CONCLUSION
Disrupting the Nonprofit Sector
In the last ten years, the nonprofit sector has grown more than 60%113 in the United States to an estimated 1.5 million organizations.114 In every vertical, ranging from the environment to public health, there are hundreds if not thousands of organizations with similar names and missions competing for advocacy, donor, and foundation support. No wonder our constituents’ in-boxes and mailboxes are stuffed with action alerts, fundraising appeals, and newsletters with similar messaging from several nonprofits vying for attention. You probably recognize this problem too, and find it frustrating that your community has to sift through so much noise to determine which organization’s actions to take or where to donate money.
If we are going to truly solve the world’s toughest social problems and obtain the necessary resources to do it right, we need to examine how the nonprofit sector can evolve to create more innovative and efficient organizations. This involves disrupting the nonprofit sector as we know it today. Here are some ideas to consider as you think about the future of your organization and of the nonprofit sector.
REDUCE COMPETITION AND CONSOLIDATE RESOURCES
“Nonprofits need a fundamental change in how they collaborate with each other. If the mission is the most important thing, why is there unnecessary competition? I think the industry as a whole needs a more transparent, decentralized way of eliminating resource-waste. Collective energy could go so much further,” says Maddie Grant, founder of Social Fish.
One way to address this is to reduce competition within each cause area by combining nonprofits to bring the best talent, resources, and innovation together. Imagine how much more of an impact nonprofits would have if staff could spend more time working on solving issues rather than struggling for funding, resources, or spending time on internal politics and grant reports that offer little value to the foundation or donors.
David Svet, CEO of Spur Communications, says setting up nonprofit venture funds developed for each of the world’s problems could help combine nonprofits and make them much more effective in solving social issues. “If we care to address social justice issues, we may want to look at investing in a nonprofit fund that will endeavor to remedy the problem and who can hire and invest in the necessary solutions. So if we were passionate about domestic violence and its many forms, there would be a venture fund for it. The fund would collect investments, distribute the money to the few vetted nonprofits working on domestic violence, and manage the nonprofits’ work around the investment. Investments would go 50 cents on the dollar to the cause with the balance going to an endowment to remedy the problem. When the problem is remedied, the endowment would be moved to another issue,” said Svet.
Measuring impact and reporting outcomes of the investment would be crucial to the success of the nonprofit venture fund concept. Donors would need to be treated like investors and given clear documentation of needs and outcomes.
What’s great about Svet’s vision is that people want to feel like they are investing in an issue that they are passionate about instead of trying to figure out which organization they should support. Nonprofits in the fund could then spend even more time on the ground working with the community to solve social issues. Equally important, organizations would have the capacity to build stronger relationships with their community and inspire more people to get involved and contribute their ideas as potential solutions to social issues. All too often nonprofits dictate how some issues should be solved as if social justice issues are nonprofits’ problems to face alone. They are everyone’s problem to address together.
THINK LIKE A STARTUP
Even though there are 1.5 million nonprofits in the United States alone, social change is not happening fast enough. Yes, you can blame this on partisan politics, the economy, and myriad other things; but nonprofits that also enforce rigid top-town management and don’t foster innovation within their organization are to blame, too. We are hopeful that organizations can begin to change that by adapting some strategies from the startup sector.
Test New Ideas Quickly
Startups are often encouraged not to be risk averse and to test new ideas quickly to figure out what aspects of their product do not work so that they can learn from their failure and iterate. Nonprofits can adapt this model too. For example, Save the Children Italy has a testing budget to test new online fundraising and outreach ideas to empower people in Italy to help children in need. Staff are encouraged to test a variety of ideas ranging from online games to apps so that they can learn from their successes and failures fast. All of this knowledge is then shared with the rest of the organization so that they can invest more in the digital strategies that are actually working.
“Testing helped us to create a better digital ‘ecosystem’ which is linking digital engagement and digital fundraising, while offering our supporters different experiences according to their interests,” said Daniela Fatarella, head of marketing and communications at Save the Children Italy. “When we failed, we analyzed reasons for failing: wrong content, language, timing of [campaigns], activities, type of request and level of engagement, and sometimes also the willingness to innovate much more than to consolidate. All this has leveraged our knowledge of digital fundraising and helped us to build on our experience and get better in acquiring and retaining our digital donors.”
Save the Children Italy has learned that recycling the same old solutions to solve social issues clearly isn’t working. Can you imagine how much more they would learn if they increased their budget to have an incubator inside the organization solely focused on dreaming up and testing new ideas to address the ongoing struggles children in poverty face every day in Italy? Since Save the Children has affiliates in 120 countries, the incubator could share the results and resources with the rest of the affiliates, benefitting the entire network of organizations.
“I’d love for everyone to wake up working for organizations that demand endless experimentation and creativity from their employees, and whose donors and supporters are 100% aware and on-board with exactly how the organization works and what it’s working toward,” said Porter Mason, deputy director of Social Media at UNICEF USA. We agree! And while some organizations are trying to operate in this way now, there will need to be many more moving in this direction soon. As our community members continue to expect more from your communications, your campaigns, and impact, so too do your staff.
charity: water’s Fundraising Experiment
Towards the end of 2011, charity: water launched an innovative social fundraising experiment that they thought had potential to raise hundreds of millions of dollars. They created an online book called WaterForward115 filled with faces of people helping to end the water crisis (see Figure C.1).
Figure C.1 Screen Shot of charity: water’s Microsite WaterForward: Suggesting Friends to Pay It Forward to You
charity: water started the fundraising campaign by posing the question to their community, “What if the billion people around the world using social media could help the billion people without clean water?”
How WaterForward Works
You can’t put yourself in the WaterForward online book. Someone else, who is already in the online book, such as a friend or family member, has to sponsor you with a $10 donation. Since you can sign in to the WaterForward website using your Facebook or Twitter account, you can ask your friends on these networks to make a donation on your behalf and “pay it forward” for you. Alternatively, you can pledge $10 to put someone else in the online book and rely on karma that someone will see your pledge and sponsor you as well. The site also tracks everyone you pay it forward to so you can see the impact your donations have.
As of this writing, there were over 30,000 people in the online book and over $300,000 raised. While the experimental campaign has not generated millions of dollars yet, despite iterating and testing three different ways to engage people on the website, charity: water is not giving up. The organization plans to continue testing because they are determined to find out what triggers people to give, and to apply what they learn to future campaigns.
BE SELF-SUSTAINABLE: HAVE A HEART AND A HEAD FOR BUSINESS
Similar to nonprofits, entrepreneurs in startups are driven by their ambition to change the world, but through products. To build products and iterate they need resources and capital to self-sustain. Part of the founding team is often someone who has strong business skills and can help the startup scale. While nonprofits have finance departments and some even have chief financial officers, they are often narrowly focused on accounting, budgets, reporting, and meeting payroll. This is a problem for the nonprofit sector because charitable giving only grew by 0.9% in 2011 and about 40% of the wealth of foundation endowments that many organizations depended on has been eliminated.116 Nonprofits now need to be focused on developing models that are more self-sustainable.
“As a social enterprise [or nonprofit], it’s easy to get swept up in the feel-good, I’m-a-world-changing-ninja feeling. Be wary of over-investing in your social mission and under-investing in your revenue strategy and sustainability. You can’t impact the world if your own revenue strategy doesn’t work,” says Amanda Steinberg, founder of the startup DailyWorth and who founded Soapbxx, a web firm that worked with the nonprofit community from 2006 to 2011.
DC Central Kitchen, whose mission is to use food as a tool to strengthen bodies, empower minds, and build communities, has been successful operating their nonprofit more like a business. Since 1989, the organization has prepared 25 million meals for low-income residents in Washington, D.C. To support their mission they run a culinary job-training program that trains unemployed people who have been homeless, addicted to drugs, or incarcerated. The trainees receive job experience through the organization’s catering company, called Fresh Start Catering. For several years DC Central Kitchen has also partnered with farmers in Virginia’s Shenandoah Valley, who offer discounts on produce. This enables DC Central Kitchen to not only provide a lot of fresh and local ingredients in the 4,500 daily meals they provide to local shelters and soup kitchens, but it also saves the organization money. In addition to the produce being used in the daily meals they serve, the produce is also used in their wholesale food business, which sells fruits and vegetables to local grocery stores and restaurants.
DC Central Kitchen also partners with the D.C. Public School System. Since August of 2010, they have prepared over 4,000 healthy, home-style cooked meals each day for low-income children at eight public and private schools in Washington, D.C. And the organization’s school contracts have employed at least 35 people who completed the organization’s culinary job training program.
“Arrangements like these give local businesses an opportunity to express their philanthropy as part of everyday commerce, rather than digging into their pockets to make a donation,” said blogger Ed Bruske who wrote about DC Central Kitchen’s innovative business model at Grist.org.117
We think that all nonprofits bring their own unique set of expertise to the table that they can market and generate revenue from. Perhaps your nonprofit is an expert in conducting trainings, or has spent years developing and refining a human resources program for global affiliates focused on recruitment, training, and professional development. Why not offer paid consulting services to peer organizations that can benefit from this expertise?
RECLAIM REPORTING
It’s an open secret that traditional philanthropic reporting is broken. As currently structured, conventional reporting fails to meet its potential and creates an enormous drain on time, energy, and resources across the board. “We’ve become too focused on a labor-intensive validation process in which nonprofits produce 60-page reports, that few read, in an effort not only to justify the use of funds received from individual grants, but also to ensure that money keeps flowing,” said Ned Breslin, CEO of Water For People. Our misplaced reporting priorities are now an obstacle to learning.
Reporting matters, of course, but it can only serve missions when it’s actually focused on the impact funding has on people over time by advancing and refining programming, rather than being focused solely on where money is spent. In the drive for protection and “aid transparency,” we’ve missed reporting’s full potential as a unique moment and learning opportunity to reflect on how an organization is really doing and what it can do to improve.
With these challenges in mind, Water For People’s Re-Imagine Reporting offers a heartening effort to rebalance our reporting efforts. Re-Imagine Reporting’s web platform builds on new technologies for data management and visualization to bring information to life visually in ways that are consistent with how people learn across cultures, continents, and languages. Photography, video, infographics, and financial data are highlighted, with donors having the ability to see their contribution to the overall pie, as far down as receipts.
“The platform aims to facilitate a constant dialogue that allows staff, partners, communities, donors, and the broader development community to reflect on the full picture of what the organization is doing, programmatic outcomes, challenges, and future direction in light of progress toward clear and ambitious goals,” said Breslin.
Reporting should no longer be an obstacle to learning. Water For People’s commitment to reclaim the reporting process offers a glimpse of how reporting can drive an organization to ask hard questions on the impact of its work with an eye on constant improvement. We see this as just one example of advanced reporting, and we hope organizations look not just at using multichannel strategies to create impact, but also to document it.
PREPARE FOR A MORE SOCIAL AND MOBILE WORLD
We’ve also talked about mobile technology throughout this book, and the power of mobile tools and applications is only going to grow. Another arena where change is happening is in the mobility and responsiveness of the information we push out to our supporters.
Today, knowing where a supporter lives helps us segment our messages so that we can send geographically relevant messages to suggest, for example, that they attend an upcoming event we are planning in that area. Already, we can leave the segmenting up to the supporter, or, rather, his or her phone’s GPS. When supporters open our advocacy alert and the mobile GPS indicates they are in Austin, Texas, the details of your nearest event can be recommended automatically—even if their billing address in the database is in another state. In addition, supporters can forward the message to friends and family, allowing them to see the geographically relevant events near them whenever they open the message. The mobility of our messages, calls to action, and information will provide more opportunities to create richer relationships with our supporters and donors and help them decide how and when to take action.
When it comes to tracking engagement, participation, and communication with your supporters, one of the biggest hurdles is actually getting the data. In many instances, there’s an intermediary platform like Facebook or an application in the way. The web is getting more social in a way that means our data and actions are tracked everywhere we go. In the future we hope to see people in charge of maintaining and sharing their own data directly with the organizations they want to support.
Michelle Murrain, a technologist, and Beth Kanter, an author and trainer in the nonprofit space, have talked about the importance of having a portable social graph. “The ‘social graph’ is, basically, your data about who you are, and who is connected to you—who your friends are. A portable social graph would be one that you can take with you, wherever you are—so the friends that are connected with you on one network are also connected with you on another. It’s the holy grail of social network connectivity—you are connected to who you are connected to, no matter what site you are on,” said Murrain.118
Not only will we see our supporters bringing their friends and colleagues with them into our channels, but we will also see our tracking, analytics, and database technologies evolve to help capture and manage these new social data.
PREPARE FOR THE FUTURE TODAY
These are just a few of the advances and changes we see on the horizon. Whatever your focus, mission, or goals, you can start preparing your organization and your community for a new way of working together and creating social impact today. Use the tips throughout the book to start creating organizational plans, policies, and structures to support your staff in using multichannel strategies. Start with small tests and learn as you ramp up to full-blown campaigns. Use the lessons from all the organizations and individuals who shared stories in the previous chapters to identify options for your next email series and corresponding social media updates. The discussion questions are designed to get you talking with your colleagues, but the ideas you come up with from those conversations are your real invitation to dive in and get started right now.
JOIN US!
Have questions? Examples from your organization to share? We look forward to connecting with you on our website, http://www.socialchangeanytime.com, to support you in implementing multichannel strategies for real social impact anytime, everywhere! In addition to discussion topics on the website, there are also additional worksheets and handouts to help you lead your staff in succeeding in an anytime, everywhere world. We know it may sound cliché, but we really hope this is just the beginning of our working together to change the world: come join us!
NOTES
113. www.nytimes.com/2009/12/06/us/06charity.html?_r=2&scp=1&sq=charities&st=cse
114. www.grantspace.org/Tools/Knowledge-Base/Funding-Research/Statistics/Number-of-nonprofits-in-the-U.S
116. www.frogloop.com/care2blog/2009/5/20/nonprofit-mergers-and-alliances-dont-try-this-at-home.html
117. grist.org/article/food-dc-public-schools-partners-with-ex-con-agency/
118. Footnote quote from frogloop—www.frogloop.com/care2blog/2009/11/9/is-your-nonprofit-too-social-media-dependent.html