise. Here’s some examples relating to the missions shown above:

• Change in farm income
• Decrease in HIV infection rates

Sometimes that best indicator is doable, and that’s great. Other times you might need to capture it with a carefully chosen – and minimal – combination of indicators. When there is a behavior with a well-documented connection to impact – like children sleeping under mosquito nets – you can measure that and use it as a proxy for impact. Projects that can’t at least identify a behavior to measure are too gauzy for us to consider. Notice that while things like “awareness” or “empowerment” might be critical to the process that drives behaviors, we’re interested in measuring the change that results from that behavior.

We don’t pretend that this method captures all of the useful impacts and accomplishments of a given organization and their intervention. What it does do for us as philanthropic investors is answer the most critical question: did they fulfill the mission?

3. Get real numbers

You need to 1) show a change and 2) have confidence that it’s real. This means that

• You got a baseline and measured again at the right interval, and
• You sampled enough of the right people (or trees, or whatever) in the right way.

There are two parts to figuring this out: the logical side and the technical side. With an adequate knowledge of the setting, you can do a lot by just eyeballing the evaluation plan – looking carefully at the methods to be used to see if they make sense. Most bad schemes have an obvious flaw on close examination: they didn’t get good baseline data, they’re asking the dads when they ought to ask the moms, they’re asking in a culturally inappropriate way. The technical part has mostly to do with sample size, and a competent statistician can easily help you figure what is adequate.

4. Make the case for attribution

If you have real numbers that show impact, you need to make the case that it was your efforts that caused the change. This is the hardest part of measuring impact, because it asks you to be able to say what would have happened without you. When real numbers show there has been a change, a useful thing to ask is “what else could possibly explain the impact we observed?”

There are three levels – in ascending order of cost and complexity – of demonstrating attribution:

1. Narrative attribution: You’ve got before-and-after data showing a change and airtight story that shows that it is very unlikely that the change was from something else. This approach is vastly overused, but it can be valid when the change is big, tightly coupled with the intervention, involves few variables (factors that might have influenced the change), and you’ve got a deep knowledge of the setting.
2. Matched controls: At the outset of your work, you identified settings or populations similar enough to ones you work with to serve as valid comparisons. This works when there aren’t too many other variables, you can find good matches, and you can watch the process closely enough to know that significant unforeseen factors didn’t arise during the intervention period. This is rarely perfect; it’s often good enough.
3. Randomized controlled trials: RCT’s are the gold standard in most cases and are needed when the stakes are high and there are too many variables to be able to confidently say that your comparison groups are similar enough to show attribution.

5. Calculate bang-for-the-buck

Now that you know you’ve got real impact, you need to know what it cost. You can always generate impact by spending a ton of money, but it won’t give good value for the philanthropic dollar and it won’t be scalable (and it probably won’t last). Stick with the key impact you’ve chosen; don’t get sucked into the current trend of trying to monetize every social impact you can think of.

The easiest – and arguably most valid – way to calculate bang-for-the-buck is to divide the total donor money spent by the total impact. In organizations that do more than one kind of project, it is often possible to split out what they spent for their various impacts. Remember that start-ups are expensive and don’t worry so much about their current figures, but do see if their projections for steady-state operations make sense and assume (as we learned the hard way) that they are usually at the way-optimistic end of the scale.

In the end, though, the key to figuring out real impact is an honest, curious, and constructive skepticism. A healthy dose of skepticism – not cynicism – is a gift to doers, funders and the social sector as a whole.

In return for a generous grant, or as she calls it, "a robust social investment," from Candidia Cruikshanks, CEO of Wealth Bondage, I am supposed to Save Capitalism by 2015. Annually, I must report on progress against plan. I can measure and manage my outputs (posts, word count) and my outcomes (subscribers, page reads, incoming links, and comments), but now Candidia is also asking for objective proof of impact. How much Capitalism have I actually saved? And, in investment terms, how much Capitalism is she saving for every dollar she invests in Gifthub? "Sweetie, I can't manage what I can't measure," as she so well puts it.

Any thoughts? The general populace is as mystified, bestial, and stupified as ever. Does that count as postive social impact? I will go with that I guess and argue that a stupified and supine electorate saves Wealth Bondage by boosting sales, reducing pushback, and postponing the inevitable. She'll buy that. That is a lot of benefit she gets for a generous grant of $1,000 a year. A better social investment than The Center for Philanthropy and Civil Society at Hudson. Cheaper, better, faster. Well, cheaper, anyway, Bill Schambra is better. But in this bipartisan work of saving capitalism there are no competitors. We all must do our bit!

• Pictures and video from the Social Innovation Fund announcement in Washington, DC « Fuel for the Field Carla Javits, the head of REDF, a Social Innovation Fund grantee, shares photos and video from her trip to Washington. (tags: philanthropy)
• WINDING DOWN the ATLANTIC PHILANTHROPIES A new report authored by Tony Proscio for Duke University looks at the Atlantic Philanthropies decision to spend down their endowment. Interesting look at how the concept works in reality. (tags: philanthropy)

John Robb,

No big surprises at the Aspen Institute conference:  the big money is still flowing towards huge, global-scale projects and schemes that aren't likely to work.  In stark contrast, Marcin and his team of farmer scientists working on post-scarcity economics is making lots of progress (see Marcin's economy in a box presentation for context).  They are doing this on a shoestring, which is a shame.  Here are some highlights:

• The CEB (compressed earth brick) press called the Liberator.  The team has completed its first product (the design is open source, of course).  It allows the rapid manufacturing of construction materials from nearly ubiquitously available resources.  
• They've built a working prototype of an open source drill press they are currently using in their fabrication processes.
• They are building the second prototype their soil pulverizer.  

Officially, Gifthub, the nonprofit arm of Wealth Bondage, has as its goal, Saving Capitalism. The way it is going, though, my secret agenda is saving my own ass when things fall apart. Hence my interest in The Liberator, open source compressed earth brick press. I could build a real house, in the country, live like a king selling bricks to my neighbors. I guess that would be saving capitalism too. I could be the Bill Gates of compressed dirt, and even give away some bricks as a public service.

On Friday afternoon, Nathaniel Whittemore of the Social Entrepreneurship blog sent me an email questioning the enthusiasm in my recent post about the Social Innovation Fund (SIF). Nathaniel is someone whose opinion I greatly respect and his points of contention were very valid. So I sent him back a detailed response, which (with his permission) I’ve decided to republish here.

Nathaniel’s email to me made the following points:

• Nathaniel argued that the SIF grants were run of the mill, writing “The government just gave College Summit $3 million more dollars, about 20% of their annual budget. Big whoop.”
• He argued that the SIF did not do anything unique and different.
• He asked why I was focused on the intermediaries funded by the SIF rather than the subgrantees who would ultimately receive the grants.

In response I wrote:

When you write “the interesting thing about your argument is almost more about who were the intermediaries (and their approach to philanthropy) rather than who they’ll ultimately fund.” That IS exactly the whole point.

First, a quick pair of definitions (these are from a paper titled Building is not Buying by George Overholser):

• Builder: A donor who provides money to a nonprofit organization with the intent that the money be used to build the nonprofit organization.
• Buyer: A donor who provides money to a nonprofit organization with the intent that the money be used by the nonprofit to deliver products and services to the nonprofit’s beneficiaries.

(These roles are similar to the for-profit roles of investors and customers where Builder=Investor and Buyer=Customer, with the one difference being that Buyer’s buy goods and services that are delivered to other people rather than Customers who stuff for themselves).

The government has historically almost always played the role of Buyer. That makes sense. They are spending tax payer dollars so that products and services can be delivered to people who need them and thereby enhance the “public good.”

But the Social Innovation Fund is different. It very explicitly does not give money to nonprofits. It gives money to other funders. It has said it will select those funders based on their demonstrated “track record of success at identifying and growing high-performing nonprofit organizations.”

This means the SIF is the government trying to  be a Builder rather than a Buyer. BUT, the SIF was designed with the idea that the government probably isn’t the best entity to play the Builder role. So instead, the SIF is charged with identifying and funding other funders who have a demonstrated track record of being excellent Builders.

Why does this matter? Because today we are faced with a nonprofit sector that is populated with undercapitalized, underperforming nonprofits. Nonprofit quite literally live in a “starvation cycle” whereby they are constantly asked by Buyers to deliver products and services, but rarely are supported by Builders who will provide the resources they need to build and enhance their organization. What this means is that Buyers, including the government, don’t get nearly as much as they should for their money.

Imagine a for-profit sector that had customers, but no investors. You go to buy a cup of coffee, but the local shop uses a really old machine and sources only halfway decent beans. They also don’t spend much on training their baristas, so even though the people who work at the coffee shop are hard working, nice people, they simply haven’t been given the tools they need to succeed.

To make matters worse, in the nonprofit sector Buyers actually have the ability to restrict their gifts and tell the nonprofit that they simply are not allowed to use any part of the money the Buyer gives them to improve their organization. Local coffee shops can often succeed without a significant investor by devoting a portion of the revenue they receive from customers to buying better equipment, better beans and training their employees. But in the nonprofit sector, the customer/Buyer actually dictates what the nonprofit organization can use their money for! The typical donor actually wants the nonprofit to spend as little as possible on equipment, training, supplies, etc and instead just pump out as much of the halfway decent coffee (to jump back to the local coffee shop) as they can with existing infrastructure.

The SIF attempts to change all that. The SIF is the government saying that Builders are needed too. But the SIF faces a serious challenge because MOST funders in the philanthropic sector also refuse to play the role of Builder. MOST funders act as Buyers and restrict their grants so that the nonprofits they “support” can use little to none of their grant dollars to invest in their organizational infrastructure.

And then we have the gall to wonder why nonprofits aren’t more effective. What a joke.

But the SIF seems to have correctly diagnosed the problem. While funders who explicitly focus on playing the role of Builder are rare, the SIF has properly identified and chosen them as the funders best positioned to help the government finally play a Builder role.

While I’m not familiar with the approaches of every grantee (intermediary funder) of the SIF, I do know that the SIF says they want to fund Builder type funders (those who  have a “track record of success at identifying and growing high-performing nonprofit organizations”). And each of the four organizations I do know, New Profit, Edna McConnell Clark, Venture Philanthropy Partners and REDF (which collectively received 44% of all the SIF funds) all rank as some of the leading practitioners of the Builder approach to philanthropy! So the SIF didn’t just get the concept right, they executed correctly!

In your email you say “The government just gave College Summit $3 million more dollars, about 20% of their annual budget. Big whoop.” But that’s not at all what happened. The SIF gave a Builder funder a chunk of cash and that Builder chose College Summit to fund. Not just to pay them, as a Buyer would, to deliver more of their programs, but to invest in Building the strength of the College Summit organization.

This means College Summit can get better at what they do. Not just do more of what they already do, but improve and grow so they can do exponentially more of what they do and do it better.

While College Summit and a few other subgrantees were “preselected,” the SIF actually had the guts to really follow through on the idea that the grantees (the intermediary funders) were the best ones to select which nonprofits are best positioned to receive Builder grants. The majority of the SIFs grants were distributed based on the SIF’s analysis of the grantees (intermediary funders) ability to identify and grow great nonprofits, not on the SIF’s assessment of each potential subgrantee (which have yet to be chosen by the intermediary funders).

If we had a better capitalized nonprofit sector, a philanthropic sector that included a far greater proportion of Builder funders, then Buyer funders – and importantly the government, given the Buyer role it typically plays –  would have more robust, higher performing nonprofit organizations from which they could Buy social good.

Using the coffee shop analogy, this would mean that Buyer/Customers could finally have access to coffee shops that used top of the line equipment, fresh roasted, top quality beans and were served by well trained baristas.

As far as I’m concerned, the SIF hit the ball out of the park today. They did NOT simply shovel Buyer money at some cool nonprofits. They did NOT simply allocate the money based on a bureaucratic earmark process. They actually executed on their mission of providing Builder funds. When we talk about their $50 million being small, it is because we are measuring it against all donated dollars. But when we measure it as a proportion of total Builder dollars, $50 million is serious cash.

• Wise Picks? Commentators Weigh In on the Social Innovation Fund Grants – Give and Take – The Chronicle of Philanthropy- Connecting the nonprofit world with news, jobs, and ideas The Chronicle of Philanthropy rounds up the different opinions on the grant decisions of the Social Innovation Fund. (tags: philanthropy)
• The inefficient nonprofit marketplace « Sasha Dichter’s Blog Sasha Dichter wonders if the idea that resources are allocated less than optimally in the nonprofit sector is wrongheaded. (tags: philanthropy)
• Unitus fund to cash out on Indian IPO – Puget Sound Business Journal (Seattle) The Puget Sound Business Journal reporter covering the Unitus story has published a blog post linking to his source documents. (tags: philanthropy)
• Unitus fund to profit on India investment – Puget Sound Business Journal (Seattle) Clay Holtzman, the reporter who broke the Unitus news, is still digging on the story. (tags: philanthropy)
• Rejecting False Dichotomies | The Center for Effective Philanthropy Phil Buchanan urges philanthropy to reject false dichotomies. In a comment, I agree but also warn of philanthropy's tendency to reject all recognition of the real tensions between different approaches. (tags: philanthropy)
• CEP | More Truth-Telling and Candor? | The Center for Effective Philanthropy Linda Wood writes about candor in funder-grantee relationships and the notion of "radical transparency" as demonstrated by the group Forge. (tags: philanthropy)
• Calling All Billionaires: Fund Organizations, Not Projects | Philanthropy Central Kathleen Enright, head of Grantmakers for Effective Organizations, calls on the Giving Pledge billionaires to fund organizations, not just their projects. (tags: philanthropy)
• Ken's Commentary: Charity Navigator Expands Rating Methodology Charity Navigator has begun rolling out their new rating methodology. I'll write more about this soon. (Disclosure: I am a member of their rating methodology advisory board.) (tags: philanthropy)
• The Social Innovation Fund Grants Focus on "What Works" | Social Entrepreneurship | Change.org Nathaniel Whittemore talks about the tension between innovation and effectiveness in the Social Innovation Fund and wishes the fund had made different choices. (tags: philanthropy)