Written by SVP Partner Carol Ryan for the SVP Newsletter

"Don't ask yourself what the world needs. Ask yourself what makes you come alive, and then go and do that. Because what the world needs is people who have come alive."  - Harold Whitman

I love this quote. I can’t say I live it, but I believe it with all my heart. I was surprised when, upon the invitation to write about the emotional rewards of volunteering, no one moment stood out in my mind. It made me ask myself, why do I volunteer?

The volunteer aspect was a big reason I joined SVP 10 years ago. I was a journalist then, so a natural fit for me was to write articles for the newsletter. I remember interviewing SVP partner Molly Hanlon about why she volunteers. I still think about her response: “It’s how I was raised. It’s just something you do. Sleep, eat, work, go to the gym, volunteer.”

Come to think of it, volunteering is a lot like working out: You may not always enjoy doing it, but you feel so much better when you are done.

Over the years, I have honed other professional skills through SVP volunteer projects. When I began exploring how to redirect my career from the corporate to the nonprofit sector, I turned to other SVP partners for advice. It was humbling to realize how much work it would take to prepare for the transition.

In 2007, a volunteer opportunity arose with SVP investee, MetroCenter YMCA and their Alive and Free youth violence prevention program. They needed someone to develop a marketing plan, and I needed experience developing marketing and communications for a non-profit.

It was a tough assignment to take on—with a baby, a pre-schooler, a four-day-a-week corporate job, and other volunteer commitments. But the experience was invaluable. It was a breakthough in how I could marry my professional skills with a cause that helps save lives by helping kids eliminate risk factors associated with violence, like guns, drugs and alcohol. 

I learned to develop marketing materials with little to no budget, and watched with amazement as the Alive and Free program leaders filled a community center room with representatives of law enforcement, social service, and schools for a training on how to keep at-risk teens Alive and Free.

Beyond the rewards of the position, my work with MetroCenter also opened doors.  It strengthened my resume for the nonprofit sector, and in the fall of 2008 I was hired by Explorations in Math, where I now serve as the director of development and communications. 

The leap from the corporate to the nonprofit sector has brought many changes to my life, but volunteering remains a constant.  I can’t help it.  It’s in my blood.  My dad was a mentor to an ex-convict who came to our house for Sunday dinner. My mom served as Sunday school principal, Thanksgiving food basket organizer, Christmas Adopt-a-Family coordinator—and on and on. One of her prized possessions is a small plaque she received for 25 years of service to the St. Vincent DePaul Society.

Like Molly, I come from a volunteer family.  Sometimes it’s a chore.  Sometimes I do it because I know it’s good for me.  Sometimes it opens doors. 

Above all volunteering keeps me grounded even when all other aspects of my life are whipping about madly like kites torn loose in the wind.

No matter what else is going on, volunteering resets my position in relation to true north, a point on the compass that represents what is real in life.  It is me doing my part to make this way-too-crazy world a bit saner. So while I aspire to do what makes me come alive, I also get through this week, this day—the next hour. Sure it will be busy. I bet I will say more than once, “What was I thinking, taking this on?” Then I will reset and focus on what is in front of me, what matters, and what I need to do right now.

Why Do You Volunteer?

What inspires you to volunteer?  A family tradition?  A way to connect with your community?  We’d love to hear you thoughts!

Most Partners are Giving More Since Joining SVP

SVP’s 2009 Partner survey indicates that 69% of Partners have increased their giving since joining SVP, and 21% have more than doubled their annual giving.  Despite difficult economic times, the percentage of Partners reporting an increase in their giving in 2009 is on par with the results from our 2008 survey. 

Among the Partners whose giving increased, more than 80% report that SVP had a least some impact on this change.  Out of all the different activities available to Partners, serving on a grant committee made the greatest impact.

Some Partners are “giving more to fewer organizations” and setting clearer expectations for those groups.  One Partner spoke of their improved ability to “evaluate and prioritize potential organizations that I might invest in myself.”  And another expressed that “SVP gave me a framework to think about how [to give]....and that made me feel both more ‘confident’ about what I was doing, and ‘better’ about what I was doing.”

As one Partner commented, the difference comes from “being part of a community that values and talks about giving on many levels.”  These rich conversations are taking place all over SVP - during the grant committee process, and beyond.

Want to Join a Grant Committee?

Our upcoming Grant Committees focus on early childhood development (beginning September 2009) and the environment (beginning January 2010). If you are a Partner who is interested in participating, please contact Mike Quinn at mikeq@svpseattle.org.

About the Partner Survey

The Partner outcomes survey is conducted every two years to help measure SVP’s impact on our Partners’ philanthropic development.  This year the survey was completed by 141 of our current Partners. Thank you to everyone who participated! 

Stay tuned for additional highlights from the survey regarding Partners’ community involvement.  At that time we will also provide a link to the full report.

What are Your Thoughts?

What's your experience?  Is it in line with these data?   

Do you have a personal story about how the economy or SVP (or both) have affected your giving?

For those receiving individual donations for your organization, what trends have you noticed and how do they compare to these data?

Written by Lynn Coriano

 As a liberal arts major and then a graduate student in nonprofit management, I was never particularly drawn to topics in finance and capital.  Imagine my surprise when, after attending the Money Matters conference in New York, I came back eager to talk with Paul about all things finance and the implications for SVP’s work.

The topic on my mind:  Is SVP Seattle buying or building the organizations we fund and support?

National thought leaders from both the financial and philanthropic sectors attended Money Matters, which was hosted by GEO and the Nonprofit Finance Fund. This was late October, so news of significantly decreased endowments and reserves were known, and folks came eager to engage in important discussions about financing the nonprofit sector.  Among those present were Clara Miller, Executive Director of the Nonprofit Finance Fund (NFF) and George Overholser, Founder and Managing Director of NFF Capital Partners. 

One of the concepts introduced early on was the idea of whether funders are “buyers” of services and programs, or “builders” of a nonprofit enterprise.  It is a compelling theory and one I keep coming back to as I think about SVP’s funding model. 

Overholser introduces these concepts in his working paper titled, "Nonprofit Growth Capital: Defining, Measuring, and Managing Growth Capital in Nonprofit Enterprises. Part 1:  Building is not Buying."  He defines the terms as follows:

Buyers

• Provide reliable revenue to pay for what an organization is already doing.
• Do not intend to help the organization expand or experiment with impact or innovation.
• Are the life-blood of reliable, high quality services.

Builders

• Provide capital to help an organization change
• Intend to help the organization expand, use different technology, respond to changing market conditions, merge, downsize, etc
• Builders’ capital is essential to attract reliable, consistent buyers (and more of them).

Clara Miller drew upon this in her opening remarks at the conference: “Buyers are not builders.  Providing the funds to support programs year in and year out is different from building the enterprise that delivers them.  Many investors think they are ‘builders’ contributing to the establishment of a stable organization.  In reality, however, they are buyers whose money goes to purchasing more services for more users.”

With SVP’s multi-year general operating support, strategic volunteers and outside consultants, I wondered is SVP a buyer or a builder?

“In the philanthropic world everyone wants to be a builder – it just sounds more important. The majority of grants are too small to get the favorite organization all the way up the growth curve.”  

- Clara Miller

Looking through a strictly financial lens, I was fairly convinced SVP was more buyer than builder – especially with Investees where SVP’s contribution represented a very small percentage of a budget.  However, in some cases it did seem like SVP was a builder, with organizations whose budgets were in the $300,000 - $500,000 range, it was hard to argue that an investment of $225,000 over five years didn’t have a significant impact on the organization.

But what about SVP’s non-financial resources? Does strategic volunteering play a role in determining whether a funder is a buyer or a builder? 

I think it does.  There have been many cases over SVP’s history where volunteers were able to engage in projects with an investee that were clearly transformative and contributed to efficiencies in a lasting manner regardless of the size of the organization or its budget.  Database development and training, human resource planning, new fund development strategies, and leadership development work can all have lasting impacts. 

This combination of volunteers and capacity building support, plus the multi-year general operating support that SVP provides, definitely influences how we define ourselves in terms of Builders vs. Buyers.  What cannot be overlooked as well is the significant influence the investee brings to the table: 

• Leadership & Degree of Engagement (strong, transparent leadership that’s willing to engage on a variety of levels)
• Stage of Organizational Development (Is the organization as a whole ready and committed to doing the work and really focus on capacity building?)
• Type of volunteer engagement  (Is the organization identifying projects that have the potential to transform the organization, its people and/or the way it does its work?)

To be a true builder and a smart buyer, a funder must work in partnership with the organization it is supporting.  Thus our role is in part defined by the nature of this relationship. 

We introduce these concepts, not to force SVP into one camp or another.   It’s a way for us to think about SVP’s partnerships with nonprofits through a different lens – and consider the implications for our model as we pursue new opportunities and collaborations to support the nonprofit sector in a very different economic time. 

What Do You Think?

In terms of buyers vs. builders, how do you define SVP?  How important is this differentiation to you?

What are some ways in which we could improve our approach to augment our role as a builder or a buyer? 
  

Please provide your comments below.  We’d love to hear your thoughts!

Learn More

To learn more about these concepts and to hear Clara Miller’s opening speech from the conference, check out these resources:

• Clara Miller’s Opening Speech (YouTube video)
  Money Matters Conference October 2008

• Stanford Social Innovation Review, Summer 2008
  The Equity Capital Gap by Clara Miller
• Nonprofit Growth Capital - Defining, Measuring and Managing Growth Capital in Nonprofit Enterprises
  Part One:  Building is not Buying by George M. Overholser
  
  
  

Every one of us has been to a meeting, a gathering in the last six months where that phrase was somewhere in the title. And well it should be. As the saying goes, deal with reality as it is, not as you wish it were. One measure of that reality is the sense that, in past economic downturns, some of us might say we knew someone that knows someone adversely affected. This time, I think every one directly knows someone that’s been significantly impacted. I know I do. And yet …

… And yet, for the past few weeks, I’ve had this rumbling in my gut. We cannot walk away from the day-to-day reality and challenges so many people in our communities face. Indeed, it’s why we do what we do. But we also have to find ways to alter the lens through which we view our world. In times like this, some people find the determination and imagination to look forward and upward. Since SVP has been through the dot-bomb and other ups & downs the last 11 years, we’ve learned that good organizations not only make it through tough times, but come out the other end ready to accelerate at a faster speed and more effectively than organizations that hunkered down. I’ve been trying to piece these separate thoughts together until …

… until I recently spent a day at a conference where the keynote speaker was Jim Collins.  Collins is a 200-mph burst of energy and optimism, grounded in real life, not theory. He was there to talk about his great little book – Good to Great and the Social Sector © (get a copy if you haven’t already or we’ve got a few copies around the office). I didn’t really hear what he was saying about the book; instead he was firing questions and concepts that helped resolve the uneasiness in my gut and clarify that lens through which SVP can view the world today. How so?

“In these times, there are massive opportunities” – easier said than done, right? But true. I twittered last week about a meeting SVP was in with 20 funders and 10 more on the phone. It was an intense discussion about how we can help build the capacity of the sector and non-profit organizations, right now and in the longer-term. Wow! We have come a long ways; 10 years ago a capacity-building conversation would have included birds heard chirping during frequent silences. Today, the PNW funding community is committed to building stronger non-profit organizations (not just programs). Out of this is going to come significant new institutions and support for effective nonprofits. SVP will help play a meaningful role. Stay tuned.

“It’s the Who, not the What” – amen to that. The April newsletter sent out Tuesday proves the point beyond the shadow of a doubt – Susan Loosmore and Tanya Kim, Neal Myrick and Sari Pascoe, Kevin Phaup and Kim McKoy, Rogers Weed, Yoram Bernet and Maya Kanzler. And Jeffrey & Paige Wilder. Read what they’ve done and you will know that we will make it through the tough times better and stronger than ever. Like most challenges, the solution is right there, in our own hands, our heads, and our hearts. One of Collins’ core ideas is Level 5 Leadership.  So many of our Partners and the people we work with are on their way to “Level 5 Social Sector Leadership,” * especially that vital element of humility. Who will be the next SVP Level 5 Philanthropic Leaders?!

“What Must You do and what Can You do?” What SVP must do is execute with better precision than ever, be more financially conscious than ever before, and pay even closer attention to our investees and fellow Partners and strengthening the community we’ve built amongst us. What we can do is find rays of optimism amidst the clouds of challenges, be a leader by raising our sights to take on new initiatives when it seems hardest to do, and move ahead with a sense of not just what is tough today, but what is possible tomorrow. Come to the Spring Partners’ meeting on June 2 and we’ll raise our sights together and see what is possible. 

Not one single word here is meant to diminish or ignore the hardships that so many people in our community feel. The tough times are real and for some people, they are life changing. Collins left us that morning with a story …

… a story a few of you may know … Vice Admiral James Stockdale was one of the most decorated officers in the history of the United States Navy and was the highest ranking officer to serve as a POW in Vietnam. He was held for seven years, locked in leg irons in a bath stall, routinely tortured and beaten. His story goes on and it is unfathomable. He survived and made it out in 1972 because he was, he said, a realist, not an optimist. Other POW’s were convinced they’d be home by the next holiday and eventually succumbed to their dashed hopes. Stockdale dealt with the brutal facts, not blind faith. But the most profound thing he did, in his own words, was to decide that “this would be the turning point in my life.” …. One has to absorb that statement for a moment before you can even believe it.

None of us have to even remotely deal with what Vice Adm. Stockdale did, but we can and we must take that kind of inspiration and make these tough times a turning point in our lives and for SVP. A turning point where we move into new terrain to help strengthen the state’s early learning networks, where we build a stronger and more vibrant SVP community, where we invent new opportunities to more effectively and creatively help our investees and the non-profit sector not just survive, but succeed. Those are all tangible, real plans that will come to fruition in 2009, because of who we are, not just what we do.

I went back and re-read our 5-year vision and plans last night for inspiration. What do you think we can and must do at SVP? What do you think can make us great? We want to hear from you. 2009 is the massive opportunity in tough times to be a new turning point for SVP.

Written on Friday, October 24

I’m sitting at 6:37am watching the markets take another roller coast dive, Dow down 338 points in 7 minutes. I’ve had a number of thoughts rolling through my head for several days now (as I’m sure all of you have too).

It goes without saying that we are living through a period of time, who knows how long it will last, that is different than anything any of us have ever experienced. It seems destined to make the ’01 dot-bust look like a blip / dip comparatively. You all know that the social needs in our neighborhood, cities, region, nation, world are going to grow and the public funds are gonna concurrently tighten (they have to). Philanthropy can’t begin to replace but a fraction of those dollars and this is going to affect all of us.

When people ask me in the last few weeks how all his will affect SVP, I say I don’t know yet, it’s been so quick. I do know that in ’01 individuals were more persistent and stretched their giving longer and further than institutions did or could, though none of our wallets are bottomless.

But even more important than our financial capital, and I mean this 100%, is our spirit and our human capital. None of us can avoid feeling the stress and pain we are going through, but we can choose to not let it overwhelm and redefine us as human beings and citizens and philanthropists. I’ll share two thoughts I’ve received in the last few days –

“There’s plenty of reason for hope. Following a decade of record-breaking, boundary-spanning philanthropic efforts, bigger dollars and more people are engaged in philanthropy than ever before. By showing bold, effective leadership at a time of such global uncertainty, we could tap latent interest and entice others to join us in this collaborative effort to improve lives.” – Kathleen Enright, www.geofunders.org

“I will not be sending stock. (My gawd, it’s sooo LOW that would be crazy), but I will send a check tomorrow. And just so you know, I thought about backing off, but in these times, figured it was even MORE important to continue giving – at least to those orgs that are efficient & effective.” – SVP Partner, 10/22/08

What we can do is be role models, we can persist, we can be the kind of people that don’t lose hope and remember that history shows there is ALWAYS a new AND better day on the horizon, no matter how far off it may appear. America, SVP, each of you, and countless philanthropic and non-profit organizations WILL persevere and we will make a huge difference in the lives and institutions that we all care about deeply. Our wallets are not bottomless, but our courage, our optimism, and our fortitude can be.

At SVP, we have spent nearly 11 years building a model and body of work that has leverage, effectiveness, passion – we need to amplify and accelerate our efforts, not back off. We need to look upward and outward and work harder, not hunker down.

It’s 51 minutes later now and the Dow is down another 131 points … I was looking for one specific quote from Martin Luther King to close with – “The ultimate measure of a human is not where he stands in moments of comfort and convenience, but where she stands at times of challenge and controversy.” And as I was searching for that one, I found many others that might speak to each of us personally and intimately so I’ll share a few of those too, just in case one of them speaks directly to one of you.

I suspect times will get tougher before they get better, but we have each other and we always have our hearts and minds and souls and strength to continue to make a positive difference in our world, especially when it is needed most. Carry on!

Almost always, the creative dedicated minority has made the world better.

Change does not roll in on the wheels of inevitability, but comes through continuous struggle … A human can’t ride you unless your back is bent. Darkness cannot drive out darkness; only light can do that.

Every person must decide whether he will walk in the light of creative altruism or in the darkness of destructive selfishness.

Faith is taking the first step even when you don’t see the whole staircase.

Life’s most persistent and urgent question is, ‘What are you doing for others?’

We must accept finite disappointment, but never lose infinite hope.

We may have all come on different ships, but we’re in the same boat now.

Whatever your life’s work is, do it well. A human should do her job so well that the living, the dead, and the unborn could do it no better.

Statement #10 - I have a great idea for a new program - I’ll start my own nonprofit.

It’s the last time we’ll say it – just don’t!  Or certainly make it your last option. There has been a proliferation of non-profits over the last 10-20 years, some of them quite valid and needed.  This also means there are more and more small organizations struggling to get enough resources to reach some level of sustainability and organizational capacity.

In short, it is much easier to start a non-profit than a for-profit company, but it is much harder to effectively sustain a non-profit over the long-term. When you have a new idea, please be sure to look around to see if anyone is already doing the work you care about; or if there is someone to partner with or someone that might want to take on a new “line of business.”

Paul S.

Lesson #9 - “I want to be sure our family foundation is around for a long time to come so I need to be sure to spend only as much as I have to every year”

There is nothing wrong with that approach, but you might want to consider what more and more philanthropists and foundations are doing now ( i.e. giving away their full corpus within a stated time frame.) Bill and Melinda Gates said 50-100 years, Warren Buffet said 10 years! Whatever the amount, the decision is driven, in part, by the good ol’ time value of money--a dollar spent today often has more value than the same dollar spent in the future.  If that economic concept applies anywhere, it should really apply to the application of philanthropic funding to social needs and problems.

Some causes and non-profits  might deliver more positive good in the world if they had the same amount of money sooner vs. spreading it over a longer period of time.  Again, this certainly is not a “mandatory,” but it is worth your strong consideration if you are creating a family foundation or some kind of permanent corpus.

Paul S.

Lesson #8 - “I have a great idea for a new program that XXX could try for kids. I just want to run it by them”

Whoa! Slow Down! Or more accurately, be very cognizant of what you know and what you don’t know.  

Be sure your suggestions are within your expertise, relevant experiences and interactions with nonprofits.  Given the range of pressures a non-profit faces from a myriad of funding sources, they have “big ears” and sometimes listen to and even act upon a lot of suggestions and “ideas.” Just be mindful of that.

Paul S.

Lesson 7: “Non-profits move so slowly; it takes forever to make decisions”

Yes, there are some non-profits that are inefficient, just like some for-profits. But more often than not, the pace and decision-making style of a non-profit is more consensus-driven because of its constituencies, communities, and clients.

Their missions and decision makers are, on average, more diffuse and varied and the goals more numerous. It is just a different context in which works gets done and goals achieved.  It dictates a different kind of strategy and tactics. This does not mean that any organization, non-profit or for-profit, should accept mediocrity, unnecessary bureaucracy, or ineffectiveness. It does mean that, as a donor, you need to know you are working with a different “industry” with a different set of norms and rules.

Paul S.

Lesson #6: “I joined that Board because I was invited by a friend and it looks good on my resume”

Just don’t :-)

If you look across the non-profit/philanthropic sector, probably the #1 challenge is Boards that do not understand their roles and do not carry out their goals. Given that, we must have committed, focused, high quality people join Boards.  Not people who do it to pad their resume or because they are only doing a friend a favor. If your time and energy is limited, join one Board and do it great rather than joining two or three Boards marginally.   Or, if you want to be helpful to a non-profit, but not sure you are ready to step up to a leadership role, find another entry point-- like a lower-intensity volunteer role.

We feel so strongly about this that we are co-developing a new curriculum series later this spring at the Evans School at UW on “Advanced Board Leadership” (details to follow). Boards own the organization. They are its stewards and governors. Don’t take on that vital role unless you are committed to acting on and believing it. 

Paul S.

Lesson #5 -- “I think philanthropists that are public and visible are just showing off with their money”

There are cases where that is true and certainly it’s a personal decision about how public or private to be about one’s philanthropy. More often than not, someone being more public or visible about their philanthropy is done for a reason, i.e. to show leadership and commitment to a particular cause. And to do so as a means to an end, to help raise more philanthropic capital. This is true especially for newer organizations and causes.

Like most things in this world in we each invest, we want to know who we are investing in (not just what). And knowing who the other “investors” are is an important signal that may guide our own decisions. Visible philanthropy might occasionally be motivated by arrogance, but more often it’s a signal of public leadership and commitment.

Paul S.

P.S. A lot of those people that are the most visible in their philanthropy in one realm are also very private or anonymous in other areas of their giving. 

Lesson #4: "The non-profit needs to be run more like a business and set specific goals …"

Like a lot of things in life, it depends on what you mean by the words "run like a business." Sometimes the expression is used inappropriately and ignorant of the unique issues a non-profit faces. Three simple examples: 1) in most situations in the non-profit world, the "end customer" does not buy the product or service, 2) the usual economies of scale are often not present for non-profit direct service organizations, and 3) there is no clear "market signal" like earnings per share to guide and optimize where capital flows; in fact sometimes money can run away from successful non-profits because they don’t "need" it as much. Non-profits don’t need to be "run like a business" when it comes to mission, effectiveness and resource allocation, etc.

But when it comes to efficiency, operational processes, measurement, etc., non-profit organizations can learn important lessons from private sector business (and some certainly have). No matter how fuzzy or grey the social outcomes are, measurement is important.  How else do you know if you are realizing your mission? Areas like how to...do strategic planning, build financial / cash planning scenarios and tools, hire and retain quality staff…are all examples of domains where running a non-profit more like a business does make sense. In the end, the only reason to do so is to help the non-profit increase its capacity to be effective at achieving its mission.

P.S. By the way, private sector businesses could learn a lot from non-profits as well, but that’s another future topic altogether.

Paul S.

Lesson #3 - “I need to be careful to not let the non-profit get too dependent on my contributions”

Lesson #2 – “It is clear this non-profit needs my support more than the other.  This non-profit might not survive without my contribution and that other non-profit has plenty of money.”

There are certainly times where urgent financial need is the right criteria for making a grant decision. But just as often it is not. When presented with this scenario, consider some questions – why are they in such dire need? Why are they so low on cash? Should I fund organizations based on financial urgency or on positive impact? Sometimes a non-profit might be in that circumstance because of poor cash planning, questionable program effectiveness, or ineffective fund development. The point is not to categorically reject or approve giving to an organization in need, but to take a little time to understand why that is the case.

On the flip side, philanthropists will sometimes shy away from funding successful non-profits with a strong financial position because they don’t “need” it as much. But why would we punish successful organizations?  Isn’t that what we want?  Organizations doing great work, with effective programs, and that have the ability to sustain and maintain funding over time.

Lastly, there can be a tendency for philanthropists to fund need instead of impact because one organization’s mission is more compelling than another’s. We all want to give to what we care deeply about and there is nothing wrong with that. While difficult to measure, at the end of the day the reason to contribute to a non-profit is to get improved academic outcomes, fewer teen pregnancies, a cleaner environment, and other positive changes in our world.

Paul S.

I’m going to start a series – “Ten Things We’d Like to Tell Every New Philanthropist.” Each of the 10 things will be posted individually every few days and each will open with a title that paraphrases a common misperception or mistake. We plan to follow-up this series with another equally provocative topic – “Ten Things We’d Like to Tell Every Non-Profit”

Important Note – This is written in the spirit of sharing knowledge and helping philanthropists be more effective. Every mistake articulated here has been made by all of us. The intent is not to preach a one-size-fits-all formula or to be arrogant in our viewpoints. Our sincere hope is that it will encourage reflection and stimulate lots of feedback, criticism, and conversation.

Lesson #1 – “I want all of my contribution to go directly to the program and the kids being served and not have any wasted on overhead or administration” (comment frequently overheard from philanthropists)

This desire is well intentioned, but the consequences can oftentimes be detrimental.  How so? First of all, what is “overhead and administration?” For example, are staff overhead? Non-profit organizations are businesses just like any for-profit entity, but with a social mission. They have to invest not only in the “product,” but also in the systems, infrastructure and operations to support the end product. Let’s use an analogy here from the private sector: What if an investor in Intel was able to buy shares, but then instruct Intel Co. that they could only spend that money on engineers and chips? Who knows better how to ultimately, collectively invest its capital – an investor or the employees of that organization? Can you have a successful company without a sales, marketing, and finance infrastructure to support the product? A non-profit has to build a successful, holistic enterprise just like any other business.

This kind of “micro-targeting” of some philanthropic dollars can have other consequences: it can lead to under-funded organizational structure with a  demoralized staff and reduced internal capacity. It can force the non-profit to play a “shell game” with donors where it rearranges its numbers to create the appearance of 100% program spending, and it can lead to a non-profit executive having to make suboptimal spending tradeoffs. This is not to suggest that a donor shouldn’t  care about where their money goes and what the ultimate social benefit is. But the practice of over-controlling and directing a donation to a non-profit is like asking a non-profit to put together a 100-piece puzzle, but having duplicates of some pieces and none of others.  The puzzle will never be put together right.

Paul S