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Weekly News Alert: Social Impact, Donor Appeal, Best Practices and Best Models


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Top Trends:

On Social Impact and Investment...

  • A new initiative, Social Impact Exchange, from Growth Philanthropy Network and Duke University has been launched.  Social Impact Exchange is a “focal point for studying, funding and implementing large expansions of proven social purpose organizations.”  It offers an “investment clearinghouse” of the most effective nonprofit organizations.  Sean Stannard-Stockton, of Tactical Philanthropy, comments on the Clearinghouse and how it is similar to the stock exchange; the most relevant aspect of the stock market which also applies to philanthropy, he says, is that the stock market has certain ongoing requirements that organizations must adhere to.
  • In response to Social Impact Exchange, Sean Stannard Stockton revisits an article he wrote for the Financial Times in March 2008 about what he believed philanthropy would look like in 25 years.  In 25 years, philanthropy will be based on this model of Social Impact Exchange in which nonprofits compete for listings in the Exchange because they gain creditability and, once they are listed, grant dollars seek them (rather than the other way around).  Philanthropy will also develop a kind of camaraderie as both funders and organizations are encouraged to work together.

On Appealing to Donors...

  • Recently there has been a lot of talk about giving money to high-performing, effective organizations, leading people to make the assumption that rational giving is effective and emotional giving is ineffective; donors are under the impression that they should give with their heads rather than their hearts.  This is worrisome because we run the risk of reducing charitable giving.  A study in 2007 found that activating logical thoughts (without stimulating emotional thoughts) inspired people to give less than if they had appealed more to their emotions.  A better way to think about the head vs. heart dilemma is to think about it as left-brain vs. right-brain functions; each has their own function and each should be appealed to in philanthropy.
  • Nicholas Kristof, a New York Times reporter has conveyed for years the stories, images, tragedies and progress he has witnessed travelling throughout war-torn regions of Africa.  It is frustrating though that often New Yorkers (and others) are more upset by a socialite's mortgage status than the millions of lives that have been lost in the Congo, for example.  Kristof explores ways that he thinks charities could more effectively promote their causes, raising higher levels of awareness and funds.  He concludes that we need to utilize the “dark arts of marketing” in order to emulate the “psychological persuasion used on Madison Avenue.”
  • The blog, Seeking Grant Money Today, publishes a post about “donor development” and how organizations can build up a donor base.  The key behind donor development is that the donor needs to be treated like an investor.  This means that the donor needs to have incentive to continue giving; organizations can achieve this incentive by providing transparent information about the state of the nonprofit and the effectiveness of its work and offer the donor an active part to play in the nonprofit community.

On Individual vs. Group Performance...

  • Often, focusing on individual achievements comes at a cost to group performance.  Companies and organizations are complex group efforts and require positive group productivity; without this mentality, companies will under perform.  However, there are two aspects inherent to companies that hinder group productivity: the first is that company performance is atomistic (meaning it runs under the assumption that company results are the consequence of individual decisions) and the second is that individual performance is largely motivated by financial rewards based on individual performance.

On Best Practices: Communication and Evaluation

  • Generally, foundations do a good job of publishing reports and showing the degree of impact they have had.  As we enter a new age of transparency and collaboration though, the communication strategies for foundations are changing.  It is no longer acceptable for foundations to stay in the background; to effectively achieve their goals, foundations must speak out directly and collaboratively.
  • Guidestar, Charity Navigator, GreatNonprofits, Philanthropedia and GiveWell issued a press release last week discussing the best way to evaluate charities.  The organizations believe that, in the past, too much emphasis has been placed on programs.  Placing emphasis on programs sends the message that organizations which send money “straight to the beneficiaries” are somehow better than organizations that set money aside for overhead.  However, this is not true.  Charities should be evaluated based on their overall effectiveness, not just where they allocate their money, the press release says.

On Best Models: Collaboration, Innovation and Leadership

  • At the core of Interaction Institute for Social Change’s model outlining their “Profile of a Collaborative Change Agent” is Service, Authenticity and Love.  It is these values which leads to strategies inciting change (including collaboration, receptivity and flexibility).
  • Blogging Innovation shares a model, the “Four Quadrants of Innovation” which distinguishes between disruptive innovations and more incremental or sustaining innovations.  The model describes dynamics for innovations according to their technology and market impacts.
  • Everyone has different leadership styles and BeALeader.Net breaks down the different types of leadership styles and categorizes them by color (gold, blue, green and orange) into a model.  Each color represents a different strategy and, while most people employ a combination of all the strategies, there is still one that will emerge as the stronger, more natural way to lead for each person.

Top Articles:

Social Impact Exchange
Author: Sean Statnnard-Stockton
Date: December 4, 2009
Source: Tactical Advisors
The donor landscape of 2033 is bright
Author: Sean Stannard-Stockton
Date: March 1, 2008
Source: Financial Times

Using Your Head & Your Heart in Philanthropy
Author: Sean Stannard-Stockton
Date: December 9, 2009
Source: Tactical Philanthropy
Nicholas Kristof’s Advice for Saving the World
Author: Nicholas D. Kristof
Date: December 2009

How the Everyday Donor Can Become a Major Ally in Your Nonprofit Surviving This Economy
Author: Arlene Spencer
Date: December 6, 2009
Source: Seeking Grant Money Today

Human Capital x Social Capital = Productivity and Innovation
Author: Meri Gruber
Date: December 10, 2009
Source: Blogging Innovation
To Love Is To See
Author: Curtis Ogden
Date: December 10, 2009
Source: Interaction Institute for Change

Communicating for Impact Means You Can’t Stay in the Background
Author: Bruce Trachtenberg
Date: December 7, 2009
Source: The Communications Network blog

The Worst (and Best) Way to Pick a Charity This Year
Author: Tim Ogden
Date: December 1, 2009

Four Quadrants of Innovation
Author: Hutch Carpenter
Date: December 6, 2009

Leadership and Colors
Author: Ken Valenzuela
Date: December 10, 2009