Kay Sprinkel Grace
It’s Not Your Father’s Philanthropy: New Strategies for a Time of Transition Boys & Girls Clubs of America – New Orleans 11 May 2016 – 10:45 a.m. to Noon Kay Sprinkel Grace, Presenter
What We Will Cover Philanthropy: Rapid changes, but what is our response? Beyond the crossroads: who drew the map, and where is this road headed? Review of trends and how donor needs and behavior are changing
Making room for others in our space: what will it take? Discussion: trends in your communities The new roadmap: Are you ready? Is the sector willing? Closing comments
Where Are We Headed? And are we moving fast enough?
We Are Beyond the Crossroads: Discussion Where is philanthropy headed? Who laid down the road?
Who is in the driver’s seat? Where are we? What was/is our role? Is this how we want it to be?
If not, what do we need to do? Roadblocks ahead? Detours to new (and magical) places?
Late Breaking News Foundations are following the Ford Foundation and shifting their focus entirely to a cause (income equality, e.g.) Latest: James Irvine Foundation, California, now exclusively “helping California’s working poor attain greater economic opportunities and a more effective political voice.” For Irvine-funded organizations, arts funding is gone. Donors are partnering for greater impact: Creation of “Blue Meridian Partners” (6 individual donors and 4 foundations committing $1 billion in grants to help youth charities grow).
News - 2 Calls for Charity Navigator to “grow up or shut down” – critics saying it “…dumbs down the conversation about the real impact charities have, or should have, on our society….The site is full of meaningless statistics, disguised – or promoted – as relevant data under the illusion of helping donors support solutions to the world’s persistent challenges.” Doug White, Op Ed, Chronicle of Philanthropy, 1/26/16 Nexus USA Youth Summit philanthropy conference at the White House – 3,000 members across 70 countries (a project of the Giving Back Fund, a DAF accelerator. Their charge: “..find people and help accelerate their dreams and their passions.”
Are We Accelerating Dreams and Passions? What remains strong about our sector? Where do we need to focus for future strength?
What Remains Strong? Majority of giving (83%) is still from individuals and it is still mission/vision/values driven People still give to “make a difference” (but now they call it “impact”) and because they believe in the cause
Donors want to be appreciated They want to know how their money has been spent: facts + stories = engagement
Their desire for an experience with the organization, the issue, or the people in the organization The historic legacy of ethics and integrity of leadership
Where Do We Need to Be Watchful and Adapt? Gifts come via the stairway or the helicopter landing pad Donor-investors are researching you as much as you are researching them Diversity of the donor-investor is remarkable Expectations are higher for accountability: but what does “accountability” entail? Traditional stewardship may not work Research is easy, information abundant: but we need new strategies for using it
Signs of a Shifting Sector Donor advised funds are growing at a faster pace than direct philanthropic giving Corporations are extending their work into areas of social responsibility (doing good while doing well) We are seen as organizations focused on scarcity (our own need for money) rather than organizations that celebrate and advance investment and abundance (in order to alleviate scarcity) People with money and passion are bypassing us and starting their own nonprofits
Solving Poverty in Africa “GiveDirectly,” the brainchild of four Harvard and MIT graduate students, is so simple, it’s genius. Give poor Kenyan families $1,000 – and let them do whatever they want with it.” Atlantic Monthly, September, 2012
Started with a Giving Circle: received $2.4 million from Google in 2012 to expand; lauded 1 November 2015 in a NY Times article on Silicon Valley Philanthropy 92 cents of each dollar given went directly to poor households through M-PESA, a mobile phone banking service: success has led them now to Universal Basic Income support for 6,000 Kenyans: a decade of support What is the impact of this new model on philanthropy?
Cure Alzheimer’s http://curealz.org/ Founders researched all existing global Alzheimer’s organizations and determined they were too bureaucratic to move quickly on this growing problem of an aging society Cure Alzheimer’s was formed. It channels 100% of the funding into research; none into “overhead”
Their breakthroughs have set new benchmarks in Alzheimer’s research What is the impact of this new model on our work?
What Are Donors Looking For? Trust What is your track record and how well do you steward your money and donors? Can I trust your programs to fulfill my hopes and dreams? Relevance Why does this matter? To me? To society?
Urgency How critical is this need in our community? Why now? Why our Club?
Cross-Generational Giving and Asking Yet another variable in our success as professionals What are the age demographics of your donor data base?
Are you bringing younger major gifts officers into your organization? Are you changing the face of major gift askers as the face of the donors changes? Are you familiar with their giving preferences, habits and investment methods? Did you know about Nexus? With what generational “categories” are you familiar?
Engaging New Philanthropists of All Ages Communicate in their preferred mode Offer only the information they want on the timeline they prefer
Show them that you know them – what they do/don’t like, what they do/don’t want Listen
Uncover their values Be a renewing organization: “surrender the memories” and “take the best and leave the rest” (Robert Waterman, “The Renewal Factor”)
And What About Our Traditional Philanthropists? It (and they) remain at the core of our donor family: they are very invested in us Honor and engage them, as you always have and keep those relationships strong At the same time, gear your actions to this century and the host of new investors who expect entrepreneurship, problem solving and innovation We can engage and educate these “new philanthropists” with our vision and responsiveness while maintaining our relationships with more traditional donors
So, What is Frustrating Even Traditional Investors About The Philanthropic Sector? Slow pace in solving chronic problems Perception of bureaucracy Cumbersome decision making process Lack of dynamic/impact measurement in what we do, and “perceived” waste Seeming inability to have impact Poor stewards of donors: where is the “UX” (user experience) factor? How does human centered design theory apply to us?
How does your Club measure on these issues? Where are you better than most? And where do you fall short?
And What About Our Boards? Performance v. Purpose (Chaitt and Taylor) UX (user experience) and design thinking for recruitment and for participation Redefining their roles Attracting newer philanthropists to our board Are we confusing “micro managing” with a desire to be more involved: how do we resolve this in a balanced way?
What Affects All Trends Philanthropy in the 21st Century is accessible to increasing numbers of individuals globally: there are more players on the field, and more discerning investors Sources of revenue are changing: we are sharing the (philanthropic) space more and more
While most reasons for giving remain the same, the motivations and actions of newer philanthropists are more complex and their needs are greater The rise in wealth has been accompanied by a rise in poverty – this presents both opportunities and challenges, especially for Boys & Girls Clubs (tapping in) If increased large social investment is the wave of the future, it begins with how we engage our donors of all ages
Affecting Trends - 2 Organizations are working harder to persuade donors to keep giving year after year Katherine Fulton of the Monitor Group cites our “amateurism” Our annual giving programs eat up large sums to attract new contributors to replace the ones we lose, driving up the cost of fundraising Turnover among qualified fund raisers has increased – also driving up the cost of maintaining a development office
Others are doing things only we used to do..
Would You Agree? No Longer Going It Alone “A lot of conversation was about catalyzing innovation at this critical moment in time when needs so outweigh what any of us individually can solve. How can philanthropy work with government and other partners to take risks, to identify solutions, to catalyze change, to pilot innovative ideas?” Jean Case, White House Conference on Philanthropy, 2012
Who Are The New Partners? Very high net worth attendees at the Forbes 400 Conference (in 2012) said they partner to accelerate impact: 40% partner with businesses 28% partner with other nonprofits
22% partner with government agencies 7% partner with other private funders With what kinds of organizations do you partner?
Making Room for Others in Our “Space” We are no longer alone in providing programs to solve chronic or critical community issues
• B Corps (Benefit Corporations) • Cross “industry” partnerships • Corporate divisions • Consortiums of funders with a common issue agenda • Local governments • What else?
Accessing the New Philanthropy New avenues New opportunities New challenges
Donor Advised Funds: Cursed or Celebrated? Fast-growing: 217,000 such funds, an increase of 20% from 2012 to 2013 nationwide, now totaling $60 billion Community foundations, financial institutions Donor receives immediate tax deduction $9 billion was distributed in 2014 Gifts to DAFs were 5% of US giving in 2013 2015: 20% of funds in DAFs went out to nonprofits
DAFs: Cursed or Celebrated? - 2 Critics cite the fact that money does not get out to charitable organizations quickly enough – there are no time restrictions or pressure to distribute. Enthusiasts say this money is set aside for philanthropy. DAF holders are cross-generational (skew to younger and older) What is our responsibility to excite donors to pull those funds out and give them to our Clubs? Where are our “big ideas?” How do we seize the opportunity? And what should we know to negotiate with a DAF holder?
What Our Sector Needs to Do to Unleash New Investment
We need to have more big ideas, more solutions, more “change the world” strategies – we do not excite donors with the way we message about our ongoing fundraising practices of closing gaps, supporting operations, etc. They would support our ongoing needs if they saw that these were needed steps to get us into a direction or level where we are making a massive difference in the arts, environment, health, etc. Where do the big dollars go? To already-successful organizations including medical centers and universities – who talk in an inspiring manner about the difference they make.
This Model Still Works: But What Strategies Must Be Different? Philanthropy Based in values
Development Uncovers shared values
Fund Raising Gives people opportunities to act on their values
Daring to Dream: Will You Serve or Solve?
To access the new philanthropy, dare to dream and put that dream out in your messages in a way that is consistent, inspiring and includes a call to action and the impact you believe you will make in the community (work closely with marketing and public relations to get your dream out there).
Money that is in DAFs or family foundations or partnerships with others (business, government, other nonprofits) who are determined to uncover new dreams in which to invest could work miracles: but what “change the world” incentive do you offer? Are you a dream broker?
Can you name a dream your Club has?
Five Strategies for Taking Command of the Road That Lies Ahead How we can address our most pressing issues? (youth leadership, graduation rates, street gangs, etc.)
5 Strategies 1. Always position your Club as a transforming community benefit corporation worthy of social investment, not as a “charity” – and partner with others who are visionaries about the capacity of the communities you serve to fulfill their dreams 2. In your messages, stop focusing on your needs and promote your impact (substitute scarcity for abundance) and be seen as a change agent 3. Imagine the biggest idea, craft it into a vision, and share it broadly with constituencies you may never have engaged before: be bold 4. Innovate and take risks: do “zero based” thinking to re-set your case and get permission to fail (and promise to pivot) 5. Rethink your Club board’s purpose as well as its performance issues – engage them as purposeful partners
Unlocking The Barriers What are the challenges you will face as you navigate the road ahead? Write down: What 3 – 5 things will you do differently (or better)? Share if you wish…
Closing Thoughts “(We) cannot discover new oceans unless (we) have the courage to lose sight of the shore.” Andre Gide, French author
“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” William Pollard, Physicist and Episcopal Priest
It’s Not Your Father’s Philanthropy Boys & Girls Clubs of America 11 May 2016 – 10:30 to 11:45 a.m. – 3:15 to 4:30 p.m. Kay Sprinkel Grace, Presenter
What We Will Cover Philanthropy: Rapid changes, but what is our response? Beyond the crossroads: who drew the map, and where is this road headed? Review of trends and how donor needs and behavior are changing
Making room for others in our space: what will it take? Discussion: trends in your communities The new roadmap: Are you ready? Is the sector willing? Closing comments
Where Are We Headed? And are we moving fast enough?
We Are Beyond the Crossroads: Discussion Where is philanthropy headed? Who laid down the road?
Who is in the driver’s seat? Where are we? What was/is our role? Is this how we want it to be?
If not, what do we need to do? Roadblocks ahead? Detours to new (and magical) places?
Late Breaking News Foundations are following the Ford Foundation and shifting their focus entirely to a cause (income equality, e.g.) Latest: James Irvine Foundation, California, now exclusively “helping California’s working poor attain greater economic opportunities and a more effective political voice.” For Irvine-funded organizations, arts funding is gone. Donors are partnering for greater impact: Creation of “Blue Meridian Partners” (6 individual donors and 4 foundations committing $1 billion in grants to help youth charities grow).
News - 2 Calls for Charity Navigator to “grow up or shut down” – critics saying it “…dumbs down the conversation about the real impact charities have, or should have, on our society….The site is full of meaningless statistics, disguised – or promoted – as relevant data under the illusion of helping donors support solutions to the world’s persistent challenges.” Doug White, Op Ed, Chronicle of Philanthropy, 1/26/16 Nexus USA Youth Summit philanthropy conference at the White House – 3,000 members across 70 countries (a project of the Giving Back Fund, a DAF accelerator. Their charge: “..find people and help accelerate their dreams and their passions.”
Are We Accelerating Dreams and Passions? What remains strong about our sector? Where do we need to focus for future strength?
What Remains Strong? Majority of giving (83%) is still from individuals and it is still mission/vision/values driven People still give to “make a difference” (but now they call it “impact”) and because they believe in the cause
Donors want to be appreciated They want to know how their money has been spent: facts + stories = engagement
Their desire for an experience with the organization, the issue, or the people in the organization The historic legacy of ethics and integrity of leadership
Where Do We Need to Be Watchful and Adapt? Gifts come via the stairway or the helicopter landing pad Donor-investors are researching you as much as you are researching them Diversity of the donor-investor is remarkable Expectations are higher for accountability: but what does “accountability” entail? Traditional stewardship may not work Research is easy, information abundant: but we need new strategies for using it
Signs of a Shifting Sector Donor advised funds are growing at a faster pace than direct philanthropic giving Corporations are extending their work into areas of social responsibility (doing good while doing well) We are seen as organizations focused on scarcity (our own need for money) rather than organizations that celebrate and advance investment and abundance (in order to alleviate scarcity) People with money and passion are bypassing us and starting their own nonprofits
Solving Poverty in Africa “GiveDirectly,” the brainchild of four Harvard and MIT graduate students, is so simple, it’s genius. Give poor Kenyan families $1,000 – and let them do whatever they want with it.” Atlantic Monthly, September, 2012
Started with a Giving Circle: received $2.4 million from Google in 2012 to expand; lauded 1 November 2015 in a NY Times article on Silicon Valley Philanthropy 92 cents of each dollar given went directly to poor households through M-PESA, a mobile phone banking service: success has led them now to Universal Basic Income support for 6,000 Kenyans: a decade of support What is the impact of this new model on philanthropy?
Cure Alzheimer’s http://curealz.org/ Founders researched all existing global Alzheimer’s organizations and determined they were too bureaucratic to move quickly on this growing problem of an aging society Cure Alzheimer’s was formed. It channels 100% of the funding into research; none into “overhead”
Their breakthroughs have set new benchmarks in Alzheimer’s research What is the impact of this new model on our work?
What Are Donors Looking For? Trust What is your track record and how well do you steward your money and donors? Can I trust your programs to fulfill my hopes and dreams? Relevance Why does this matter? To me? To society?
Urgency How critical is this need in our community? Why now? Why our Club?
Cross-Generational Giving and Asking Yet another variable in our success as professionals What are the age demographics of your donor data base?
Are you bringing younger major gifts officers into your organization? Are you changing the face of major gift askers as the face of the donors changes? Are you familiar with their giving preferences, habits and investment methods? Did you know about Nexus? With what generational “categories” are you familiar?
Engaging New Philanthropists of All Ages Communicate in their preferred mode Offer only the information they want on the timeline they prefer
Show them that you know them – what they do/don’t like, what they do/don’t want Listen
Uncover their values Be a renewing organization: “surrender the memories” and “take the best and leave the rest” (Robert Waterman, “The Renewal Factor”)
And What About Our Traditional Philanthropists? It (and they) remain at the core of our donor family: they are very invested in us Honor and engage them, as you always have and keep those relationships strong At the same time, gear your actions to this century and the host of new investors who expect entrepreneurship, problem solving and innovation We can engage and educate these “new philanthropists” with our vision and responsiveness while maintaining our relationships with more traditional donors
So, What is Frustrating Even Traditional Investors About The Philanthropic Sector? Slow pace in solving chronic problems Perception of bureaucracy Cumbersome decision making process Lack of dynamic/impact measurement in what we do, and “perceived” waste Seeming inability to have impact Poor stewards of donors: where is the “UX” (user experience) factor? How does human centered design theory apply to us?
How does your Club measure on these issues? Where are you better than most? And where do you fall short?
And What About Our Boards? Performance v. Purpose (Chaitt and Taylor) UX (user experience) and design thinking for recruitment and for participation Redefining their roles Attracting newer philanthropists to our board Are we confusing “micro managing” with a desire to be more involved: how do we resolve this in a balanced way?
What Affects All Trends Philanthropy in the 21st Century is accessible to increasing numbers of individuals globally: there are more players on the field, and more discerning investors Sources of revenue are changing: we are sharing the (philanthropic) space more and more
While most reasons for giving remain the same, the motivations and actions of newer philanthropists are more complex and their needs are greater The rise in wealth has been accompanied by a rise in poverty – this presents both opportunities and challenges, especially for Boys & Girls Clubs (tapping in) If increased large social investment is the wave of the future, it begins with how we engage our donors of all ages
Affecting Trends - 2 Organizations are working harder to persuade donors to keep giving year after year Katherine Fulton of the Monitor Group cites our “amateurism” Our annual giving programs eat up large sums to attract new contributors to replace the ones we lose, driving up the cost of fundraising Turnover among qualified fund raisers has increased – also driving up the cost of maintaining a development office
Others are doing things only we used to do..
Would You Agree? No Longer Going It Alone “A lot of conversation was about catalyzing innovation at this critical moment in time when needs so outweigh what any of us individually can solve. How can philanthropy work with government and other partners to take risks, to identify solutions, to catalyze change, to pilot innovative ideas?” Jean Case, White House Conference on Philanthropy, 2012
Who Are The New Partners? Very high net worth attendees at the Forbes 400 Conference (in 2012) said they partner to accelerate impact: 40% partner with businesses 28% partner with other nonprofits
22% partner with government agencies 7% partner with other private funders With what kinds of organizations do you partner?
Making Room for Others in Our “Space” We are no longer alone in providing programs to solve chronic or critical community issues
• B Corps (Benefit Corporations) • Cross “industry” partnerships • Corporate divisions • Consortiums of funders with a common issue agenda • Local governments • What else?
Accessing the New Philanthropy New avenues New opportunities New challenges
Donor Advised Funds: Cursed or Celebrated? Fast-growing: 217,000 such funds, an increase of 20% from 2012 to 2013 nationwide, now totaling $60 billion Community foundations, financial institutions Donor receives immediate tax deduction $9 billion was distributed in 2014 Gifts to DAFs were 5% of US giving in 2013 2015: 20% of funds in DAFs went out to nonprofits
DAFs: Cursed or Celebrated? - 2 Critics cite the fact that money does not get out to charitable organizations quickly enough – there are no time restrictions or pressure to distribute. Enthusiasts say this money is set aside for philanthropy. DAF holders are cross-generational (skew to younger and older) What is our responsibility to excite donors to pull those funds out and give them to our Clubs? Where are our “big ideas?” How do we seize the opportunity? And what should we know to negotiate with a DAF holder?
What Our Sector Needs to Do to Unleash New Investment
We need to have more big ideas, more solutions, more “change the world” strategies – we do not excite donors with the way we message about our ongoing fundraising practices of closing gaps, supporting operations, etc. They would support our ongoing needs if they saw that these were needed steps to get us into a direction or level where we are making a massive difference in the arts, environment, health, etc. Where do the big dollars go? To already-successful organizations including medical centers and universities – who talk in an inspiring manner about the difference they make.
This Model Still Works: But What Strategies Must Be Different? Philanthropy Based in values
Development Uncovers shared values
Fund Raising Gives people opportunities to act on their values
Daring to Dream: Will You Serve or Solve?
To access the new philanthropy, dare to dream and put that dream out in your messages in a way that is consistent, inspiring and includes a call to action and the impact you believe you will make in the community (work closely with marketing and public relations to get your dream out there).
Money that is in DAFs or family foundations or partnerships with others (business, government, other nonprofits) who are determined to uncover new dreams in which to invest could work miracles: but what “change the world” incentive do you offer? Are you a dream broker?
Can you name a dream your Club has?
Five Strategies for Taking Command of the Road That Lies Ahead How we can address our most pressing issues? (youth leadership, graduation rates, street gangs, etc.)
5 Strategies 1. Always position your Club as a transforming community benefit corporation worthy of social investment, not as a “charity” – and partner with others who are visionaries about the capacity of the communities you serve to fulfill their dreams 2. In your messages, stop focusing on your needs and promote your impact (substitute scarcity for abundance) and be seen as a change agent 3. Imagine the biggest idea, craft it into a vision, and share it broadly with constituencies you may never have engaged before: be bold 4. Innovate and take risks: do “zero based” thinking to re-set your case and get permission to fail (and promise to pivot) 5. Rethink your Club board’s purpose as well as its performance issues – engage them as purposeful partners
Unlocking The Barriers What are the challenges you will face as you navigate the road ahead? Write down: What 3 – 5 things will you do differently (or better)? Share if you wish…
Closing Thoughts “(We) cannot discover new oceans unless (we) have the courage to lose sight of the shore.” Andre Gide, French author
“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” William Pollard, Physicist and Episcopal Priest
It’s Not Your Father’s Philanthropy Boys & Girls Clubs of America 11 May 2016 – 10:30 to 11:45 a.m. – 3:15 to 4:30 p.m. Kay Sprinkel Grace, Presenter
