A collaborative capital campaign created an entire new arts and business district in Cleveland. Photo: Gordon Square Arts District

Collaborative fundraising takes time and trust. That’s what we heard over and again in our interviews with seven nonprofit executives in Rhode Island, Boston, Cleveland and Spokane, each of them successful collaborative fundraisers.

We looked into the topic at the prompting of our friends at New Roots Providence and presented our early findings at a New Roots workshop on January 19.

The short version of what we learned from our informants:

• Successful collaborations flow from a deep process of trust-building among the partners. The right partners may take years to self-select, discover their shared goals and commit to combined action.
• Detailed legal agreements help establish trust and smooth functioning by exploring and resolving the partners’ deepest worries in advance. (These also take time)
• At the same time, good partners must be ready to make commonsense adjustments to agreements when they create unfair or unproductive results for some partners.
• Long-term and permanent collaborations need to form an independent organization to fundraise and distribute revenues. (Another time-consuming process.)
• The collaborative case must promise more than the sum of its partners: new funders respond to a transformative vision.
• Truly successful collaborations can reach more and larger funders and generate more income at lower cost than the two partners could achieve separately.

Our cases covered five forms of joint fundraising: grants, workplace campaigns, events, capital campaigns, and, finally, our elusive ideal of truly integrated annual fundraising. We’ll tell you more about three very interesting cases in future posts:

• The YWCA and YMCA in Spokane, Washington created a fully integrated capital campaign to build new shared buildings in two locations.
• The Gordon Square Arts District in Cleveland, Ohio brought two theater companies together with a community development organization to build not just theaters, but a whole theater-oriented arts district with major economic benefits for the city.
• The Central Square Theater in Cambridge, Massachusetts began by building new shared performance space for the the Nora Theater Company and the Underground Railway Theater. The partnership then went on to take on all fundraising, business and back office operations, leaving both groups free to focus on their artistic missions alone.

If you have had a good – or bad – experience with collaborative fundraising that you think could help others, please send me an email. We’d love to hear from you.

Notice those checks, stars and caution signs?

Clearly these are meant to serve as rating systems for viewers. Missing a check or star? The system implies that your organization may not be 100% up to snuff –or else it might be hiding something.

While I’ve done my ranting about rating systems (see my posts  below), I’m afraid that your organization is stuck  with this new configuration.

By now I’m sure you know that Guidestar is a go-to site for the media, funders, bloggers, benchmarkers like me or others individuals who are curious about your nonprofit. Online donation sites like Network for Good, Facebook Causes or Change.org link up and pull their data from Guidestar.

So, get thee to Guidestar.

Login (you’ll need to register if you haven’t, the basic edition is free), search for your organization’s name and pull up your Guidestar profile. You may be surprised at how many checks you are have or are missing. Try printing out a report and you’ll quickly see what is incomplete in your Guidestar profile.

Follow the button that says Update Nonprofit Report to review the instructions for updating your information.  Read about the options for earning the Guidestar Exchange seal, for posting reviews on GreatNonprofits and developing a self-assessment impact profile through the new Charting Impact (please share your experience with our readers if you have completed an impact profile. I noticed that only 104 organizations have).

You’ll need to decide just how much you want to commit to updating. The new check view system is clearly designed to get you deep into the world of Guidestar and its partner organizations.

And please come back and share your experiences. Happy 2012.

Related posts

Fundraisers, do you know what your 990 isn’t telling donors about your nonprofit?

My worst nightmare is now true, sloppy ratings of nonprofit effectiveness in Haiti

Thank you, Guidestar, for hearing our concerns

1. What’s working?
2. What isn’t?
3. What are your recommendations for change?

I’ll be forever grateful to my graduate program in organization and management at Antioch University New England for revealing these three simple questions. I don’t remember whether it was faculty member Peter Smith or Marsha Greenberg who shared these organization development gems with us, but thank you to both of you. The questions have remained with me and they are at the core of my own work today.

What I like about these questions is that you don’t have to hold a master’s degree in organization development or anything else to use them within your organization to help solve problems, improve programming,  or make operations more effective.

Of course, the answers will be different depending on whom you ask. Each person has a different experience of an issue and a different level of knowledge and expertise. That’s why we consultants gather and synthesize input from many perspectives as it helps us get a well-rounded view of your situation.

In asking, it is critical to be a neutral listener, someone who is willing to put aside their own assumptions and really listen to what is being said. After you’ve synthesized what you think you’ve heard, share your analysis with the people you’ve spoken to and ask them if you understood the situation correctly. You want to reach agreement on your understanding of what is working and what isn’t.

Hopefully you will have many recommendations for improvement. Do some additional study before you jump into making changes, however. You’ll want to explore more fully which recommendations might work best for you. And you’d also be wise to seek out possible solutions that no one raised simply because they didn’t have the knowledge of other approaches.

What questions do you use in your organization to help you solve problems or challenges that you are facing? I’d love to hear from you.

“It doesn’t matter whether you can quantify your results. What matters is that you rigorously assemble evidence — qualitative or quantitative — to track your progress. If the evidence is primarily qualitative, think like a trial lawyer assembling the combined body of evidence. If the evidence is primarily quantitative, then think of yourself as a laboratory scientist assembling and assessing the data.”

Collins goes on to say that being hard isn’t  an excuse for not attempting to measure performance. “All indicators are flawed,” he reminds us.

But, prescient of the charity raters, Collins reminds us that it is important to be curious to learn for its own sake, in pursuit of the greatness to which we aspire. (For me, greatness means really taking on social challenges – making the world the best it can be – whatever your cause.)

Just yesterday, I was discussing the framework for one of those sessions with a board member who will be at this retreat and has been thinking carefully about this topic. The retreat I’m preparing is designed to help program staff and board members learn to love evaluation — okay, maybe not love yet, but appreciate the importance of.

We both agreed that the conversation about measurement needs to shift away from evaluation, which conveys judging, to learning, which is about a desire to get better at what you do for the sake of the people or community you serve.

So let me say I was cheering when I read the  three principles that The Gates Foundation says guide its approach to measurement:

1. “Measurement should inform specific decisions and/or actions.
2. “We do not measure everything, but we do strive to measure what matters most.
3. “The data we gather help us learn and adapt our initiatives and strategies.”

Hallelujah.

Their formula for actionable measurement is just brilliant in my book:

“Planned collection, analysis and synthesis of data + time devoted to development of reflection and insight + willingness and ability to change = Informed Decisions & Actions”

With the growing drumbeat to rate and rank nonprofit outcomes, it is refreshing to hear such an important funder talk about reflection, insight, adaptation, learning.  I’m also impressed that this foundation that has more money than any of my clients could ever dream of makes a point that they are judicious about what they measure as they can’t (and shouldn’t) try to measure everything.

They also note that the initiatives they fund are one of many factors that lead to large community change. Thus, while they track those top level  indicators of what they call “strategy-level”  outcomes and impact, they don’t try to account for how their specific investments contribute to that impact as they know they are one of many partners pushing to the same objective.  That should come as a relief to many smaller organizations whose funders are asking them to show how their limited programs are ending poverty or hunger, etc. Now you can cite the Gates Foundation.

My advice: download the guide, read and discuss it with your Board and staff. It may give you many ideas for how to approach the idea of evaluation and measurement in your organization.

But a conversation yesterday brought back to me a dynamic that I’ve been observing for many years: the role of boards as conservators.

A little background.

Yesterday I made my bi-annual trek to life portfolio company New Directions to discuss life in the nonprofit sector with their clients. New Directions clients are accomplished people in business or the professions who are designing the next stage of their life journeys.

My portion of the conversation was “The rewarding and confounding world of the nonprofit sector,” which is partly nonprofit 101 and partly DEEP THOUGHTS.

A fellow “interpreter of the sector” was the Executive Director of a capacity building (smallish, $500K budget) nonprofit. He mentioned that for the last two years he had been a co-executive director, a leadership team that resulted from a merger. He mentioned that the other ED was winding up his term and he would soon be the sole ED. When I asked how the co-directorship worked for him, he shared he really liked the arrangement, but his Board just wasn’t comfortable with the shared leadership model.

Boards as Conservators

At first a bit surprised by this tale, it reminded me that many boards are naturally suited to their role as conservators.

Here I’m using conservator in its definition as someone who conserves or keeps safe. Like a custodian, guardian, or protector.

The words we use to describe board duties — like prudent, loyalty, care, fiduciary — imply moderation and caution. Another word I might use would be  “conservative.”

In my experience, most Boards of Directors are loathe, and rightfully so, to take big risks. In their conservator role, boards put the breaks on reckless spending. Because boards usually reflect the mindset of the communities they serve, they often restrain choices, decisions or actions that could put their organization ideologically too far in front of the constituencies and communities they serve. I’ve seen boards wisely put the kabosh on ill-conceived public policy actions that could threaten public good will.

When conservator = ill-conceived road block

Too frequently, however, the conservator role of boards holds back innovation.

Staff often find themselves far ahead of their part time leadership volunteers when it comes to mission implementation. As the professionals, they interact with their peers and seek out new research and best practices. They are immersed every day in the work, thinking what comes next, how can I do this better (or at least we hope they are).

But their board members aren’t. They have other lives, other jobs, other concerns that take precedence. Few, if any, are traveling in the same professional spaces. They only know what is, and may have no clue about what might be and why that is important. So when staff bring forward these big new concepts, it takes time for board members to digest them.

Many years ago I was Director of Development and Communications at Plan International USA. During my tenure, we launched a soul searching strategic planning process. For a number of reasons that included maintaining our standing among our peers and funders, a commitment to fostering better international understanding, and our need to deepen the global understanding and thus the retention of our donors, staff were interested in expanding our fledgling development education programming and making it an important, though always small, part of our program mix.

A small cadre of academic board members were extremely resistant to the idea that we could educate donors through such a populist (for lack of a better word) approach to development education. After many frustrating conversations, the Board chose to delete development education from the strategic plan, sending it back to committee for discussion and reconsideration at a later date. Needless to say, staff were extremely frustrated (angry?). Ultimately, after many more months of give and take, we finally found a compromise that enabled us to proceed forward, albeit in very tiny steps. (Outcome: Our new, grant-funded development education program was hugely successful and achieved the strategic objectives that underpinned our initial reasoning).

Now, more than ever, we need our boards to look forward with vision, radical rethinking, insatiable curiosity, and the judgment to know when conservatism is called for and when disruption is essential.

While more organizations are ripening to the idea of doing business somewhat differently, I’m still finding too many boards oblivious at best and resistant at worst to newer ideas — like  joint ventures with other nonprofits. While due caution is needed for big changes like mergers or subsidiary relationships, others –like outsourcing financial management or the case I described above of co-directors — seem to be resisted for no apparent reason.

Unfortunately, these dynamic and perilous times require us to reconsider all historic assumptions and brutally question every aspect of the way we do business. Now, more than ever, we need to maximize the energy and resources that go into serving our communities and constituents. We can no longer assume that something that worked well enough in the past has any hope of surviving the future.

I don’t know if this is possible. Do you?

My post on Tuesday, “My worst nightmare is now true, sloppy ratings ratings of nonprofit effectiveness in Hatii,” and a storm of Tweets generated quite a bit of attention.

As Tuesday’s post explains, after my first critique, Guidestar changed their hastily constructed home page listing  Top Ten Relief Organizations Working in Haiti, which I strongly debated the evidence for, to a somewhat more accurate Most Reviewed Relief Organizations in Haiti.

After a long conversation this afternoon with Debra Snider, Guidestar’s VP of Communications and Administration, and Shari Ilsen, Director of Marketing and Outreach at GreatNonprofits, Guidestar made the laudable decision to drop the listing altogether.

Now when you land on Guidestar’s homepage and scroll down, you’ll see Disaster Action Center and encouragement to post a review if you have firsthand experience with an organization working in Haiti. A link takes you to the site of GreatNonprofits.

Why is this so much better?

• Guidestar is no longer implying that simply because 10 organizations received more reviews than 25 others that the reviewed organizations are somehow more worthy of your giving. (My point: Once they call out a top list, even if they don’t say it directly, the donor infers that somehow this list is more special than the rest).

• Dropping   “received the most reviews” eliminated the task of keeping that list revolving and accurate. (It wasn’t.)

• As Guidestar’s intent was to help increase the number of reviews received by GreatNonprofits, this new configuration achieves the same goal without the baggage of implied ratings. I’d also suggest that it is clearer and probably will be more effective at accomplishing that goal.

• Guidestar can still offer the longer informational list they compiled of organizations that are working on relief and recovery (or longer term development) in Haiti, without trying to assess their effectiveness. This doesn’t compromise Guidestar’s valued credibility and keeps up what Guidestar is best known for — providing us with credible information on organizations and educating us about how we can make our own informed giving decisions.

Do I still have concerns about Amazon style rating systems? Absolutely. But we can talk about that at another time.

Thank you, Guidestar (and Debra), for hearing my concerns — which aren’t just my concerns, but include a rising tide of very concerned individuals with deep reservations about intermediary rating systems of nonprofit effectiveness.

P.S. You can also read a quick summary of the controversy in today’s Give and Take, the Chronicle of Philanthropy’s roundup of blogs about the nonprofit world.

That’s what “Looking at Life as One Big Subscription” by Damon Darlin of the New York Times got us thinking about recently.

Magazines, gym memberships, cell phone plans, online computer backup services and cable TV all rely on variations of the subscription business model. Netflix has used this old model to transform the movie rental business. The details vary but the basic subscription model has the consumer pay (or at least commit to pay) up front for access to a product or service over a period of time.

Consumers get reliable and often privileged access to the offering, usually at a compelling discount. Providers get an assured revenue stream and reduced marketing costs. Even better, they get paid whether or not customers actually use their cell phones or gym memberships.

As Isaac Newton taught us, bodies at rest tend to stay at rest. Subscribers must get off the couch and take an action to cancel the agreement. As long as providers don’t anger them with bad service, most subscribers will sit back and let the revenues flow.

Does this powerful business model work for philanthropy? Well, symphony orchestras and museums already use the subscription model with season tickets or admission-based memberships. However, they actually provide goods and services over time directly to the consumer, more or less like a for-profit business.

What about the usual three-cornered nonprofit proposition where A gives money to B to deliver a service to C? Direct self-interest doesn’t operate here. Still, one category of non-profits have used the subscription model to support service to third parties since the 1930s with great success. Can you name that nonprofit sector? Have you adapted the subscription model to fundraising?

I’ll provide the answer and look at what that example could mean for other nonprofit fundraisers in a future post.

There is a snowball gathering momentum and mass rolling down the hill in the USA. Your board needs to pay attention to it now.

That snowball is the growing movement by independent intermediaries to develop simple rating systems for the very complex world of nonprofit performance and social impact.

As charitable giving has grown to over $300 billion  annually in the US, it seems that the business world is now taking great interest. Those individuals who brought you the financial crisis have now decided that most charitable giving is misdirected (see this Fox Business News clip and you’ll get the picture). What the public really needs, they believe, are unbiased “intermediaries” to redirect charitable giving to  the “best performing” nonprofits.

Funders are focused on measuring and publicizing nonprofit outcomes

A 2008 study released by the William and Flora Hewlett Foundation, called “The Nonprofit Marketplace: Bridging the Information Gap in Philanthropy,” outlines the desired objective:

“…a more efficient and effective nonprofit market would direct more funds to solving the world’s social problems faster and at a lower cost, thereby helping more people sooner. Reallocating just 10 percent of the current $300 billion annual fund flow to the best performers would have a similar effect as raising billions in new funds — with nowhere near the same cost in fundraising time and energy.”

Now, as much as I want to debate those assumptions, the train has already left the station.

For example, The William and Flora Hewlett Foundation has already provided seed funding to an organization called GiveWell which they are promoting on their website. They describe GiveWell as

“the sometimes controversial … independent, nonprofit evaluator of nonprofit organizations. A self appointed watchdog, it performs in-depth research to help people accomplish as much good as possible with their donations.”

Who are GiveWell?  As listed on their web profiles, their staff are former hedge fund employees and recent college graduates (who appear to have little-to-no nonprofit experience). They boast on their website that they have already evaluated 500 nonprofits and only found four worthy of their top ranking!

While you may not have heard of GiveWell, you’ve probably heard of Charity Navigator. Ken Berger, its thoughtful President and CEO, has heard the criticisms of its 4 star ratings which assess only financial indicators and not nonprofit program performance.

Mr. Berger is aware of the criticisms of Charity Navigator’s limited perspective and determined

“to transform our evaluation system of charities to include two additional dimensions (beyond financial health) – accountability (including transparency) and outcomes.”(Emphasis added).  Read more here

Charity Navigator has appointed an advisory group to help it design its system.

Is your organization attempting to measure outcomes at all?

We all know that measuring outcomes is one of the hardest tasks that most nonprofits and social benefit organizations face. And one of the most controversial.

Just look at the maelstrom stirred up by the US government’s No Child Left Behind Act which tests students to assess public school performance. Critics of the testing process point out many shortcomings including school cheating, lack of similar standards across states, the failure to test the same students over time, the wide disparity of the student starting line, a too narrow focus on test scores that excludes other factors that contribute to student success (like social-emotional intelligence), or the narrowing of the curriculum to focus on only what is measured.

Yet, I hope we all agree that we have a responsibility to our investors and our donors to use their money responsibly.

And we have an even bigger responsibility to the people whose lives we touch, or the world we live in, to produce something very good with those dollars.

Unless we attempt to measure our performance, how will we ever know that we are moving toward our desired vision of societal change?

Unfortunately, way too many nonprofits use the excuse of “it’s too hard” to avoid any outcome measurement at all. Under these public rating systems, you won’t be able to use that excuse much longer.

Your organization will be especially penalized if it lacks any attempts at all to assess its performance and social impact.

A public airing of your performance measurement (or lack thereof) may be right around the corner

In a conversation I had this summer with Ken Berger, he indicated that Charity Navigator’s goal is to include all nonprofits with budgets over $1 million, though they intend to start with the largest nonprofits that consume most of the charitable dollars and have the most capacity for measurement. (Yet may be some of the most complex and multilayered as well.)

One of the instruments that Charity Navigator is reviewing as a prototype for its ratings was developed by Hunter Consulting LLC for social and human service organizations. Its name is very revealing of its intent: “Protocol for assessing Investment Risk – with regard to the likelihood that an organization is producing Social Value.”

My intent is not to be a how-to on performance measurement. Instead, my goal is to give you a heads up before you find your nonprofit listed without a star for all the world to see.

I’d especially suggest that you add your voice to the discussion about how to rate nonprofit performance, sharing your own experiences and what you’ve learned about what works, what doesn’t and unintended consequences.

And though I am absolutely a cheerleader for every nonprofit developing a vision of the societal change they are trying to create along with measures and assessment of their progress toward that vision, I have deep, deep reservations about intermediary developed rating systems and their attempt to influence donor dollars.

For example,

• I worry about the smallest nonprofits, like neighborhood associations, small watershed organizations, food pantries or community advocacy groups which won’t even be on the radar of these rating systems, yet perform invaluable services at the micro-level.

• I worry about a focus solely on individual organizations and how that overlooks the critical networks of organizations that only create effective change as a system themselves.

• I worry about funding for advocacy organizations that take up the most difficult of causes, like ending the death penalty in the US or protecting human rights around the world, and how a national push to rate effectiveness may result in the abandonment of life-saving activities that don’t meet funder expectations for large numbers of “successes.”

• I wonder what timeframe will be used for measurement, as many of us know that social change takes decades, or that the consequences of actions are not often revealed for years.

• I worry about the loss of funding for experimental organizations, especially in the arts, culture and humanities which may be forced even more than they have already to justify their work only by non-artistic measures like economic impact because those are the easiest to assess.

• I also wonder how these intermediaries and their supporters will develop and confidently proselytize their measurement formulas in mere months while some of the best minds in academia and government and the nonprofit sector have been struggling for decades to isolate agency actions and measure social outcomes.

But regardless of my reservations or yours, change is on the way. So dust off those logic models, start your indicators and bring on the evaluators.

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This article first appeared in the September 23, 2009 edition of Nonprofit Boards and Governance Review at CharityChannel.com

In her latest op ed piece in The Nonprofit Quarterly, “Mom and Pop Giving Over to Big Brother?,” editor-in-chief Ruth McCambridge, shares our concern about national trends that overlook the value of “small, locally controlled organizations to civic life.”

She goes on to note that small businesses have disproportionately shed jobs in this recession and cites examples that indicate that this may be the result of government policy directing recovery funds toward the biggest corporations and away from the small guys. Ruth worries whether this will be repeated for nonprofits as this Administration works with “large philanthropic organizations to craft … approaches to ’social  innovation.’”

We have raised the same question in different forms in this blog . See Now I’m Worried – Who decides what is effective and who should be funded or Are nonprofits only safety nets? among other entries.

If we get too caught up in focusing funder attention on “taking programs to scale,” we are destined to overlook the critical community building that can only be done by small, in-the-neighborhood organizations. Or, those scale-ups may overlook the impact of design that is an adaptation to local circumstances that doesn’t scale well or shouldn’t be scaled but should be redesigned for a new locale or new population. Or, even more likely, we may tend to  forget that social change depends on a continuum of organizations, people and actions to finally tip power balances and produce desired improvements.

Thanks to The Nonprofit Quarterly for using its national platform to continue to remind the top of the nonprofit infrastructure that this is a complicated world and that the contributions of the little guys can’t be dismissed or ignored.