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Monthly Archives: July 2010

Fund Organizations, Not Projects

It’s hard to be more succint than that.

Responding to the news that Buffet and the Gates are calling on their billionaire peers to give away half of their wealth, Kathleen Enright, president of Grantmakers for Effective Organizations has some advice in a post entitled: Calling All Billionaires: Fund Organizations, Not Projects. (She just finished guest-blogging at the aforementioned Duke Center for Strategic Philanthropy).

The first word of advice to the billionaire philanthropists of tomorrow: Focus on building strong organizations rather than supporting only discrete programs or projects.

That’s wonderful advice and it should be said (and heard) clearly and loudly.

Her other advice to these philanthropists is to provide targeted support for activities associated with “effectiveness-boosting” ie: leadership and board development, strategic planning, etc. which “nonprofits put off or ignore when faced with restrictions on gifts combined with the urgent challenge of simply staying afloat”.

Yes, both these suggestions mean supporting strong organizations, instead of cherry-picking projects, but this advice still comes across as somewhat contradictory. Funders are first instructed not to direct funds to programs on the grounds that “if a billionaire (or any philanthropist) truly believes in the mission and the leadership of a nonprofit organization, then why not trust that organization to invest your money in ways that its leaders believe will get the best results?” (emphasis added).

And then secondly, funders are encouraged to sometimes direct (ie: restrict) funds to organizational capacity building. I’m a believer in investing in organizational capacity-building – I’m on the board of an organization whose mission is exactly that. I’m not necessarily against her second suggestion, but I would be interested in hearing how she would instruct funders to navigate that apparent conflict, of when to entrust non-profits by giving them funds not directed to projects, and when they should restrict funds to their priorities they identify – even those related to organizational capacity, effectiveness, or health – as opposed to the priorities identified by the non-profit. Why would “targeted capacity-building support” be necessary if funders can trust organizations and if organizations are better experts than funders?

Check out the rest of her posts from her stay as a guest-blogger. I really like the concept of “net grant” from her post Cut the red tape. I’ll be blogging about it later.

The new new

I wanted to share a report recently out from the Center for Strategic Philanthropy and Civil Society at Duke University

Disrupting Philanthropy: Technology and the Future of the Social Sector

This report presents an overview of some of the impacts that the networked digital technology and data are having on the philanthropic sector. It’s very readable and is a good orientation to a few of the high-tech developments.

From the summary:

This monograph explores the immediate and longer-term implications of networked digital technologies for philanthropy. Our claim is that information networks are transforming philanthropy. Enormous databases and powerful new visualization tools can be accessed instantly by anyone, at any time.

[W]e examine how networked technologies are affecting five philanthropic practices:

• Setting goals and formulating strategy: how funders and enterprises make decisions about what to do, where, and how.
• Building social capital: how funders and enterprises support one another, cooperate, and collaborate.
• Measuring progress: how funders and enterprises set benchmarks, measure outputs, and make course corrections along the way.
• Measuring outcomes and impact: how funders and enterprises know whether what they’ve done has made a difference.
• Accounting for the work: how funders and enterprises account for what they do, to the public at large and to regulators.

[W]e feel confident in predicting we’ll see an increase in the following three phenomena:
• New blendings of market-based and nonmarket solutions.
• Networked, boundaryless, and often temporary alliances that call for the creation of new ways of activating, coordinating, and governing cooperative efforts.
• More and better data, more readily available and at lower cost.

Ajah is an prime example of several of the trends mentioned in this report.

New fund available for non-profit infrastructure in Ontario

News just in from Ontario provincial government about a new program. Via the Social Planning Network of Ontario:

Building on Non-Profit Infrastructure Projects

Ontario is launching a new program to support infrastructure projects for non-profit organizations that serve cultural communities.

The new Community Capital Fund will support infrastructure projects that help Ontario’s non-profit organizations deliver important public services to diverse cultural communities. Diverse cultural communities rely heavily on non-profit organizations and their facilities. These include newcomer settlement services, multi-service community centres, performance venues, and cultural activity centres. Unfortunately, limited access to venues and cost barriers often prevent organizations from effectively delivering much needed services.

Non-profit organizations currently receive funding for operating expenditures from various sources including government, philanthropic and private sector donors. However, they have inadequate access to funding for capital projects. (emphasis added)

The $50 million fund will be administered by the Ontario Trillium Foundation. It will be used to invest in projects that support cultural communities and help revitalize community-based infrastructure.

Application forms (including criteria) are only available as of September.
Minimum contribution of $20,000 and a maximum of $500,000 with 50% matching funds required.
Projects must be completed in 2012.

Get ready, get set, go!

Consultation on the new federal non-profit act

Industry Canada released draft regulations for the the new Federal non-profit act.

There is a “Notice from the Director” which gives some context to the problems that the draft regulations are hoping to address.

The CCA has not substantially changed since 1917. It is antiquated and lacks modern corporate governance rules. Its financial disclosure provisions are weak, the duties and responsibilities of directors are ill defined, it does not provide a proper defence against liability, and the ability of members to scrutinize the activities of the corporation is limited. Several issues, including remedies and internal governance, are not addressed directly in the Act, but through administrative policies established by Corporations Canada

In response, An Act respecting not-for-profit corporations and certain other corporations (Bill C-4), which received Royal Assent June 23, 2009, will create the Canada Not-for-profit Corporations Act (NFP Act) to address the issues identified above with respect to the CCA. The new NFP Act contains leading edge provisions and will be modern framework legislation. These proposed regulations are needed in order to bring the NFP Act into force.

The rest of the overview is equally to-the-point. It’s brief and interesting to read. I’m looking forward to finding out about any weak points from voices in the sector.

There is a consultation process on the proposed regulations. Comments are due by October 1, 2010.