Why It’s Important: The Funding Gap

Why It’s Important: The Funding Gap

WHY IT’S IMPORTANT: Five CEOs of Wealthy Foundations Pledge to Do More to Help Charities Pay Overhead

This article in The Chronicle of Philanthropy is a long read, but hugely important to every nonprofit organization that relies on grant funding for at least part of its revenue.

It’s notable when five of the wealthiest foundations revisit their granting processes and decide that they’ve been underfunding the support (they call it ‘overhead’) that makes it possible for nonprofits to deliver their missions. It prompted them to examine different ways they might change their granting structures to allow more flexibility in the operations and investments in infrastructure of their grantees.

No Reserves!

The foundations are: Open Society Foundations, John D. and Catherine T. MacArthur Foundation,  Ford Foundation, William and Flora Hewlett Foundation and David & Lucile Packard Foundation. After engaging Bridgespan to research the effects of their giving on a subset of their grantees, they learned that 42% of the nonprofits had less than 3-months of operating revenue on hand. While the foundations have agreed that their funding processes need to change, each will make their own adjustments based on their own priorities, and as they experiment with their own grantees.

As my colleague Justin Pollock, has pointed out, restricted funding is not inherently a problem if it actually covers the true costs of a program. But when a nonprofit ACCEPTS restricted funding that only covers PART of a program’s costs, by default they are saying ‘we will restrict our own dollars’ to go towards completing the program’s budget.

These efforts by major foundations to look at their own practices are a welcome sign that change may come.

It may mean more unrestricted funding or it may mean restricted funding that truly covers costs. But it will take time for any change to spread. Wherever you are located, don’t expect immediate change. I doubt that any local foundation landscape will change rapidly. While smaller organizations can often be more nimble than larger ones, larger foundations have the staff and funds to research new methods and their implications. On the other hand, you may find that a handful of your local foundations may read about this research and be energized to make their own changes.

Definitely something to watch.  And you may want to forward this article to your friendly funders, as well.

This series of “Why it’s Important” is meant to keep you abreast of news, research and articles that provoke thought about how we govern and manage nonprofits.

 If this article has started some conversations, or even caused some deep thinking about funding, please let me know.

And watch for more curated articles. If you see an article you think everyone should read, please send it on. Or if you want to talk about facilitation or planning for your organization, I’d love to have that conversation.

More eyes – more articles – more wisdom!

– Susan Detwiler

Why It’s Important: Can Empathy Be Learned?

Why It’s Important: Can Empathy Be Learned?

Making Empathy Central to Your Company Culture

One of the most fascinating concepts in this Harvard Business Review article is the notion that empathy can be taught. Not only can it be taught, but there is evidence that people who think you either have it or you don’t – those with a ‘fixed mindset’ – are less likely to work at connecting with others.

That’s just the way I am

Or, as I might put it, the people who say “that’s just the way I am,” may be telling the truth; but they’re wrong when they think they can’t change.

Empathy leads to better connection, less stress, and higher morale, and CAN be taught. But not by merely mouthing the instruction to be empathic. It takes practice and it takes role models. If you espouse the value of empathy,  the actions need to be congruent with what you say, from the board on down through the entire organization.

The article lists – and expands on –  three ways leaders can embrace and foster empathy in the organization.

  • Acknowledge the potential for growth
  • Highlight the right norms
  • Find culture leaders and co-create with them

What does this mean for you? 

Do you work for an organization that encourages empathy? Have you tried to foster empathy in your work or your board? Or If this article has started some conversations, or even caused some deep thinking about values, please let me know.

And watch for more curated articles. If you see an article you think everyone should read, please send it on. Or if you want to talk about facilitation or planning for your organization, I’d love to have that conversation.

More eyes – more articles – more wisdom!

– Susan Detwiler

Why It’s Important: Irrational Wisdom

Why It’s Important: Irrational Wisdom

This really short article by colleague Rebecca Sutherns makes an important point. No matter how much time you take to come to a decision, the decision may still not feel right. That doesn’t mean it’s the wrong decision, though.

Look deeper

That ‘wrong feeling’ is occasion for a deeper look at why it feels wrong. Is it because there’s something you forgot to take into account? Some aspect your gut recognizes but your head doesn’t?  Or is it because of your own assumptions? Does the decision grate against childhood beliefs? Are you succumbing to personal, unacknowledged biases? Is your team looking at it only from one point of view?

Don’t shortchange the time it takes to make a good decision.

If you scheduled a day for a retreat, and the results feel wrong, schedule time to figure out why. You may find out that your gut is right, and you need to side-step the work you just did. You still might go with the ‘gut feeling,’ and be glad of it.

BUT!   Just because the conclusion you came to doesn’t feel right doesn’t mean it’s wrong.  It means it’s time to look again.

If a recent decision your team has made still feels wrong, or if you want help making decisions that feel right, please let me know.

Watch for more posts about important articles. If you see an article you think everyone should read, please send it on. Or if you want to talk about facilitation, governance or planning for your organization, I’d love to have that conversation.

More eyes – more articles – more wisdom!

Susan Detwiler

Why It’s Important: No Tokens Allowed

Why It’s Important: No Tokens Allowed

When and Why Diversity Improves Your Board’s Performance

Why is this article important?  It has some interesting points to make about the difference between tokenism and really embracing diversity on a board.

The majority of people on nonprofit boards, acknowledge that board diversity is important. But even as research shows the intention to improve board diversity, the 2017 report, Leading with Intent, shows that boards are no more diverse than they were two years ago.”* Meanwhile, as boards continue to talk about diversifying, the definition of what constitutes diversity has evolved.

From tokenism to inclusion

Society has moved from tokenism to ensuring that people of diverse age, gender, ethnicity, orientation and background not only fill important roles with their skills and talents, but are also valued for the diversity that they bring.

The perspective of this article from Harvard Business Review, When and Why Diversity Improves Your Board’s Performance,  is that of a for-profit corporation. But there are valuable lessons for nonprofit boards that want to both encourage diversity and take advantage of that diversity. To quote the authors:

“Diversity doesn’t matter as much on boards where members’ perspectives are not regularly elicited or valued. To make diverse boards more effective, boards need to have a more egalitarian culture — one that elevates different voices, integrates contrasting insights, and welcomes conversations about diversity.”

What might that mean for your Governance or Nominating Committee? More pointedly, what might that mean for how your board approaches ambitious or controversial decisions? How might having different voices around the table change not only the decisions that you make, but how you make those decisions?

If this article has started some conversations, or even caused some deep thinking about governance and recruitment, please let me know.

And watch for more curated articles. If you see an article you think everyone should read, please send it on. Or if you want to talk about facilitation, governance or planning for your organization, I’d love to have that conversation.

More eyes – more articles – more wisdom!

– Susan Detwiler

*Leading With Intent 2017 National Index of Nonprofit Board Practices.

Why It’s Important: Planning or Improv?

Why It’s Important: Planning or Improv?

The Sensemaking Mindset: Improvisation over Strategy

Why is this article important?

The title of this Nonprofit Quarterly article, The Sensemaking Mindset: Improvisation over Strategy, implies an either/or relationship between improvisation and strategy. But buried in this Nonprofit Quarterly article is the caveat that structure is necessary for improvisation to work. There needs to be a framework. Using Karl Weick’s jazz as a metaphor, you can interpret, embellish, do a variation, or improvise from a basic melody. But you still need that basic melody.

Looked at this way, you might consider crafting a strategic framework, rather than a formal, step-by-step plan. This gives your organization – and the talented people in it – the latitude to respond to opportunities that come your way.

It takes courage to give people this kind of latitude. They need to know the ultimate vision you are all working toward. They need buy-in. And they need to trust that YOU trust THEM.

Can you build flexibility into your strategic planning? Do you allow improv?

If this article has started some conversations, or even caused some deep thinking about planning, please let me know.

And watch for more curated articles. If you see an article you think everyone should read, please send it on. Or if you want to talk about facilitation or planning for your organization, I’d love to have that conversation.

More eyes – more articles – more wisdom!

-Susan Detwiler