By Andy Carroll, Exponent Philanthropy

I regularly explore trends influencing philanthropy by spotlighting articles, reports, and essays in the media. I cast a wide net, venturing beyond philanthropy and traditional topics to consider a variety of ideas, innovations, debates, and critiques. Read previous posts in the series 

Philanthropy’s Attachment to Project Support Comes Under Fire

Philanthropic entrepreneur Paul Shoemaker, founding president and a board member of Social Venture Partners International, joins the growing chorus calling upon funders to offer more general operating support to nonprofits. Shoemaker points out how damaging it would be if the CEO of a private sector firm were barred from shifting resources from different revenue streams according to need and opportunity. Nonprofits need to be able to adjust to changing circumstances, he asserts. And restricted grants compel organizations to distort their accounting and operations, forcing “orgs to cut corners [and] allow higher costs into line items, which can ultimately amount to cracks in the ethical foundation of an NGO.”

According to Forbes writer Tom Watson, as more foundations and donors call upon nonprofits to deliver measurable impact, they may be undermining the prospects for that impact by focusing too much on project grants, failing to build the long-term capacity of these organizations. This is especially true today, he points out, as government support for nonprofits is cut, and as needs for human services increase. “I’d love to see more philanthropists, foundations, and giving companies focus on building organizations for the long term, investing in staff ability and systems, and providing resources for organizational stability. When well-meaning board members tell my clients that organizations should “operate more like businesses,” this is what I think of.”

Women Still Make Less for Equal Work in Nonprofit Sector

Tom Watson also takes stock of the persistent gender gap in compensation and leadership—in the economy as a whole and the social sector. In its annual report on nonprofit compensation,  GuideStar found that women who are nonprofit chief executives made 11% less on average at organizations with budgets of $250,000 and 23% less at organizations with budgets between $25 million and $50 million. Our compensation data among member foundations (login required) echoes this trend, with female foundation CEOs earning less than male counterparts, even with more experience. Research by both GuideStar and BoardSource also reveals a continued disparity in executive leadership, with women often leading smaller nonprofits but lagging as chief executives of larger organizations. For example, according to BoardSource, organizations of medium size (over $1 million) or large (over $10 million) employ female chief executives at a rate of just 37%.

Why Some Teams Are Smarter Than Others

Researchers in the fields of business and psychology are examining this question, and coming up with surprising findings useful to foundation and nonprofit boards seeking greater effectiveness. Up to now, thinking has been that group effectiveness is rooted in team members’ high IQ, high motivation, and participation by extroverts. New studies reveal three determinants of team effectiveness that are different: 1) Equal participation by every team member in discussions; 2) members’ ability to read complex emotional states of their team mates; and 3) having more women on teams (women are generally more skillful at emotion-reading, studies have found). Teams with these characteristics have greater “collective intelligence.” Researchers found another surprise: “Emotion-reading mattered just as much for the online teams whose members could not see one another as for the teams that worked face to face. What makes teams smart must be not just the ability to read facial expressions, but a more general ability, known as ‘Theory of Mind,’ to consider and keep track of what other people feel, know and believe.”

Strengthen your “people powers”

A Small Funder Asks: How Can We Make the Best Use of the Time Left to Us?

What if you realized that all the grantmaking you do now and in the coming years will not solve the problem you set out to solve? And you challenged yourself to consider what it would take to actually solve the problem?

This is exactly what Maryland’s Town Creek Foundation, an Exponent Philanthropy member, set out to do. Though the foundation makes inquiry and questioning a regular practice, two recent events prompted a sense of special urgency and deep reflection: the board’s decision in 2011 to sunset by 2021, and its recognition that the foundation’s goal of making the Chesapeake Bay healthy for the long term would not be achieved with its current grantmaking framework. 

I believe more small-staffed funders are challenging themselves in this way—and even more will do so in the coming years—to consider whether their current grantmaking will achieve their desired outcomes, and push themselves to ask how they might transform their work to bring about the change they desire. The Town Creek Foundation models this bold questioning and re-envisioning. 

A crucial realization for the foundation was that existing political arrangements and power balances allow only incremental changes—changes that will never deliver a healthy Bay. Executive Director Stuart Clarke writes, “The Bay Journal conference raises the possibility that our economic system may be in fatal conflict with our ecosystem. This can be a tough idea to wrap one’s mind around, and once you’ve done so it is even harder figuring out what to do about it.”

In spite of the challenge, the Town Creek board decided on a course of action: to more fully engage its non-grant powers of “communications, convening, and connecting,” in order to work with partners and coalitions “to undermine the power of existing political, economic, and cultural arrangements that disadvantage sustainability.”

This is philanthropy that is big and bold—that makes full use of funders’ independence, deep knowledge, creativity, freedom to question assumptions, look beyond the status quo in society, and take calculated risks to make transformational change. It is leadership.

Senior Program Director Andy Carroll writes resources, designs workshops, and facilitates seminars for funders. Andy also dedicates a significant portion of his time to managing our Leadership Initiative that defines, validates, nurtures, and celebrates the many ways philanthropists lead. Andy has 25 years of experience in nonprofit organizations, and he enjoys talking with funders about their questions, interests, passions, and plans for making a difference. Follow Andy on Twitter @andycarrollexpo.