January 05, 2009

Lesson 8: Ten Things We'd Like to Tell Every New Philanthropist

Lesson #8 - "I have a great idea for a new program that XXX could try for kids. I just want to run it by them"

Whoa! Slow Down! Or more accurately, be very cognizant of what you know and what you don't know.

Be sure your suggestions are within your expertise, relevant experiences and interactions with nonprofits. Given the range of pressures a non-profit faces from a myriad of funding sources, they have "big ears" and sometimes listen to and even act upon a lot of suggestions and "ideas." Just be mindful of that.

By Paul Shoemaker

Find more from Paul Shoemaker and SVP/Seattle here.

Guest Contributor

January 02, 2009

Lesson 7: Ten Things We'd Like to Tell Every New Philanthropist

Lesson 7: "Non-profits move so slowly; it takes forever to make decisions"

Yes, there are some non-profits that are inefficient, just like some for-profits. But more often than not, the pace and decision-making style of a non-profit is more consensus-driven because of its constituencies, communities, and clients.

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Guest Contributor

December 31, 2008

Lesson 6: Ten Things We'd Like to Tell Every New Philanthropist

Lesson #6: "I joined that Board because I was invited by a friend and it looks good on my resume"

Just don't :-)

If you look across the non-profit/philanthropic sector, probably the #1 challenge is Boards that do not understand their roles and do not carry out their goals. Given that, we must have committed, focused, high quality people join Boards. Not people who do it to pad their resume or because they are only doing a friend a favor. If your time and energy is limited, join one Board and do it great rather than joining two or three Boards marginally. Or, if you want to be helpful to a non-profit, but not sure you are ready to step up to a leadership role, find another entry point-- like a lower-intensity volunteer role.

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Guest Contributor

December 30, 2008

Lesson 5: Ten Things We'd Like to Tell Every New Philanthropist

Lesson #5 -- "I think philanthropists that are public and visible are just showing off with their money"

There are cases where that is true and certainly it's a personal decision about how public or private to be about one's philanthropy. More often than not, someone being more public or visible about their philanthropy is done for a reason, i.e. to show leadership and commitment to a particular cause. And to do so as a means to an end, to help raise more philanthropic capital. This is true especially for newer organizations and causes.

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Guest Contributor

December 29, 2008

Lesson 4: Ten Things We'd Like to Tell Every New Philanthropist

Lesson #4: "The non-profit needs to be run more like a business and set specific goals …"

Like a lot of things in life, it depends on what you mean by the words "run like a business." Sometimes the expression is used inappropriately and ignorant of the unique issues a non-profit faces. Three simple examples: 1) in most situations in the non-profit world, the "end customer" does not buy the product or service, 2) the usual economies of scale are often not present for non-profit direct service organizations, and 3) there is no clear "market signal" like earnings per share to guide and optimize where capital flows; in fact sometimes money can run away from successful non-profits because they don't "need" it as much. Non-profits don't need to be "run like a business" when it comes to mission, effectiveness and resource allocation, etc.

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Guest Contributor

December 26, 2008

Lesson 3: Ten Things We'd Like to Tell Every New Philanthropist

Lesson #3 - "I need to be careful to not let the non-profit get too dependent on my contributions"

Logically, how does discontinuing funding to a non-profit make them more "independent" or "less dependent"? There is a reality for most non-profits - they depend on funders (corporate, individual, public) for some or much of their revenue. To the degree that they have fee-for-service, or earned income revenue streams, they can become less dependent on philanthropic sources of funding. But discontinuing their funding is not an action that prevents or reduces their dependency per se. If a funder wants to improve a non-profit's independence and long-term sustainability, they can focus on capacity building, longer-term and bigger grants, investing in outcomes systems, etc.

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Guest Contributor

December 24, 2008

Lesson 2: Ten Things We'd Like to Tell Every New Philanthropist

Lesson #2 - "It is clear this non-profit needs my support more than the other. This non-profit might not survive without my contribution and that other non-profit has plenty of money."

There are certainly times where urgent financial need is the right criteria for making a grant decision. But just as often it is not. When presented with this scenario, consider some questions - why are they in such dire need? Why are they so low on cash? Should I fund organizations based on financial urgency or on positive impact? Sometimes a non-profit might be in that circumstance because of poor cash planning, questionable program effectiveness, or ineffective fund development. The point is not to categorically reject or approve giving to an organization in need, but to take a little time to understand why that is the case.

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Guest Contributor

December 23, 2008

Ten Things We'd Like to Tell Every New Philanthropist: Lesson 1

Paul Shoemaker,Executive Director of SVP/Seattle, has graciously allowed PhilanthroMedia to post his "Ten Things We'd Like to Tell Every New Philanthropist" series over the holiday season. We'll be rolling out a new addition each day. Enjoy!

Lesson #1 - "I want all of my contribution to go directly to the program and the kids being served and not have any wasted on overhead or administration" (comment frequently overheard from philanthropists)

This desire is well intentioned, but the consequences can oftentimes be detrimental. How so? First of all, what is "overhead and administration?" For example, are staff overhead? Non-profit organizations are businesses just like any for-profit entity, but with a social mission. They have to invest not only in the "product," but also in the systems, infrastructure and operations to support the end product. Let's use an analogy here from the private sector: What if an investor in Intel was able to buy shares, but then instruct Intel Co. that they could only spend that money on engineers and chips? Who knows better how to ultimately, collectively invest its capital - an investor or the employees of that organization? Can you have a successful company without a sales, marketing, and finance infrastructure to support the product? A non-profit has to build a successful, holistic enterprise just like any other business.

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Guest Contributor

December 18, 2008

The Gift For Someone with Everything

It's been a common refrain in my family household for years: "don't get me any more stuff- my shelves are packed with things I never use." So when holiday time rolls around, I've taken to alternative gift-giving methods. Want to give to a family member who has seemingly every gadget out there? Try, instead, by giving to someone who has nothing, in your family member's name.

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Dana Variano

December 17, 2008

School Partnerships: Aiming for Lasting Change

Despite economic and geopolitical turmoil, education remains one of the top concerns for many Americans, according to a recent Washington Post/ABC news poll.

It’s only logical that philanthropists nationwide want to improve the education that children in their communities receive. However, it can be difficult for individual donors—or even a group of donors—to understand where a relatively small amount of funding can have the greatest impact on the quality of education in their local schools.

Fortunately, community foundations have found some innovative ways to help. Through partnerships with school districts, community foundations are helping donors to produce lasting, positive changes in their school systems.

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Caroline Heine