If you had $100, 300, or 500,000 to strengthen Milwaukee's nonprofits, how would you spend it?

I guess I’m just lucky to have the luxury of sitting at my desk pondering the variety of ideas parked in my virtual lot. There were so many good ones that we discussed over the years, but were tabled for a “lack of a second” so to speak. Where do I start? A budget is a likely area, as it is how we do things in Milwaukee—how much money do we have is often asked before what is it that we need? So, I am going to complete this mental exercise by starting with the money, rather than how I approached my hundreds of presentation to the Fund Committee over the past 20 years.

Scenario A: $100,000= The Linchpin Project

In most of the nonprofit sector’s sub-sectors or mission areas, there is an organization that is critical to the success of a system, a strategy, an idea, or a community.

The Nonprofit Management Fund has the capacity to make a difference in many ways. An effort might focus on a few nonprofits that are vital to implementing a current plan of one of the funding partners, or play a crucial role in addressing a key social ill. Whether it is free medical attention for the indigent, hunger, homelessness, literacy, or teen pregnancy, there are organizations that need to address management or governance issues in order to build their capacity to provide a cornerstone service for the community.

One could also argue that the Nonprofit Management Fund is exactly such a program, in that the grants awarded by the Fund strengthen individual organizations so that the funding partners can make better investments in Milwaukee.

For $100,000, six to eight nonprofits could be identified to participate in a focused effort to stabilize their organization. Once groups are identified, the leadership of each group must determine key areas for improvement. Based on the results, a series of small grants would be made over the next year aimed at addressing management or governance deficiencies. This model was tested in our work with Hispanics In Philanthropy to the extent that grantees became a cohort with specific activities that built individual and collective capacity, with two organizations emerging as critical to making strides in Milwaukee—Voces de la Frontera and Hispanic Professionals of Greater Milwaukee.

By the way, this model might attract additional funding partners, such as the Zilber Family Foundation, if there was a linchpin organization in one of their neighborhoods.

Upon completion of the grants, highlights of improvements and progress towards sustainability would be shared with the Committee. Likewise, the funding partners most invested in the selected organizations would report on the return of their investment in the organization’s programs, as well as in the success of addressing the societal concern.

Related Blog posting #3: Does Size Really Matter?

Scenario B: $300,000 = Leadership Development

In year two, if the linchpin project was underway, set aside $50,000 for a few second or third project grants. If we’re aiming at starting in 2015, take the first $100,000 for linchpins, and then appropriate another $100,000 for a community-wide technical assistance program akin to the Fund’s traditional marketplace grants. I have been told by dozens, if not hundreds of nonprofit leaders that they deeply appreciated our model of putting the purchasing power in their hands, letting them own their management improvement efforts. Management and governance needs do not dissipate just because there aren’t financial resources available, so some technical assistance catching up might be in order. Projects in board development, marketing, financial management, or fundraising are probably at the top of many executive directors’ “To Do” lists. However, I wouldn’t spend any of these precious few dollars on technology projects! There isn’t a for-profit or nonprofit that can run its business without technology—therefore, those costs should, in my opinion, be covered through annual operations funding and not from an external resource.

Keep in mind Blog #24: Responsive versus Intentional Grants.

Now, how best to spend the remaining $100,000 in this scenario on developing new, emerging, and veteran leaders?

In the vast majority of successful projects undertaken by the Nonprofit Management Fund, leadership has been the key to success overall, and certainly to an organization that is first surviving, and then hopefully thriving. This experience is borne out by numerous local and national studies.

Nonprofit leaders are facing some of the most difficult economic times. These leaders are concerned not only with the viability of their own organizations’ programs and services, but how the entire sector will fare given a seeming lack of focus on leadership development for executives, as well as second-in-command and third-tier managers. These nonprofit leaders also recognize that certain core skills (including , but not limited to business acumen, cross-sector relationships, advocacy, and collaborations with other nonprofits) are more essential than ever to the sector’s survival and growth.

Studies show an increased need for new nonprofit leaders, concurrent with executive dissatisfaction with job stresses, low pay, and other challenges. Historically, the nonprofit sector may not have done a good job of growing and developing leaders from within—organizations are typically small or work too hard to train leaders, yet often promote a good program manager without adequate support.

According to our research, Milwaukee is home to over 70 nonprofit leadership development programs targeted at high school and college students, young workers, and mid-career professionals. Public Allies, Future Milwaukee, Young Nonprofit Professionals Network, the Helen Bader Institute for Nonprofit Management and others all provide opportunities for talent development. These organizations provide informative experiences in some cases, as well as practical tools and skills development in others. However, whether or not the participants in these programs progress into strong nonprofit leaders is not currently known. And, there are few resources targeted at the senior level executive who has been in the field for many years, or is nearing retirement, but still has great wisdom to share.

To implement this scenario, I would develop several online and place-based opportunities described in Blog #18: Envision a Nonprofit Leadership Development System.

A serious investment of $100,000 in launching a nonprofit leadership development system would help ensure that the leaders of tomorrow would be more skilled and better equipped to move our community forward. Foundations, corporations and others could advance a community-wide effort to coordinate myriad pathways for new, emerging, and veteran leaders.

Scenario C: $500,000 = Nonprofit Depot

Once upon a time, a partner in the Fund asked me, “If you were Queen for a Day, what changes would you make in our local nonprofit sector?” Whew…heavy responsibility to answer that question, but later that day I began to sketch an idea.

If leadership can be defined as:

“Inspiring, motivating, and engaging others to collaborate toward a shared vision”,

then the vision for the Fund should be:

“A vibrant nonprofit sector in the greater Milwaukee area characterized by a healthy partnership between philanthropic and nonprofit organizations and a strong infrastructure that enables local nonprofits to achieve their missions.”

The idea that I began to sketch in the fall of 2011, was to establish a Nonprofit Depot, with a projected unveiling next year. For years, I have heard various philanthropists say “why don’t we buy a building to house many of these smaller nonprofits? Well, if they were going to be housed in a single building, we’re talking about one twice the size of our 40+ storied US Bank building, which would not be practical for more reasons than I can count. Besides, co-locating a spectrum of needy or weak groups does not make for stronger organizations.

Instead, let’s flip the picture of those nonprofit organization residents and envision a shopping mall for nonprofits to purchase the services they need with multiple options, which is a totally different kind of one-stop shopping experience.

There would need to be a few anchors, such as: university-based management certificate and degree programs; headquarters for multiple leadership development applications; and, a nonprofit staffing agency offering wide-ranging services from “Jobs That Serve” postings to executive search to back-office support recruiting employees and volunteers.

Stability from a least three major anchors would allow for some statewide or national chain services, such as satellite offices of auditing firms, credit unions, insurance agencies, office supply stores, and payroll services. However, the majority of the spaces need to be reserved for the boutique operations of small businesses that offer marketing, web design, accounting, conference services, IT, graphic designers, realtors, legal services, printers, event planners, travel services, and management consultants.

Note: Now when many of the consultants choose to relocate here out of their home offices, they will also need ongoing professional development opportunities to hone their skills or bolster their knowledge. Such services at a more advanced level must be offered if we are to expand the depth and breadth of the current consulting roster.

Of course, in this scenario all current intermediaries would be encouraged to relocate to this complex of resources. Trade associations from the Wisconsin Nonprofits Association to the Association for Fundraising Professionals would find a new home here. Sector-wide services such as SERVE Marketing; a community-focused variation of ENTECH; and, a revitalized comprehensive galaxy of services from BoardStar could add much greater value to the sector than the current minimal offerings. Philanthropic entities—including the Donors Forum of Wisconsin, Nonprofit Management Fund, United Performing Arts Fund, and Community Shares—would also be located here and their members would benefit from mixing and mingling with those that they fund, since they would regularly visit this marketplace for their respective member programs.

$500,000 is a small price to pay to fortify our nonprofit infrastructure. If we expand and enhance the foundation of resources available to nonprofit organizations, by logical extension, we improve our nonprofits’ capacity to accomplish their missions. If they fulfill their missions, we achieve our vision.

I invite others to engage in this mental exercise….and I hope that those who are gathering to discuss the Fund’s future make quick and lasting progress. Milwaukee is a much better place today than it was when the Fund started thanks in great part to the vision of the Fund partners. Oh, and feel free to borrow any of these ideas.

From DOS and Y2K to the Cloud

At a time when floppy disks were inserted into disk drives, when Windows 95 was replacing DOS, and when the world was apprehensive that everything from bank accounts to water supply would stop working on 1/1/00, the Nonprofit Management Fund began a project that would define its work in technology. 
 
In 1998, the Fund issued the results of a survey of 80 organizations, underwritten by the Faye McBeath Foundation, on technology use in the Milwaukee-area nonprofit community. Three quarters of the respondents had operating budgets of $1 million or less. The survey found a wide range in the age of computers, use of software, types of technology, and available resources. We learned 25% of the organizations did not have internet access; 75% did not have a website; and, 50% of the respondents had zero budgeted for technology.

The Fund partners saw both a challenge and an opportunity in the results. A strong theme emerged for a neutral party to assist organizations; not a salesperson, but a person who could assess and advise. This person would provide services without expectation of direct payment or an order for hardware. The Rockefeller Foundation had just launched a “circuit rider” initiative nationally; someone who would proselytize the advantages of using technology and address a wide range of technology needs. The Fund partners decided to implement this model.

In a relatively short time, we designed a comprehensive technology assessment and completed dozens with nonprofits; published web.dots—a resource guide for nonprofits using technology; organized a technology conference for local nonprofits; placed students at 10 nonprofits for summer projects; designed multiple databases for various community efforts; updated and revamped a Technical Assistance Directory; and, detailed sample technology policies.

For three years, the Technology Initiative was housed in the Fund’s office and worked in partnership using IT students under an experienced supervisor to assess the technology needs of local nonprofits. In 2002, this initiative was spun off to the Center for Urban Initiatives and Research at the University of Wisconsin-Milwaukee to manage, and hopefully, to expand its impact on both the participating students and the nonprofit community. The Helen Bader Institute for Nonprofit Management agreed to assist with fundraising.

As ENTECH (Empowering Nonprofits in Technology), the program flourished, faltered, picked up steam, pulled a Rip Van Winkle, and finally was revived. As both department and program leadership at the university changed, it took a toll on this initiative. There’s no doubt that ENTECH helped many nonprofits navigate their technology issues, and it also assisted in projects that would have a big impact on the community. For example, ENTECH designed the “Jobs that Serve” website promoting employment opportunities in Milwaukee’s local nonprofits; programmed the database “Greater Milwaukee on Board” to match interested candidates with Board vacancies; and, the Fund’s extranet database for proposal review. ENTECH also became a major provider of hardware to area nonprofits thanks to donations from Northwestern Mutual and other companies.

Although this initiative contributed significantly in advancing nonprofit technology in Milwaukee for 10 years, there were flaws in the model. The reliance on students had limitations with regard to available hours, lack of knowledge about nonprofits, and varying technology experience. Also, once transferred to the university, the project was challenged by changes in leadership. The original department and program that provided the “student power” went through its own transition, limiting the supply of students to staff ENTECH.

The idea of assembling youthful expertise, aided by a seasoned manager and pairing this resource with Fund grants in technology produced many successes. Today, resources for technology are more available and the transition to the Cloud and use of social media are dominant themes in the conversation.

Having recently hosted a technology conference for nonprofits, UW-Milwaukee is currently trying a new direction by launching a project called TechConnect. If successful, TechConnect will be the 3.0 version, initially incubated by the Nonprofit Management Fund. Best wishes to this advancement and we hope it goes viral!

Note: This blog was co-written by Scott Gelzer, who was the lead staff person assigned to this initiative; he is currently the Executive Director of the Faye McBeath Foundation.

24 blogs on 20 years...we've only just begun.

1. Papercuts and Eye Strain

 

2.  Single Focus, Dual Purpose or Trifecta?

 

3. Does Size Really Matter?

 

4. From “Possibilities” to “Strategic Initiatives”

 

5. Happy 30th Anniversary!

 

6. 21st Century Grantmaking…Sometimes Old School is Better

 

7. Too Big to Fail?

 

8. Is Milwaukee Ready NOW for Mobile Giving?

 

9. No Sibling Rivalry Here

 

10. Integrating Interests

 

11. Investing in the Art of Consulting

 

12. Philanthropic Vehicle

 

13. The  Talent Divide

 

14. Soiree Straight Talk

 

15. From Webster’s to Wiki…Definitions of Leadership Abound

 

16. From veteran leaders to emerging executives…mentoring & coaching are fundamental.

 

17. From classes & conferences to fellowships & sabbaticals…opportunities for growth abound.

 

18. Envision a Nonprofit Leadership Development System

 

19. So Long, Farewell, Goodbye

 

20. Why Did We Say No?

 

21. 50 Shades of Good Governance

 

22. Working Within a Framework of Organizational Effectiveness

 

23. Mixing Charity with Business (Scott Gelzer)

 

24. Responsive versus Intentional


Responsive versus Intentional

To date, the funding partners at the Nonprofit Management Fund have agreed to put purchasing power in the hands of our nonprofit consumers (grantees) to spend on the resources (often consultants) of their choice, addressing an organizational (management or governance) challenge that they have identified as a priority. In the vast majority of our grants, this model served us well, and the grantees, the resource providers, and the community benefitted even more. The model worked. It is one that is relatively simple, flexible, anti-bureaucratic, and effective. In the field of philanthropy, we are atypical.

 

Freedom of choice is a hallmark of our democratic society. Having options is critical to being able to make choices. Whether we are shopping for groceries, cars, or shoes, we want options. When pursuing an education, we want options of not just schools, but educational philosophies as well. In choosing a career, or just employment, we want a variety of opportunities. At our leisure, we may spend our time and money today at a sporting event, tomorrow at a play, and next week at the movies or a festival.

 

Apply that free enterprise principle—freedom of choice—to permeate the nonprofit sector. We not only want many different selections for health care, family therapy, theatrical productions, childcare, dance classes, environmental cleanup, or historic preservation, but we also want to select services in our neighborhood, yet have the possibility of going across town. When these nonprofit organizations decide to increase their capacity, or even compete with one another, shouldn’t they have myriad resource opportunities as well? A variety of workshops, an array of websites, a range of consulting expertise, and a spectrum of talented technical assistance providers should all be available.

 

 

The rhetoric in philanthropy is that applicants and donors form “partnerships”. Funders are exhorted to be “partners” when the request is for funds versus advice, expertise, or any other asset besides money, to implement efforts that are designed as part of a submitted proposal. However, just because an investment is made, it doesn’t mean that a partnership occurs…not sure about that? Just think about the partnership you enjoy with the bank that holds your mortgage. There are, of course, examples when the proposal review discussion results in change, and occasionally, a partnership of sorts is forged. It is also understood that this model may be amended for individual donors and others who may take a more “hands on” approach in their grant-making efforts.


 

The Fund developed trust, a key characteristic of a true partnership. Nonprofits were encouraged to analyze an element of their own management and/or governance, secure consultation for resolution, and submit an application for funding. The review of the proposal assured the internal integrity of the idea (for instance, did the consultant’s workplan match the nonprofit’s self-assessment, or did the work product appear to address the problem identified). Occasionally, we would ask questions about the priority of the challenge to be addressed. Trust was involved because the submitting organization was identifying a weakness or challenge, airing their proverbial dirty laundry, to a funder. The Fund trusted the applicant’s basic assessment of its own needs and how best to address the challenges the applicant trusted the Fund Advisor to present their challenge to the decision makers in a way that did not hurt them in the future.

 

During its history, the Fund tested just about every known funding strategy: place-based philanthropy, collective impact, symptom funding, crowdsourcing, civic engagement, etc. It also tackled situations grouped by community challenge (funds were set aside for organizations addressing basic needs), type of nonprofit (faith-based organizations), or by purpose of a grant (diagnostic clinic). However, these were only special projects; the core principle was to let the market set the priorities. There was never any doubt that we were responding to the nonprofit market, as it was telling us what it needed. The funders were not determined to set the priorities; those were identified by people on the “front lines”. An exception was when an application arrived requesting assistance in fundraising. Queries would then be made to determine the root cause for the lack of funds—was it an apathetic Board, poor reputation, or inadequate financial accountability, all of which may have been reasons for a grant other than fundraising.



A few examples: 1) Rarely did we tell an applicant to work on their Board. Typically, an application would be submitted by the Board Chair saying that she needed help in overhauling governance policies or identifying candidates for the Board. 2) We did not mandate formats for financial information. Rather, a finance department staff member applied for new hardware and software to be able to produce more comprehensive financial statements on a more-timely basis. 3) We did not suggest that a new marketing strategy was needed to attract more program participants. More likely, a staff member encouraged the ED to request funding for a new, more user-friendly website that could be better accessed on a smart phone. And, only in the case of a diagnostic clinic (comprehensive organizational assessment) was there a limited roster of consultants from which the applicant could select (only those consultants that were certified through a three-year training program could conduct a clinic); 93% of the time, applicants identified their resource provider of choice for the consultancy.



While several of our funding partners may have selected a philanthropic strategy that aligned with their corporate or foundation goals, they expected that the Fund would experiment with different strategies (sometimes with more than one simultaneously), and yet, we always seemed to return to our core values of responding to a diverse applicant market using a wide-range of resources. The Fund was designed with the freedom to be less prescriptive and more open than many of its investors.



Beyond the myopic view of the nonprofit sector as just encompassing: health and human service nonprofits, educational programs, economic and community development groups, or arts and culture organizations, the Fund also encouraged many other types of tax-exempt corporations to apply. Diversity in mission was just as important to us as diversity in size ($25,000-$3 million in budgets), race (minority-led leadership), geography (central city to suburban to rural), or service scope (we were focused on local organizations). Therefore, 13% of our applicants represented: advocacy, animal welfare, civic, environment, historic preservation, legal, professional development, recreation, religion, or technical assistance sub-sectors. Only a few types of nonprofits designated as 501(c) 3 organizations were excluded: groups that were primarily engaged in making grants (such as federated campaigns, including United Ways); entities that had taxing authority (such as school districts or Business Improvement Districts); and, regional, national, or international organizations (even if located in the Milwaukee area, they had to conduct 70+% of their work here).



Although the applicants varied widely, their organizational challenges were very similar. The quality of the assistance received and the depth of the organizational leadership were the keys to a successful project.



The Fund worked diligently to be responsive to community needs, and it did so using a model that could be characterized as trusting the marketplace.

 

Should that model change?

Mixing Charity with Business

There’s a financial management class as part of the Trinity Fellows Graduate Program at Marquette University, where students select a research project as part of a segment on income, and interestingly, social enterprise has been a popular choice.  Blending nonprofit and business ingredients remains a powerful ideal among our sector’s future leaders.  It is also an idea that was embraced, then faded, and has now experienced a rebirth in Milwaukee. 

According to the 1997 report entitled “Possibilities”, the Fund’s interest in social enterprise drew from several sources: 1) the need for a diverse income mix for nonprofits; 2) an interest by nonprofits in earned income strategies, ranging from marketing and sales to organized business ventures; and, 3) a response to external factors in the business environment, including the then popular concept of performance-based contracting.

At the time, the funding partners were divided on the merits of establishing an initiative aimed at increasing earned income.   Comments from committee members in early conversations ranged from strong support to total skepticism.  However, common interest in building capacity of organizations participating in finance/earned income and marketing finally forged a consensus to move ahead.  A well-known national intermediary, the National Center for Social Enterprise from Minneapolis was selected, and after a review by Fund partners and area nonprofits, the National Center was matched with 6 groups in arts and culture, community development, and social services.  Two participants wanted to develop business ventures, and 4 organizations sought to substantially improve their current earned revenues. Five of the six nonprofits would complete the 18-month project, with one deciding to chart its own course.

About the same time, two other signature efforts were launched locally, including a business financing or “venture fund initiative” led by Helen Bader Foundation involving 5 nonprofits, and the Denali Initiative, which was based on the successful Manchester Craftsmen’s Guild in Pittsburgh, PA that planned to train 5 executives as social entrepreneurs. By 1998, Milwaukee was, according to many observers, a national laboratory for social enterprise strategies to build organizational capacity, enhance financial stability, and breed a new type of entrepreneurial leader in the nonprofit sector.  While we orchestrated the National Center’s project, the Fund played a support role with the Denali Institute and the Venture Fund projects.

What became of these efforts?   In surveys of area nonprofits in 2002 and again in 2005, earned income was a prominent revenue source on the balance sheets of local organizations.  There was a community-wide increase in social entrepreneurship support, ranging from the Nonprofit Center, conducting several area workshops to UW-Milwaukee’s School of Business, which sponsored a Social Entrepreneur in Residence with a grant from the Fund.  A national conference on social enterprise came to Milwaukee in 2005, adding cache to local efforts.  In the Fund project cohort, groups tested business ideas, yet typically found them to be marginal or not to be feasible.   However, most reported solid management outcomes, such as revamped financial management systems, improved capacity in pricing, rigorous cost benefit analysis, as well as enhanced marketing techniques.  It could be argued that the Fund’s original goals and their outcomes could be viewed as a qualified success. 

It is difficult to point to a single specific business venture spawned during this period that is viable today.    Several, notably an effort to increase food distribution capacity, operated for a few years.   If the evaluation metric was establishing businesses, the projects had minimal impact.   Nonetheless, many seeds were planted, and several projects including the Skylight Music Theatre’s creative use of its pre-and post-performance lounge, as well as Pier Wisconsin’s educational program aboard its schooner, can trace their roots to work done during this period.        

From another vantage point, if an organization pursues an idea for business activities through a serious assessment, and finds it to be marginal or unsustainable, that can also be considered a positive outcome.  This approach is a small part of the counter-intuitive nature of the social enterprise recipe—philanthropy wants to be involved in launching big ideas…..reaching a conclusion to NOT start a project is often seen as an undesirable outcome.    Or, perhaps from the perspective of a grant maker, this is a case of “be careful what you wish for”.

Thankfully, others continued their explorations in financing with the Helen Bader Foundation entering the Program Related Investment realm, one of the very few Wisconsin foundations to do so.    Marquette University maintained an active partnership with Ashoka, an international fellowship for social enterprise leaders, until last year.  Goodwill Industries, Milwaukee Center for Independence, Feeding America of Eastern Wisconsin, Habitat for Humanity, and others have used business strategies to earn money and extend their mission.  The local Feeding America leader was an active participant in the Denali project.  Although, there are entrepreneurial successes in the nonprofit cosmos, there are just not as many as promised, nor are they typically generating revenues at a proportionate level to the investment.

With significant challenges along the way, and often disappointing results, why is there continued interest in social enterprise?  How could we do it differently in the future to ensure greater success?

 

Note: This Blog posting was written by Scott Gelzer, who was the Fund’s representative overseeing this initiative from 1998-2001, and is currently the Executive Director of the Faye McBeath Foundation.

Working Within a Framework of Organizational Effectiveness

Sometimes, we really can’t see the forest for the trees. Nonetheless,  it certainly is more important to see the forest rather than looking at a birch sapling or a towering oak.  



At the Fund, many trees were felled to review more than 2000 applications. We scrutinized every proposal and evaluation report looking for the seeds to determine if our grant could or did grow that organization. We diligently debated if our investment would bear fruit. If nearly 800 applicant organizations were our trees, then Organizational Effectiveness in our local nonprofit sector was our forest.



Early in the Fund’s history, we chose to work within a framework of organizational effectiveness. Nationally, we learned with our colleagues from across the country by participating in Grantmakers for Effective Organizations. Locally, I used a strategy matrix to guide my reports and recommendations for committee consideration and decision. The Fund engaged different methodologies to achieve specific desired outcomes aimed at achieving its four effectiveness strategies. The most basic strategy was to provide and disseminate information. Through public forums, written materials, and website resources, the Fund enriched current management knowledge and better informed its nonprofit audience. For example: the Board Bibliography and web dots were two publications produced around the turn of the century to identify resources for our grantees on board development and technology. Later, these two topics were married when we used technology to produce 112 podcasts on boards and governance.



In order to develop individual skills, we organized and offered hundreds of workshops, clinics, seminars, and forums so that the participants were better equipped to implement a management task or achieve governance objectives. As often as possible, experiential activities provided opportunities for attendees to analyze the composition of their board; detail objectives to diversify their income; practice a fundraising pitch; or, outline their strategic planning process.



To build organizational capacity was the centerpiece of the Fund’s effectiveness strategies. Through grants for board development, financial management, marketing, fundraising, etc. consultants worked with Board Directors and staff to achieve management benchmarks; detail changes in policy or practice; clarify roles and responsibilities; focus on future plans; and, guide them in making more efficient and effective decisions.



However, the ultimate strategy to achieve our goal of organizational effectiveness was to enhance the nonprofit sector. The funding partners decided that we needed to institutionalize some changes in our local nonprofit landscape that would continue to benefit organizational leaders of the future. The Fund determined the feasibility of establishing certificate and degree programs at local universities; offered professional development institutes to enhance consultative skills and knowledge; and, made grants available to address management and governance concerns. As a result of just a few of our sector investments, Milwaukee has more trained managers; greater depth in the expertise provided by consultants; and, accessible capital for solving nonprofit challenges.



The resources informed nonprofit leaders, the educational opportunities developed their skills, and the grants to individual organizations built capacity, however, most importantly, the local nonprofit sector was greatly enhanced with a value beyond the Fund’s investments over the past 20 years.


50 Shades of Good Governance

Amazingly, the nonprofit governance system recommends—or should I say, demands—that a relatively small, diverse group of disinterested individuals be recruited to sit at the same table and be charged with making good governance decisions on behalf of a nonprofit corporation. Most of these individuals (in Wisconsin, Boards range in size from the legal minimum of 3 to a high of 108) are asked to tackle this responsibility without prior experience, training, or even an orientation to their job (only about half of the Boards offer regular orientation). Yet, when these individuals act in unison, the Board can be a very powerful leader.


 

Although Boards may come in 50 shades ranging from a hindrance to an enormous resource, it is not unusual for an executive director to ask—as one recently did of Kim Klein, founder of Grassroots Fundraising—“Is the Board structure essentially useless? Shouldn’t it be dissolved?”




Certainly, there are times when an executive poses this question, though they may not dare say it out loud. Rightfully so, Ms. Klein restated the question as “How can the Board be most effective?”




An effective and efficient Board, fulfilling its governance responsibilities, that is passionate about an organization’s mission and supportive of its staff, shouldn’t just be an executive’s dream. Rather, a vast majority of this country’s more than 1 million nonprofit Boards should act prudently and resourcefully on behalf of an organization.


 

1998 was a very important year for the partners at the Fund. It was the year that new funding partners were encouraged to join the three founders, and a sister fund was established in Waukesha. It was also the year that the second part of the Fund’s mission—“increases the resources for nonprofit management in the greater Milwaukee area.”—came to life.




This was the year that the Board Orientation And Resource Development Initiative was launched. From a series of focus groups, we understood what Board Directors wanted to learn, needed to know, and were willing to attend. Armed with this information, a multi-faceted initiative was designed, implemented, and evaluated. The first depiction of our initiative slowly evolved over the next 13 years under the Fund’s direction and with its support, until it was spun-off as an independent nonprofit in June 2011.


 

Both Board effectiveness and individual Director satisfaction can be correlated to solid governance practices, which was documented in the Fund’s 2003 third-party evaluation. The evaluators found that engagement and involvement of the Board was the critical factor in successful management improvement projects. The 2004 Milwaukee Governance Index corroborated this finding with 94% of local executive respondents noting that there is a direct correlation between Board effectiveness and overall organizational performance. In 2010, BoardSource validated the expectation that Boards that are well informed about their roles and responsibilities are more engaged, more effective, and have a more positive impact on the organization. In 2012, BoardSource found that 62% of Boards felt the Board was “well informed” or “very well informed” of its responsibilities.


 

Although we may be moving in the right direction, Milwaukee funders often lament if only the Boards of their grantees had more training, the organizations would be more prosperous. Maybe. Probably so. But, definitely not guaranteed.


Training alone is not a panacea. A workshop is a great technique to bring everyone up to the same informational level, but typically applying the information is more difficult than it may seem. Across the country, training is the standard tool for Board development, be it in the form of a workshop, a webinar, a podcast, or a conference.


 

However, combine training with consultation, add a service that assists with recruitment, and make available online tools and resources, a Board can move forward in a more efficient and expeditious manner. The core lesson learned it that there is no single approach that will assist Boards in becoming more helpful, rather it is a combination of activities and resources that appeal to varying ages and learning styles that will make a difference in their organizations.


 


Therefore, from the beginning of the B.O.A.R.D. Initiative through the end of my leadership, there were always a broad array of Board development activities. Over the years, we conducted numerous focus groups of Board Directors; researched governance practices and Board demographics; detailed a 21-module governance curriculum; recorded 112 educational podcasts; matched many candidates with Board vacancies; designed a Board assessment survey and compiled data on hundreds of Boards; chaperoned dozens of nonprofit leaders to governance conferences; taught thousands of Directors through hundreds of workshops; assisted employers in placing employees on Boards; hosted two multi-year professional development institutes and trained 22 consultants to be more effective governance consultants; organized dozens of Dialogues with Directors to learn from each other; produced three 30-minute cable TV shows on governance; published a bibliography of Board resources; awarded more than $1.2 million through approximately 220 grants for Board development; partnered with BoardSource and the Alliance for Nonprofit Management to bring national resources to Milwaukee; established a membership organization for Board Directors; and, incubated BoardStar.



 

aA new market within the nonprofit sector was created—Board Directors—who were hungry for governance and willing to pay to learn.



aSeveral thousand local Board Directors were engaged in conversations about new governance policies and practices, and were eager to apply what they had learned.



aBoard Directors felt empowered enough to apply for funding to increase their effectiveness. Before our efforts, almost all applications to the Fund were initiated by staff; as a result of our work, approximately a third of the applications were pursued by Board Directors.



aMany Milwaukee-area Boards followed national trends by trimming the overall size of the Board; eliminating executive committees; reducing the number of standing committees; and, using a consent agenda at Board meetings.



aBasic Board training has become highly accessible.



aGrantee evaluations repeatedly reported that Board engagement significantly increased after working with a governance consultant.



“…gained a far more detailed understanding of the role of its Board of Directors in governing and supporting the organization and its activities.”



“One of the most important things our organization learned is that the Board has a much greater governance responsibility than previously realized…We expect long-term improvements in the areas of governance, fundraising, the training of new Directors and a better defined Board and staff relationship.”


 

 

Over the years, the strategies and techniques used to engage Boards may have changed from face-to-face and in print to digitized and online, but the goal is still to teach current Board Directors governance best practices and encourage talented individuals to see Board service as a valuable life experience. For the approximately 300,000 people who serve on a nonprofit Board in Wisconsin this is a tall order. The need is clear. Will BoardStar become more effective in reaching and engaging these eager Board Directors? Will the new iteration of the Fund continue investing in building the capacity of our local nonprofits by strengthening their governing bodies? Will Milwaukee be a model for other cities in building better Boards?


 

 


Why Did We Say No?

While reviewing some statistics of both the Milwaukee and Waukesha Nonprofit Management Funds, I came across a few interesting numbers.


At the Milwaukee-Ozaukee-Washington County Fund, we funded 75% of all applications, and only denied 515 proposals over 20 years. The Waukesha County Fund only declined 20% of its applications saying no to 60 requests during its 16 years of operation.


In trying to analyze why we declined an application, I didn’t focus on the groups that had received at least one grant from the Fund, but rather looked more closely at the 141 nonprofit organizations that had submitted 158 applications, but were never funded by the Milwaukee Fund. I also reviewed the 13 applicants that never received funding from the Waukesha Fund.

 

Before I try to enumerate some of our reasons to decline funding, it is important to put our funding rates into context. Anecdotal data from discussion among committee members about their grant award rates, noted that for most, their numbers were the opposite of those at the Fund. In fact, more than one committee member stated that it was more likely for them to fund only 20-25% of their requests and decline 75-80%. To be fair, some of the larger philanthropic partners have very deep pockets in comparison to our grants budget of approximately $400,000 a year, and therefore, the volume of requests may have been significantly higher than ours. Yet, while I worked to make almost every one of our applications ready for a positive funding decision by the committee, one of the committee members stated that she “worked just as hard to say no to most and fund just a few applications that had the greatest potential for success.”


I guess it is good news that the philanthropic community doesn’t include funding rates as a measure of their success.

 

Across foundations, most applications are declined for one of three reasons: 1) the applicant or application does not align with the mission or field of interest of the funder; 2) the staff or trustees of the foundation do not have confidence in the organization’s capacity and/or in their commitment to achieve the goals/objectives/activities stated in the application; or, 3) the funding source just does not have enough funds to underwrite all of the interesting and worthy applications that it receives. It is not an excuse that foundations run out of money, it is the truth.

 

Back to why the Milwaukee Fund said no to 141 organizations. First, there are two basic reasons that were easy to decline. 1) The organization didn’t fit our guidelines in that their annual budget was too large; the organization was not in our geographic scope; or, that the proposal requested funding for staff of another line item in their annual budget, such as an audit. 2) The application from an unknown group was so incomplete or incoherent there was no chance of making it competitive in an already full roster of qualified applications for very limited dollars.

 

Only a couple dozen of these groups fell within one of these two decline categories. The others were not funded because of a nuanced reason. Almost all of the management or governance projects submitted to the Fund identified a consultant who would assist the organization for the project. Not every consultant identified by the applying organization was qualified for the project, but since we encouraged all groups to identify their own consultative resource, we sometimes declined the application due to shortcomings in the consulting proposal instead of meddling in the process. (This group included Greater Milwaukee Free Clinic, HSC Community Outreach, Ice Age Trail Alliance, St. Clair Management, etc.)

 

Sometimes, the mission of the applicant seemed, to the funding committee, less important than others. For example, organizations with missions that focused on animals always rated lower than those that focused on people. (This meant a “no” for Cats International, Timber Wolf Preservation Society, Wildlife in Need, etc.)

 

Religious entities that applied for assistance in strengthening their church policies and practices were readily declined. (Balm in Gilead For All People Church, Christ Tabernacle Church of God in Christ, Holy Trinity Our Lady of Guadalupe Church, etc.)  

 

Sometimes, an organization did not apply for what might have addressed its most immediate need. For example, one organization had a deficit for more than three years in a row, and the application did not request assistance for fundraising, financial management or Board development, any of which might have helped them improve their bottom line.

 

Several times, an organization would request the maximum amount (in Milwaukee that ceiling was $10,000) but couldn’t justify the amount for the project.

 

A few groups submitted an unrealistic proposal requesting an amount that would have been greater than 10% of their operating budget (which was our guideline). For instance, a small arts group with a $14,000 annual budget requested $7,500 to help them meet their annual budgetary needs. An environmental group with a $16,000 operating budget requested $10,000 for a strategic planning process.  Both requests seemed to be overkill for the size of the organization.

 

The Fund worked to stretch its dollars as often as possible, frequently awarding partial funding for a project, with a caveat that the group needed to raise a cash match, or allowed the organization to renegotiate its contract with a consultant. However, not every group saw this reduced grant as a gift. A few even felt it to be insulting, therefore, they withdrew their application, and four of those groups never returned.

 

While the Fund operated as an unusual funding vehicle, a great deal of time and energy went into proposal review.   As the Fund Advisor, I worked to make nearly every application as competitive as possible.  Yet, it’s important to publicly discuss reasons that the Fund did not support applications. We believe that for the most part, the reasons were rooted in logic and guidelines. Other reasons revolved around what was the best strategy to build capacity at a specific organization. Whether the consumers felt we made the best decision or not, we truly tried to fund, at least in part, as many capacity-building projects as possible.

 

As the Fund committee plans for the next iteration, what criteria should be added to clarify the reasons for not funding a proposal?

So Long, Farewell, Goodbye

SHUT THE DOOR, TURNED OUT THE LIGHTS, CLOSED, TERMINATED, DEFUNDED, DEVOLVED, ELIMINATED, EXPIRED, KICKED THE BUCKET, OUT OF BUSINESS, SANG ITS SWAN SONG, HIT THE END DATE, BIT THE DUST, OUTTA HERE, WENT BELLY UP, ACQUIRED, MERGED, DIED WITH DIGNITY...

Metaphors and clichés may lessen the pain of ceasing to exist, but closing is a somewhat frequent occurrence in the nonprofit sector. Nationally, we may read about the demise of a nonprofit on a weekly basis—and those stories are usually about the bigger, more established groups; the small organizations don’t usually garner attention from the press. Consider just a few headlines over the past weeks from stories in The Wall Street Journal to the Chronicle of Philanthropy to the Nonprofit Quarterly.

“San Jose Rep Theater Goes Under; Latest Down in Recent Arts Upheavals”

“Breast Cancer Support Group to Liquidate”

“Adult Education Center Closes”

“Minnesota Group Servicing Disabled Closes”

“Major Hospital in New York Closes”

“Scandal-Plagued Texas Cancer Agency’s Foundation to Close”

“$112-Million Stupski Foundation Shuts its Doors”

“Charlotte Set to Lose a Nonprofit Theater with Strong Area Ties”

Unfortunately, Milwaukee has not been spared from similar losses. Since the Fund started awarding grants in 1994, 111 of its grantees are no longer with us, which seems to be a very large number on its own. This figure represents nearly 8% of the total number of applicants to the Fund over the past 20 years. From another perspective, it may be just what our civic leaders have hoped to hear. The “lopper offers”, as one Fund committee member who shall remain nameless fondly called the group of civic leaders who seem to enjoy saying there are too many nonprofits, repeatedly cry “Just lop off the [small][arts][poor][unknown] nonprofits”, or any other term that corrals all but the biggest and most institutional of our local organizations.

We acknowledge that the organizations qualified for grants from the Nonprofit Management Fund are smaller, less structured, and perhaps more fragile than larger institutions. Yet, even Milwaukee’s Symphony and YMCA have recently made front pages with their financial woes and potential bankruptcy.

Over the years, we have said goodbye to LaFarge Lifelong Learning Institute, Elder Care Line, Aurora Weier Education Center, Christian Family Gathering, Greater Milwaukee Educational Trust, Islamic Family and Social Services, and Hmong Educational Advancements. Certainly, these groups were not of a singular mission, nor the same community.

Some of us miss being entertained by: Ballet Wisconsin, Great Lakes Opera Company, Heritage Chorale, Theatre X, Great American Children’s Theater, Bialystock & Bloom Theatre Company, Foothold Dance Performance, Hotel Milwaukee, and Milwaukee Shakespeare. Although all of these groups shared similar missions, they ranged from ballet to music and from traditional to contemporary.

Achieving the mission of some that have passed away is still critical to our community: Metcalfe Park Residents Association, Day Care Advocates of Milwaukee, Leaders’ Forum, Latino Health Organization, Golf Foundation of Wisconsin, Project Equality, Fair Lending Coalition, and Walker’s Point Development Corporation. Who will champion these causes?

Why did we lose so many nonprofits?

Did we make bad grants? Were our grants too small? Were the organizations too far gone when we started funding them? Was it a case of survival of the fittest? What would it have taken to ensure a positive turnaround?

So many organizations…so many questions.

While we mourn our losses, we also need to drive ahead. I do not nor have I ever subscribed to the lopper-offer credo. I firmly believe in a market place model where competition could be healthy. (On the other hand, why do we have 4 dry cleaners in one strip mall or 11 hair salons in one neighborhood?) Yet, in the nonprofit sector, multiple educational opportunities, an array of social services, or broad-based entertainment, seem to raise the collective hackles of so many business leaders. Certainly, inefficient or ineffective organizations should not continue to slurp philanthropic dollars, but just because that organization is large or this group has been around a long time is not a reason to fund only the established.

If our community’s nonprofit/public/commercial sectors are healthy, our quality of life is enhanced. It takes small, medium, and large businesses, governmental departments, and many sizes of nonprofit organizations to create a dynamic, vibrant, and prosperous ecosystem in every community.  I salute those groups that started, shared, and eventually departed, thanks for trying.

Envision a Nonprofit Leadership Development System

Metropolitan Milwaukee is home to over 6,000 nonprofit organizations. Certainly, this many nonprofit managers deserve a cohesive effort to encourage their development into leaders that will address our social woes and add vibrancy to our communities.


Every sub-sector from the arts to education and from social services to philanthropy has challenges that could benefit from vocal and talented champions, and of course, each organization has a greater chance of flourishing if it is led by a strong and skilled executive.


Although rudimentary in its design, my systemic approach to nonprofit leadership development in Milwaukee would equip our local leaders with necessary skills to advance their visions for a stronger and more robust community. The eleven apps can each unlock potential within individuals and/or organizations. Together, they complement each other’s contributions and simultaneously achieve greater community impact.


  • Fund career-capstone fellowships for transitioning or retired leaders that would benefit the community and capture their advice for future leaders. 
  • Assist nonprofits in creating succession plans for emergency situations, continual growth, or planned departure transitions.


  • Strengthen networking and service opportunities with professional development associations.

     

  • Partner with southeastern Wisconsin academic programs in nonprofit management, ensuring that the curricula includes courses on leadership.

 

  • Publish the leadership program inventory online, with the ability to mix and match offerings and provide feedback loops.

     

  • Organize diverse leadership cohort sessions.

 

  • Facilitate mentoring and coaching relationships, beginning with an online matching process and a high-touch personalized process as well.

     

  • Implement a sabbatical program for experienced leaders to be reinvigorated with new ideas to implement locally.


  • Create a second-in-command program that would enhance collaboration and cultivate relationships.

     

  • Widely promote web-based leadership resources, including best practices and affordable initiatives.

     

  • Make grants available for leaders to attend national, regional, and local conferences, then share what they learned.


For more detailed information about these recommendations, read the report “Strengthening the Visionaries of the Future” on the Nonprofit Management Fund’s website.


A serious investment in a nonprofit leadership development system would help ensure that the leaders of tomorrow would be more skilled and better equipped to move our community forward. Foundations, corporations, and others could advance a community-wide effort to coordinate myriad pathways for new, emerging, and veteran leaders.

From classes and conferences to fellowships and sabbaticals...opportunities for growth abound.


In 2012, the Fund began to identify gaps in our leadership program offerings, and in order to do so we needed to understand the current roster of available opportunities. It was relatively easy for the funding partners to list 22 leadership development programs, but were there others that we forgot or didn’t know existed? With a small grant, we enticed the Planning Council for Health and Human Services to inventory leadership programs targeting nonprofit executives and managers in the greater Milwaukee area.


Little did we know—that’s for sure. Our list of 22 entries was very short, compared to the 68 programs profiled in the inventory. Since then, 2 additional programs surfaced.


Milwaukee is fortunate to have 70 professional development programs for local nonprofit leaders however, there is no directory of all of these programs. Certainly, an online, searchable database with available courses, conferences, classes, degree programs, and training opportunities would be helpful. The directory could be the starting point to enable an executive to design a custom program for each staff member. If an “Angie’s List” format followed, the customer satisfaction aspect could really inform the decision to invest or not in a program.


From the Black Women’s Network to BoardStar, from the Executive Director’s Academy to the Institute for Conservation Leadership, from the Kiwanis to the Rotarians, and from Public Allies to Teach for America, we seem to have the gamut of leadership development possibilities covered.


Or, do we?


The final page of the narrative that accompanied the inventory for Fund committee members was perhaps the most interesting. This page questioned what was found and what was missing. For example:


     1. Who is actually being reached by these programs?

                 3. Should leadership development for the nonprofit sector be  more concerned with creating a critical mass of people with leadership skills, or would it be more effective to support a few leaders who are catalysts and champions?

     6. What is the goal of nonprofit leadership development? Is it to give individuals leadership skills; is it to increase organizational performance; or, is it to create a better community?



If there are so many opportunities to enhance


a nonprofit executive’s ability to lead


…why does it seem that we have too few leaders?

  

At the same time that the Planning Council was identifying current programs, we encouraged the Center for Urban Initiatives and Research at the University of Wisconsin Milwaukee to provide an overview of national trends in professional leadership development for nonprofit executives, and to suggest programs that could add value to those that already existed in Milwaukee.


At the Fund, we were focusing on programs that developed skills in individuals, yet, we were simultaneously interested in building the capacity of local organizations, and ultimately desired to strengthen our communities.


The types of leadership programs that are most frequently employed around the country are: sabbatical, executive coaching, mentoring, conferences, fellowships, academic programs, workshops, and peer learning circles. While there may be benefits and drawbacks to each type of activity, some principles or concepts are generally accepted. Successful program characteristics include:

  • Opportunities need to allow executives to rejuvenate, recharge, and reflect.
  • Experiential components are vital complements to training or education.
  • Compensation for learning is appreciated; fees or expenses covered by the employer are expected.
  • Expansion of participants’ networks and contacts is crucial.

 

Professional growth plans should engage a variety of tools and techniques, and they should first focus on affirming strengths before addressing areas for improvement.


If  “national trends in nonprofit leadership development are driven by a concern for ensuring an adequate pipeline of new talent, for making executive transitions smooth, and for taking full advantage of opportunities to boost nonprofit performance”, then what do we want for our Milwaukee leaders? The same!  Leadership development is a process, not a singular activity. We need integrated approaches, not program silos, to ensure the most effective outcome of successful leaders, and “Leadership development is most successful when it is supported by organizational leadership and tied to organizational strategies.”


What could we do in Milwaukee to develop leaders and enhance nonprofit performance?


Stay tuned for my next episode!


From veteran leaders to emerging executives...mentoring and coaching are fundamental.


About a year ago, I had the opportunity to conduct two focus groups—one for veteran nonprofit leaders (at least 10 years in their position) and another for emerging leaders (at least one year in top management). On one hand, there was quite a contrast between their perspectives in that the veterans were waiting for staff to demonstrate the potential for leadership, and the emerging group discussed frustration with the perceived glass ceilings in their organizations.


On the other hand, both groups agreed that leaders do not necessarily take credit for their achievements, but often highlight the contributions of their teams instead. Sharing a leader’s vision with others, and being inspirational in attracting followers, was understood by both groups.


Interestingly, the veterans’ examples were usually from within their organizations and the executives were taken aback when I pushed them to use examples about their leadership in the community instead. While leading externally was an interesting concept to them, it was not necessarily planned nor in the forefront of their thinking . Several in this group were opening the retirement door and noted that “legacy is important”, “succession planning is critical”, and mentoring by someone outside the organization was very helpful to their careers.


However, while mentoring has its advantages, some of the emerging leaders gave it mixed reviews. “Everyone tells you to find a mentor, and it is very awkward to find a good match. I’ve had four mentors, two were worthless, and two were helpful.” They also cautioned to use only one mentor at a time, as “more mentors can mean conflicting advice”.


Overall, all focus group participants found it difficult to identify and connect with a good mentor. While the veterans acted as mentors and coaches, they encouraged their teams to find others as their role model, which has not been an easy process. There are few generally-accepted guidelines for mentoring and coaching, and only a few of the trade associations offer a matching process as one of their membership benefits.


According to our local leaders, charisma may certainly be useful to a leader, but not required. Leadership is not necessarily innate and is often learned by modeling behavior. Emerging leaders advocated for senior managers to make assignments that would stretch their abilities, allowing them to showcase talents and receive feedback in a safe environment.


With regard to leaving an organization, the veterans expressed frustration in reading resumes of candidates that revealed a pattern of job hopping. However, the younger leaders described a similar degree of frustration when there is no room or opportunity for advancement in their organizations. Therefore, they feel forced to find positions elsewhere.


While designing a leadership initiative, it became clear that although all executives and managers are expected to develop their skills, most nonprofits lack the resources to invest in their talent. Even if a line item in the annual budget was designated for professional development of the staff, it is almost always the first to be deleted when shortfalls occur.


Interviews with several community and civic leaders reinforced these observations. The Director of an academic program believes that “leaders need to make time for self-reflection and that there should be increased dialogue between veteran and emerging leaders”. Another cautioned “There is only so much that you can learn inside your organization, to be a good leader, you must have a community presence.”


The civic leaders were very forthright with their advice. “Leaders should be authentic, open to change, resourceful, and advocate for the bigger picture.” Or as one leader admonished, “a strong leader need to be able to say no, and must engage in intentional planning”.


Several of the interviewees noted that over the years they had participated in successful leadership circles, and strongly encouraged their staff members to join a circle, roundtable, or group coaching effort.


Do we have enough opportunities to hone our leadership skills?

Are there strong role models willing to mentor emerging leaders?

What’s missing from our leadership development opportunities?


  

Stay tuned for our next episode!

From Webster's to Wiki...definitions of leadership abound.

I’m sure my nonprofit colleagues would agree with me: leadership is the key to success. Of course, strong management and good governance are essential, but are younger siblings to the older, wiser leader. Perhaps family harmony— or dysfunction—among siblings is not an apt metaphor, but what is leadership if it is not about people who influence us.

Milwaukee’s nonprofit sector has many experienced and talented executives, but if national trends hold true here, two-thirds of these professionals anticipate leaving their current positions within five years. As the guard changes, new and emerging managers need to learn the skills to operate successfully in an environment in which organizations must do more with less. Management skills like budgeting or Board development, while useful, are no longer sufficient to encourage the development of a good leader. The Center for Creative Leadership warns that executives of nonprofit organizations are now required to addresses challenges not faced by their for-profit counterparts, in that they are tackling complex issues with few resources within a multifaceted environment. Of even greater concern is that many of the retiring executives were active leaders within their organizations as well as in the community.

What is leadership?

The concept of leadership is not as concrete as management and governance, and there are many different definitions of leadership. Some describe leadership as an individual who influences change; others emphasize a leader’s ability to explain a vision; still others focus on a leader’s legacy. Is nonprofit leadership different from for-profit leadership? Is there a one-size-fits-all definition of leadership?

Last year, one of the first assignments that I gave to an intern working with me on designing a leadership initiative, was to craft a definition of leadership that could be adopted by the Fund to guide future program investments. She said she would complete the assignment by the end of the week—after all, she was a practicing attorney and enrolled in a graduate program. So, we began the search through Wikipedia, dictionaries, quotations, and research reports to find an appropriate definition. During the process, we laughed at some of the ideas and we thoughtfully debated others.

Here are a few that spurred a reaction; some definitions are succinct while others ramble, and some just outright confused us.

  • Leadership is power.

  • Leadership is vision.

  • A leader is a dealer in hope.

  • Leadership is intentional influence.

  • A leader is someone who guides or directs.

  • “Leadership is the process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task.”

  • “A leader is one or more people who selects, equips, trains, and influences one or more followers”…(plus 41 more words.)

  • “The activity of leading a group of people or an organization or the ability to do this.”

  • “Leadership is living a life that inspires others to do more and be more than they ever thought possible.”

  • “[Leadership] is like a dogsled team. If you ain’t the lead dog, they scenery never changes.”

  • “A leader is like the Abominable Snowman, whose footprints are everywhere but who is nowhere to be seen.”

  • John Quincy Adams declared, “If your actions inspire others to dream more, learn more, do more, and become more, you are a leader.”

  • The Drucker Foundation for Nonprofit Management (now known as The Frances Hesselbein leadership Institute) has long been in the forefront of thinking about leadership in the nonprofit sector. The forward to the Drucker Foundation’s “The Leader of the Future” sums up the meaning of leadership as “The only definition of a leader is someone who has followers.”

  • And a little closer to home in Wisconsin, Vince Lombardi asserted “Leadership is based on a spiritual quality; the power to inspire others to follow.”

  • Or to paraphrase Will Rogers. “A leader knows that you should drink upstream of a herd.”


After consideration of more than 100 descriptions and three months of work, we recommended that the following definition be adopted by the Fund.

“Leadership is inspiring, motivating, and engaging others

to collaborate toward a shared vision.” 

Every community needs visionaries who deal in hope and use their influence to create a more productive, effective, and brighter future. How do we ensure that some followers become willing and adequately prepared to lead?

In order to determine if Milwaukee’s resources were sufficient and appropriate to educate or train the next generation of leaders in the nonprofit sector, the Fund’s partners authorized a small-scale undertaking that would assess the current leadership programs for local leaders, and scan the country to identify interesting leadership development models. In contrast to BoardStar and the Fund’s typical technical assistance grants, this project was launched to identify and enhance professional development opportunities for individuals, not organizations.

To support nonprofit leaders, local foundations have been instrumental in the creation of many community- and college-based leadership development programs, but are these opportunities keeping up with new paradigms? Do Milwaukee’s current and prospective nonprofit leaders have access to the types of training and support they need?

In the next few weeks, I will share the wisdom of veteran and emerging nonprofit leaders; an overview of 70 local leadership programs; some national trends in leadership development programming; and, my recommendations for implementing a nonprofit leadership development system in Milwaukee.

Stay tuned for our next episode!

Soiree Straight Talk

Recently, I asked a dozen or so executives of Fund grantees to attend a soirée at my office. During the “Meet and Munch” segment, several connections emerged among these leaders. Interestingly, few knew each other when the evening started, yet various promises were made to meet for coffee and discuss future collaborative opportunities.

Of course, as we all know there is no such thing as a free cocktail hour, so I had prepared a few questions for these nonprofit leaders, making them work for their refreshments.

What positive impact did the Fund’s investment have on your organization?

  • “Grant helped leverage more money.”

  • “We found value in grants, classes, guidance, and having experts come talk to our Board.”

  • “The Nonprofit Management Fund helped the organization be better stewards of the resources received.”

  • “Helped us create an organizational structure.”

  • “Before the Fund, I stumbled around in the dark and didn’t know what it meant to run a nonprofit. Meeting Pat changed all that, I no longer felt in the dark, and was able to connect with other nonprofits.”

  • “I was getting poor advice that was all over the place from the few resources I was able to connect with as a small organization.”

  • “Without the Fund’s encouragement African American Children’s Theatre wouldn’t be in existence; you gave me encouragement to just try for another year, encouragement to try other things, encouragement to fix problems, encouragement to use other resources that are available.”

How has the Fund enhanced the nonprofit community?

  • “Provided training that the Board Directors received, which helped them when they moved on to other Boards in the community.”

  • “Small organizations feel they have little power; I felt that the Nonprofit Management Fund could speak for us.”

  • Several individuals noted that the Fund, built the capacity of organizations and gave nonprofits access to professional, high-level training opportunities that they couldn’t otherwise afford.

  • “Encouraged our staff to take time for planning, not just focus on day-to-day survival.”

  •  “The Fund is the only Milwaukee organization with a focus on infrastructure.”

Aside from money, what was the Fund’s greatest gift to Milwaukee?

  • “The funding is great, but without the other resources and guidance, there will be a void.”

  • Change agent

  • Vision

  • Broker of resources that strengthen infrastructure

  • Belief in the improbable

  • “Pat has a sincere appreciation for our missions.”

  • “Conveyed credibility about the nonprofit sector to the corporate elite.”

  •  “The Nonprofit Management Fund has high caliber resources, it isn’t just milk toast.”

     

    What separates the Fund from other funders?

  • “Program funding is easier to get than funding for organizational assistance.”

  • “There is an exchange that happens at the Fund that is more about relationship building and engagement than just about a transfer of money.”

  • “NMF helped give direction and prioritize were to spend energy in order to grow.”

  • “I believe it’s easy to feel lost and like you aren’t making a big enough difference, having the Fund’s attention is encouraging.”

  • “Other funders don’t want to know the nitty gritty of how you are making it happen, they just want to know what your outcomes are going to be.”

  • “As the Fund advisor, Pat was a human being with values and commitment, not just a piggy bank.”

  • I felt it was easier to be held accountable when I knew the person asking questions and checking on the organization actually cared (and wasn’t just calling because of requirements).”

  • “Pat didn’t tell the organizations what to do, but helped guide them on their own path.”

  • “I believe the Fund was a person.”

     

    While the comments represent only a sample of the rich discussion, the participants truly enjoyed meeting each other and I had no difficulty in keeping the conversation flowing. We learned executives loved being convened for a leisurely, yet focused, discussion.

◊ They freely contributed to the conversation, and were not intimidated to share an opinion contrary to others.
◊ Executives want a strong nonprofit sector, not just a strong organization.
◊ They all felt the Fund had a huge impact on both their organization and Milwaukee.
◊ The Fund is unique—in that its focus on organizational infrastructure is not duplicative of other funders.  
◊ The Fund is inclusive, acknowledging even the smallest of nonprofits.
◊ Many of the consultants are very helpful and willingly share their expertise.
◊ Only a few organizations felt the need to look beyond Milwaukee for a specialized consultant.
◊ That the Fund offered more than grants was a significant asset.
◊ The Fund provided vision for the local nonprofit sector.
◊ The guidance of a Fund Advisor is critical to the success of the Fund. Executives stressed the importance of finding another Advisor with nonprofit expertise and not changing to a more robotic and less individualized funding approach in the future.

 

It became clear as folks lingered after the sessions ended that there are too few opportunities to connect with other executives. The standard meeting routine is only to contribute to items on the agenda, but this conversation encouraged the leaders to think beyond their turf and discuss how the Fund plays a very important role in strengthening our local nonprofit sector.

The Talent Divide

In 19 years of the Milwaukee Fund, 667 different consultants were named on 2,095 applications. In reviewing that list, some big-picture statistics emerged.

  • 3% of the consultants were identified on 20 or more applications. These consultants’ proposals were funded 83% of the time.

  • 8% of the consultants that were named on 5-19 applications were funded 76% of the time.

  • The vast majority of consultants, 89%, were identified on 5 or fewer applications, and only 68% of these applications were funded.

     

    Bear in mind that the nonprofit applicant identified their consultant; the Fund avoided matching a nonprofit with a consultant, except for diagnostic clinics.

     

    If we just look at a single year, 2012, we learn that 60 different consultants were named on 127 applications.

     

  • Ten consultants were each used on two different contracts with grants from the Fund averaging $2,107 per project.

  • Two consultants were each hired three times with a grant from the Fund, averaging $4,500 per contract.

  • One consultant was hired four times and another was engaged on five contracts all with grants from the Fund averaging $4,855 per contract.

  • One very enterprising consultant, with a strong marketing effort, was contracted by 9 grantees for an average of $3,422 per project.

     

    So, in hindsight, what did we learn?  

     

  • There are about 20 consultants who have marketed themselves very well to local nonprofits.

  • Lots of people feel qualified enough to hang out the proverbial shingle and announce that they are a consultant.

  • The more familiar a consultant’s work was to the Fund, the more likely that consultant would be engaged for more work.

  • Most of the consultants who were named only one time, worked in technology or web design; at the same time, we can say that there is a lot of “expertise” to address technology or marketing needs.

  • Consultants who regularly work with Fund grantees work on smaller projects, mostly between $3,000-$4,000.

     

    While Milwaukee has certainly broadened its consulting pool, nearly 700 consultants wide, depth and quality of the expertise are still concerns that need to be addressed in the future.

Philanthropic Vehicle

In addition to making an annual contribution (minimum of $25,000) for participation in the Fund, many partners invested additional grants for sector-wide initiatives or for specific projects.

Particularly, once the funding partners learned to trust each other and the Fund as a working entity, several of them choose to use it as a vehicle for more than technical assistance grants to any local nonprofit that applied. The Fund became another tool in many of the partners’ toolkits to achieve their foundation’s mission.

For example, the Fund only awarded grants in Milwaukee County for the first three years. However, in 1998, the Northwestern Mutual Foundation asked that the Fund conduct a diagnostic clinic of an organization which they were very interested in funding, but it wasn’t quite ready for a serious investment from this major corporation. The only problem for the Fund was that the organization was located in Ozaukee County. Northwestern Mutual was so interested in this organization that it made a special grant to the Fund to cover the cost of that organizational assessment, and paved the way for an expansion of the Fund’s eligibility boundaries.

While Northwestern Mutual may have broken ground for investing in particular projects, it didn’t take long for other partners to follow. Over the years, the Faye McBeath Foundation urged the Fund, with a grant of $5,000, to determine nonprofits’ needs in technology. The Greater Milwaukee Foundation asked the Fund to award grants to strengthen nonprofits in the Harambee neighborhood with a small balance from the Neighborhood and Family Initiative.

The Helen Bader Foundation found the Fund to be the perfect vehicle for a series of initiatives beginning with making a special grant to build the capacity of five AODA residential organizations. Later, the Bader Foundation included the Fund in their multi-year Arts in Education Initiative to conduct assessments of 15 arts organizations, the analysis of which became the impetus for art$upport.

Every once in a while, the Fund partnered with another entity that was not a good match for regular participation. For instance, the City of Milwaukee’s Block Grant Office tried to join the Fund, but as a small donor-advised Fund at the community foundation, we just weren’t ready to adhere to  another layer of governmental accounting procedures. So instead, we found a compromise that suited everyone: the CDBG office would fund a diagnostic clinic for one of its grantees; then the Fund and CDBG would split the cost of the first follow-up grant for strategic planning, marketing, or whatever was needed. It developed into a great working relationship, without financial encumbrances.

Sometimes, a local funder who was not part of the Fund still saw it as an opportunity to address a concern about one of their grantees. For example, WE Energies identified an organization in which they wanted to invest long-term, but that group’s board needed some guidance and it lacked a strategic plan for growth. WE Energies made a $9,000 grant to the Fund so that we in turn could make two grants to build the capacity of the identified group, which would then be eligible for a much larger investment by WE Energies.

Additional funds were easily raised when the partners agreed to sponsor or organize a small project or a large initiative. Sponsoring the Board Initiative that became BoardStar certainly took a greater investment of time and dollars than paying for a facilitated planning retreat, which resulted in the idea of creating a pro-bono legal clinic affiliated with Marquette University’s Law School. Yet, each project was very important.  Just as organizing focus groups of nonprofit executives to determine the interest in establishing a degree program in nonprofit management was a relatively small payment for what became a huge impact in Milwaukee through the Helen Bader Institute for Nonprofit Management at UWM.

Most of the partners found that the Fund was the perfect vehicle to invest in projects aimed at building a segment of the sector or specific organizations that were instrumental to their philanthropic mission.

Investing in the Art of Consulting

 

Consultants are key players in the Fund’s model of building capacity at our local nonprofits. The grantees depend on the expertise of consultants to guide and assist their staff or boards through planning, board development, marketing, fundraising, etc. And we as funders rely on the grantees to develop their organizations into more effective investment opportunities.


Milwaukee’s consultant talent pool has always been relatively shallow.  Around 2000, it became clear that the Fund needed to act to improve the skills of local nonprofit consultants.  Certainly, we had some depth in marketing or technology, but according to several sources, including Fund evaluation reports, we had gaps in board development and corporate structure, as well as in organizational analysis and planning.

To address this concern, the Nonprofit Management Fund sponsored three multi-year professional development institutes.

  • Board Development 2001-2003

  • Diagnostic Clinic Assessments 2004-2009

  • Board Development 2008-2010


While we developed the knowledge base and consulting skill sets of 22 consultants, we deepened the talent pool by only a relatively small measure.


In 1997 and again in 2014, I queried a group of consultants on how they hone their consulting skills or in which professional development activities they participate. Both times, I received the same response. The first minute after the question was posed—SILENCE. Then one or two of the consultants begin to enumerate a list of conferences they attend or journals they read. Over the next few days, I receive two or three more responses that note conferences, journals, or something they’ve written. Overall, however, the responses are underwhelming.

Although the Fund identified 70 leadership development programs in Milwaukee, none are aimed at increasing the knowledge of consultants or enhancing their skills in consultation. Over the years, I proposed that the Fund organize more modest activities for consultants, such as the following.

  • Professional development breakfast series 4-6 times a year featuring a provocative and/or educational speaker on topics of interest to the group.

  • Week-long immersion course on “The Art of Consulting”, designed to be a tuition-based intensive with a one-day pre-session on “Contracts & Work plans”; a week-long series on “Building Your Consulting Skills”; and, a one-day post-session on “Report Presentation”.

  • A one-year institute on “Planning”.


Although the funding partners seriously considered, and sometimes debated these ideas, their final decision was to say no. Why? Their investments in the three previous institutes approximated $200,000. While a vocal minority of funding partners stated that we needed to continue investing in our local talent, the majority noted it was time for the consultants to invest in their own development. 

 

 I think we need more skilled consultants, but not more individuals to hang out a shingle. Milwaukee needs depth, not breadth. We need talented professionals in their 40s and 50s who are willing to learn how to consult—not more boomers looking for a part-time gig!


My 40 year consulting practice has been my career—not just something I did between jobs. I can now see the time horizon at which I will depart from this very difficult, yet significantly rewarding practice of strengthening nonprofits.  It is not easy to be a good nonprofit consultant. As much as one may know about a particular aspect of nonprofit organizations, it is not enough to just share; more importantly you must teach/enable/guide/coach and coax your client to their next level of development.


 

Who is willing to lead?  Who is ready to follow?  How will you learn the art of consulting?


 

 

 

 


Integrating Interests

In 2002 and again in 2004, we were asked to make a presentation at national conferences about the experience of establishing a funders’ collaborative. My presentation in both cases included six points about collaboration. These six principles guided the Fund’s development for the first 10 years and promoted integrating the interests of all philanthropic partners.


  1. Even if the funding partners aren’t philosophically compatible in their own grant-making efforts, they must agree with the mission of the collaborative.

  • In our case, all funding partners need strong nonprofits in which they can invest.
  • At the Nonprofit Management Fund, all partners agreed that a focus on improving management or   governance  is considered a strength, not a weakness.

     

2. Funding partners must share common perceptions of the needs to be addressed by their collaborative efforts.

  • The infrastructure of many nonprofits needs to be developed in order to achieve their mission.
  • Resources to build capacity must be made available to nonprofits.

     

3. A track record of successful joint efforts should exist among the collaborating partners. However, even if there isn’t a history of working together, the collaborative will produce a list of successful accomplishments.

 

  • Some of the foundations in the Fund’s Collaborative worked together in the past on common interests (e.g., education, economic inequality, etc.), but none had been in a structured philanthropic partnership before the Fund.

  • A few major corporations connected with the Fund because of their broad commitment to the community.
  • United Ways were new additions to the funder mix, and like all partners, had to learn to play by the rules of the collaborative, rather than by their guidelines.


4. Partners must perceive benefits and/or see it in their self-interest to collaborate, and agree as to the nature of these benefits.

  • Funding partners can reach more nonprofits by pooling their dollars, as well as leveraging other funding.
  • The collaborative can fund all aspects of the nonprofit sector through the collaboration, although individual interests at their respective employers prevent funding some segments of the sector.

  • The Fund can add special expertise, i.e., Fund Advisors. 


5. The collaboration must ultimately produce tangible results for the grantees.

  • Grantees must be able to demonstrate improved organizational capabilities.

  • The overall capacity of grantees must be expanded.

  • As a result, grants made by the individual funding partners can be made with greater confidence.


6. Funding partners must be willing to share personal resources and information with the other participants if collaborative efforts are to be successful.


  • All of the funding partners must have trust in the group in order to have forthright discussions.

  • A la Las Vegas, the Fund adopted a policy on confidentiality regarding discussions of grantees—what was shared in a committee meeting, stayed at the committee meeting.

Another decade has passed since this list was compiled and I still agree with the points on the list. I just want to add another half dozen lessons that we’ve learned along the way, but

before I show you mine, I’d like you to show me yours.

What points would you add to the list?

No Sibling Rivalry Here


Siblings. Those brothers and sisters whom you love and cherish most of your life are also those individuals with whom you compete, fight, collaborate, and support, and depending where you are in the household pecking order, you might lead, follow, or ignore them.


The Nonprofit Management Fund in Milwaukee understands familial relationships as it spawned a sister fund in the neighboring county. In 1998, five funders from the Milwaukee Fund partnered with three local entities to establish the Nonprofit Management Fund of Waukesha County.


For the most part, the big sister fund led the way, modeling grant-making behavior, and launching initiatives that would benefit the full metropolitan area.  Each partner enriched its own grant-making efforts through learning to analyze nonprofit management needs and results. With a track record of success and the satisfaction of observing measurable improvements in many local nonprofits, the partners acknowledged 16 years of strengthening Waukesha County nonprofits and quietly stopped making grants in August 2013.


From the beginning, the two funds paralleled each other’s goals and guidelines, as well as proposal and evaluation formats. Primarily, only two aspects distinguished the funds: the grant range in Waukesha was $500-$7,500 (Milwaukee $1,000-$10,000), and the Committee only met twice a year in Waukesha, compared to the standard six annual grant cycles in Milwaukee.


Whatever the future may hold for Waukesha nonprofits, it’s worth celebrating awarding 296 grants for a total of $1,439,590 to 80 different organizations. An incredible 83% of 356 applications were funded, with an average grant of $4,860.


Grantees were diverse with 175 grants totaling $845,540 to health and human service organizations; 70 grants were made to arts & culture groups for a total of $366,739. Over the 16 years, 57 grants for a total of $230,720 focused on technology; 49 grants enhanced fundraising for an investment of $265,582; 45 grants were made for marketing totaling $221,881 and another 45 for planning adding to $251,470.  And, 17 nonprofits received a diagnostic clinic, which is a comprehensive organizational assessment.


Technical assistance, coaching, and consultation were provided by 197 different consultants, with 10 of those consultants helping grantees on 5 or more projects.


These statistics mirror those in Milwaukee, and the committee members generally followed the lead of the older sibling when it came to funding initiatives that provided assistance and resources to all local nonprofits, including strengthening Boards, enhancing technology, and training consultants.


Yet, there was a departure from the “following” role when the Waukesha Fund announced at its 10th anniversary that it was launching a new private/public partnership--the Strategic Alliance Fund. This Fund would award grants to local human service agencies to establish a formal collaboration, negotiate a strategic alliance, co-locate to share back-office and other administrative functions, or restructure organizationally through a merger.  Although this Fund only made a few grants, the partners continue to chant a mantra of merge or establish a formal alliance.


As the Milwaukee  committee plans for the next generation, it should consolidate the family business and bring the little sister into the fold as one Fund covering the four-county area.


Is Milwaukee Ready NOW for Mobile Giving?

Strong nonprofit arts ecosystems add value to Milwaukee. We thought that an umbrella fundraising mechanism for small and mid-sized nonprofit arts organizations would strengthen the organizations themselves, build a web of integrated creativity, and support more individual artists. Local nonprofit arts and cultural organizations allow and encourage artists to discover and nurture complementary talents that spark innovation, launch careers, and build community. They push our community in ways we wouldn’t expect – using race, socio-economic, and gender issues to spur conversations. We must nurture subsequent generations of Milwaukee artists by supporting smaller or experimental organizations.


In 2013, to support small and mid-sized arts groups, the partners of the Nonprofit Management Fund created an inaugural event that had the potential to be a new, ongoing revenue stream for local arts organizations — art$upport  a community-wide  pop-up art event. A pop-up performance is a spontaneous, artistic activity — singing, dancing, reading, drawing, painting, image projection —lasting 3-5 minutes in a restaurant, public space, a lobby or almost anywhere.

What happened?

 38 organizations -131 performances - 60 public and private venues 

36 hours from Thursday through Saturday, 25-27 July 2013

8,000 promotional cards distributed to potential supporters

 

Three fundraising strategies were involved: 1) matching funds raised in advance; 2) online contributions solicited, and 3) a $10 text solicitation could be made via mobile phone.  The Nonprofit Management Fund allocated funds to cover all expenses. In addition, Chris Abele, Greater Milwaukee Foundation, Daniel M. Soref Charitable Trust, Spirit of Milwaukee, Faye McBeath Foundation, and the Helen Bader Foundation made grants totaling $61,500 for distribution in August 2013 to participants.


Online contributions and text donations were not very successful, raising only about $2,000, which was re-granted in December 2013. Despite the small figure of $1,675 per group, the comments were passionate.

“The 2013 art$upport event provided a tremendous opportunity to highlight the amazing talent and art resources that benefit the greater Milwaukee community.”

“We all really enjoyed the event and are grateful to have been a part of it.”

“First of all, thank you both for all your efforts in making this possible. This really was a significant undertaking, and it was also a tremendous opportunity for arts groups like us. We are very grateful to you for including us.”


This month, our United Performing Arts Fund is soliciting contributions principally to support 15 large arts groups. Perhaps another 15-20 mid-sized organizations will also receive a smaller grant.  What about the more than 100 other small artistic endeavors that showcase remarkable talent and spark our creative thinking? Don’t they deserve support too?


The Fund chose a method of solicitation—texting through a phone—that had not been used widely in Milwaukee, except for disaster relief, so that we weren’t competing for the same dollars as other campaigns, and cultivating new,  perhaps younger, donors to the arts. Small phone contributions also seemed to be in scale with the size of the 38 eventual recipients. While texting may one day be a viable funding strategy, our brief experience with mobile giving does not bode well for another attempt—yet.

Too Big to Fail?

For 20 years, the Nonprofit Management Fund promoted the importance of building a strong organizational infrastructure. Over and over, we espoused good management through great leadership.  We funded planning, governance, staff development, financial management, fundraising, marketing, etc. so that every aspect of administration could be reinforced.


  • Boards need to fulfill all of their governance responsibilities.
  • Programs must further the mission.
  • Staff must be developed into an organization’s greatest asset.
  • Mission and vision should be clearly articulated.
  • Funding streams should be diverse.
  • Financial management is crucial to stability and longevity.
  • Communications to the public should be transparent and engaging.


This list is just a shortened version of a lengthy one of good management practices. To ensure that managers learn best—or at least better—practices, classes, courses, and workshops abound and even degrees and certificates in nonprofit management can be pursued.


In Milwaukee, foundations and corporations believe so strongly in good management, that they fund “overhead” and administrative or governance projects.  With significant, long-term investments in building the capacity of hundreds of organizations, it is disheartening to read in the morning paper about a local charity not fulfilling its mission, or that a venerable institution is forced into “massive restructuring”, or that our largest arts organization is in a financial crisis – again.


Now for the most part, these three recent local examples are organizations with budgets much greater than the 776 organizations that applied for funding through our small grants program, yet, obviously size does not matter when it comes to management challenges.


Strong leadership with an eye on the fiscal bottom line, as well as a finger on the pulse of mission achievement is vital, for EVERY nonprofit—big or small. Perhaps the need for a nonprofit management fund is just as critical for large organizations as it is for small emerging groups. We’ve always known that management and governance challenges are on every executive’s to do list, but the capacity to attract resources to address them is greater at the top than at the bottom of the nonprofit food chain.


So, why do we still read about groups on the brink.


Why haven’t Boards fulfilled those governance responsibilities including providing vision and resources? Why does an executive let a financial shortfall rise to the level of a fiscal precipice?


Whatever the answers, nonprofits in Milwaukee have once again demonstrated the need for serious investments in infrastructure, not just programs.

 

What advice do you have for the Fund in the future?


 


 


 

 


21st Century Grantmaking...Sometimes Old School is Better

 


In 2000, the technology initiative was in full swing, with a gaggle of eager students offering their assistance on a host of web-related projects for the Nonprofit Management Fund.


With such talent available and an interest in conserving Fund partners’ time, in addition to a desire to be more environmentally conscious and reduce our paper consumption, we decided to design a “Grant Review Extranet”. You have to understand that 15 years ago, this simple concept was as complicated as putting on a Broadway musical. Contrary to popular opinion that grant makers are bland and boring, we were “da bomb”.


From early 2001 through 2003, the Fund partners read each application and recommendation online, and then voted online through a password-protected portion of our website. The proposal review and voting process could be conducted in the privacy of their home, office or hotel room. And, by reviewing the early am log in times, it is clear that more than one committee member wore their fuzzy slippers to vote.


Overall, 19 cycles were reviewed through our super-duper extranet, which was another Fund groundbreaking achievement, as we were the first in Wisconsin to use technology for approving grants. When the word spread throughout the philanthropic community, we received several requests for using our software. A missed opportunity to create our own earned income venture for sure.


Throughout the review process, the committee members were able to comment, pose questions, change their vote, and even dissent vociferously. However, the lonely voice couldn’t be heard as loudly, unless we were all sitting at the same table.


According to a third-party evaluation of the Fund in 2003, “the in-person and on-line methods are seen as comparably effective on three very important factors: results in fair grant decisions; results in effective grantmaking; and, provides an atmosphere where all partners can give candid input.”


Despite our intent of reducing their time investment, the ease of the voting process backfired. In actual time, this private and insular process allowed committee members to vote on auto-pilot, spending only a few minutes to cast their ballots. Luckily, policy meeting discussions encouraged committee members to articulate complaints, admonitions, and mea culpas.


  • “I pushed for online voting, thinking it would be easier. Truth is, it isn’t easier.”

  • “Now (with online voting) I just try to get it done.”

  • “While online voting is fascinating, it’s a misapplication of technology because the partners don’t think as much or learn from each other.”

  • “I delegated the online voting!”

  • “People tend to vote with the majority without truly evaluating the issues or challenging the recommendations.”

 

As a result of an honest discussion, the Fund partners decided that despite the excitement of being the first on the block to have a “new-fangled widget”, the extranet was more of a belly flop. They decided to revert back to an in-person grants review process.


  • “It’s helpful to bounce things off other partners.”

  • “It’s a rare opportunity to put everyone in one room.”

  • “It’s a way for corporate, private and family organizations to work collaboratively. You miss that online.”

  • “In the beginning having everyone face-to-face was critical to learn.”

  • “I still miss it.”

  • “I would read more intensely if I knew that I had to express my feelings to a group.”

  • “Voting in-person results in a more careful review (of the materials).”

 

While we tried to be innovative in using resources that we created for local nonprofits through the technology initiative, it turns out that good, ol’ fashioned, face-to-face conversations with colleagues are more desirable than time efficiency. Discourse, debate, and deliberation remain the critical hallmarks of our success as a funders’ collaborative.


 


Happy 30th Anniversary!

Today, Management Cornerstones Inc. turns 30. It’s been a phenomenal journey through creative periods, client successes, and community accomplishments. These 30 years have also encompassed lean times, work overloads, and small business turmoil. However, I am so glad we did it!
Scott Gelzer and I, along with two colleagues, decided to open our consulting firm by signing a lease on a small suite of offices in the historic Uptown Bank Building in Chicago on 1 April 1984. The four of us boasted a large network of contacts in the nonprofit sector and a wide range of management skills. As the impetus for the firm, I also had nine years of consulting experience with a lengthy client list.
For the first 13 years, we consulted on all aspects of nonprofit management; trained in a variety of management and governance topics; conducted dozens of management audits; published an array of articles and manuals; and, facilitated hundreds of Board retreats.
Over 4,000 nonprofits benefitted from our advice and assistance. Yes, we really have client list the size of a phone directory for a small town! For 98% of those contracts, we were consultants--teaching, demonstrating, and enabling the client to move forward in the future without further guidance from us.
On the other hand, for the past 20 years, Management Cornerstones has been under contract as the Fund Advisor to the Nonprofit Management Fund “staffing” the oversight Committee of funding partners; managing the grant-making activities; and, designing, if not implementing, the initiatives. We played the role of contractor rather than consultant.
The Fund was often criticized, or at least received many dazed looks, when we approved a policy that we would not underwrite independent contractors who were acting as staff. Instead, we funded local nonprofits to engage consultants to provide technical assistance that would build their capacity. Although the difference may be subtle, it is far more than semantics.
Whatever path the Fund chooses to follow in the future, I am glad to have had the opportunity to have served in both roles over the past 30 years!

From "Possibilities" to "Strategic Initiatives"


From day 1, the grants program has been the centerpiece of the Nonprofit Management Fund. This focal point has fulfilled multiple purposes —developing nonprofit organizations, strengthening grant-making opportunities for the Fund’s investment partners, and informing the Committee about organizational needs and nonprofit trends. Yet, as important as this successful program has been, it didn’t necessarily build Milwaukee’s nonprofit infrastructure or create additional local resources.


So, why did we divide our attention between making grants and designing initiatives?


Although we had only 10 grant cycles under our proverbial belt, the applications pinpointed a short list of management challenges plaguing local nonprofits. The funding partners recognized an opportunity to address the second part of the Fund’s mission—refer to Blog #2—and launched several initiatives in 1998. These initiatives were determined through a lengthy discussion of the results from three data-gathering activities: a survey completed by more than 50 organizations that identified their management needs; an environmental scan, which detected gaps in services provided by intermediaries;  and mini-feasibility studies on six possible areas of concentration:


  • organizational assessments

  • earned income strategies

  • training for Boards

  • university degree or certificate programs in nonprofit management

  • collaboration

  • organizational mentorship

     


Finally, the oversight committee of the Fund narrowed the “Possibilities” and established three “Strategic Initiatives”.  “The three initiatives were designed to have a significant impact on nonprofit organizations of varying types, sizes, and structures in Milwaukee County over the next three years. The greatest emphasis will be placed on those organizations that qualify for a grant from the Nonprofit Management Fund.”


The nonprofit sector’s ability to function depends in part on access to various resources, despite the myriad challenges that exist in the operating environments. Resources may be financial or in-kind, but assistance is helpful only if it matches the challenge. Hence, the assessment or diagnosis of a problem is critical to resolution. Therefore, the diagnostic clinic service was offered to local nonprofits as an alternative to a technical assistance grant.   


            GOAL: To implement a range of diagnostic services as part of the Nonprofit Management Fund’s repertoire of approaches to enhancing the Milwaukee area’s nonprofit sector.


The long-term viability of many nonprofit organizations is dependent on the group’s ability to attract resources using a broad spectrum of financial strategies. The need for a diverse income base will be addressed by several earned income projects to be implemented by nonprofits throughout the County.


GOAL: To develop and implement a demonstration project, which will provide technical assistance to a group of six Milwaukee nonprofit organizations and create a body of knowledge to build the local sector’s capacity.


The differences between a nonprofit and for-profit corporation are many. One critical advantage to the nonprofit status can be its Board of Directors, representing financial, programmatic, and personal resources. Governing Boards are often the untapped resource in organizations. The recommendation to create a B.O.A.R.D. Institute was an effort to have a demonstrable impact on Milwaukee-area Boards of Directors through a variety of placement and training services.


            GOAL: To strengthen the involvement and capability of governing Boards of nonprofit organizations in Milwaukee County through the Board Orientation And Resource Development Institute.  The B.O.A.R.D. Institute will offer recruitment and placement services; governance training; and, publications.


These were the inaugural initiatives of the Fund and they continually evolved into programs that were eventually spun-off to another host in the community. Over the next 15 years, the Fund designed, launched, and supported six major, multi-year initiatives and about a dozen minor ones. The six extensive initiatives encompassed many years, phenomenal numbers of people and organizations, copious investments, as well as an extraordinary number of hours of hard work.


Diagnostic clinics conducted by 2 Fund advisors magnified into over 100 comprehensive organizational assessments conducted by 8 certified consultants.


Earned income projects with 6 groups expanded to become a social entrepreneurship network engaging 15 organizations.


The B.O.A.R.D. Institute morphed into BoardStar.


Y2K fears eased into a technology initiative that grew to become ENTECH.


Professional development activities multiplied into three multi-year Consultant Institutes, graduating 30 consultants.


Hispanics in Philanthropy’s interest in developing Latino-led organizations was magnified into the Funders’ Initiative for Strong Latino Communities with a multi-million dollar investment.

Numerous debates and painful discussions were held during many policy meetings over the years about the need for community-wide resources, diversion of funds into projects instead of organizations, and the Fund’s role as project manager rather than grant-maker.

 

  • Should the Fund have ignored the potential of creating initiatives and just focused on building the capacity of individual organizations? 
  • Do you think it was a good investment of the Fund’s finite resources to have invested in establishing initiatives that served the nonprofit community at large?

Does Size Really Matter?

Since the beginning of the Fund, we have funded 75% of the applications.  There have been cycles, and even years, where that percentage has been as high as 90%.  Many funding partners have commented that their funding percentage is almost the opposite of ours, in that it is more typical for them to fund only 20-30% of their applications.  Another significant distinction between the Fund and its investors is that our average grant size is approximately $5,000 and the partners make grants at substantially higher amounts.

Fund grants are for very specific, time-limited management or governance projects.  Historically, we have determined that those projects should be fulfilled for a much smaller amount than an organizational program or service project.   Committee members believed consultants should be able to provide technical assistance for a market rate of $100-150 per hour, and generally complete their consultancy in approximately 40-50 hours. However, we also were open to an organization submitting for another phase of the consultancy, if the project required more work, and therefore, more money.

Over the years, we received negative feedback from consultants that the grants are too small. While most of our grants ranged from $2,500 to $7,500, sometimes we awarded only a portion of the requested amount, in order to stretch the Fund’s dollars, or to encourage the applicant to contribute towards the project through a match.  Although most of the Fund’s grants could be considered “administrative” in nature, none were for “general operations”, nor did they pay for programs, staff or standard annual expenses.

One financial trend might cause a concern for the future direction of the Fund…in 1995, grants averaged $5,817; in 2001, the grant average reached a high of $6,977; in 2005, the grant average dropped to $3,953; and, in 2013, grants averaged $3,526. That represents a 50% reduction in average grant size in the past 12 years. So, as the Fund aged, it was less able, or perhaps less inclined, to make larger grants.

Since the overall amount available to grant on an annual basis remained relatively stable over the past 5 years, (the possible reasons for the fact that it was not increasing in revenues will be discussed in another blog) and demand remained high, we worked hard to ensure that all applications with merit received at least some funding to get started in building their capacity. Certainly, not all consultants, agency execs, or even Fund Committee members agreed with this approach.  Some were very vocal about selecting “a few” organizations and concentrating our grants to those groups, enabling larger grants to be made.

What should be the criteria to ascertain grant size?  Nobody would argue that one size fits all.   Perhaps the challenge is determining when a “large” grant makes the most sense.   For 61% of  Fund applicants, those with budgets under $500,000, the idea of a major grant to build capacity, would be outsized or focus on adding staff, which did not fit the Fund’s criteria.  From one perspective, the Fund existed to leverage talent, ideas, and resources, not to provide them in the majority or entirety. On the other hand, it is widely acknowledged that nonprofits need a plethora of resources to develop into thriving groups, which have the capacity to fulfill their missions.

In hindsight or for the future, should the current grant range of $1,000 to $10,000 change?

Single Mission, Dual Purpose, or Trifecta?


“The Nonprofit Management Fund improves the management effectiveness and efficiency of nonprofit organizations and increases the resources for nonprofit management in the greater Milwaukee area.”


From the beginning, there have been two parts to the mission of the Fund.  

The first level focuses on enabling a nonprofit organization to build its capacity in order to more effectively address its mission. The Fund awarded small grants for a nonprofit to engage an external resource, which was usually, but not always, a consultant.

The second part of the mission encourages the Fund to invest in the local nonprofit infrastructure.

We’ve had many discussions over the years about changing the mission through wordsmithing or refocusing, but we always decided to not make any changes. During those discussions, about half of the committee members wanted to focus on the grants to the organizations; the other half wanted to create more resources for all nonprofits to take advantage of them.


However, in hindsight, maybe there should have been a third part to the mission.


When we started in 1994, we were the first funders’ collaborative in Wisconsin, and one of only a handful in the country,  perhaps we should have acknowledged our ignorance and stated to the world that we wanted to learn about creating a new breed of philanthropy.

Should we have added something like “and documents the development of a new giving model”?


What do you think?

Paper Cuts and Eye Strain

Twenty years of hard work can leave behind a small mountain of paper files, and a mind-boggling number of electronic ones. Sorting, s(h)ifting, and organizing these voluminous records has produced several headaches, a dozen paper cuts, and plenty of afternoons where I can be caught wearing my sunglasses working on my computer.


However, I can honestly say, that since these records are now organized, I feel an enormous sense of accomplishment. Twenty years is a long time; yet, just one flow chart, application, or thoughtful memo can transport me back in time, remembering a discussion about whether or not we should publish a grants list, or a debate over should we monitor project outcomes at six-month and annual intervals.

While this initial entry is just to set the stage for what drama might be played out in the later postings, I found a few items from the beginning years that are both sentimental and informative.



I found the original want-ad in the Milwaukee Journal from 9 May 1994. 
Wanted: "Non-profit Management Fund Advisor
...Candidates should have substantial experience in working with diverse nonprofit organizations and a knowledge of effective strategies to improve organizational and management skills, and board, resources and staff development..."



On an agenda from a Committee meeting in May 1998, more than twelve items were listed for discussion, but two are interesting in hindsight.
¤ Should the Fund apply a for a Public Ally? (a government-sponsored public service initiative)

¤ Should the Fund accept funding from the City's Community Development Block Grant office for conducting diagnostic clinics of City-funded organizations?

(Note: We answered YES to the first question and NO to the latter).



Prior to the Y2K scare, the Fund was engaged in bringing nonprofits into the digital age.
"Based on the results from a series of group discussions and a survey of greater Milwaukee nonprofit organizations, the Fund launched a technology initiative in May 1999. As part of the planning process, the Fund Advisors and Sarah Dean of the Faye McBeath Foundation sought ideas and input from nonprofit administrators, consultants, university representatives, and intermediaries serving nonprofits, among others.
From the Milwaukee Fund, $46,440 in technology grants were made in 1999 for projects ranging from software installation and training to an extensive analysis of technology needs. "

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