Developing a Learning Culture in Nonprofit Organizations

John Baldoni via Bloomberg.com, interviews Steven Gill who has written a book that talks about establishing a learning culture in organizations. The book addresses the following important questions.

How can today’s nonprofits demonstrate effective use of funds?

How can they motivate employees and volunteers and combat burnout and high turnover?

How can they ensure that they are performing in accordance with their mission and purpose?

What Nonprofits Teach Us About Learning

The recession that has staggered the world economy has leveled the nonprofit world. Endowments have lost significant value, and donations from corporations and private citizens have dwindled. But dealing with hard times is nothing new to many in the nonprofit sector. Well-run nonprofits know how to be frugal as well as creative in how they work with limited resources.

A core competency of the nonprofit world is people, men and women who are committed to a cause who know how to get effective results. A virtue of effective nonprofits is their culture; it extends beyond a gathering of like-minded people who want to do good; it is a generative culture that focuses on learning.

Recently I asked Stephen Gill, a colleague and consultant who has worked a good part of his career with the nonprofit sector, three questions about the value of creating a learning culture. This is a topic that Steve has written about in his newest book, Developing a Learning Culture in Nonprofit Organizations.

Organizations are cutting resources and headcount. Why is it important for an organization to create a learning culture?

"It is precisely because they are cutting resources and headcount that organizations, nonprofit and for-profit, must find ways to be more efficient and effective with what they have... To maximize productivity they need to be continuously learning. They must learn what they should be doing, how they can do it better, and how they will know when they have achieved the results they want...This means making information feedback, reflection, and knowledge-sharing part of the way they function on a day-to-day basis... Doing more of the same, even if slightly better, is not the answer."

What can the for-profit world learn from the nonprofit world about establishing a learning culture?

"Nonprofits tend to be values-driven. They are concerned about the beliefs and motivations of their employees. This means that these organizations ask themselves questions such as: Are we doing what we ought to be doing in the way we ought to be doing it? What's the impact on our communities and is that the kind of impact we want? Are our actions aligned with our values? In a learning culture, these questions are asked constantly. For-profit organizations should be asking these questions more often. They would have greater employee satisfaction and engagement and they would be better corporate citizens."

What is a key take away from your book that has relevance to a manager seeking to navigate hard times?

"This is no time to do nothing about improvement. Even when the economy turns around, it is no time to be doing business as usual. Rapid change will continue and unless organizations are continuously learning they will not be able to sustain themselves. They need feedback and they need to reflect on that feedback and turn that learning into action. What better time than now? A no-growth mode gives managers the time and rationale to focus the organization on the collective discovery, sharing, and application of new knowledge. This is critical for emerging from hard times and managing the economic upturn that is inevitable."

Fundamental to a learning culture is measuring impact, something in which Gill specializes. He has spent a good part of his long career helping organizations assess their learning and measure the effectiveness of their training programs. One evaluation tool included in his book features three essential questions that would be useful for any executive to use when gauging the effectiveness of any project. The questions are: one, what issues do we still have; two, how can we strengthen our organization based on what we know; and three, what challenges lie ahead. Answers to such questions can lead to honest evaluation of progress.

Next generation organizations will continue to evolve in response to the dynamic nature of bringing people together to work. Central to future success will depend on how well the organization can adapt and innovate. Those competencies will depend on creating a learning culture.

Nonprofits may see longer downturn

Tom Parsons, writing for the Associated Press features Ruth McCambridge of Nonprofit Quarterly magazine. She believes that nonprofits are in for a longer than usual downturn if they are reliant on foundations for funding.

Once again, we recommend that nonprofits embrace revenue diversification. That is, not reliant on any one funding source, but embracing a spectrum of support besides grants, that includes discretionary donors, sponsorships, endowments and event fundraising.

Nonprofit expert sees longer-than-usual downturn

Charities tightening their belts because of the recession should gird themselves for a longer-than-usual downturn, the editor of Nonprofit Quarterly magazine said Friday.

Ruth McCambridge said the asset bases of foundations that provide much of the charitable giving in the country have fallen drastically, and grants from those groups have declined accordingly.

"And many foundations are planning to give less next year than this year," said McCambridge, who spent 35 years working at nonprofits before taking the helm of the quarterly in 1999.

Still, there are many creative ways "to help us get through this period," she told an audience at the Clinton School for Public Service that included many staff for nonprofit Arkansas agencies.

She recalled working at a women's shelter in Lawrence, Kan., as federal grants began to dry up in the early 1980s during the Reagan administration. The shelter got a notice that a grant providing 90 percent of the organization's budget would be discontinued in six months, she said.

The shelter staff and board - many of them volunteers - worked hard to expand the number of people involved with the organization and do more fundraising, McCambridge said.

"In the end, we had our budget covered locally, and we had been given a new shelter house," she said.

According to McCambridge, in nonprofits' drive toward professionalism, "we have forgotten that these people who are at our door every day are big assets."

Asked if organizations should consider dipping into reserves they have built up over the years, she said a lot depends on a group's particular situation. But if an agency's board decides that the rainy day has come, it shouldn't be done without an eye to the future, McCambridge said.

"You have to have a plan of what it's going to take to get through a period when you're using your reserves," and how to rebuild them, she said.

Philanthropy 101: students learn the science of giving

Tracy Jan of the Boston Globe writes about college courses enabling students to understand the mechanics of philanthropy through group research and giving.

For philanthropy courses, students become the givers

College students, many of whom spend the little extra cash they have on pizza and laundry, don’t fit the typical profile of a wealthy benefactor. But in a growing national movement, students enrolled in newly created philanthropy courses are steering thousands of dollars to local charities.

At Tufts University, students decided this spring to give $1,500 to expand English courses to immigrant parents in Medford. Northeastern University students donated about $2,500 to a Boston after-school program promoting cross-cultural tolerance through cooking. And students at Boston University distributed $7,500 to help local at-risk teens land jobs in the financial sector.

At least 10 New England colleges, including Brandeis, Holy Cross, Boston College, Wheelock, and Lesley, will offer similar courses next school year, using seed money donated by corporate and family foundations. In the classes, students draw up mission statements for makeshift foundations, research nonprofits in their communities, and decide how to allocate the pot of money.

The goal, say professors and donors, is to build upon surging interest in social responsibility among college students and make philanthropy part of the mainstream curriculum. A potential side benefit: helping colleges improve town-gown relations and, some professors said, cultivate future alumni donors.

“Some of these kids will become very wealthy in the future,’’ said Paul Schervish, a sociology professor and director of the Center on Wealth and Philanthropy at Boston College, who will soon begin teaching experiential philanthropy classes. “The professors see that this is a way to teach financial morality in the realm of philanthropy.’’

But teaching students how to give away money responsibly is more complicated than one would think, said academic leaders who gathered recently at Brandeis’s Sillerman Center for the Advancement of Philanthropy for the first national conference on teaching philanthropy. The Waltham college started a “practicing philanthropy’’ course this spring for graduate students and plans to create a similar course for undergraduates next spring.

Students spent about two months debating their priorities, ultimately narrowing their focus to organizations committed to economic development, and early childhood education. Their task: find worthy recipients of a $40,000 donation from the Sillerman family.

“At first everyone thought, ‘Oh boy, this is going to be easy. We have money to give away,’ ’’ said Charley Francis, a 26-year-old master’s student in public policy. “But the fact that we’re giving away real money adds a real seriousness to it. It’s not just an academic exercise.’’

Francis and his classmates drew up criteria on which they would evaluate the nonprofits, conducted interviews and site visits, and combed through financial statements, ultimately awarding four local charities each $10,000.

Two national foundations interested in promoting the teaching of philanthropy on college campuses began donating money for the courses across the country in recent years. The Sunshine Lady Foundation, established by Doris Buffett, sister of famed investor Warren Buffett, has given colleges $10,000 a year to disburse since 2003. The foundation’s Learning By Giving program will double next year to include 15 colleges across the country, including Tufts and Holy Cross.

The foundation has ramped up its efforts this year because there are greater unmet needs of all types because of state budget cuts, said Alex Buffett Rozek, director of Learning By Giving, and grandson of Doris Buffett. Undergraduate business students, who may wind up working for large corporations with charitable trusts, should learn to look critically at the needs and to assess how money is to be spent in the most effective way, he said.

“There needs to be better awareness of how to distribute these scarce resources more effectively, and do due diligence on how the money is actually used,’’ Rozek said. “It’s not just writing a check and saying, ‘Put my name on this building.’ ’’

The recent efforts on college campuses also build upon donations by Fidelity Investments, which in 2007 teamed with Campus Compact - a coalition of more than 1,100 colleges working to build civic engagement into academic life - to give schools one-time grants of $15,000. Fifteen colleges, including BU and Northeastern, participate.

In addition to just giving money away, the classes have inspired some students to choose careers in the nonprofit sector. At Tufts, where classes have disbursed $30,000 in the past three years, students learn to be grant writers and discerning grant makers. Those skills helped Laura McNulty land a job at the Somerville office of National Student Partnerships.

McNulty, who graduated in 2008 with degrees in community health and Spanish, had written a grant for the organization during a philanthropy class her senior year. Her class awarded $2,500 to the national nonprofit, which organizes student volunteers in antipoverty work.

“The hands-on experience of writing a grant, evaluating a grant, and then giving real money away made the whole class feel like it had a tangible purpose,’’ said McNulty, 22. “It made students feel more accountable for the work they were doing.’’

Her grant-writing experience and knowledge of what foundations look for when making funding decisions was invaluable in helping her secure a $10,000 grant to start her own nonprofit, Health Horizons International, McNulty said. She will move to the Dominican Republic this fall to help connect volunteer doctors on medical missions with community health initiatives in the Caribbean nation.

Students at other schools have taken what they’ve learned in the classes and spread the philanthropy movement campuswide. Northeastern students started an extracurricular club last fall that operates as a de facto board of directors charged with overseeing, and growing, the pot of money students disburse through the philanthropy classes.

Missy Elumba, a health sciences major and ice hockey player who founded the club, also started a spinoff for NU student athletes. The group granted about $8,000 to local youth sports organizations, including helping bring tennis to impoverished Boston elementary schools.

“The class inspired me to make a difference and build something that could go on year after year,’’ said Elumba, who graduated last month.

“In the future, these student athletes could go on to be professional athletes and make money with philanthropy instilled in them.’’

Nonprofit Brands Ranked

Interesting article about national nonprofit branding. As highlighted by Stephanie Strom of the New York Times, the top ten came out as follows:

YMCA

Salvation Army

United Way of America

American Red Cross

Goodwill Industries

Catholic Charities

Habitat for Humanity

American Cancer Society

ARC of the United States

Boys and Girls Clubs

According to the study, few nonprofits question the benefits a strong brand can have for their organizations, yet some are not leveraging their hard-earned halo by translating it into bottom-line benefits.

The American Lung Association, Special Olympics, The Humane Society of the United States and the Make-A-Wish Foundation of America all earned image scores in the top fifth of the list; however, their brand value fell sharply because revenue did not perform at the same level. The result is some of America’s most beloved nonprofit brands may be leaving millions of dollars in unrealized income on the table.

We wonder what the most recognized nonprofit brands are in Northeast Florida?

An Analysis Ranks Brands of Nonprofits

The Y.M.C.A. has the most valuable brand in the nonprofit field, according to an analysis by two marketing companies.

The second-most-valuable brand belongs to the Salvation Army, followed by the United Way of America.

The analysis, by the marketing firm Cone LLC and Intangible Business, a British brand-valuation company, used financial data, projected growth in revenues and a survey of 1,000 Americans to determine the top 100 most valuable nonprofit brand names among organizations providing social, environmental and animal-related services.

“We hope to show what a powerful asset a brand can be to a nonprofit, if it is leveraged properly,” said Alison DaSilva, executive vice president of Cone.

Nonprofits like the United Way and the American Red Cross, whose name was the fourth most valuable on Cone’s list, have made efforts to value their brand names in the past, but the new analysis appears to be the first that applies the same method of measuring that value across many different nonprofits.

The list is likely to interest companies as well as nonprofits and donors, Ms. DaSilva said. Businesses support nonprofits as a way of enhancing their own brands, and nonprofits with the best brand names will have a greater halo effect.

The analysis spotted some interesting things. Environmental groups are the darlings of donors right now and their revenues are among the fastest growing in the sector — but their brand names scored lower values in the Cone research.

“They have spent a lot of time raising awareness of the issues through things like calls to action — put a brick in your toilet, turn out the lights — but not for their brands,” Ms. DaSilva said.

Conversely, she said, the Make-A-Wish Foundation enjoys widespread recognition, but its revenues do not reflect that. “They can capitalize on the brand recognition to increase revenues,” Ms. DaSilva said.

Social Networking Explained! Get Great at New Media Networking!

Jack and the Social Media Beanstalk

10 Magic Beans to Enhance Your Business Learn about: Social networking Create a brand in the new media Acquire the tools to stay ahead of the ever-changing web When you embrace Social Media you have to learn how to plant your magic beans and watch your business grow! Details June 26 from 8:00 a.m. to 10:00 a.m. University Club 1301 Riverplace Blvd., Jacksonville, FL Advanced Purchase Pricing: $160 for a Corporate Table of 8 $25 per person / $20 for University Club Members *Advanced purchases must be made by June 23rd Continental Breakfast is included Each attendee will receive a free E-Book of the presentation For more information or to register http://www.newmediajax.eventbrite.com or call 904.240.4910 Presented by CIME4,NewMediaJax and the Small Business Development Center at the University of North Florida

Are Charities Really Public Money?

John Tyler, secretary and general counsel of the Kauffman Foundation, and Evelyn Brody of the Chicago-Kent College of Law, have collaborated on a monograph titled "How Public Is Private Philanthropy?" Contrary to the popular assumption that governments should exercise tighter control over philanthropy because philanthropic assets are "public money," the authors argue that legal precedents treat charities as private entities with private assets.

Nonprofits Seeking Wealth Management Help More Often

Shelly Banjo writes in this Wall Street Journal article about a new trend where more nonprofits are seeking professional investing advice to preserve their reserves. One might think this is adding kerosene to a fire, but as stewards of their mission, nonprofits must do what is seen as proactive in preserving precious program dollars. Nonprofits should follow guidelines in selecting a wealth manager.

PRACTICE MANAGEMENT:

Charities Turn To Wealth Managers

Wealth managers are seeing increased interest from charities and private foundations that, hit by endowment declines and shaken by prominent fraud cases, are seeking more professional help with investment decisions and due diligence.

Large financial companies including JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC) and Bank of New York Mellon Corp. (BK) have long served these clients, but say more organizations are turning to them for help.

JPMorgan recently launched the JP Morgan Foundation Research and Investing Center, a group of investment, client, family wealth, philanthropic and tax professionals who meet at least monthly to manage foundation clients' assets and coordinate grant-making execution and tax and administrative services. JPMorgan manages more than $18.3 billion in assets for charitable organizations and works with 60 client foundations.

Based on research and historical analysis of foundation performance and the markets, the center launched a new investment strategy. "Our new approach focuses on a more complete diversification of a portfolio," said Tony Werley, managing director and global head of portfolio construction at JPMorgan. He said it depends less on equities and includes alternative investments and fixed income.

In 2008, foundation assets nationwide dropped about 22%, or almost $150 billion, from a year earlier, according to the Foundation Center, a nonprofit research firm in New York. Squeezed for cash, many foundations were forced to sell assets into a falling market to fund grants and operations. Nearly 150 foundations including the Picower Foundation of Palm Beach, Fla., and the Chais Family Foundation in Encino, Calif., lost millions of dollars due to the Bernard Madoff scandal.

As a direct result, investment-manager turnover could reach historic highs over the course of the next 12 months, according to a survey out Monday by Greenwich Associates, a Stamford, Conn., institutional financial-services research firm.

Two-thirds of U.S. institutions plan to hire a new investment manager in the next year and almost 30% of endowments and foundations plan to fire a manager, the report said.

This is an opportunity for investment managers who can answer to "increased demands for greater transparency, due-diligence practices and demonstrate that appropriate risk controls [are] in place," said Chris McNickle, a managing director at Greenwich Associates.