Folly #84: Uncharitable?
Pooling our donations to build better nonprofits.
In the past week, my conversations seem to be following a theme: sustainable staffing and infrastructure - and how rare that is for nonprofits.
Fixing What's Uncharitable
Last week it came up in a film and panel discussion around the case that Uncharitable makes in contrasting for-profit and nonprofit sensibilities around essential staff and operational costs called "overhead." I always recommend Dan Pallotta's excellent TED talk about this dichotomy – and his call to donors to stop looking at percentages and start making large, multiyear, unrestricted gifts and grants. (I like to call them investments, because that's what they are: investing for social returns.)
The 90-minute Uncharitable film doesn't add much over the 19-minute TED Talk, but the real impact was seeing a theater packed with people learning this for the first time. Even if you know it already, Pallotta's talk is worth a watch.
Investing in Metrics
Then, thanks to a Follies comment from a long lost colleague, we hopped on a Zoom to reconnect. I absolutely loved hearing about the progression of her work ... from grantmaker to consultant serving both sides of philanthropy, funded by foundations to:
Help nonprofit grantees create metrics that make sense with their resources and mission (as opposed to metrics defined by funders).
Assess an issue landscape and learn which nonprofits are doing the work in order to leverage a foundation’s impact.
(Lisa, I hope I captured that right. And that you’ll talk about this important work in an Follies interview!)
Heres how she asks each nonprofit organization about metrics that make sense to them ...
Tell me what you measure. Tell me why that matters.
Brilliant! Let nonprofits define metrics instead of funders.
Pooling Resources to Build Capacity
Back to the film event. One of the panelists spoke about our regional community foundation's pooled donation funds, which support a variety of nonprofits doing reproductive rights work or literacy, for example. Any donor can contribute, not just those who give through a donor-advised fund. Another brilliant idea!
Pooled philanthropy achieves two things that individual gifts and grants cannot:
Stable nonprofit funding through larger, multiyear gifts, and
A rising tide that lifts all nonprofits facing shared challenges.
Those pooled funds are issue focused. Now, imagine if they were infrastructure focused? Think of it...
A fund to support IT for regional nonprofits. Donor database management always comes up when I teach fundraising to small-staffed nonprofits. They just don't have the resources to have a tech person on staff.
A fund for strategic planning and capacity-building by issue area. Pooled funding could support multiple nonprofits assessing community needs, pay for quarterly facilitated convenings, and collaboratively define measurable metrics to assess progress towards shared goals.
Here's how that could build nonprofit capacity:
Create economies of scale where each nonprofit can bring their particular expertise to the table. Different organizations are good at different things, many of which are complementary – when you collaborate rather than compete.
Attract top talent for shared fundraising, communications, HR and IT. Individual organizations struggle to pay competitive salaries. I believe that donors would make larger gifts to support collaborative work on an issue that is close to their hearts, rather than lots of small gifts to nonprofits doing similar work independently.
Do tell ... what foundations do you know that are supporting this kind of pooled funding for nonprofit infrastructure?