Oct 5, 2018
Changing the World? Let’s Get Real.
As someone who has spent over two decades in the non-profit sector, I notice two trends lately. The first is that an alarming number of social entrepreneurs and non-profit founders are stepping down. Founders of organizations including Code 2040, Blue Engine, Education Pioneers, Genesys Works, Lift and Thinking Beyond Borders have either left or announced their intention to leave at the end of this year. I have various theories — our work is more challenging than ever before, we feel a sense of crisis and the work we have been doing is not enough as we need to change systems not individual lives or, for some of us, we are just beaten down and exhausted.
For many of us the philanthropic lift becomes too heavy and there is a winners’ curse — the more impact your organization has the more money you have to raise for your clients. Fundraising is a voracious beast that needs to be fed and that beast grows larger and faster the more successful an organization becomes.
This leads me to the second trend. I have been getting an extraordinary amount of emails from Foundations publishing reports on their own effectiveness. Larry Kramer, President of the Hewlett Foundation, just published an excellent piece on the importance of listening to grantees. The Skoll Foundation just sent out a report entitled, “Scaling Solutions Toward Shifting Systems: How Funders Can Do Better.” I applaud these introspective learnings and reports but at the same time I have come to the conclusion that no matter how effective funders become organizations and non-profit leaders cannot, if they wish to be sustainable, rely only on philanthropic dollars. They need to diversify their revenue sources — just like any good business.
For almost 20 years I ran a successful, award winning, and by most accounts, inspirational non-profit. BUILD was able to attract extraordinary minds and leaders to the table and produced results year after year that are demonstrable and virtually level the playing field for young, low-income students who then beat national averages in educational attainment. It’s an innovative model, embedding an entrepreneurship program across multiple districts, multiple teachers’ unions and multiple schools. BUILD raised over $50,000,000 in philanthropy and yet we came close to going under. Twice.
I want to proceed with caution advocating that all non-profits need to have an earned income stream and operate more like for-profit businesses. Although still a huge proponent of Social Entrepreneurship (I have taught this topic as a graduate level course for 15 years), I do see major challenges with pushing this business mindset and solutions on social change movements. Reading WINNERS TAKE ALL: The Elite Charade of Changing the World by Anand Giridharadas has been a powerful wake-up call challenging assumptions about the good work many of us feel we are doing — but that topic deserves a future post.
I still believe being beholden completely to philanthropy is a very dangerous proposition if one wishes to create something sustainable. It often creates a supplicant relationship for the leader of the organization with the funders that does not allow for mutual learning and greater impact. Perhaps if I were the (female) founder and CEO of a for-profit startup that had an extraordinary and unrivaled product, demand that I could not fill, a renowned leadership team and board, and a founder like myself — I could be considered a unicorn! Instead, my life revolved around selling psychic benefit to folks. Doing this work during this administration has been soul sucking. It is a funder’s prerogative to decide their “strategic focus” has changed or decided that because of an administrative change or new law — all of their donations will be redirected to the “crisis du jour”. And it has felt like there is a daily crisis to support over the last two years. One day it’s refugee rights, then climate control, the next week it is Planned Parenthood, and the week after will be yet again the ACLU. All of these causes are extraordinarily important but it’s impossible for a small direct service organization to compete with them. And perhaps that is how other Founders feel who have recently left this work. Leaving is so hard and often anti-climatic. There was no liquidity event. There is no IPO. There is no acquisition. There is only more work and a relentless need for more funding and typically a feeling you could not do enough.
For this reason, we must change and we must be honest about the world in which we live. We must encourage young, social entrepreneurs who enter the field idealistically to start with a business model that is sustainable. It’s time for non-profit leaders and boards to start having more dialogue and learning best practices about earned income streams, diversified “product” lines, partnerships with corporations and government programs where the dollars are not being deployed strategically. Conversations also need to happen about investing in the capacity building of our clients and approaches like “positive deviance” which allows the communities themselves to come up with the solutions they most need.
We must stop teaching in classes about non-profits of the brilliance of foundations and philanthropists, but be honest about their generosity and also their fickleness. We must not continue to believe that this is the work that drives our nation, but instead acknowledge that we are still capitalist in every respect and thus so must be the services that we afford our most vulnerable populations.
I still believe we can change the world. I still feel hopeful about the younger generation and their commitment to making our nation greater. But I’d like to suggest they not start by asking for a donation to the cause.
