We wanted to understand their concerns and aspirations to learn what role UNCF and other organizations could play in helping African-American communities demand better education for their children. You can read the complete findings in the public report we produced with UNCF, which was also written up in the March 2013 issue of Essence. There were three key themes that emerged from our research:

1. When we talk about educational disparities that exist across ethnic groups, we often start by saying that many low-income African-American communities need to raise their educational aspirations and aim for a college degree rather than just a high school diploma. But our research challenges that notion, showing that 87% of African-American parents and caregivers surveyed already want their children to graduate from college.
2. The way many African-American parents and caregivers select schools may be working against the college aspirations they have for their children. An overwhelming majority of parents surveyed (87%) select schools based on “safe, secure, violence-free environment,” prioritizing this need over other measures of school quality more strongly correlated with college readiness. In addition, data on school quality in the districts where we recruited survey participants indicate that students are largely underserved by their local schools. Yet a strong majority of parents and caregivers (80%) rated their children’s school as “excellent” or “pretty good,” even though 41% of those surveyed believe that schools in their local communities are not doing a “good” or “excellent” job of college preparation. This expectation gap can be setting African-American children up for failure.
3. When we asked parents about what comes to mind when they hear the term “education reform,” most parents surveyed didn’t respond positively and there was no consensus on the meaning of the term. Many felt that there is a lot of discussion regarding the changes needed but that in reality, very little changes for their children. However, 62% of parent respondents  believed that public school reform efforts would be improved if there were more African-American leaders driving change. Specifically, parents view members of the faith community and other parents as the most trustworthy sources to drive systems change and communicate information related to supporting their children’s educational journey.

Building high-quality schools and providing parents with choice is not enough. Parents have high aspirations for their children and recognize the importance of attending college to achieve their dreams. But they struggle to translate these ambitions into specific steps that will prepare their children for success. With these survey findings in mind, Monitor Institute sees a number of ways that we and other actors in education reform should take a different approach when engaging African-American parents:

•  We should empower parents with an easy to understand “checklist” of the steps they should take to prepare their children for success.
• We should forge a greater sense of partnership between parents and schools to ensure that all children can successfully navigate the college-going process.
• We should recognize that messengers matter. Parents distrust systems that have a track record of failing to serve them well. We need to leverage trustworthy messengers, such as faith leaders and experienced parents, who understand the day-to-day realities of African-American parents and are positioned to help them navigate the educational system and college going process.

It is the team’s hope here at Monitor Institute that the results of this study will improve the field’s understanding of how to engage low-income African-American parents, and may eventually shift education actors’ perspectives on what’s needed. There is a great role that African-American leaders, organizations and community members can play in driving improved education options and outcomes for African-American children across the country, and there is real potential for the education reform community to embrace indigenous leadership to close the opportunity gap in our nation.

6. The supporting analysis is qualitative and targeted

While data-driven decision making is equally important in any strategic planning process, the kind of data that is most relevant in informing these decisions can vary dramatically in business versus nonprofit settings. For example, in a corporate process, a decision about whether and how to enter a new market may be informed by thousands of customer surveys and analysis of hundreds of competitive products and pricing schemes. Those can then be synthesized into a handful of market entry scenarios, each with clearly differentiated risk and profitability profiles. At the other end of the spectrum, the same type of decision at a nonprofit might be informed by a neighborhood-level demographic analysis of the organization’s target population and a handful of interviews with funders to determine whether they would support expansion into the new geography. Nonprofit leaders place the same value on rigor, but the program-focused nature of funding leaves fewer resources available for doing analysis, and they are also usually working on solutions where effectiveness is far harder to verify.

At a deeper level, the barriers that nonprofits face are rarely solved by more and better analysis. Nonprofits deal with “human systems”—the interpersonal, political, and stakeholder management issues that require high quality conversations and networking skills to align and ensure effective operations. The right answer may only get you so far before you have to start working on building agreement.

7. The time horizon is long

Finally, for-profits and nonprofits operate on radically different timelines and planning horizons. In many instances, the corporate strategy exercise occurs once every five years, with annual budgets. All of the time pressures on for-profits push planning timelines to become shorter, not longer. Public companies have to answer the question of “how am I doin’?” every quarter.  Some public for-profit companies may end up managing the expectations game as much as they are measuring their absolute performance, as its market value may be primarily a function of projections about future performance.

Nonprofits may also develop a five-year strategy, but the time to impact is much longer – “wicked problems” are slow to change. Nonprofits are required to spend lots more time developing their goals and intended impacts, but may/generally find it is easier to measure outputs than outcomes. Most nonprofits require decades of work to achieve significant impact, with very few measurements available that can completely validate that they’re on the right path. Early childhood interventions provide a good example of why the endpoint makes the difference.  Numerous studies of Head Start and similar programs have found that their impact on academic performance fades quickly, and have therefore questioned their effectiveness. But when the HighScope Perry Preschool Study tracked program participants into adulthood, it found that those who received early childhood interventions had significantly better long-term life outcomes.

These different timing horizons also affect organizational reactions to negative feedback. Falling stock prices push for-profit companies to “streamline” and “focus” with the expectation that if a company sticks to its strengths, things will get better. The providers of capital – shareholders – have very limited influence on the strategic choices made by public for-profit companies. On the other hand, nonprofits are pushed by funders and stakeholders to “think big,” “expand impact with new projects” and “do more.” Funders will often donate their money with strings attached to a new project or initiative that may not always align with the nonprofit’s current operations or long-term goals.  Finding the resources to sustain the work without becoming the sum of your funders’ wishes is one of the central challenges of leading a non-profit organization.

To sum up:

Creating great strategy for an organization to make headway on a social challenge is quite simply a different game from the strategic planning process that many are used to in the for-profit world. The drastic differences in goals, processes, metrics, audiences, and timelines we have outlined create a distinct set of needs for non-profit strategic planning to satisfy. While there is certainly room for nonprofits and foundations to improve performance by taking lessons from the for-profit world, strategy is one arena where being “business-like” is not always an asset.

As we’ve been discussing, strategy at a for-impact enterprise can be very different than at a for-profit. Last time, we discussed how growth is not always the goal and the organization’s purpose is rarely settled. Today let’s discuss three other areas of difference: process, audience, and decision rights.

3. Bottom-up engagement can be essential

In our experience, corporate strategic planning processes often start from the C-suite down, with the senior management team working closely with external consultants and/or internal strategic planning groups to collect data and set company-level direction that is then communicated to the rest of the organization for implementation.

In contrast, nonprofit organizations often begin strategic planning processes by engaging staff members and other stakeholders to understand their perspectives on the opportunities they see on the ground and key issues facing the organization. This not only provides important information to ground the process, but begins to engage stakeholders in the strategy process from the beginning, which in mission-driven organizations is critical to effective implementation once the strategic direction is determined.

4. The audience is both internal and external

Corporate strategic plans are primarily internal documents, intended to ensure alignment and accountability within the relevant organizational units. Sharing strategy externally is bad business for most for-profits, as it telegraphs its intentions to competitors. When strategies are shared externally, it is typically as a brief, bland summary in the annual report

In the nonprofit sector, strategic plans are not only used to ensure alignment and accountability internally, but also serve as important communication documents with funders and other external stakeholders. In addition to the expectation of high levels of transparency around strategic plans – which many organizations post in full on their websites – these plans can be an effective tool to attract support for the organization and investment in its growth. For example, when we finished working with Audubon Society on its new strategy, the result was a glossy publication that was not only published online but was mailed to the organization’s entire membership.

5. Planning happens in one place

In many corporations, once senior management has set the strategic direction, each business unit goes through its own planning process that identifies strategic initiatives, cost and revenue targets and the underlying business case for each initiative. Then, in many corporations, these plans are reviewed and funded (or not) by senior management, with the resulting strategic decision-making driven primarily by the leadership of each business unit. This is rarely replicated at nonprofits and foundations, where (a) the typical organization is much smaller and (b) the organization impact is often a combination of direct-service programs and efforts to change a broader system. It may be critical to gather input from a wide range of internal and external stakeholders, but the ultimate decision rights typically sit with a small group.

Next, we’ll wrap up by discussing how creating strategy for the problem requires different data and a longer time horizon. 

As we mentioned last time, we’ve noticed seven distinct ways that creating strategy for a social problem can be quite different from creating strategy for profit. We’ll start today by digging into the first two: how the goal and the starting-points can be the opposite of what you might expect.

1. Growth is not always the goal

Corporate strategic planning processes focus on analyzing how the organization can increase its growth and profitability in new and existing markets. Nonprofits should understand the systems in which they operate, the key levers for creating desired change, and how to effectively marshal the resources of others – government, other organizations, public opinion, etc. – to further their impact.

For-profit entities have their own specific agenda. They are trying to ensure their own continued success, and to maximize some measure of financial performance such as earnings, market share, or share price. But a nonprofit’s goal is broader than its own longevity, and its financial performance (in terms of dollars raised) is a means not an end. A non-profit organization’s goal is to achieve impact at the scale of the problem it is working to solve, which today more than ever does not necessarily mean growing the organization. A classic case is 350.org, which organized one of the most widespread days of political action in history in October 2009, with over 5,000 organizers in 181 countries making public demands for cleaning up carbon in the atmosphere. It considered disbanding after the event, freeing up its staff and volunteers for other work in the movement to fight climate change. It remained together only because it saw greater potential in organizing additional grassroots direct action.

2. The organization’s purpose is rarely settled

At a for-profit company, the overarching goal is to deliver increasing financial returns. The main focus is on where to play and how to win, so conversations center on the topics of customers, products, and positioning. Even when for-profit companies measure themselves against a triple bottom line, they don’t generally act in ways that aren’t good for their bottom line. Consider the many companies that are making public investments in triple bottom line initiatives.  While these have important social impact, they are primarily driven by the profit imperative.

By contrast, at a nonprofit or foundation, the basic set of assumptions are often an open question. Without the unifying effect of the profit motive, it is no simple task to get alignment around what the mission/vision/goal is going to be. This is why systems mapping is often so important: even if you agree that your goal is, for example, to reform the food system in California, reasonable people are quite likely to disagree on what effort can lead to that outcome. That’s why Roots of Change went through in-depth work at its founding to collect input from a wide range of stakeholders on what the system was that they were trying to shift. RE-AMP did the same, as we have previously described in a case study.

Next, we’ll explore three other ways that for-impact strategy departs from the for-profit norm: process, audience, and decision rights. 

A group of approximately 50 participants – including multibillion dollar hedge funds, private equity firms, sovereign wealth funds, asset managers, financial services companies, foundations, and social enterprises – spent over two hours brainstorming and debating on how to accelerate – and “mainstream” – the flow of capital towards impact investing. To learn more about the insights from that event, read this blog post written by Chris Harvey, Deloitte’s Global Leader for the Financial Services Industry and Global Lead for Major Financial Institutions.

Coming out of this discussion, Deloitte and the World Economic Forum are now crafting a strategy for institutional investors to approach impact investing in new and creative ways.

In the months ahead, there are a few other large, global initiatives coming up that give attention to the impact investing space: The Skoll World Forum on Social Entrepreneurship will convene social entrepreneurs, thought leaders, and strategic partners in April at the Said Business School in Oxford to exchange their ideas and solutions. Meanwhile, the British Prime Minister David Cameron is said to throw his weight behind plans for financial innovation and impact investing. Cameron will use the UK’s presidency of the G8 this year to develop new agreements on impact investing and social impact bonds. (See here for more about Cameron’s plans.) And finally, at CGI America in June of this year, innovation in the community finance space will be on the agenda.

My hope is that through these meetings and other initiatives, bigger and bolder investment vehicles and action tanks will emerge that can channel the collective power of civil society, the private sector, and the public sector.

Many will agree that a successful impact investing market won’t emerge overnight. Different sources of capital, including philanthropic capital, will likely be needed to build the impact investing market.

Philanthropy plays a critical role in building supportive ecosystems and markets, as my colleagues Harvey Koh and Ashish Karamchandani laid out with the Acumen Fund in our 2012 report From Blueprint to Scale: The Case for Philanthropy in Impact Investing. As Chris Harvey adds in his blog, patient capital is needed to make sure that the economics of individual deals and value chains work.

To truly achieve bigger and bolder initiatives, I would add another priority to this list of uses of philanthropic capital: To enable bigger and bolder solutions, today’s impact investing leaders should be given the time and bandwidth to think big … collectively.

In the few years that I have been working in the space, I have had the opportunity to work with some of the smartest leaders and biggest thinkers one could hope to interact with. But the bandwidth is often lacking to allocate resources to promising ideas that may not bring results tomorrow but that have the potential for long-term transformation. Instead, many of these visionaries are required to keep their eyes on their short-term goals.

What if the resources can be gathered to bring these leaders together in a concerted, longer-term effort to drive “collective action at scale”? Will bigger things happen? And what would a “bigger effort” look like? Who can we learn from and with along the way?

These are some of the questions that keep me up – and dreaming – at night. In the year ahead, I am looking forward to pushing for action together with my new colleagues at Monitor Deloitte and the rest of the Deloitte family of member firms. In the meantime, I welcome any questions, reactions, or answers, you may have to my questions already.

This post was originally published on SocialFinance.ca. 

Note: Joel Bryce, senior consultant at Deloitte Consulting LLP contributed to this blog. We welcome any reactions and/or suggestions you may have for us. Contact Carolien at @cdebruin08 or cadebruin@deloitte.com.

*As used in this document, “Deloitte” and “Monitor Deloitte” refers to certain member firms of Deloitte Touche Tohmatsu Limited (DTTL) that participated in the acquisition of the business of Monitor Company Group Limited Partnership (Monitor). Each of DTTL and its member firms is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of DTTL and its member firms. Certain services may not be available to attest clients under the rules and regulations of public accounting.

Photo credit: http://www.flickr.com/photos/jonnygoldstein/8560935226/

Image source: onebravethingaday.com

This is a common situation. Strategy as a discipline was born in the military and grew up in corporations, and only in recent decades has it been adopted by those working on social challenges. Today, an increasing number of those running social-sector organizations come from the ranks of business, and many who start new ventures are now called “social entrepreneurs.” What’s more, where social-sector organizations used to keep their focus solely on the work that they could handle alone, there’s now a burgeoning movement to work collectively. To make things even more complicated, working on social challenges is no longer synonymous with using charitable sources of funding; now there are many models for driving impact by earning revenue. It’s no surprise that those who swing the trusted hammer of business strategy can find themselves pounding away at what looks like a nail but turns out to be something quite different.

We live that translation task every day, adapting methods developed at Monitor Deloitte in corporate settings for our nonprofit and foundation clients. Many are effective as is; others require significant adjustment to apply in our work. Through that experience we’ve found that creating strategy at a for-impact enterprise is different in at least seven ways from creating strategy at a for-profit:

1. Growth is not always the goal
2. The basic purpose is often up for discussion
3. Bottom-up engagement can be essential
4. The audience is both internal and external
5. Planning happens in one place
6. The supporting analysis is qualitative and targeted
7. The time horizon is long

Over the coming weeks, we’ll be exploring each of these one by one. We welcome your reactions and would love to hear about any experiences you’ve had that relate.

Members of the lowest-income U.S. families are 10 times less likely to earn a bachelor’s degree than members of the highest-income families. This situation would be troubling in any environment, but with income inequality only increasing and global job  competitiveness intensifying every year, it is downright dangerous—not just for low-income students but for society at large. While a field-level conversation about the college access, persistence, and completion challenges that face low-income students has been slow in coming, we believe that conversation is now imperative.

Our new report Brighter Futures outlines the problem, the state of the field, and how to collectively intensify the ways we address these pressing challenges:

1. Improve coordination between key actors: between high schools and colleges, within the college community, among nonprofit organizations, and between actors in the field and parents/communities
2. Create clarity around metrics—and what drives successful outcomes
3. Look beyond the traditional definition of “student”

To find out more, read Brighter Futures: Tackling the College Completion Challenge.

This post was originally published on the Stanford Social Innovation Review blog. 

Take a moment and read these two words: strategic plan. Now close your eyes and picture one. If what comes up is a thick binder, gathering dust on a shelf next to other thick binders from five and ten years past, you’re not alone. We believe that a better understanding of the history of strategy and what caused the demise of binder-bound strategic planning can point the way to re-inventing strategy for the world we live in today. It is important to remember that strategy’s roots are military. Military strategy focuses on setting objectives, collecting intelligence, and then using that intelligence to make informed decisions about how to achieve your objectives—take that hill, cut this supply line.

Historically, the battlefield was a place where you could count on a few constants:

• The past was a good predictor of the future. There were years or decades between meaningful shifts in the basic variables, such as the power of a soldier’s weapons or the range of aircraft.
• Good data was scarce and hard to come by. Scouts and spies had to risk their lives to find and relay information, and had to be ever on the lookout for enemy deception.
• Lines of communication were unreliable at best. Small numbers of clear directives were a tactical imperative.

Not surprisingly, after a couple of millennia, military strategy became well adapted to these constraints.

After World War II, when military strategy came into the business world as strategic planning, so did these constraints. As a result, strategic planners focused on predicting the future based on historic trend lines; invested heavily in gathering all available data; and produced a small number of directives issued from the top, for the rest of the organization to execute.

This approach to strategic planning was a reasonably good fit for much of the business world from the fifties through the eighties. But with the rise of high-tech tools and increased globalization in the nineties, the world began to change, and now it looks quite different indeed. The future is no longer reasonably predictable based on the past—in fact, it is liable to be startlingly different. Good data is easy to access and cheap to acquire. Communication is rapid, indiscriminate, and constant.

The world has become a more turbulent place, where anyone with a new idea can put it into action before you can say “startup” and launch widespread movements with a single Tweet. This has left organizational leaders with a real problem, since the trusted, traditional approach to strategic planning is based on assumptions that no longer hold. The static strategic plan is dead.

This has led to increasingly polarized attitudes about the value of having a strategy at all. Some leaders are valiantly trying to save strategic planning by urging us to focus even more on rigorous data analysis. Others deny the value of strategy, arguing that organizations need agility above all else (an attitude that famed strategist Roger Martin reports hearing with increasing frequency).

We think that what is necessary today is a strategy that breaks free of static plans to be adaptive and directive, that emphasizes learning and control, and that reclaims the value of strategic thinking for the world that now surrounds us. Martin acknowledged this point at the Skoll World Forum in 2010 when he said: “Every model is wrong and every strategy is wrong. Strategy in a way helps you learn what is ‘righter’. People think you can prove a strategy in advance. You can’t.”

The approach we developed in working with our clients at Monitor Institute is what we call adaptive strategy. We create a roadmap of the terrain that lies before an organization and develop a set of navigational tools, realizing that there will be many different options for reaching the destination. If necessary, the destination itself may shift based on what we learn along the way.

Creating strategies that are truly adaptive requires that we give up on many long-held assumptions. As the complexity of our physical and social systems make the world more unpredictable, we have to abandon our focus on predictions and shift into rapid prototyping and experimentation so that we learn quickly about what actually works. With data now ubiquitous, we have to give up our claim to expertise in data collection and move into pattern recognition so that we know what data is worth our attention. We also know that simple directives from the top are frequently neither necessary nor helpful. We instead find ways to delegate authority, get information directly from the front lines, and make decisions based on a real-time understanding of what’s happening on the ground. Instead of the old approach of “making a plan and sticking to it,” which led to centralized strategic planning around fixed time horizons, we believe in “setting a direction and testing to it,” treating the whole organization as a team that is experimenting its way to success.

This approach wouldn’t surprise anyone in the world of current military strategy. Recent generations of military thinkers have long since moved beyond the traditional approach, most notably famed fighter pilot John Boyd. He saw strategy as a continuous mental loop that ran from observe to orient to decide and finally to act, returning immediately to further observation. By adopting his mindset (with a particular emphasis on the two O’s, given our turbulent context), we can get much better at making strategy a self-correcting series of intentional experiments.

To provide structure to this fluid approach, we focus on answering a series of four interrelated questions about the organization’s strategic direction: what vision you want to pursue, how you will make a difference, how you will succeed, and what capabilities it will take to get there.

The skills and mindset for today’s strategic planning will come from continuously asking ourselves these questions about our organizations, programs, and initiatives. Once we accept Dwight D. Eisenhower’s sage advice that “Plans are useless, but planning is everything,” we will be ready to adapt to whatever curveballs the twenty-first century sees fit to throw.

We’re always on the hunt for the deeper news about social change. Here’s what we’d recommend from the last month:

Moving Forward in Tough Times

David Bornstein’s weekly Fixes column in the New York Times highlights promising new developments in social change, and in this year-end column he describes how three dozen organizations he’s covered have thrived in 2012, in spite of the continuing economic hardship.  

Using Networks to Tackle Complex Problems

As organizations question the status quo and the go-it-alone grantmaking approach taken by most nonprofits and foundations, they increasingly conclude that business as usual will not going to result in the social impact they seek. Networks continue to emerge in the social change world and exhibit great potential in addressing the “wicked problems” of our time. Jennie Curtis, executive director of the Garfield Foundation and the founding supporter of the RE-AMP network, explores the network movement in the December 2012 issue of Alliance Magazine. 

Education to Employment: Designing a System that Works

Closing the Pioneer Gap

More money than ever is flowing into impact investing, yet many entrepreneurs creating companies that serve the poor still find it difficult to raise capital, particularly at the early stages of their company’s growth. Following their 2012 report From Blueprint to Scale, Monitor Inclusive Markets and the Acumen Fund make the case for philanthropy in impact investing. 

SROI – Myths and Challenges

The measurement approach of SROI (Social Return on Investment) aims to reduce social inequality and environmental degradation by revealing the broader value of an organization’s work. It is intended to answer the question of “how much value are we creating?” Yet many misunderstandings persist about the approach and its value. This brief from the SROI Network dispels the most common myths and explains what the real challenges are to expect when putting  SROI measures into place.

You also might be interested in these five pieces:

• Pre-K on the Range: Rural, conservative, impoverished Oklahoma has built the nation’s brightest model for early education (The American Prospect)
• Giving in Numbers, 2012 Edition: Trends in corporate giving (Committee Encouraging Corporate Philanthropy)
• Collaborative Learning: A case study on more than wheels and ways to work (Robert Wood Johnson Foundation)
• Transforming Democracy Through Digital Technology: Five lessons from groundbreaking women (Stanford Social Innovation Review)
• For Whom is College Being Reinvented? ’Disruptions’ have the buzz but may put higher education out of reach for those students likely to benefit the most (The Chronicle of Higher Education)

Originally published on SocialFinance.ca

On October 19th the Rockefeller Foundation, Omidyar Network, and the Latin America-based AVINA Foundation launched the Impact Economy Innovations Fund, an $840,000 pool of grant funds intended to help develop and grow the impact investing industry throughout the region. The launch was accompanied by a day-long discussion – facilitated by Monitor Group – with investors, social entrepreneurs, academics, regulators, and other stakeholders. On the agenda: What must happen to accelerate the flow of private sector capital sourced from within Latin America towards solutions to the societal issues confronting the region today?

The convening was the first of a series of regional meetings being led by the Rockefeller Foundation, designed to more deeply engage emerging market investors in the global impact investing industry, who have heretofore been underrepresented in the field. Based on economic realities of the day, with more and more capital accruing in emergent global financial centers such as Sao Paulo and Mumbai, this historic North-South divide needs to be addressed in order for impact investing to achieve its potential. The goal of the meetings is therefore to help activate larger networks of “Global South” investors and to help them identify and take advantage of opportunities to unlock greater flows of impact capital that benefit poor or vulnerable populations.

While there are indeed similarities region to region, the opportunities and obstacles facing the impact investment communities across the Global South vary, particularly based on the stage of development of the local industry and macro-level contexts. In the Latin America discussion, these were the themes that stood out:

THE ASPIRATION FOR IMPACT INVESTING: CAPITAL AND INNOVATION

Keynote speaker, Professor Ricardo Hausmann, Director of the Center for International Development and Professor of the Practice of Economic Development at Harvard University, elegantly reframed the aspiration for impact investment as one of accelerating social innovation. His assertion is that the search for new ways to attract private sector capital will result in new avenues toward transformative change. Put another way, the growing focus on impact investing is helping to generate important innovations in the way solutions to pressing societal challenges are being imagined and implemented, so that as the field continues to gain speed, we can expect to see an increasing number of such solutions emerge, making change possible at unprecedented scale.

INGREDIENTS TO LOCAL IMPACT INVESTMENT SUCCESS

Professor Hausmann made the provocative remark that impact investing has not been transformative… yet. While great progress has been made, and early examples like the development of Prodem and the emergence of Bancosol have shown the potential of microfinance, and while the work of FiRST, IGNIA, and LGT Ventures has begun to build a series of investment successes, the scale of investment that many hope for has not yet materialized. Even the microfinance field, which has existed for decades, has not reached the scale some predicted.

What are the ingredients for achieving a competitive, innovative, capital-rich impact investing market?

• A range of leaders at the conference, including Valdemar Oliveira Neto, director of continental initiatives at AVINA , expressed the need for a cultural shift and change in mindset, where the definition of doing business goes hand in hand with a shift in values and attention for one’s social and environmental impact.
• As noted earlier, Professor Hausmann reinforced the need for ongoing innovation. Innovation can, and needs to, happen everywhere in the value chain, and daring to challenge conventional thinking will continue to be an important ingredient to success.
• Eliza Erikson and Paula Goldman from Omidyar Network repeated their message from SOCAP this year that the “pump needs to be primed,” arguing that it is critical to build not only firms but whole sectors in order to achieve sustained investment in social and environmental investment success. (See their report for more details.) This is reinforced by Omidyar’s finding that business case for impact investment can often only truly be made at a sector and not at the level of an individual initiative or business.
• Subsidies are needed to achieve a cultural shift, to innovate, and to prime the pump. This point is illustrated by the evolution of the microfinance market. Microcredit, now a well-established business model, required vast subsidies and time to prove the model and become established. One of the first movers, Grameen Bank, took 17 years to reach operating breakeven, while the most recent entrants, such as Equitas, only needed 1 year to reach this point. It is unrealistic to expect today’s innovative models to generate demand and reach sustainability without initial subsidies and/or patient capital. 

THE LATIN AMERICAN IMPACT ECONOMY INNOVATIONS FUND

The Impact Economy Innovations Fund aims to support market building efforts in the Latin American region. Similar initiatives will be rolled out by The Rockefeller Foundation and its partners in Asia and Africa over the next few months.

Margot Brandenburg from Rockefeller Foundation explained the intent of the Fund as follows: “The impact investing field is still early stage. In the months and years ahead, those who care about changing the face of our capital markets and accelerating impact investment face the daunting cause of energizing investors and managing expectations at the same time. Our intent is to take this growth challenge one step at a time: focus on seeing what is, doing what can be done today, and watching for what possibilities exist in the ‘adjacent possible.’ The Impact Economy Innovations Fund is meant to fuel the journey that lies ahead”

For information on this or any of our upcoming regional meetings, and for information on the associated Impact Economy Innovations Funds, please email impactinvesting@rockfound.org.

If you enjoyed this piece, you might also be interested in our 2012 report “From Blueprint to Scale” on the case for philanthropy in impact investing. 

* * *

Carolien de Bruin is a Consultant at Monitor Institute, focused on general strategy, social entrepreneurship, and impact investing. Her clients have included actors such as New Profit Inc, the Rockefeller Foundation, Calvert Foundation, Women’s World Banking, and the Global Impact Investing Network (the GIIN). Carolien has spent a decade working at the Monitor Group, analysing, advising, and leading strategic consulting practices around the world. She has an MSc, Finance from the University of Groningen and an MBA from Columbia Business School.

As an Associate at The Rockefeller Foundation, Kelly Teevan works on the Harnessing the Power of Impact Investing initiative, which seeks to catalyze an efficient impact investing industry that can unlock substantial for-profit investment capital to complement philanthropy in addressing pressing social challenges. Prior to joining The Rockefeller Foundation, Kelly held positions at the U.S. Department of State in the Office of Investment Affairs; the Millennium Challenge Corporation, a U.S. foreign aid agency; and the Small Enterprise Assistance Funds (SEAF), an investment management group that provides growth capital and business assistance to small and medium enterprises in emerging and frontier markets. She also worked for a startup green housing company based in the San Francisco Bay Area, managing corporate communications and helping to launch the company’s green lifestyle media arm during her tenure. Kelly received a bachelor’s degree from Princeton University and a master’s degree in International Relations with a certificate in International Business Diplomacy from Georgetown University.

If this doesn’t sound like a far-fetched idea to you, it’s because her beliefs about the power of games are spreading both inside and outside the gaming community in the last several years. Gaming has continue to grow as a social phenomenon and an industry continues (now estimated at $86 billion in revenue), and both companies and institutions such as the World Bank, American Heart Association, and Intel are increasingly using game design as part of their social innovation efforts.

She makes two main points that we in the social sector should heed:

1. We can and should build intrinsic reward into our public-facing campaigns.
2. Gamers are building skills that are critical for creating change today.

Defining “games”

McGonigal thinks about games as any activity that has the following characteristics:

1. it has a set goal,
2. the participants follow a set of rules,
3. participants pursue goals and get feedback on how close they are, and
4. participation is voluntary.

Everything else we often associate with games (e.g., interactivity, graphics, narrative, and competition) is just “an effort to reinforce and enhance these four core elements.”

Point 1: focus on intrinsic reward

McGonigal views game developers as “happiness engineers” and games as “the quintessential autotelic activity.” (If you’re reaching for your dictionary, an activity is autotelic if it is its own reward.) She goes so far as to say that because “reality is broken” – because the reality of life in today’s society often does not satisfy genuine human needs – it is a good thing that we have games to make us happy. And she urges her readers, including social change leaders, to learn from gamers about engagement. Rather expecting folks to do good for the sake of doing good, she argues that we should start with what makes people feel good and incorporate those elements into the design of any initiatives. (It doesn’t hurt to include a gamer on your design team.)

One example is Free Rice, which asks players to answer vocabulary questions and rewards them with virtual grains of rice, donated by advertisers to the World Food Program. The game itself is addictively fun, attracting eyeballs to the advertisers’ messages, giving the advertisers a stronger incentive to donate than they would have otherwise. Everybody wins. Other examples of socially-focused games are a several-thousand-player simulation called World Without Oil, and a massively multi-player investigative journalism project launched by The Guardian called Investigate Your MP.

McGonigal examines the methods that the gaming industry has developed to keep gamers playing, many of which are based on positive psychology. She identifies four universal ways that we as humans can find an activity to be the source of intrinsic happiness:

1. SATISFYING WORK: We want to be “immersed in clearly defined, demanding activities that allow us to see the direct impacts of our efforts.”
2. HOPE FOR SUCCESS: We crave a sense of agency over our own lives, “to aspire to something and to feel like we’re getting better over time.”
3. SOCIAL CONNECTION: “We want to share experiences and build social bonds, and we often accomplish that by doing things that matter together.”
4. MEANING: “We want to belong to and contribute to something that has lasting significance beyond our own individual lives.”

Take a look at those four, and think about social change campaigns that you’ve organized or been a part of. How much did they meet those needs? How could they have met them more directly or more powerfully?

Point 2: games build critical skills for social change

In McGonigal’s eyes, “Game design isn’t just a technological craft. It’s a 21^st century way of thinking and leading. And gameplay isn’t just a pastime. It’s a 21^st century way to accomplish real change.” Most of the conversation about games for social change focuses on games as a technology platform for organizing social change work through tools such as the The Extraordinaries,  which makes it fun to become a micro-volunteer on any mobile device. She argues that games are also developing the kinds of thinking and leadership skills that a person needs today to play a powerful role in effecting change. Specifically, gamers gain skill at:

• Collaboration: Many games require highly coordinated prosocial behavior, e.g., playing by the same rules, collectively committing to show up, following the game through to completion, and working together to make believe that the game truly matters. McGonigal notes that even violent games often require some form of collaboration, and that the trend over the last few years has been toward more co-operative play (i.e., working together to defeat some opponent) and collaborative creation systems (i.e., creating digital content to build up virtual worlds).
• Taking the long view: Many games require players to think at a scale far larger than ordinarily encountered, and to contextualize their moment-to-moment activities over very long time frames. This enables players to imagine changes that they wouldn’t have otherwise. For example, in World without Oil – a 10,000 player simulation – players were forced to imagine a future without oil and how they, their families, and their communities would cope with the crisis.
• Ecosystem thinking: Some games, particularly those that put the player in a “god’s-eye view,” force players to look at the world as a complex web of interconnected, interdependent parts, and to anticipate the broader influences of changing one or another aspect of a world. It’s easy to imagine this perspective transferring to greater understanding of the complexities of real social systems such as homelessness, poverty, or a sustainable food system.
• Pilot experimentation: Some games, particularly planet-craft games, involve the process of designing and running many small tests of different strategies until a successful strategy is found. Risk-taking and repeated failure is part of the game. This same mindset is at the core of the pilot experimentation and “failing fast” in innovation processes and design thinking, as advocated passionately by IDEO’s Tim Brown in Change by Design.

Games, then, are not just wasting time. They’re also a model for how to turn important work into self-rewarding fun, and they’re building people into better leadership material for creating change. World of Warcraft has enticed players to invested 50 billion hours (that’s 5.93 million years) in earning gold and fighting battles since 2004. If social change leaders succeed at making the work of social change even half as fulfilling, we could draw in millions (or even billions) of people to join our causes.

If you enjoyed this piece, you might also be interested in our 2009 profile of The Extraordinaries.

Hope Consulting, in conjunction with GuideStar, recently released their third report on donor behavior and charitable giving in the social sector. The motivation behind the original Money for Good (MFG1) report in early 2010 was to “seek the voice of the customer for charitable giving” and to better understand the emergence of impact investing.  Building on the existing fact base gathered by MFG1’s comprehensive study on donor behavior, motivations, and preferences for charitable giving, the second report, Money for Good II (MFG2), looked at ways in which nonprofits and foundations could influence giving behaviors to support their own mission. The newest publication, titled More Money for More Good, is a guidebook to help nonprofit organizations understand how to collect the information that donors want, communicate it to donors in the manner they want to receive it, and connect with current and prospective donors. We recently spoke with co-author Greg Ulrich about his report and the state of giving in the social sector:

From your earlier research you identified six segments of donors, each with different motivations for giving, including Repayer, Casual Giver, High Impact, Faith Based, See the Difference, and Personal Ties. Have you seen any recent shifts in US philanthropy towards or away from one particular segment? Why is it important to see your donors as belonging to a particular segment rather than by their demographic information?

GREG ULRICH: Charitable giving is a very personal experience. Understanding the underlying motivations different donors have for their giving can help nonprofits understand which segments are most appropriate for them, and then communicate with their target donors in a manner that speaks to the donors’ core drivers for giving. We have not done any trend research, but I would not imagine that there has been any noticeable shift recently. Giving motivations are deep-seated, and while I personally would like to see more donors ultimately care about the impact a nonprofit is having (a core motivation of the “high impact” segment), I believe that progress on that dimension will be slow. Moving this market is like the analogy of moving an ocean liner, not a speed boat.

 From MFG1 you found that only 35% of donors ever do research before they give, and most of those only do research to validate their existing beliefs. Why do you believe so few people adequately research where their money is going? What would change their behavior?

People research things like computers, mutual funds, and restaurants because the quality of the ultimate product or service is critical. You want your computer to work well, your mutual fund to outperform, and the restaurant to deliver a great experience. People approach charitable giving differently. They want to give to an organization that is aligned with a cause they believe in, and for that money to do some good. The bar is different. Donors are more concerned about a nonprofit not “wasting” their donation than they are about a nonprofit maximizing its impact. So, people don’t research because it isn’t seen as necessary to their ultimate goal for giving.

From MFG2 you noted that effectiveness and impact data were the areas with the biggest unmet needs. Have there been any advancements in the quality of this kind of data available today? What portals or resources do you recommend for donors to research the effectiveness and impact of social organizations?

This has been, and continues to be, a gap in the sector. Fortunately, there are many organizations doing increasingly good work here. I can’t possibly name them all, but a few worth noting are:

• Philanthropedia, which polls “experts” (e.g., academics, foundation officers) in a cause area to find the best nonprofits. The model has the ability to scale, which is a challenge for some other services.
• GiveWell conducts very in-depth studies of nonprofits, based on all of the available research, to find those that are having a proven difference and have room for more funding. They typically only recommend a few nonprofits (they currently support two), but donors can be rather confident that dollars given to those organizations will have a real social impact.
• Nonprofit Investor is a new organization. I don’t know them as well, but they are producing some interesting “analyst reports” on nonprofits. They rely on volunteers to evaluate organizations, giving them a “buy”, “hold”, or “sell” rating.
• And of course there is Charity Navigator. What I like about Charity Navigator is how hard they work to find a way to rate a large number of organizations on increasingly relevant matters. They already incorporate accountability and transparency into their ratings (in addition to financials, which has been their core approach for years), and are moving to evaluate organizations on their impact reporting. They currently cover 6,000 nonprofits (representing 50% of all gifts) and they aim to cover 10,000 soon.

What is the most effective medium or best way for social organizations to push out information on their own effectiveness and impact to donors?

For now, it’s right on their website. Our research and others’ reveals that this is the primary place that donors look. It is also important to include these achievements in appeals and outbound communications. In the future, getting this information to nonprofit portals will be increasingly important as portals become more ubiquitous. This is where donors “want” to get info – most just don’t yet know that services like GuideStar exist.

The title of More Money for More Good is based on the finding that if just 5 percent of this year’s charitable donations were given to high-performing nonprofits, $15 billion would go to the organizations that are having the most impact. What kind of effect do you believe a shift like this would have on how donors and organizations approach giving?

Yes, 5% – or $15 billion – is what we calculate is achievable based on our research; this amount could make a real difference if it’s really put to use. And my hope is that this would lead to a positive cycle:

• More money goes to nonprofits that show they are having an impact. This increases the total social impact in the sector, as the best organizations are able to increase the programs and services they offer.
• Other nonprofits will see that organizations that can prove their impact are getting more money. This causes them to monitor and measure their progress.
• By collecting better information, nonprofits start to learn what is and is not working. By communicating this information, others can learn from their experiences. All this helps organizations perform better .
• As more organizations produce better information, donors will start to notice more and more. More of the best organizations will get even more donor dollars.
• And all of a sudden you see positive cycles of nonprofits collecting better information, nonprofits communicating better information, and donors and foundations giving to the organizations that can show real results. This will all lead to a more effective and dynamic nonprofit sector, greater social impact, and greater evidence of that impact.

Of course, I don’t see a world in which this is the way that all nonprofit behave, and all donors operate. But I do think that we can move a long ways from where we are today.

It is often difficult for social organizations to quantify the impact they are having. In lieu of good data, what else can nonprofits do to give donors the information they want and build a story of their organization’s impact? How can the Charting Impact tool (included below) be used to present an organization’s story in a compelling way that meets the needs of many donors?

Charting Impact is a great tool. By completing it, organizations can build consensus internally around what they are – and are NOT – doing, and they generate the bedrock of the information donors want. While it doesn’t go all the way to true “impact data”, it does help organizations articulate their story in a way that is useful for their own operations, and to donors.

When we tested the Charting Impact tool (disguised) in our surveys, we found that the information it contains is of great interest to donors, AND the idea of a self-reported narrative resonated. While the full Charting Impact report (which generally runs about 4 pages once completed by organizations) is incredibly useful for internal purposes, when communicating to donors I would recommend either:

• Using the core content from it to inform your solicitations and appeals
• Creating a shorter, 1-page, Charting Impact and circulate that to donors

Here’s the Charting Impact tool, for reference:

You might also be interested in reading What’s Next for Philanthropy for insight into how funders can use their resources to support high-performing and high-potential nonprofits, as well as Seizing a Crisis: How Great Nonprofits Grew Amid the Economy’s Challenges.

Markets for Good: Upgrading the Infrastructure for Social Change

“In order to move towards a more effective sector, powered by information, we need to begin by strengthening the core building blocks of data exchange.” A new vision paper from Markets For Good details  how and why the social sector needs to upgrade its information infrastructure, including the architecture that helps to connect, organize and structure information so that it can be supplied and used more easily. As part of their effort, Markets for Good is seeking input from others, and is looking for partners committed to supporting this space. You can join the conversation at www.marketsforgood.com.

Social Change’s Age of Enlightenment

Are we entering an age of social change enlightenment? Our increasing knowledge about how humans work, improved data measurement systems, and collective impact approaches to social problems are raising expectations for what’s possible in today’s toughest social challenges. The more we hear about innovative programs that are achieving their goals, the more we can make sense of why the best approaches are working and the less legitimate it will be for those with vested interests to defend the status quo. 

Housing Near Transit Creates Thriving Communities

One of the most economically efficient strategies for providing public services is to ensure that housing near public transportation is affordable to people with a range of incomes. Enabling lower-income households convenient access to transit helps to create successful economies by linking workers to jobs and consumers to businesses. This blog post dives deeper into the often overlooked economic benefit to locating low-income housing near transit, supported by a new policy analysis by Reconnecting America.

What Happens In Brooklyn Moves to Vegas

“If you fix cities, you kind of fix the world.” When Tony Hsieh, the 38-year-old chief executive of Zappos, wanted to move his company to Las Vegas, he was seeking an urban community aligned with the culture of Zappos, which encourages the kind of “serendipitous interactions” that happen in offices without walls. The only hitch was that it would require transforming the derelict core of a major city. The New York Times dives into Hsieh’s Downtown Project, a $350 million urban experiment to build “the most community-focused large city in the world” in downtown Las Vegas. 

A Crisis in Education is a Terrible Thing to Waste

The U.S. education system is facing a public crisis of confidence. And yet, the NEA asserts that “we are on the brink of a renaissance in education technology.” Entrepreneurs and investors have historically proceeded with caution in education, due to challenges with scaling and subjective methods of student assessment. However, significant advancements in cloud computing, the proliferation of tablets and smartphones, and low-cost bandwidth have led to an explosion of education start-ups in the U.S., with VC dollars invested in the sector more than tripling over the last five years. The NEA details four major themes shaping and disrupting the education industry as we know it today,  creating compelling investment opportunities in a sector not historically known for innovation. 

You also might be interested in these five pieces:

• Tapscott vs. Shirky: Two of today’s most sought-after authorities debate the ups and downs of our networked world (Frog Design)
• Why IRIS? The impact of investing and the role of metrics (Stanford Social Innovation Review)
• Design for Complexity: The Hidden Power of Networks (World Economic Forum)
• Social Finance Launches First Ever Listed Retail Social Investment Product (Civil Society)
• Global Prosperity Wonkcast: Development Impact Bonds (Center for Global Development)

But the problem Yelp is trying to solve is a simpler one than exists in the nonprofit sector. Many people who receive a nonprofit’s service aren’t paying for it, and many people interact with a nonprofit as a volunteer or a board member rather than as a customer. Since GreatNonprofits has been working on this thorny challenge since 2007, we interviewed its founder Perla Ni to find out what she’s learned so far. Read on to hear how she thinks about their evaluation model, her belief in the value of personal stories, and her experiences at the forefront of creating greater transparency and feedback in the marketplace for social good.

Q: When and why do you think people show up at your door, and what role do you think you play in their choices?

Nonprofits use GreatNonprofits to collect feedback from their clients, volunteers and donors. It’s simple, fast and free. They are able to collect amazing stories, written in the authentic voices of real people in their community, of how their work has made a difference. Many of these nonprofits use these stories in their annual reports, share it on their Facebook page, or in their grant applications. They also read the reviews to better understand if there are ways in which they can improve.

Donors and volunteers use GreatNonprofits to help them pick a nonprofit. 90% of donors who use our site says that reading the reviews help them better understand the work of the nonprofit. 80% of donors say that the reviews affect their decision to give to a specific nonprofit. There are so many nonprofits, and it’s hard to know exactly what they are doing because mission statements are pretty general. Volunteers want to know what other volunteers experience. Did they feel their time was well used? Donors want to know how their donations are affecting the community. The ability to respond to these questions requires a human-centered, yet crowd-sourced approach. That is why donors and volunteers use GreatNonprofits. It’s like Yelp or Tripadvisor for them.

So our role is two-fold: To collect feedback that helps both donors and nonprofits better understand the affect of the nonprofits’ activities on the ground in the local community and to bring the highly-reviewed nonprofits, as rated by their local community, to the forefront.

Q: How do you think about the value of personal stories versus numbers in evaluating nonprofits?

Let’s look at the decisions we make daily in our lives – where to go to get our hair cut, where to eat out, which vacuum to buy, which hotels to book for the family vacation, etc. We are generally not making these decisions based on statistics from double blind random trials! We ask our friends, we look online at Yelp or Amazon reviews, or frankly we just make decisions based on a photo. We need simple to use, easy to access information that will make our decision better.

The only type of data that all scientists accept is data from double blind, random trial experiments. Everything else is kind of in the grey zone – just look at the debate over the studies of organic vegetables. It is not feasible to do double blind, random trial studies of most nonprofit activities – for a whole list of reasons, among them, hiring a Ph.D., cost, decades of time, creating a control group of people who will be tracked but denied benefits of the program, etc.

Q: What do you bring by comparison to your partners at Charity Navigator, GuideStar, and GlobalGiving, and by comparison to traditional forms of nonprofit evaluation?

We offer a human-centered, crowd-sourced approach to understand how a nonprofit’s activities are making a difference. At the end of the day, we are all interested in real-world results. We want to know which nonprofit is making a difference, and which ones aren’t and which ones could do better. And through our syndication partners, it complements other types of useful data about nonprofits.

We are also starting to develop tools for collecting feedback about international development nonprofits via SMS feedback collection. We’ve seen that typically, feedback on World Bank projects for instance, may take up to 10 years for an assessment to be done. Now donors can learn that in a village in Somalia, for instance, “Oh, that market in the village never got built. The village council men took it all for themselves.” One of the leading groups doing this is the Danish Refugee Council. Donors to international nonprofits don’t have the benefit of seeing the work first-hand, so it’s doubly more important to get feedback from the local people in those countries quickly and easily.

Q: Many of the nonprofits have only a few reviews, and most of those with reviews are rated between four and five stars. How do you think about accuracy?

It’s still early in this marketplace, so the content is still growing. I would not focus on the top-level numbers. I urge people to read the reviews. Look for the reviews that are detailed. These narrative reviews are extraordinarily rich vehicles to communicate a lot of information. One mother for instance, described how the nonprofit organized harpists to play in the hospital room of her son, in between his traumatic chemotherapy treatments. She goes on to describe the calming effect it had on her son, and how it helped him through his hospital treatments. Or read the review by a man who is an ex-felon, and the nonprofit provided him a job, and now he’s a supervisor and he can provide for his two boys financially and can be a responsible role-model for them. Do I think these are accurate? I think, just as on Yelp or Amazon reviews, people can read the reviews themselves and see which ones they find credible and ring true to them.

Q: Your system asks each reviewer to label themselves by their role (volunteer, client served, board member, etc.). Tell me about that choice: are all opinions about a nonprofit equally important?

In addition to everyone wanting to know about the perspective of the beneficiary, volunteers and donors want more information specific to their experience. For instance, volunteers may also want to know from other volunteers if they felt that their time was well spent, or if they received enough staff support. Donors may also want to know what other donors experience. Many donors make site visits – for instance, what did they observe of the patients when they visited the medical clinic?

Q: You’ve been around since 2007. What have you learned in those five years about what makes a nonprofit great?

We did an analysis of the most popular words used by the community to describe nonprofits that were rated highly. The word “helpful” and “dedicated staff” were among the most frequently used words in these reviews. Our theory is that great nonprofits are those which listen to the needs, priorities and solutions proposed by their community. And they respond enthusiastically to meet those needs, priorities and solutions. One nonprofit which consistently gets exceptional reviews is North Hills Community Outreach in Pittsburgh, PA. They were providing a food pantry and they noticed that many of the people coming to them were people who had lost their jobs. Well, the staff started asking them, how did you lose your job? And it turned out many of them had cars that broke down and because they were late to their jobs, they were laid off. Their clients wanted reliable cars so that they could get a job again. So, North Hills Community Outreach then started a program which sold used cars with a 6 month service warranty to their food pantry clients. The result? Their clients have gotten jobs and held on to them and no longer are dependent on the food pantry. That’s an example of listening to and being responsive to the needs, priorities and solutions of the community. If more nonprofits did that, we would raise the excellence of the nonprofit sector.

In 2008, Hillel: The Foundation for Jewish Campus Life, with generous support from the Jim Joseph Foundation, began testing an innovative program that leveraged peer networks and relationships to help Hillel achieve its goal of “doubling the number of Jewish students who are involved in Jewish life and who have meaningful Jewish experiences.” Piloted at 10 colleges, Hillel’s Senior Jewish Educators and Campus Entrepreneurs Initiative (SJE/CEI) recruited and trained student interns to engage their campus peers in Jewish conversation and activities; it also featured “Jewish educators” whose role was to help stimulate deeper learning and growth among students interested in exploring their Judaism.

The idea of leveraging social networks to increase social impact is not new, but it has received heightened focus in the last few years. Networks of individuals can be mobilized to produce specific outcomes, exchange information, facilitate learning and growth, share resources and services, and align action toward a common goal, among other things. Indeed, it was the mobilizing potential of networks that prompted the Jim Joseph Foundation to provide nearly $11 million of support for the pilot over five years — the largest single investment ever made to impact Jewish student life. (The program began in 2008 and runs through the end of 2012.)

Fortunately for its investors, the Hillel SJE/CEI pilot program has proved extremely successful in its first four years; by the end of 2012, an estimated 22,000 Jewish students will have been newly engaged on 10 pilot campuses through the program. A two-year external evaluation found that increased student interaction with the program’s interns and educators was positively correlated with their learning and growth. Consequently, Hillel’s Schusterman International Center (SIC) — the “hub” of the federated Hillel network — has now decided to scale this program to many more campuses beginning in 2013. In preparation, SIC spent the last year stepping back, taking stock of the current program, assessing lessons learned, and planning for adaptation and scale.

Below we summarize the lessons learned from the first four years of the SJE/CEI pilot program, as well as additional learning surfaced during the “planning for scale” project. Many of these lessons are relevant to any group — nonprofit or funder — seeking to scale its impact by leveraging social networks:

1. Networks can generate multiple layers of impact in a human system. The SJE/CEI pilot program had positive outcomes at many levels: on participants (engaged students); on network leaders (interns); on Jewish educators; on the campus Hillel culture and approach to student learning; on participating Hillel directors; on Hillel’s SIC as the hub; and, on the overall national network of Hillels.
2. Optimizing networks can require making tradeoffs. Because networks have many kinds of impact, they can be optimized for different goals. Funders and grantees should be clear about what they want to achieve, then optimize the network for those outcomes while helping participants manage various tensions, such as balancing breadth and depth of reach.
3. Design for scale from the outset. The SJE/CEI pilot was designed to minimize risk and maximize quality; for example, the Jim Joseph Foundation and Hillel invested significantly in hiring Jewish educators — a costly input. But scaling the program without reducing these costs would not be feasible. Hillel was thus challenged to find ways to address this new hurdle without diminishing the impact of its program.
4. Manage the tension between standardization and customization. One of the challenges of any distributed network of organizations is that program design must be standardized enough to create similar quality of outcomes across affiliates, while also being flexible enough to fit the local context.
5. Build in measurement and evaluation. It’s important for any program scaling to multiple sites to establish shared metrics that align with the program’s goals and then evaluate progress. Hillel’s SIC created software for tracking “engagement” and paid for a third-party evaluation, but could have done more to create a common data baseline from the outset.
6. Learn and share together. In order to maximize learning across campuses, Hillel’s SIC established “communities of practice” (CoPs) for each of the pilot program’s participant cohorts: interns, supervisors, Jewish educators, and directors. Every single group reported that these CoPs contributed greatly to their own learning, growth, and development.
7. Over-communicate your progress. Some Hillel affiliates that were not part of the pilot program noted that the lessons learned weren’t being shared more broadly, and as  a result, they were unable to benefit from the program’s learnings. In hindsight, Hillel’s SIC and the Jim Joseph Foundation could have used some of their seed funding to create a strategy for communicating the pilot program’s progress and findings more broadly.

The Jim Joseph Foundation and Hillel’s Schusterman International Center took a risk with their initial peer-engagement pilot program — a risk that has paid off significantly. Their emerging approach to leveraging networks as a vehicle for social change was so new that there were very few roadmaps for such work five years ago; even today, the roadmaps are few and far between. As this area of study continues to emerge, our hope is that our case study will both contribute to the research base and inspire other funders and nonprofits to try similar network-based approaches to constituent engagement as a way of magnifying their social impact. You can download the full case study from the Jim Joseph Foundation website.

You might also be interested in reading our other reports and case studies on the use of networks for social change: Catalyzing Networks for Social Change, Connected Citizens, and Transformer: A Case Study of the RE-AMP Energy Network.

Over the past decade, the education reform movement’s energy and resources have fostered a proliferation of actors with a common commitment to fixing the educational pipeline for low-income students, particularly those of color. However, current data suggest there is still a steep hill to climb.  According to the National Center for Education Statistics, the bachelor degree completion rate for Whites aged 25-29 years old is 37%, which is almost double the college completion rate for African-Americans (19%). Students whose family incomes are at the bottom quartile are ten times less likely to earn a Bachelor’s Degree by 24 than students from the top income quartile. We believe a host of obstacles, including financial constraints, insufficient academic and social preparedness for college, and an inability to navigate college systems, account for these alarming statistics.

In addition, much policy and practice is based on an outdated definition of a “student,” imagined as a young man or woman who graduates high school at 18, proceeds directly to college, and graduates in four years.  However, this archetype is a very small piece of a highly dynamic and complex student ecosystem.  According to College Complete America, only 25% of students attend school full-time at residential colleges, whereas 75% of college students are college commuters, often juggling families, jobs and school.  Many education funders and actors are driving change primarily from the lens of the “traditional student”, and are using overly simplistic descriptors of students (e.g. minority vs. majority, full-time vs. part-time).  We believe much work is yet to be done to investigate and articulate the diverse paths students take to obtain their degrees, and the challenges they face along the way.

Monitor has developed an extensive set of tools, called GrowthPath®, that generate deep insights into consumer beliefs, perceptions, and behaviors.  We believe that applying these tools to better understand students, the oft-overlooked “consumers” of education, will help the field create a richer understanding of the different types of students who are pursuing a college degree, and that this understanding can be used to identify and remove barriers to college completion.

Large corporations today use highly advanced tools in order to better serve their customers in increasingly nuanced ways – finding better ways to market and deliver products at exactly the right time, with exactly the right pitch, at exactly the right price.  Our goal is to bring that same level of sophistication to the college access and completion space to help education organizations better serve their customer…the student.

We believe the field needs to:

• Develop a richer, more nuanced understanding of the drivers and barriers to student success.  By exploring the college completion “buying process”, we could investigate the decision points that students encounter on the path to and through college and the obstacles they face.  For example, what drives a student’s decision to enroll in college?  to stay for another semester?  to complete a degree?  How do they gather information?  Who do they view as key influencers?  And where do they get “stuck”?

• Segment the types of students who are pursuing a college degree based on meaningful differences that define their behavior and experiences, rather than just demographics.  We need to create data rich portraits that bring the different student archetypes to life so that we can understand which positive behaviors to reinforce and which barriers need to be addressed for each student segment on their path to college.

• Design more targeted, contextually-relevant programs and interventions based on this nuanced understanding of different student segments.  We would be able to differentiate students who are close to completion versus those that need in-depth support, creating more customized interventions.   We could also create a more meaningful set of impact metrics informed by what really moves the needle on college success.

We believe that this work can and should be done to more effectively help students enroll in and successfully complete college, and we believe that we can help.  If you are interested in learning more or exploring the topic further, please contact Allan Ludgate (allan_ludgate@monitor.com / @AllanLudgate), Frances Messano (frances_messano@monitor.com / @FrancesMessano), or Owen Stearns (owen_stearns@monitor.com / @OwenStearns).

SOCAP12 was bigger than ever before. Some 1,600 social entrepreneurs, impact investors, funders, advisers and other ‘social capital markets’ participants packed into Fort Mason Center on the San Francisco waterfront by day, and bounced from reception to merry reception by night. It was a four-day feast of rousing plenary addresses, meaty panel discussions, funky design workshops, private roundtables and those all-important side meetings, against a stunning backdrop of Pacific Ocean blue studded with America’s Cup sailing yachts.

But the word was that SOCAP12 was also more serious than ever before: while continuing to showcase inspiring entrepreneurs with the potential to help solve big problems, it also held up a much-needed mirror to the burgeoning field of impact investing. On the first morning, my colleague Katherine Fulton described how impact investing is at a crucial inflexion point, past its early days of budding promise but not quite established as a powerful force for good. She warned of the risk of a bubble forming, as investor expectations race ahead of realities on the ground. Kevin Starr from Mulago Foundation echoed this on the second day when he said that ‘the biggest risk we face is that this will be a market for nothing – not impact, not profit’. Matt Bannick from Omidyar Network observed that so many investors are ‘waiting around for fabulous deals but not doing the work up-front to generate those deals’. Our own panel session called attention to the ‘Pioneer Gap’ in funding and support that strangles innovative new models long before they become investable.

This is the Bay Area, of course, so no sooner had the impending crisis been announced than came the solution ideas flowing thick and fast. In a series of sessions through the week, Omidyar Network called on investors to ‘prime the pump’ – investing in early-stage social enterprises and focusing on building whole sectors, not just firms. In a similar vein, our own team advocated the practice of ‘enterprise philanthropy’ to create the more flexible, risk-tolerant capital required to close the pioneer gap. Meanwhile, Kevin Starr described Mulago’s practice of ‘liberal impact investing’, lending at zero interest and buying equity stakes with remote prospects of exit, where there is potential to achieve outsized impact.

Elsewhere at the conference, the Markets For Good initiative was launched to tackle another big problem with impact investing today: the poor measurement and articulation of impact itself. This challenge is neither new nor unique to impact investing, but it presents grave problems when ambiguous social impact is delivered alongside crisply measured (and very tangible) financial returns. Led by the Bill & Melinda Gates Foundation, the Hewlett Foundation and the financial services technology firm Liquidnet, this effort aims to upgrade the information infrastructure of the social sector so that we can have transparent and effective ‘markets for good’ in the way that we have markets for capital and for products. It was just one more sign that we are now starting to move beyond the heady enthusiasm of the early years to the serious business of working out how we will use these new tools to really change the world.

Harvey Koh is an Associate Partner with Monitor Group’s Inclusive Markets Unit, based in Mumbai. Follow him on Twitter @HarveyKoh

Mobile Phone Data: The Oil of the Digital Age

“There is an unprecedented and largely overlooked opportunity to harness digital data for global development efforts,” from tracking the outbreak of disease to coordinating relief efforts by tracking population migration as a result of natural disasters. Three quarters of the world’s six billion mobile phones are in the developing world, and the ubiquity of these devices provides valuable digital traces of activity that have never existed before. Although we are the in the early stages of properly utilizing this data for social causes, the potential benefits are enormous.

Nonprofit CEOs and the Network Mindset

Networked nonprofits are open, transparent, and see every person and organization in their network as assets for reaching their mission. To embrace a networked mindset, leaders must exhibit decentralized decision-making and embrace collective action, while operating with an awareness of their surrounding network and cultivating those strong and weak ties to achieve the impact they care about. However, putting a network approach into practice is not easy. The CEO of the San Francisco Goodwill, Debbie Alvarez-Rodriguez, shares her experiences transforming her own organization into a networked nonprofit, along with additional insights from Beth Kanter.

Innovation Is Not the Holy Grail

According to this piece from the Stanford Social Innovation Review, many of the assumptions about innovations in the social sector have been misleading, and pushing innovation can actually stifle progress just as much as it can enable it, due to innovation’s perception as a development shortcut. The authors lay out six concise recommendations for productive innovation in the social sector, urging organizations to approach innovation as an straightforward process rather than an outcome or ideology.

Must-Read Reports for Nonprofits

This post spotlights nine reports about online communications, fundraising, social media, and mobile technology, which the authors present as the most valuable of the many available in terms of useful and practical data and how-to advice. Check back in the future–they plan to keep the list updated as new material emerges.

5 Transformational Forces That Should Be Driving the Social Sector (But Aren’t)

According to William Gibson, “the future is already here – it’s just not evenly distributed.” But what if tech advances powering the rest of the economy were indeed widely adopted in the social sector? Targeted messaging, lean startup methodologies and the proliferation of production networks hold enormous potential for nonprofits and social organizations in the right circumstances. While some nonprofits are beginning to employ these tools in their own organizations, Fast Company argues that adoption in the social sector should be far more widespread than currently exists.

You also might be interested in these four pieces:

• Don’t Just Scale, Retrofit! (Stanford Social Innovation Review)
• Tools and Resources for Assessing Social Impact (Foundation Center)
• 8 New Case Studies of Inclusive Businesses (Seas of Change)
• Content Curation Primer (Beth Kanter)

Before sitting down to catch his breath, adjust to the time change from Japan, and write up what he learned in a new book, he shared these initial reflections, which are capture here both in bullets and with the artistic hand of our graphic recorder, Lynn Carruthers:

REFLECTIONS:

• Positive Attitude: Francis encountered universally positive attitudes toward innovation, even though the definition of innovation varied from “a revolution” to “a new opportunity to make money” or simply “a new combination.” This was part of a contrast he saw between innovation, which is inherently something that arises from local unmet needs, versus modernization and its association with imposing Western ideas. He believes that “Silicon Valley can serve as inspiration but not as a model for change”; that is, that the Silicon Valley story can be used to inspire entrepreneurs, but its model cannot be indiscriminately transplanted to geographic areas with different demographic realities and economic and socio-political challenges.
• Timeframe for Change: Francis’ world tour did nothing to dampen his certainty that innovation will come from everywhere in the world, but he did amend the timeframe to longer than 10 years—because cultural differences are accelerating innovation more in some places than others. For example, in some places parents may prefer that their children work with large, lucrative firms rather than startups. In others, the concept of failure may not yet be as accepted as it is in Silicon Valley—and it may take time and additional success stories for this attitude to change. He also noted that we in the U.S. may not even be aware as increasing amounts of innovation comes from elsewhere, because it may be solving different problems, as is already the case with SMS services that seem outdated in the U.S. but are very effective way to convey information in Africa.
• 3 types of entrepreneurs: Francis sees a continuum of entrepreneurship that runs from business entrepreneurs, to social entrepreneurs, and finally to activist entrepreneurs—all of whom deserve the term “entrepreneur” because they gather resources to make something happen. We see the three as distinct in the industrialized world, but he saw the roles blend abroad, illustrated by the joke he heard that “had Steve Jobs been in Africa he would have been a social entrepreneur, because he would have had to build his own infrastructure.” One case in point was Marlin Parker, who started out digitally recording the lives of six gang members in Western Cape’s impoverished Cape Flats and went on to create a technology platform that brings social media and instant messaging functionality into a single affordable application that can be managed by individuals and organizations. Parker went from activist to social entrepreneur to business entrepreneur in a very short period of time, and as he did his reach grew to 15 countries outside South Africa.
• The Importance of Place: A key concept of Stephen Johnson’s book Where Good Ideas Come From is that innovation comes from assemblage—bringing together many small things that are not necessarily new. Francis felt that the same notion applies to places that foster innovation, because there is a need to create the opportunity for people from different backgrounds (e.g., engineers, designers, investors, and entrepreneurs) to meet. He encountered several types of places that were well-designed to encourage technology innovation:
  • Public clusters, large zones or office parks that are typically created by the government
  • Incubators and accelerators, where you provide entrepreneurs with what you think they need, and keep people separate enough to protect IP but connected enough to nurture creativity
  • Co-working spaces, such as the well-known iHub in Nairobi
  • Common spaces within organizations that foster creativity and connection
• Global Startups: There seem to be global startups in many places, and this is a source of optimism for many small countries. For example, Francis encountered a fascinating example of cross national entrepreneurship in StartupChile. Chile, a country isolated by geography, wanted to be the “Singapore of Latin America,” but the country did not have a strong entrepreneurial culture. In effect, the government created a program inviting 40 entrepreneurs from all over the world — and gave them $40K to implement their solution — on the condition that it was globally scalable. But what Francis did not see was a great deal of lateral connection among entrepreneurs in different countries.
• Creative Diasporas: Francis was particularly intrigued by the role of diasporas in fostering innovation. He saw how expatriates, foreign-educated nationals, and other diaspora communities play a huge role, both in Silicon Valley and abroad—and how little we understand about the phenomenon.

His greatest take-away from the work to date: “Innovation means the future can be yours,” because it is the path for everyone in every country to advance their own development.

If you’d like to follow Francis’ work as he develops his ideas, or follow up with questions, you can read his blog or find him on Twitter at @francispisani. After visiting this many cities, he’s bound to arrive at new wisdom:

One common pitfall of network leadership is the tendency to form the network around a set of goals and objectives that aren’t shared by many of the participants. Easterling noted that this is especially challenging with externally-catalyzed, funder-run networks, which often die down over time as members steadily lose their feeling of ownership over the network’s direction and their motivation flags. A network must rely on the self-interest of its members to thrive, which we described as exercising leadership through active participation by finding where the conversations are happening and taking part as a peer. Citing their work in the Appalachia region, the Babcock Foundation stressed the importance of this point – they see their role as supporting individuals’ inherent ability to collectively seek greater opportunity for themselves and their communities.

Williams argued that a good “network officer” must continually encourage the network to drill down on its core issues, establish a direction, and then learn and adapt its strategy. The best way to do that, he said, is often by asking probing questions in group discussions. Playing that role requires gaining credibility with network’s most central actors, which we wrote about as “knowing the network” by understanding the existing relationships, centers of power, intersecting issues and levers for change.

Last week’s conversation didn’t get to what we see as the final step in leading an effective network: transforming or transitioning the network as it grows. Networks are in a constant state of change, and success does not always mean longevity. We see success in a network’s continuous evolution and adaptation to the needs of its participants—which can mean making hard choices. A good network officer, or any program officer supporting a network, will at times need to either help the network transform by refining or redefining its value proposition, or help it transition by winding it down and repurposing its assets (including knowledge) to support other related work projects.

Our thanks to The Foundation Review, The Wake Forest School of Medicine, and the Mary Reynolds Babcock Foundation for sharing their insights last week. We’re glad to see the art of supporting network capacity moving ahead.

If you’re interested in the full discussion, it’s available here:

But what about here in the U.S.? You could be forgiven for taking it as assumed that here, with our proliferation of advanced handsets and high-speed networks, the social sector would find it natural to use mobiles to the fullest. Yet when ZeroDivide took a close look in their April report, Funding Mobile Strategies for Social Impact, they found that it was strikingly low. “We’re doing about 96% of our work with organizations outside the U.S.,” they heard from Katrin Verclas, founder of the well-known MobileActive.org. “Our experience is that, except for a handful of funders, there just isn’t awareness of the opportunities in mobile or much support for this work here yet.”

That’s not to say that nobody’s taking the plunge. To the contrary, the authors catalogue a wide array of examples of nonprofit and social-enterprise solutions to social challenges that put mobiles’ potential to creative use. They provide case studies of programs that use text messaging, multimedia messaging, mobile websites, geolocation, smartphone apps, and even take advantage of today’s new tablets and e-readers.

At a workshop I joined yesterday, hosted by ZeroDivide and the Vodafone Foundation, we heard a series of compelling presentations from the creators of these solutions. A personal favorite was VozMob, short for voces mobiles (mobile voices), a storytelling platform for Latino day laborers to fight anti-immigrant hate speech by sharing their personal narratives. Part of its power came from being co-developed over two years of prototyping and improvement with an engineering team that worked directly with the users.

It’s hard to pinpoint the precise reasons behind our collective reticence to adopt these new tools. Josh Nesbit of MedicMobile commented yesterday that he’s implementing their systems at one U.S. nonprofit where he has to tie together no less than 23 legacy data systems, whereas in Uganda he has the freedom to build a modern system from scratch. After yesterday’s discussion, my best guess is that we may not only be held back by our legacy technical systems but also by a legacy of existing program designs and organizational structures. Not only is it harder to convince an existing set of nonprofit leaders to change their approach, but it’s also harder for those leaders to convince funders in turn to hand out new money for technology upgrades to programs that they already support. It may just be a lot less exciting for everyone involved when the new technology is an incremental upgrade rather than a way to meet an entirely un-addressed need.

Yet there can be no argument against the authors’ case for the value of pursuing mobile strategies here in the U.S. The question is simply how to smooth the path so that nonprofit and foundation leaders alike can be confident that they know how to do the work well. The authors have a number of recommendations: build powerful partnerships, prioritize publicity and outreach, involve the community, foster strong ties with technologists, be realistic about the limitations of technology and access, and to always include training. They also include a series of recommendations for how funders in particular can foster learning, support their grantees’ work, convene key stakeholders, and expand the audience.

Yesterday’s workshop was one of three small gatherings and a larger convening that ZeroDivide will be hosting to develop those recommendations further and inform a final edition of the report. Across the many ideas that came up in the breakouts, one of the common themes was the need for a better way for developers and nonprofits to find one another and understand each other’s needs. Many people felt that nonprofits have a bias to do the least amount of technology development possible, or at most to hire one developer. Yet developers do their best work on multi-person teams that are embedded in an organization where they can learn from one another, develop new skills, and come to know the organization’s needs well enough to drive its technology agenda. There may be a lot of interest among the developer community to volunteer and join weekend hack-a-thons such as the recent Code for Oakland, but there is only so much that can be done without nonprofits’ fundraising for (and funders’ support of) a dedicated development team. MedicMobile spent a year and a half without one, and now half of its fundraising goes to its software R&D.

Their research is just the first step in plumbing the depth of opportunity that mobile is opening up for addressing social challenges here at home. If you’d like to join the conversation, feel free to share any ideas with them on Twitter at @zerodivideorg or using the hashtag #fundertech.

Local Forces for Good

Smaller and local nonprofits clearly face different challenges from those of larger groups operating at national or global scale—but being locally focused has distinct advantages as well. This piece shares highlights from the second edition of the influential book Forces for Good, co-authored by our Heather McLeod Grant, which examines how their original six-practice framework for creating high-impact nonprofits applies to local and smaller organizations.  They find that being small and local shapes how organizations can employ the six practices, and means that they often build them out in a different order from nonprofits seeking to scale up as they scale out their impact. For more from the second edition on the economic crisis, see Seizing a Crisis: How Nonprofits Grew Amid the Economy’s Challenges. 

Scaling Social Impact: A Literature Toolkit for Funders

If you’re a funder trying to help your grantees achieve scale, there is no shortage of perspectives to wade through from the past two decades of debate. This literature review is a rich resource in that regard, simplifying the process by providing a guide to all the relevant material housed at the Social Impact Exchange’s 175-item online database, as well as other published content from many of the Exchange’s members.

Four Essentials for Evaluation

“Evaluation is about more than ensuring that grantees are doing what they promise, or that a specific program area at a foundation is meeting its goals,” GEO states. “Rather, it’s about advancing knowledge and understanding among grantmakers, their grantees and their partners about what’s working, what’s not and how to improve their performance over time.” This GEO guide serves to help grantmakers improve their evaluation efforts and promote a culture of using evaluation in ways that reach beyond compliance to act as a mechanism for organizational learning.

Data Philanthropy

“The most exciting development right now is the spread of data philanthropy” argues Lucy Bernholz. She defines data philanthropy as the donation by big data companies of their public-use data to a data commons, allowing shared social and humanitarian goals to be solved collectively by the crowd. Lucy expands on this promising idea and lays out what needs to happen for data philanthropy to become a common reality. 

For Ambitious Nonprofits, Capital to Grow

Nonprofits have long encountered the difficulties of navigating funding restrictions to grow their organization. But what if great social organizations could grow the way companies do? David Bornstein of the New York Times details the many new efforts to use grants as equity investments rather than buying services.

It’s been a rich month for ideas. You also might be interested in these five pieces:

• Self-interest is key to open-source collaboration, says Linux creator (BBC News)
• The characteristics of effective founders (Nonprofit Quarterly)
• Measurement that Benefits the Measures (Stanford Social Innovation Review)
• 3 Characteristics of Responsible Corporate Citizens (Fast Company)
• How Social Influence Can Undermine the Wisdom of Crowd Effect (Farnam Street)

The reason for organizing: “We organize because we are on the trail of becoming human, alive, and compassionate—building cities and nations where justice and happiness is available to all.” – Rev. James Lawson

The need for non-violence: “There is no chance of any social movement overturning the American empire by imitating the American empire. Our nation needs non-violent conflictive struggles that will cause the movements of the 20^th century to pale in comparison.” –Rev. James Lawson

How to forge unity: “When people meet and hear each other’s stories, it breaks down ignorance. People who have been oppressed have a hard time hearing about others’ oppression without breaking down their own biases.” –Dr. Zohara Simmons

The power of love: “They drew a circle to shut me out. Dumb, heretic, a thing to flout. But love and I had the wick to win. We drew a circle that took them in.” –poem quoted by Rev. Phil Lawson

The importance of art: “Every movement I’ve been a part of has had singing, music, and poetry.” –Mayor Gus Newport

The need to know history: “Activists ought to be come like a military officer who has read the history of war and military campaigns, and has learned from that history how to carry on a battle today.” – Rev. James Lawson

How to look at Occupy: “Occupy was one of the most effective big-tent efforts. Some of what it was criticized for was because they were trying to develop the kind of society that they wanted, right there on the land they had occupied.” –Dr. Zohara Simmons

How to change institutions: “To work within an institution, you need a separate movement on the outside that is the vehicle for bringing force and power, so that you have the freedom to do what you need to do within the institution.” – Rev. Phil Lawson

How to reach youth: “Everyone speaks to young people. Not many people speak with young people. They act out because they’re not being included.” –Mayor Gus Newport

The need for inter-generational connection: “21^st century movements must be inter-generational, as were the movements we were part of.” – Rev. James Lawson

• Download the Regional Networks Guidebook 2.0
• Download the accompanying presentation
• Or view either document below, by clicking the full-screen button on the lower-right corner of the SlideShare viewer:

With the release of the Urban Sustainability Directors Network’s Regional Networks Guidebook 2.0, we had the great pleasure to interview the authors, Pete Plastrik and Julia Parzen. Plastrik is the coauthor of Net Gains: A Handbook for Network Builders Seeking Social Change and the author of many articles and blogs about the practice of network building, and Parzen is the founding Coordinator of the Urban Sustainability Directors Network.

Q: Much about the world has changed since you published Net Gains in 2006. In writing this new guidebook, what struck you as having changed the most about what we can accomplish through networks?

Plastrik: Since Madeleine Taylor and I published Net Gains we’ve noticed that many more people are starting networks to achieve social impact—and that philanthropic funders in particular are paying more attention to the power of networks. At the same time, development of network building tools and case studies—practical knowledge of the practice—has been too slow, partly because little funding has been dedicated to this work.

Q: You note that peer-to-peer sharing and learning is probably the easiest starting point for a network, because leaders desire contact with like-minded, like-positioned people in other communities. Are there effective networks that seek to combine people & organizations who tackle similar problems but have drastically differing worldviews & ideas for success? Would conflicting organizations benefit from networking or would networking in this case be counter-productive?

Plastrik & Parzen: They could benefit. But the network would not be about the area of conflict. It would be about something else where they have a common need, for learning and/or collaboration. They could organize around a common barrier, for instance. However, it’s likely that in order to do even that they would have to share/learn about their differing world views—and that may take a lot of time and may not result in a productive relationship. And at some point they would have to agree on what success of their collaboration would look like, otherwise why collaborate?

Q: You mention that most network builders for social change seek to build production networks to foster joint action for specialized outcomes. What are the major challenges networks typically face as they shift from a connectivity network to an alignment network, and finally to a production network?

Plastrik & Parzen: The biggest challenge in a network’s evolution from connectivity to alignment and then production is that the relationships among members must become deeper, more stable, and more accountable. Agreeing to connect to learn about something from or with each other doesn’t require much risk-taking or a lot of commitment. Agreeing to work together for a year to achieve a certain outcome, such as legislative adoption of a new policy or testing of a new idea for reducing energy use in buildings, involves much more commitment, clarity about what each of us is contributing to the effort and about how we will be accountable for doing what we said we’d do. This requires more trust and a detailed understanding between us—and therefore more risk.

It’s important to understand also (a) that connecting, aligning, and producing together requires different capacities and skills of network members at each stage and (b) even as members intensify their collaboration, the network must continue to support/enhance connectivity among members.

Q: How do members of a network balance their desire to have control over their decisions & direction with the benefits that come from collaborative action? Are these two mutually exclusive?

Plastrik & Parzen: In peer-driven networks, members remain autonomous—under their own control—until they make agreements with other members, at which point, they have to live up to whatever commitments they have made. So we don’t see an inherent conflict between control and collaboration. Of course, if a network’s members never agree to collaborate on anything, perhaps because they want to maintain total control at all times, then they don’t really need the network.

Q: What is typically more valuable to a network – member diversity across geographies, perspectives, resources, and/or types of organization, or depth of similar types of members that can more easily reach a common ground?

Plastrik & Parzen: Member diversity can serve valuable network purposes, such as the desire to develop innovations, which benefits from openness to other points of view. Member similarity can also be essential, for instance, in the case of an identity-based network such as links among Korean-American professionals. The “who” of a network starts with the “what” of the network—its purpose. If the purpose is best served with diversity, rather than similarity, then that’s how the membership eligibility should be structured. For most networks, we suspect, there’s a balancing act between diversity-similarity: there is some similarity and some diversity among members. For example, the Urban Sustainability Directors Network has 110+ members who have similar jobs in cities/counties, but their communities are in different climactic regions and therefore their local conditions and strategies may differ.

Q: How can you best encourage members to participate in a network? What are some of the best ways to incentivize participation, beyond members’ existing interest in the network’s mission?

Plastrik & Parzen: The two best ways to encourage participation in a network are (a) member to member: have other members, not network staff, connect with members who are not participating significantly and engage them; and (b) offer several ways, not just one way, for members to engage in satisfying value propositions that matter to them. In short, a member’s engagement depends entirely on the prospect of fulfilling an important value proposition through building relationships with other members. When members want to be/work with other members, they will engage.

Networks can set expectations for participation by members. Typically this starts as a “low hurdle” (e.g., attend meetings, respond to emails) and as members perceive more value in the network the hurdle can be “raised” (e.g., pay a membership fee, lead a network project). In addition, networks can organize peer recognition of members’ contributions to the network: awards, thank yous.

Q: How do you suggest capturing and communicating the value that a network provides?

Plastrik & Parzen: Measure the connectivity and participation of members in the network. Inventory their collaborative activities—the work they undertake together than none could do on their own—and the outputs/products of their collaborations. And, as the network gets more clear about what it seeks to achieve collectively, find ways to measure the network’s impact/outcomes. Some of this may require use of outside evaluation, but a great deal of the monitoring and measuring can be done as a part of the network’s routine work—and then can contribute to continuous improvement of the network.

Q: How can a network mitigate “group think” as members become more and more interconnected?

Plastrik & Parzen: There are ways for a network to encourage “divergent thinking” even if its membership is not very diverse. 1) Build bridges to other networks/organizations and bring their thinking into the network. 2) Encourage clusters of network members to form projects; don’t require all members to “march in lock step.”

You can view the Regional Networks Guidebook 2.0 in its entirety on SlideShare, as well as a presentation for a workshop hosted by Plastrik & Parzen on “Using Networks to Advance Environmental Goals.”

This post can also be found alongside the rest of the blog coverage of the 2012 Social Impact Exchange.

The key themes of the 2012 Social Impact Exchange were all about collaboration. Collective intelligence. Community solutions. Needle-moving collaborations. Collective impact. Much has been made of this new brand of collaboration and it was clear at SIEX12 that many of us who spend our days (and nights) looking for ways to scale solutions to our most vexing social problems see enormous potential in this approach.

But, as much excitement as there was, there were also notes of caution. Speakers and panelists highlighted that the day-to-day realities of collaboration require perseverance and stamina. In the session on “How Funder Collaboratives can Ramp-Up High-Impact Scaling Initiatives,” panelists described their successful collaborations as “messy,” “time-consuming,” and as having “a dollar investment was at least matched by the investment of time and energy.”

So, we have to ask, why bother? Why not be content with other models for scale – replication of proven programs? Advocating for policy change? Disseminating curricula and training programs to spread new models?

As Ben Hecht from Living Cities put it so well on the first day of the conference, because collaboratives create “differential impact” that enable groups to do more with less, get to new solutions more quickly, and grow them exponentially more quickly than any individual organization could do alone.

If this is the raison d’être, how do we go about creating differential impact? Doubtless, there are many answers, but a few stuck with me from SIEX12:

 1. Keep the problem at the center – Lance Fors from SV2 shared this important advice that can often slip out of our field of vision. Unlike for-profit businesses, we are solving a different set of problems, and we have to understand that as good as our organizational solution may be, it is inevitably missing something. If we are a community group, we may be re-inventing the wheel instead of building off a model that’s been successful elsewhere. If we have a national program, we may have blind spots around how to adapt our model to best meet a community’s specific context. However, if we keep the problem – and not our limited individual solutions – at the center, we create the space necessary for bigger and better solutions.

2. Figure out where you can disrupt the gears of the current system – In his opening keynote, Patrick McCarthy, president of the Annie E. Casey Foundation, spoke passionately about AECF’s efforts to support change in the juvenile justice system. Critical to the success of these efforts was their willingness to work within the system, looking for leverage points to focus their efforts, such as reforming pre-trial detention decision making processes to better identify young people who truly were a danger to others. Too often, we default to focusing on workarounds to broken systems rather than focusing on specific leverage points that could expedite change. Working collaboratively can help us see the full system more clearly so that we can determine where we can productively disrupt these systems to work better for us all.

3. Look through other eyes – “People will go to great lengths to do what makes sense for them.” This reminder, also from Ben Hecht at Living Cities, made me reflect on how little time we spend on understanding the realities, hopes, and desires of those we are trying to help, compared to making assumptions about how best we can meet their “needs”. Of all the practices we’ve ported over from business in the last 20 years, we’ve paid scant attention to the highly sophisticated market research and marketing methodologies that can provide insights into the nuanced aspects of how we make decisions and why we do what we do. We can, and should, apply these insights to our work to create more practical, demand-driven solutions. Shifting away from a needs-based, supply-driven mindset can help those we are trying to “serve” become part of their own solution.

Perhaps my biggest worry coming out of SIEX12 is this: given that working collaboratively is messy, time-consuming and hard, how do we prove that this next-generation collaboration belongs in our long-term arsenal for scaling solutions?

The better we get at demonstrating how groups create differential impact, the less likely the next generation approaches to collaboration will end up as just the latest next big thing.

Be Fearless

After reflecting that their greatest successes over the past 15 years have come when they experimented & took risks, the Case Foundation calls for a fearless approach to solving social challenges by setting audacious goals and pressing forward while accepting the possibility of failure. In this call to arms aimed at not only foundations but everyone tackling social challenges, they advocate for following five principles to drive toward fearless decision making: make big bets and make history; experiment early and often; make failure matter; reach beyond your bubble; and, let urgency conquer fear.

In Search of the Hybrid Ideal

As part of the first large-scale, quantitative research study of hybrid models for social enterprises that combine for-profit and non-profit value creation, the Harvard Business School and Echoing Green examine the inner workings of these organizations. The challenges they face are daunting: legal hurdles to housing both entities under the same roof, unclear financing structures, the fact that many “customers” lack the financial means to pay, and organizational decisions that must strike a balance between the twin commitments to both profit and the social mission. The article reports a number of emerging solutions that are making this challenging model increasingly viable.

Going from One-Size-Fits-All Education, to One-Size-Fits-One

“We need to teach children individually, and in a way that doesn’t emphasize memorizing the right answer, but more realistically reflects how we learn and succeed in the real world,” explains Cathy Davidson, in an appeal for a new educational mindset. We tend to think teaching looks a certain way: students learning from teachers and then using standardized tests to measure who is best. But in an age of information abundance, that model is holding us back.

The Social Side of Strategy

Crowdsourcing your strategy may sound crazy, but a few pioneering companies are starting to do just that, boosting organizational alignment in the process. Collaborative strategic planning can help inject more diversity and expertise into your strategy process, get leaders closer to the operational implications of their decisions, and avoid the experienced-based biases that tend to invade top-down decision making processes. This McKinsey Quarterly piece illustrates how strategy has been opened up in both for-benefit and for-profit organizations.

“Business Thinking”

“We must reject the idea – well-intentioned, but dead wrong – that the primary path to greatness in the social sectors is to become ‘more like a business,’” says Jim Collins, and Phil Buchanan at the Center for Effective Philanthropy agrees. It is misguided to equate “business” with “effective,” he argues, particularly in the social sector where returns are measured by impact, rather than profit, the competing voices of funders and other stakeholders, and broad, systematic problems raise a whole host of challenges that can’t be solved by simply applying business principles to a nonprofit.

It’s been a rich month for ideas. You also might be interested in these four pieces:

• Six Theory of Change Pitfalls to Avoid (Stanford Social Innovation Review)
• Evaluation Through a Learning Lens (Stanford Social Innovation Review)
• Lisa Gansky’s Perspectives on the Share Economy (Global Business Network)
• 22 High-Impact, Low-Cost Social Media Opportunities for Nonprofits (Philanthropy411)

City Year, Feeding America, and Habitat for Humanity took bold actions at a time when many nonprofits were paralyzed.

What makes a nonprofit great is no easy question to answer in good times. But it’s even tougher—and more important—as America’s nonprofits adjust to a new austere financial reality.

We started asking this question in the mid-2000s—a boom time for the nonprofit world—as we gathered research for our book, Forces for Good: The Six Practices of High-Impact Nonprofits. We wanted to know how a dozen successful nonprofits had rapidly increased their reach in recent decades, and in 2007 we published our findings about what made them great. That year, philanthropy would peak at its all-time high.

As we prepared to issue a new edition of our book, we wondered whether the groups in our study had weathered the recent global economic crisis and, if so, what they might teach other nonprofits about how to survive in difficult times.

The biggest lesson, it turns out, is that by seizing the crisis as an opportunity, some of the nation’s most effective groups are achieving even more impact during the downturn.

Along the way, the majority significantly increased their revenue as well—which truly surprised us.

Teach for America, for example, vaulted from $41-million in 2005 to $277-million in 2010—and landed as No. 136 on The Chronicle’s Philanthropy 400 by 2011. Four other groups we studied essentially doubled in size (the Center on Budget and Policy Priorities, City Year, Habitat for Humanity, and the Heritage Foundation). And almost all the others grew at healthy clips.

It was counterintuitive to us that these nonprofits managed to expand both their impact and their budgets during the Great Recession. Here are a few lessons we learned about how they did it:

Accelerate in a downturn. Instead of causing setbacks, the recession became a force that seemed to propel high-performing groups forward. Rather than putting their foot on the fundraising brake, as so many nonprofits did, most of them accelerated their development efforts.

For instance, in 2006, Habitat for Humanity set an ambitious goal of growing from $1-billion to $4-billion across its global network of affiliates; although it had fallen short as of 2011, it still doubled its annual global revenue to $2-billion.

City Year’s transformative growth was also dramatic: Two years before the recession, its chief executive, Michael Brown, led an intensive strategic-planning exercise. At the time, City Year was operating on $40-million annually with sites in 21 cities and continued to lobby to defend and promote AmeriCorps, the national-service program that financed a good part of City Year’s growth. But Mr. Brown felt that City Year “needed to show that national service wasn’t just nice but necessary.”

To do that, the group decided to stop trying to solve a multitude of community problems and instead focus on just one: improving student performance in challenged public schools. This required that City Year drop its traditional corps-member volunteer activities that weren’t education focused—a difficult move, given the group’s 20-year track record doing things the old way (and the many supporters who were invested in the approach).

Yet already, the signs of success are positive.

Schools with active City Year corps members saw significant increases in student attendance and other factors that led to improved academic achievement and graduation rates. What’s more, the charity’s new approach helped the group persuade city governments to pay for City Year corps members to work in public schools and was a key reason it won a grant in the federal government’s highly competitive Investing in Innovation competition—awards typically reserved for nonprofits focused exclusively on school reform.

Instead of backing away from making major changes in a tumultuous period, City Year took a bold approach that paid off in helping students, and the results are reflected in its current annual budget of $80-million.

Many of the other nonprofits we studied recounted similar tales of counterintuitive growth and success—often pushing forward with new strategies and campaigns to increase donations at a time when most nonprofits were cutting back.

Stay close to your donors. The moment Edwin Feulner Jr., CEO of the Heritage Foundation, recognized how severe the recession might be, he instructed his development team to call every one of Heritage’s major benefactors.

“But don’t ask for money or for confirmation of their support,” he advised. “Instead, ask: ‘How are you doing? How will this downturn affect your giving?’” From those conversations, Heritage deduced that donations from its larger supporters would drop by about 10 percent in 2009.

Although the organization had just ratified a new strategic plan and approved its annual budget, Mr. Feulner announced a hiring freeze and a cap on salary increases, which enabled the organization to withstand the short-term set-back.

Donors appreciated Heritage’s high-touch approach and cemented their long-term commitment to the cause.

“You’re the only one that’s called to ask us that,” many donors told Heritage fundraisers.

Then Heritage took another bold step: It ramped up fundraising and intensified its direct-marketing campaign.

“We went full force,” says Mr. Feulner. “Those who do well in recessions come out strong. We didn’t want to show weakness.”

The result? Heritage’s first-quarter revenue in 2009 was the best the organization had seen in years. From 2005 to 2010, the organization doubled in size to $81-million and nearly tripled its dues-paying membership base from 250,000 to more than 700,000 members.

Find opportunity in crisis. Fred Krupp, president of the Environmental Defense Fund, made the point succinctly when talking about the 2010 Gulf of Mexico oil spill: “Don’t let a good crisis go to waste.”

It’s advice that many of the nonprofits we studied have taken to heart. The Gulf Coast oil spill clearly had a horrible impact on the local economy and environment, but immediate action taken by the environmental fund and other groups resulted in the “biggest ecosystem restoration effort ever in the history of the planet,” says Mr. Krupp. “The attention given to the Gulf by the spill has created an opportunity to [advocate] with others. … Congress introduced a bill that would dedicate billions of dollars of BP’s penalty to restore wetlands in the Gulf.”

The other nonprofits we studied also managed to coax positive results from bad situations. Habitat for Humanity was instrumental in responding to Hurricanes Katrina and Rita and to the Indian Ocean tsunamis in 2004.

Although these events took place during our initial research, it was only in hindsight that they proved to be pivotal moments in the nonprofit’s evolution—bringing together the board, donors, staff, and volunteers in the response and altering the organization’s strategy.

“Of course, we all pray that there will be no disasters,” says Habitat for Humanity’s chief executive, Jonathan Reckford, who took the helm just before those crises hit. But, he says, when Hurricanes Katrina and Rita battered the Gulf Coast and the tsunamis struck the Indian Ocean, they caused the organization to rally to expand its work and “kill cultural sacred cows.”

Habitat built 25,000 homes in response to the tsunami and 2,000 in the Gulf region after Katrina.

Similarly, in response to the recent spike in U.S. unemployment, Feeding America has met skyrocketing demand by increasing—by nearly 75 percent—the amount of food it distributes.

Today, Feeding America and food-bank volunteers annually move 3.3 billion pounds of food to feed millions of hungry people. They’ve worked with their traditional corporate supporters, such as ConAgra and Kraft, but also have forged new partnerships with big-box retailers such as Wal-Mart and Kroger. And Feeding America now works directly with farmers to create markets for crops like certain kinds of potatoes, which farmers would otherwise plough under in these unforgiving economic times because they stand to lose money by harvesting and selling their produce at deflated prices.

High-performing nonprofits like Habitat for Humanity, the Environmental Defense Fund, Feeding America, and the others we have studied tackle very different causes and work on budgets of extremely different sizes.

But every one of them continues to follow the practices we first identified as leading to success in good economic times: They tap into the power of business to create sustainable ways to serve the public good, and they influence government policies to achieve wide-scale change. And they constantly build movements of volunteers and supporters while working collaboratively with their nonprofit peers.

Most of all, in these turbulent times, they’ve expertly demonstrated the art of adaptation—letting go of sacred cows to make way for new opportunities and adopting alternative strategies that may seem risky but ultimately yield bigger rewards. As a result, they’ve not just weathered the economic storm. They’ve come out stronger—and helped improve the lives of millions in the process.

Leslie Crutchfield is a senior adviser at FSG, a philanthropy consulting company. Heather McLeod Grant is a senior practitioner at Monitor Institute. Together they wrote “Forces for Good: the Six Practices of High-Impact Nonprofits,” which has just been reissued to add updates on coping with the bad economy.

There’s nothing quite like being in a room of 1000+ individuals interested, curious, and passionate about of exploring ways of connecting social media with social innovation. Unless, you can do it in the comfort of your own computer, from anywhere in the world.

Stanford Social Innovation Review has been producing and hosting compelling content in the social innovation and social entrepreneurship realm for years. But earlier today they tried something new. Partnering with Living Cities, SSIR hosted a free webinar and invited Q&A via online, live submission.

The Webinar 411: Leadership & Innovation with Digital Media (#hyperconnect)

Leading in a Hyperconnected World: Driving Innovation & Impact with Digital Media
Wednesday, May 30th 2012. 11AM PST.
Ben Hecht, President & CEO of Living Cities (Moderator, SSIR blogger)
Stephen J. Downs, CTO & Information Officer at the Robert Wood Johnson Foundation
Claire Diaz Ortiz, Head of Social Innovation at Twitter
Watch the recording here. Official Twitter hashtag #hyperconnect

Below are some key takeaways from the panelists.

Ben Hecht (@benhecht) Shares His Top 3 Lists

Ben Hecht of Living Cities handily kicked off the webinar with some helpful, organized insight. Namely in the form of three easy-to-digest top 3 lists.

3 Reasons to use Social Media:

1. To share intelligence and ideas
2. To get realtime feedback
3. To broadcast knowledge with a broader network

3 Principles that Living Cities Follows:

1. Mine. This including mining at all stages of development (i.e. early ideation, emerging idea development, and for refining ideas).
2. Engage. Ben underscored the goal of his organization to engage continuously, rather than transacting. He said that information flow should be two-way.
3. Let go. Once the information is out there, he suggested stepping away, letting go, and decentralizing the information so it can move on its own.

3 Things that Living Cities Has Learned:

1. Ideas really can go viral. Ben highlighted one instance when a single blog post was read by over 170K individuals, through simple sharing and re-posting through various social media platforms.
2. Social media can make the adjacent possible. Innovation comes when innovations from different sectors collide and intersect. Social media, positioned Ben, enables those collisions and intersections, thus furthering and enabling new innovation.
3. Social media networks can strengthen problem-solving resources. Perhaps couched on the idea of losing what you don’t share, Ben mentioned that his organization has benefited in trouble-shooting and strategizing longer-term solutions through tapping their social media networks for tips and best practices.

Steve Downs (@stephenjdowns) Connects Leadership with Social Media

Steve Downs of Robert Wood Johnson Foundation explained his organization’s mission and overall usage of social media and refocused the discussion on social media to one about how to utilize digital platforms to further leadership, especially in the mission-driven world.

He outlined his organization’s multi-faceted approach to social media as involving openness, participation, and decentralization. Steve underscored the importance of participating in the social media stream rather than using it only to push content.

Claire Diaz-Ortiz (@ClaireD) Shows Us How It Works

Claire Diaz-Ortiz of Twitter illustrated the power of social media through the story of photojournalist James Bock, his initial reluctance in using Twitter, and how it literally saved him from jail time while covering protests in Egypt in 2008. Read the story on CNN here.

She also provided an evolved look at the slacktivism, highlighting the statistic that 40% of those using social media platforms are consuming content rather than producing it. Taking the edge off of passive use of social platforms such as Facebook, Twitter, Pinterest, and other—she emphasized the importance of an engaged audience, and how those individual touch points could lead to further involvement and leadership in the future.

Questions to Ponder

There were a number of great user-generated questions. Ones that were not only useful to hear the panelists discuss, but would also be equally useful for social entrepreneurs and innovators to ask of themselves and their own efforts.

• Is it important to adapt to the paradigm shift?
• How can you take online dialogues offline?
• How will you measure ROI with social media?

Q: Could philanthropy distort that market by allowing weak models to survive?

A: Yes. Philanthropists have to have the discipline to work with entrepreneurs to achieve their long-term goals, rather than just taking grant money as a way of staving off the need to figure out a strong self-sustaining model. The ideal is a situation like Husk Power Systems, where they developed a long-term relationship with Shell Foundation, which gave them a string of grants that were closely targeted at developing their business.

Q:  How does a philanthropic funder justify giving money to an enterprise that is going to generate profits for other investors if it’s successful?

A: This is a chance to unlock large pools of investment capital that would otherwise simply not be available. And, if you’re both a grantmaker and an impact investor, you can follow Acumen’s example and start with grants but then later become an investor for those that become the most promising.

Q: This is a desirable kind of “scope creep,” since we’re talking about creating markets rather than supporting single enterprises. But that creates even more need than usual for funders to coordinate their efforts. How can we achieve that?

A: It would be a great benefit to the enterprises for funders to coordinate at a market level rather than deal by deal, particularly around the milestones and metrics required. The Social Impact Exchange is one possible venue, since they already exist to promote coordination and are set to take on the topic of impact investing very soon.

Q: What kind of human capital do we need to run fledgling enterprises at these early stages? Can we use learning communities or other methods to develop it?

A: There certainly is a need for a certain type of human capital, and not surprisingly, we’ve noticed that these enterprises tend to cluster in places where those people have been able to find each other. The ideal is a “business builder” type, like those who exist at many large corporations. For developing the talent, many fund managers and engaged donors are already using learning communities and finding them valuable.

Have you read the report? If you haven’t, you can download it here. If you have thoughts or questions, don’t hesitate to get in touch. Leave a comment below or email inclusivemarkets@monitor.com.

The David and Lucile Packard Foundation set out to answer that question three years ago, in part by offering a range of network-focused support services as part of its Organizational Effectiveness line of grantmaking. We are now happy to release a set of reflections on that experience that they would like to share with the field. We hope these lessons will be useful if you are:

• a grantmaker interested in building the capacity of your grantees to work in networks, and your own ability as a network weaver in your field
• the leader of a network or an organization who wants to sharpen my abilities at achieving impact through networks, or
• a consultant who is helping to build the capacity of others to work in networks

There are six lessons for the field from Packard’s work, each of which is detailed further in the full report:

1. Combine network effectiveness with organizational effectiveness
   Network effectiveness is clearly a distinctive set of behaviors and strengths for a leader or organization to build. But the approaches for building network effectiveness that this experiment supported were typically combined with more traditional organizational development activities.
2. For consultants, networks expertise is an addition to standard skills
   A consultant’s ability to build network effectiveness is clearly a distinct skillset—and of most value when used in concert with standard capacity-building skills.
3. Low-technology settings require high-touch network facilitation
   In areas where the use of high-tech communications is not yet widespread, working in networks can be slower and more time-consuming and require a more high-touch process for supporting the network. But the benefits remain substantial by comparison to working with one organization at a time.
4. Peer learning builds capacity, builds network effectiveness, and enables collaboration
   Not all capacity is best built through one-on-one consulting. Peer learning fills a distinctive and complementary niche: it helps grantees explore an issue that is central to their work, builds their overall ability to engage collaboratively, and also connects them with potential partners for doing collaborative work.
5. Networks are proving their value to program outcomes
   Network-based approaches have become central to the work of a number of program officers at the Packard Foundation. Each has discovered their own reasons for achieving strategic goals through network-centric modes of working.
6. Field-building work remains critically important
   The past three years have seen significant progress in the development of network practices and the level of interest among funders;  but there is substantial work to be done before network effectiveness is considered an essential capacity to build.

To read more, download the executive summary.

For details on the findings, download the full report.

If you have any questions about the report itself, please feel free to contact Kathy Reich, Director of Organizational Effectiveness Grantmaking. This reflection is one of a number of inputs into the Organizational Effectiveness team’s ongoing strategy refresh. They have made that process transparent to the public and open to outside input, using a blog that you can find here. Please feel free to contribute any thoughts you have to offer or questions you would like to to raise.

The power of philanthropy in enabling impact investment

You could be forgiven for thinking that impact investing and philanthropy are different domains. Complementary, to be sure, but separate. But according to our colleagues at Monitor Inclusive Markets, you would be wrong. There are many ways that philanthropy is essential to the growth and development of impact investing, as detailed in their new report, “From Blueprint to Scale.” For more on the recent dialogue about impact investing, see this excellent roundup.

Dissecting the failure of KONY 2012

If you’re wondering why your city wasn’t plastered with the image of Joseph Kony last week, this piece will take you through the twists and turns that led from the campaign’s explosively popular video to a near-complete fizzle of on-the-ground action. In short: while Invisible Children was masterful at the art of creating a viral video for their cause, the fundamentals of its campaign could not stand up to the many concerns raised by others, and ultimately was unable to cajole many of its followers to make the leap from slacktivism to activism. Then again, maybe it wasn’t their fault–given that a new study claims it is “sheer fiction” that Millennials are the most civic-minded generation.

Billion-dollar revenues and no bosses

Producing videogames might not count as social enterprise, but the way that Valve Software runs should interest any leader of an organization. They are pushing the limits of self-organization: every employee is free to do absolutely whatever they like, full stop–but gets  paid according to how valued they are by their teammates. The result has been not only some of the most popular and creative videogames but also phenomenal success in the market. Are you still so sure your org chart makes sense?

The rapidly-shifting landscape of education philanthropy

“A decade ago, a big frustration for edu-philanthropists was the sense that they would invest in exciting programs or practices, but that these never seemed to deliver lasting improvement… Where an earlier generation of donors had chalked up the challenges to problems of implementation or program design, the new philanthropists were much more receptive to the notion that the problem was the inhospitable cultures, systems, and policy environments in which those scale-ups were being attempted.”

If you’re not working in education, but you’re wondering what tectonic shifts are at work in your field, Grantcraft has published a new guide on scanning the landscape.

Why innovation dies

When a disruptive innovation challenges your strategy, the answer must be experimentation, not a “strategy committee,” argues vetern entrepreneur and innovation thinker Steve Blank.  As both Google and street gangs know, innovation comes from the edges, not the center. It’s a deep enough truth to apply even to city planning, as noted recently by the mayor of Portland, who argues that the kind of strategic change this nation needs must start at the local level. It helps a lot to adopt (and promote) a more open definition of professionalism along the lines of what Allison Fine describes:

But many investors report that they are struggling to find good opportunities in which to invest for impact. Why is that? Will impact investors really be able to take new models for inclusive business
all the way from idea to scale?

Meanwhile, philanthropic and aid funders are asking how they should engage with these market-based solutions. How should they harness the full potential of this early experimentation? If impact capital is the key to scaling these solutions, what then is the role of philanthropy?

New research from our colleagues at Monitor Inclusive Markets paints a clear picture: impact capital alone will not unlock the potential of impact investing for the global poor. Because of the extreme challenges facing those who are pioneering new models for inclusive business, truly realizing the impact in impact investing will require more, not less, philanthropy, and will need that philanthropic support to be delivered in
new ways.

This report:

• Explains how impact investing is constrained by the tough realities of inclusive business, and introduces the phenomenon of the pioneer gap
• Describes the emerging practice of enterprise philanthropy, and how it is the key to establishing the inclusive business models into which capital can then be deployed
• Analyzes a number of companies from the Acumen Fund portfolio to understand both successes and setbacks, and to illustrate the Four Ps of effective enterprise philanthropy
• Sets out our key recommendations for philanthropic funders and for impact investors
• Provides some practical ideas for what and how to fund, in the Enterprise Philanthropy Playbook

You can download the report here. If you would like to further discuss the themes described in the report or provide feedback, please write to the team at inclusivemarkets@monitor.com.

It’s a challenge that crops up in many places, especially when the people represent multiple organizations that are attempting to at least learn together and potentially take some form of collective action. People walk in the door with a sense of shared purpose, but the group often stumbles when it comes to making decisions. Oftentimes those who are invested in achieving a particular outcome will walk away frustrated, frequently not sure why it felt so hard to just do something.

Consultant June Holley has placed herself in these and other peer-to-peer settings for years, and just recently released a comprehensive guide for anyone who wants to navigate them well: The Network Weaver Handbook. Her tip is to step back from your goals and spend time working on the relationships and understandings that are shared within the group. If you see yourself as a “network weaver” — as someone who sees and actively strengthens the group’s relationships — then you can catalyze action within the group that would never otherwise have been possible.

The art of network weaving has applications in any situation where the strength of relationships and shared understanding can be an important constraining or enabling factor. For example:

• funders who share interest in the same issue and may want to take action together
  
• advocates with common cause on an issue who are hoping to align their campaigning
  
• nonprofit leaders who face similar organizational challenges and want to learn from each other
• grassroots organizers who want to spur large groups to action  

Among the book’s many useful frameworks and worksheets, she describes four types of roles that a network weaver can often play:

The book is a valuable resource for anyone who wrestles with the challenges of network weaving, consciously or not, and has ample handrails for guiding those who aren’t used to thinking in terms of networks. For additional thoughts on the book, see Beth Kanter’s review from yesterday. For more on how catalyzing networks can play a pivotal role in the work of a funder’s, see Catalyzing Networks for Social Change: A Funder’s Guide, which drew on input from Holley along with other contributors.

Audubon escapes state-level silos to focus on birds’ own flyways
Never say that an established nonprofit can’t be nimble. “We are a grass-roots organization that will continue to work locally, but we are building the necessary connectedness to make a broad conservation impact.” The leaders of Audubon Society are excited to launch a new strategy, re-imagining the organization around the flyways that birds travel rather than the state lines they ignore, and we’re proud to have developed it with them.

Five deep drivers of social change at work in the world
Want to think differently about how to cut in on your chosen issue? In case you missed it, SSIR has been running a series on five of the fundamental levers for creating social change in the world today. It’s a useful tool for sparking some new thinking on any issue you think you’ve analyzed to death, and a great way to get started on one that you haven’t.

The Network Weaver Handbook
Wondering what it means to “weave” a network? Want to cultivate the networks you work in, but are wondering where to start? This 376-page tome crystallizes insights from years of hands-on experience by long-time network weaver June Holley. Packard Foundation’s OE team launches an open refresh of their strategy, with a site and a blog: http://t.co/TgBU7WSA

Five observations of the zeitgeist at Skoll World Forum
1. It’s OK to make an economic return from solving social problems.
2. Measurement is no longer optional.
3. We’re in an age of social entrepreneurship 2.0 [which means more entrepreneur than social].
4. It’s cool to be corporate [and socially responsible].
5. People want to move the needle.

Leading, and communicating, in today’s hyper-connected world
“The new reality is that leaders don’t lead alone. We are all part of a much broader problem-solving network.” Three ways to do that with how you communicate: Share at every stage of developing knowledge, not just when it’s “done.” Engage continuously in genuinely two-way dialogue, rather than broadcasting an answer. Finally, make communication everyone’s job, and trust them to do it right.

“The 99% spring is here”
Will the hyper-decentralized Occupy movement persist? This organizer argues that it will, with 900 upcoming trainings in 49 states.

Do you have innovation obsession disorder?
“We humans have always innovated. It’s what we do. It got us out of the caves.” The problem is not that we’re not innovative, but that we don’t do a good job of finding and spreading what’s promising. A good point to remember–and one that makes social innovation a project that includes a far broader group than the oft-celebrated entrepreneur.

Innovating our way to a more principled capitalism
In the spirit of the article above, the new Long-Term Capitalism Challenge is calling for stories and “hacks” to shift us towards a capitalism that is more principled, patient, and socially accountable–in other words, they’re looking for bright spots to put in the spotlight. Got any suggestions?

Will social impact bonds work in the U.S.?
Social impact bonds are still in their early days, with only one working prototype located in the UK. Will this nascent model of pay-for-success work in the U.S.? This report represents inputs from 125 thoughtleaders and potential SIB players to examine the model’s strengths and challenges.

Lessons on funding social media innovation
A year ago, the Jim Joseph Foundation wanted to see the potential of new media applied to Jewish life, and decided to provide an innovation fund instead of standard grants. The three lessons they learned are applicable to funding social media innovation in any issue area.

ChangeNation: spreading proven models in new terrain
Government leaders in Ireland wanted to find solutions to their social challenges without reinventing the wheel, so they invited social entrepreneurs from around the world to share their solutions and brainstorm how to apply them locally.

“The Impact Investor: People and Practices Delivering Exceptional Financial and Social Returns”
This new report argues that the field of impact investing can already show strong performance, but needs greater shared understanding of what best practices can spread that performance more broadly.

New book on impact assessment: “The Good Analyst”
Investing for Good has released their approach to social impact assessment in the impact investment space as a free e-book.

The journey of a social entrepreneur
A beautiful use of Prezi to illustrate the path walked by many social entrepreneurs and the help they need along the way.

“What It Takes To Innovate: Wrong-Thinking, Tinkering & Intuiting”
Five practices shared by many of history’s most famous innovators that we could all benefit from applying when we go in search of new ideas.

The zero-hour workweek
A provocative perspective on run a highly effective team: what if principles guided the length of workdays, instead of a number of hours?

Irvine’s Board of Directors recently took time at their annual retreat to pose the question: What will the most effective foundations of the future look like? On hand to enliven the discussion were three leading experts in the field:

Lucy Bernholz, a highly regarded philanthropy blogger and managing director of Arabella Philanthropic Investment Advisors, discussed forecasts about the social economy that were contained in her Blueprint 2012 report. The social economy, as Bernholz defines it, expands the traditional concept of the space between government and commerce where philanthropy and nonprofits reside to include all of the ways we use private resources to create, fund and distribute public goods. In short, it refers to all the ways that we direct private resources to public goods and Bernholz sees great potential for innovation and collaboration within the field.

Brad Smith, president of the Foundation Center, emphasized the growing importance of data collection, analysis and evaluation within the field of philanthropy. One practice of the best foundations of the future, according to Brad, will be to utilize systems that provide timely and comprehensive data at a global level, leading to increased transparency and an increased ability to identify peers and collaborators on issues.

The themes covered by both Bernholz and Smith were reflected in themes raised by Katherine Fulton, president of the Monitor Institute. The Monitor Institute’s report on What’s Next for Philanthropy served as a good jumping off point for a conversation that looked at 10 ways foundations can “act bigger” or “adapt better” to achieve their aims. It’s a strong and well-reasoned list, and served as a good exercise for our board to consider. I encourage you to read the full report or view the two-page list of those “next practices” here.

Our thanks to Lucy, Brad and Katherine for provoking an engaging discussion by our board and senior staff. Do you have ideas to share on what could make foundations more effective? We welcome your thoughts on the question.

Peer learning is certainly not new, and there is rich insight draw on from the study of communities of practice. Yet, we still have much to learn about how funders can tap the power of peer learning. When should you (and when shouldn’t you) consider starting a peer learning group? How do you set up a peer learning community that can prove valuable to a wide range of participants? What role(s) might a funder play in initiating and implementing a peer learning group?  How can insight generated by the learning group be made more broadly available?

We at Monitor Institute have been digging into questions such as these as part of a broader reflection on the networks-focused work of the organizational effectiveness team at the David & Lucile Packard Foundation. They’re interested in strengthening their ability to use peer learning, and in the past three years have experimented with peer learning for building three types of capacity: network weaving, the strategic use/measurement of social media and investing in networks. Six initial observations have emerged as the most important:

• The substance of the peer learning experience should be of immediate use in the participants’ work—ideally an emerging area that needs attention where there is not yet a lot of information, and where the group can co-create material.
• The participants need a substantial amount of common ground in relation to the topic—whether it is their size, issue area, location, or other factors, they have to share enough that their commonalities are easily visible to one another.
• The group needs to quickly build trust, so that participants are comfortable learning alongside one another and seek out their peers for direct input. For many groups, meeting in-person is key, particularly in the early stages.
• The participants’ motivation is essential, so it works well for grantees to be given a free hand in choosing whether to join.
• It should be clear to all involved that the learning process will be exploratory and emergent rather than tightly structured and directive.

We and the Packard team are very interested in hearing the experiences of others. If you are a funder, when would you invest in peer learning? What role would you play in starting and running a peer learning group? What would you advise to make it successful?

Please let us know! We would love to hear from you. We will be sharing what we learn when the project concludes this spring.

Watching the unfolding events related to the Susan B. Komen for the Cure’s decision (and subsequent reversal) to stop funding Planned Parenthood, one couldn’t help but realize that we were watching our own revolution of the masses.

Unlike Tahrir Square and the Occupy movement, however, this latest chapter in our era of mass mobilization never really moved from cyberspace to the streets. It didn’t have to. As the nation of pink ribbons turned into a sea of red faces, Komen realized the rebellion in its midst and decided to change course.

There is no question that there are many lessons to be learned from Komen’s unplanned Planned Parenthood experience. Politics aside, even while assessing all of the steps and missteps Komen has made (and, we hope, continues to learn from), the Pink Ribbon Rebellion demonstrated one thing Komen actually did right: it built a social network of activists bound together by a collective identity built on education, empowerment and interconnectedness. And this network, as we saw, doesn’t need Komen at its center—it is quite capable of taking on a life all its own.

Indeed, the Pink Ribbon Rebellion’s unique facts and storyline shed deep insight on the power of pink and the network of individuals who wear it. Herewith, I offer four key lessons we can derive from network deployment in the Pink Ribbon Rebellion and what its recent success teaches us about network-building for the future.

1. Network success requires knowledge and empowerment. In his seminal book Here Comes Everybody: The Power of Organizing Without Organizations, social network expert Clay Shirky writes:“Information sharing produces shared awareness among the participants, and collaborative production relies on shared creation, but collective action creates shared responsibility, by tying the user’s identity to the identity of the group.”In many ways, the Pink Ribbon Rebellion reflects Shirky’s observation almost perfectly. On one hand, pink ribbon activists have a substantial amount of shared awareness about the fight against breast cancer and the importance of early assessment and prevention. On the other hand, by participating in the Susan B. Komen Races for the Cure, the associated fundraising and planning activities that are involved in the races, activists are also deeply familiar with collaborative production and collective responsibility.Combining the two in a network where a deeply personal tapestry of stories are inextricably bound up in the narrative of the whole, and you get a pink-ribbon nation well resourced to collaboratively respond to a decision with which it also had enough knowledge to disagree. In essence, a perfect combination for a perfect storm of protest.
2. Creating a network doesn’t mean you own the network. Komen has long been known for its careful cultivation, deployment and protection of its brand. It’s not every organization, after all, that has NFL players dressed in pink. But while Komen is often able to exercise control over how the pink ribbon is licensed, it does not have the same ability to control the passion and participation of the people that wear the pink ribbon. It is exactly the empowerment of that group that makes them so unpredictable. So while networks can be animated intentionally by carefully scripting campaigns, they can also be enflamed unintentionally. In fact, rather than Komen owning the pink-ribbon nation, in the mind of the activists, the opposite is true: the pink-ribbon nation feels a deep sense of collective ownership over the policies and decisions of Komen. This sense of ownership is, in no small measure, the purest catalyst of the Pink Ribbon Rebellion. The network stood up to say, “This decision does not represent me.”
3. Individuals spanning multiple networks can serve as powerful network-weavers. Even though it was Komen’s policy change that inspired the strong reaction by the pink-ribbon nation, it wasn’t Komen that initially lit the spark that spread the wildfire. It was Planned Parenthood. In fact, all Planned Parenthood had to do was simply send out a few emails, and its network of supporters took it from there. Komen Did What?! Komen Can Kiss My Mammogram! read just some of the headlines and petitions.But the conversations didn’t stay within the Planned Parenthood network for long. Boundary-spanning activists—or those who crossover activist bases of both Planned Parenthood and Komen—played a significant role in cross-pollinating information across various networks, many of which included Komen supporters. Using Twitter, Facebook and good old-fashioned email, they stitched together a patchwork network of activists with common interests but different circles of friends and inspired them to act. The crescendo (or perhaps the dénouement) of this network-weaving narrative was on the night of the Super Bowl, when  individuals across both social networks used the twitter hashtag #TakeBackThePink, coupled with the Komen-marketed #SuperCure hashtag, as well as other Super Bowl-related tags, weaving the message into broader social networks. (For more, check out, http://takebackthepink.wikispaces.com).
4. Networks don’t just “Like;” they can “Dislike” too. As noted above, one of the biggest stories related to the success of the revolt of the pink ribbon nation is its powerful use of social media to express its displeasure at the Komen decision. In many ways, the use of social media by the pink-ribbon nation is nothing new—with over 540,000 “likes” on its Facebook page (as opposed to the approximately 235,000 “likes” for Planned Parenthood), and thousands of active tweeters, Komen has long harnessed the power of social media to advance its message.Nevertheless, the same medium that can create legions of support also can be a powerful transmitter of criticism. Which is what makes the social media usage in the Pink Ribbon Rebellion so interesting; it was more than a reaction, it was a reversal. For many of the online evangelists of Komen, this was an essential redirection; they had long been leveraging their social capital individually and collectively on behalf of Komen and, accordingly, their feeling of betrayal instigated a personal imperative to exercise their social capital in a critical manner as well. So, in many ways, the social media storm was not just about the credibility of Komen, but the credibility of the network as well, and the challenge to that credibility was something the pink-ribbon nation definitely did not like.

As we continue to experience an era of social change inspired by the masses, the Pink Ribbon Rebellion is another case study as to how personal passion, network-thinking and dynamic communication mediums can come together in explosive and unpredictable ways.

The lessons from these case studies may be as fluid as the networks from which they are derived, but they hold valuable insights into how we can empower individuals, instigate change and address what we individually or collectively perceive as wrong. They are an especially powerful reflection on what can happen when a network of individuals feel so intimately tied to the wrong that they believe it to be a reflection on their personal integrity and are thus driven to act. Most of all, they help us understand that the power of a movement is more than the ribbon we wear, but the passion with which we collectively wear it, regardless of its color.

Working Wikily: What did you find most interesting in the research you’re about to release?

Ben Thornley: It turns out that institutional investors engage in a relatively diverse set of activities that would meet the definition of impact investing, but call them by different names—responsible investing, economically targeted investing, ESG integration, and others. For all the talk of how fiduciary duty constrains activity, we were surprised about how creative they’ve become at ensuring that they can meet their fiduciary obligations and still have an impact.

WW: What do you think is the most important task for the field over the coming five years?

Expanding the audience for the discussion around social capital markets, impact investing, and innovative finance. The conversation has just started.

A lot of the energy today is coming from social entrepreneurs, particularly in the developing world, at the grassroots. When you bring up the topic in casual conversation, people typically talk first about that kind of work; channeling private capital towards the big issues of the day where the investment is most needed—in areas such as health, education, water and other resources, and agriculture.

By contrast, my focus has been on domestic markets and institutional investors. You might imagine there’s a big gap between those two—that they’re worlds apart. I don’t think so.  I believe a lot of the lessons we’re learning at the ground level are the things that inform investments at the highest level.

That said, we do have a lot of work to do to grow the provision of capital from the largest investors. I’m excited to find ways to include institutional investors and policymakers.

In terms of policy, the discussion is primarily happening at the federal level; there are also huge opportunities at the state and local level.

In terms of innovative business practices, the conversation is currently focused on SMEs and social enterprise; it could be expanded to include corporate America more generally, to engage them in thinking beyond CSR about their role in a sustainable economy.

And as far as financial innovation is concerned, there’s a ton of opportunities to grow impact investing to be a more broadly recognized form of investment. It’s still largely perceived as a niche strategy. Especially among institutional investors, we need a much broader understanding of what it means to invest with intent and for social and environmental impact.

WW: What will the field need to do to fulfill its potential?

We need to rally around a single definition of what it means to be an impact investor and what an impact investment looks like. There’s a definitional challenge.

For me, the two key elements of an impact investment are the intent and measurable impact. That’s a high bar to get across, but they’re essential elements.

Once we can agree on that, the task is showing people what impact investing looks like. There are phenomenal anecdotes of enterprises and social entrepreneurs having great impact. We need to keep telling those stories, and also to gather enough evidence to show that they’re not just anomalies and can be scaled up to have a broader application across capital markets. We have to demonstrate to the community what impact investing  looks like, how it’s possible, what best practices are, and what it means for a whole range of stakeholders to support this kind of activity.

WW: What do you see as the potential roles for consultants and other third parties reaching it?

Impact investing is still nascent and idiosyncratic, and people are still speaking different languages. Impact investing encompasses social investment, community investment, microfinance, and other ways that people have achieved a blended return between financial and social impact. But a lot of these people are talking at cross purposes.

There is a need for translators who can tell the story, both to bring in new audiences and to help the folks who are already involved get on the same page. There’s a lot of work to be done in bringing people together. Where you can establish a basis of independent knowledge and expertise that allows you to play the role of facilitator, bringing people together in conversation is an important role. That’s where I see the need for advisory firms like InSight.

The primary role we play currently is gathering data and evidence. We try to do it in a way that’s intuitive and provides structure.  Our priority is identifying case studies: where impact investing has happened, where policy has been developed, where innovation is especially notable, what has made policy reform possible, and how that reform can be translated to other countries and markets.

For example, in South Africa they have made some adjustments to fiduciary requirements providing additional flexibility to institutional investors. It’s interesting to look at how applicable that could be to other environments. It’s a very intensive and detail-oriented task, but an important one.

And then there will always be the role of providing direct advice to clients with their specific problems.

WW: What’s unique about the vantage point at Pacific Community Ventures?

I feel grateful that the policy work and the best practices work we are doing at InSight benefits from the other work of PCV. The equity fund’s work in communities is a great laboratory for understanding the challenges of deploying capital at that level. And our work on evaluation, with large institutional clients such as CalPERS, gives us a unique insight into how they go about investing with explicit non-financial intent. All of those things give us foundational knowledge to feed into forward-thinking idea-generation about field building.

But we’re a small team. InSight is five people. PCV has a total of 15. Part of our challenge is being heard and developing a sufficient reputation such that, when we publish and convene, the findings and ideas are disseminated widely. We don’t want to write reports that sit on a shelf. We want to do work that is applied, practical, and can make an impact.

WW: We proposed the terms “impact-first” and “financial-first” in our 2009 report as a way to distinguish among impact investors. Do you think those terms still fit?

Those terms have been very useful in putting people on the same page. As soon as you say them, people understand what you’re getting at. They will always be useful as a way to broadly describe investor motivations.

But the problem with the terms is that they are mutually exclusive. In a maturing industry, which is expanding to include new players and stakeholders, I think the terms will become less accurate. My sense today is that the leaders in the field see financial and social returns as blended and not mutually exclusive.

As we grow the field, we also have to keep in mind that the idea of impact-first investing makes the mainstream financial community anxious, which is often understandable. I did some research on primarily impact-first private equity investments here in the domestic market, and my sense was that funds for those activities are limited. It’s not a growing pool of capital, whereas traditional markets represent a much larger opportunity.

The language is something we obsess too much about. What we’re talking about here is a sustainable economy that everyone has a stake in. To the extent that we can demonstrate that financial and social performance can be delivered concurrently, the more the practice will grow

WW: How would you characterize the investing mindset you’ve seen at work among institutional investors?

My experience is that one way they think about this work of investing with ancillary social and environmental impacts is opportunistically. They’re certainly not willing to sacrifice financial return.

More generally, it is an increasingly popular idea that long-term growth is tied to the application of ESG criteria portfolio-wide. ESG integration is a conversation happening very much in the mainstream; any major institutional investor conference will include sessions discussing the issue. ESG is gaining currency for the simple reason that institutions want to preserve the value of their assets by avoiding exposure to unforeseen social and environmental risks and ensure that the companies in which they invest are well managed. It’s a financial argument.

An example is the California Teachers Retirement System. Like a lot of funds, they have an “emerging manager” program where they invest in funds managed by women and minorities. Here in California, where we have a large Hispanic population, they would argue that there are companies that have been undervalued, because Hispanic-owned businesses are often not served by the traditional private equity markets. They see that as an opportunistic way to diversify their risks and increase their return, with the added benefit of an “extra-financial” social impact.

WW: You shared an in-depth perspective on the state of measurement in the field with your report in 2010. What do you see as the most important recent developments and exciting possibilities?

There’s been a ton of work since then. There are folks like GIIRS, who are providing a product that will be really useful to a lot of funds and investors. There are folks like us, who do impact evaluation on a customized basis. And there are companies like SVT Group, who imbed impact evaluation into a more mature management and improvement process.

The tools can be very specific to an industry. For example, the Opportunity Finance Network created CARS, which is a way to evaluate the total performance of CDFIs, including on social measures. CARS does a good job of giving that industry most of what it needs for impact evaluation.

I believe there is a growing recognition that the tools now exist for impact to be evaluated, and that people know how to do it. In other words, the nut has been cracked: we understand the key impacts that can be measured, how to collect the data, and how to present it in a way that is useful—whether that’s in a rating like GIIRS, or a customized report like we produce for our clients.

The question is how can we make it cost-effective and efficient, in order to build the scale we need to standardize and create the benchmarks that will really add value. That’s an adoption question. How do we ensure that what we’re doing is what investors want and need?

In traditional financial reporting, there are certain things that people expect—that reporting be transparent, predictable (i.e. regular), that the methodology is known, that it can be benchmarked, and independently verified. All of those things can be done in impact investing. We know how to do that. It’s just making it a more efficient process.

There will always be investors with very specific impact priorities that may require a more detailed, costly, experimental, scientific form of research. That’s fine. But that’s a discrete need.

Once we figure out how to take all of the tools and methodologies and present them and implement them in a way that investors really want, we will build momentum in adoption. That’s what I’m encouraging people to work towards.

Of course the progress is slow, even with IRIS and GIIRS being launched. Adoption happens investor-by-investor— through their use of the tools to do a better job at impact investing.

WW: One final question—how have you seen the field developing differently from one region to another?

I don’t know as much about international developments in impact evaluation. But certainly one of the big differences is the extent to which the government sees itself playing a role. In some jurisdictions government plays a more prominent part, such as in Europe. In India there’s been a rapid series of innovations in ESG reporting. The same goes for Australia. And the conversation is also happening in the US; consider that one of the funders of GIIRS is USAID.

It’s clear from watching the history of social movements that they can play a powerful role in achieving cultural shifts and policy change, and any organizer can tell you about changes that they’ve witnessed in the people they work with. But after decades of organizing and supporting movements, nonprofits and foundations still struggle with how to open the black box of a movement and accurately describe its progress. This is a considerable problem in the midst of the movement throughout the social sector towards evidence-based decisionmaking.

The essence of the challenge is that there is often a mismatch between the outputs that can be counted but might not be meaningful and the outcomes that might not be countable but are the reason for doing the work. I had to wrestle with that challenge in the work we did to design volunteer programs for Service as a Strategy, an initiative that gives mayors a set of instructional “blueprints” for calling on volunteers to help advance important policy priorities. It was essential for every blueprint to provide clear metrics for showing the value of the work, but my team often found that the outcomes operated on a far longer time horizon than the outputs that we could recommend counting.

The good news from three USC academics is that there are now better metrics for measuring movements and more support for proving results among organizers. Manuel Pastor, Jennifer Ito, and Rachel Rosner released Transactions, Transformations, Translations:  Metrics That Matter for Building, Scaling and Funding Social Movements last October, based on input from over sixty experienced organizers and others actively involved in movement-building. (Thanks to Beth Kanter for bringing it to my attention, and to Mario Morino for bringing it to hers.) In their conversations, the authors observed a marked shift in both the mindset around measurement and the tools for accomplishing it.

From my perspective watching the field, the mindset shift is the most interesting news. They report that whereas “community organizers have not always helped matters” by being “resistant to numeric measures on the grounds that these fail to capture the… one-on-one epiphanies of their members,” today “the field is changing: Recognizing the gravity of the times, hoping to gauge their effectiveness, and wanting to add up to more than the sum of their parts, the movement builders we interviewed are eager to come up with a common language and common framework.” They also say that a change is afoot among funders: “There are a wide range of program officers and philanthropic leaders who are eager for the evidence to make the argument that movements matter. They are actively looking for the tools and the stories that can help their institutions see the bigger picture.”

But if you’re doing this work, whether as a funder or a nonprofit, it will be the meat of the report that you’ll be most interested in: a set of suggested metrics for every aspect of movement-building. (Heads up to those who participated in the Network of Network Funders and anyone else interested in networks other than movements: a great deal of what they describe applies equally well to measuring the progress of growing networks of all kinds.) They divide them among community organizing, civic engagement, leadership development, alliance building, campaigns, research and policy analysis, communications and framing, media, organizational development, and movement building (on the whole). In each area they suggest telling a story of progress using two types of metrics: transactional and transformational. They define them as follows:

Transactions involve the quantifiable markers both internal (e.g., how much funding, how
many members, etc.) and external to the organization (e.g., voter turnout, policies passed, etc). While the data is not always easy to collect (especially with transient or mobile groups), such measures tend to be easier to track because they are more tangible. But transactions only tell part of the story and tend to skip over the richness of experience and momentum that can be precursors to big change.

Transformations, on the other hand, are the vital but sometimes “invisible” work. They show how people, organizations, and movements have been altered through the collective efforts. Taking the transformation further, they can show how societal and political views have shifted or been impacted by movement building.

They also have a special section for funders that recommends the following as goals:

• Build the Movement Metrics Toolbox
• Develop Movement Capacities to Use Metrics
• Nurture Leadership and Leadership Pathways
• Link Policy Outcomes with Broader Social Change
• Communicate Transformative Shifts
• Document Innovation and Experiments
• Adopt a Movement Frame to Evaluation
• Co-Create the New Metrics of Movement Building

Their suggestions are far from a final solution to the problem, but they do represent a real step forward. If you do this work, I heartily recommend you take the time to read their analysis. Please let me know:

What challenges do you face in quantifying your work to build movements, and how do their suggestions compare to your current practices?

You can find the full report on the USC website, or flip through it below:

It was a day of doing, structured as an innovation session, but also proved instructive and inspiring in seeing the frontier of progress for the issue areas of both impact investing and regional food systems. Here are some highlights from the presentations and plenary conversation that I think would be of interest to any fellow watchers of those two fields:

IMPACT INVESTING

• The concept of impact investing was thoroughly accepted within the group, but the precise definition varied. One of our tasks in the convening and report we put out in 2009 was to help impact investors settle on a definition of the field and a standard name for it, so it’s interesting to see how that has developed. What I heard was very strong coherence on the term “impact investing” and almost perfect coherence on the definition, with some variation around the edges. One person had a very strong association of the term with equity as opposed to debt, for example. Others saw negatively-screened SRI funds as impact investments, which are often used as the example of what impact investing hopes to surpass.
• Everyone agreed that technical assistance for investees is a must. We highlighted this in our report three years ago, and in yesterday’s conversation it was a running thread through the day, to the point that our hostess Glenda called it out as a theme for every working group to address.
• The rules around accredited investing may soon be relaxed. One of the major stumbling-blocks for getting small-scale investors involved in impact investing is the need to be accredited in order to buy equity or provide debt to a company that isn’t listed on a national exchange. There is a bill now that would make an exception to that rule for investments up to $100, which currently in Congress and has already passed the House with support from both parties and the President. If it clears the Senate, a new cottage industry could be born.

REGIONAL FOOD SYSTEMS

• California government is becoming aware of both impact investing and regional food systems as a way to build jobs. The follow-on to this event will be a report full of recommendations on exactly how to use the combination of the two as a means of rural economic development, and that report was requested as part of a state-wide economic development agenda that will be put in front of the governor and legislature in May. Even if that is the first that our state’s leadership will have heard of it, the discussion has moved inside the halls of government.
• Regional value chains are a powerful starting-point for advancing food system reform. Glenda and her team are taking an active role in building the value chains of regional food system, and see great value in working with the enterprises to find new efficiencies through coordination and shared services. One of the key challenges to sustainability-focused food enterprises is how to bring their products to market in a supply chain that was designed for giants, so this struck me as a great way to help these smaller-scale teams find the resources they need to be successful.
• The California Endowment has launched a major food-focused impact investing fund. This isn’t news, since it began halfway through 2011, but it’s worth looking into if you haven’t yet. It’s called FreshWorks, and it is currently comprised of about $250m of capital from banks and foundations. They offer avenues to get involved for investors with every type of profile: large or small, high-risk or low-risk, and grants vs. equity vs. debt. They even found a creative way for retail investors to make investments as small as $20 through a combination of the Calvert Community Investment Note and a microfinance platform. It is providing both grants and loans, focused on access to healthy food, economic development, and innovation in food retailing.

What this meeting produced was the initial energy and ideas for six small working groups to split off and compose specific policy recommendations to include in the report, to be finalized through virtual meetings and a second face-to-face session in February. Stay tuned, and in the spring I’ll report back when the ideas are finalized and ready to bring to the state leaders.

Happy holidays! Enjoy the season and we’ll see you in the new year.

Social networks are hardly news. Everyone participates in networks in our families, schools, neighborhoods and workplaces. For activists from Mahatma Gandhi to current Tea Party and Occupy Wall Street leaders, understanding networks, linking together citizens and harnessing the power of network connectivity have been central to creating social impact.

The reason to use the language of networks today is because there are now countless venues where citizens can connect with one another, nurture networks and create change for themselves and their communities. Many of these efforts were novel experiments just five to ten years ago. The crowdsourcing platform Ushahidi was piloted in 2007 and is now critical to relief efforts in crisis situations. Facebook has grown from zero users in 2004 to 800 million, or nearly one out of every nine people in the world. This story of an increasingly networked citizenry is also about face-to-face relationships. Saddleback Church, for example, has grown from 200 churchgoers in 1980 to 20,000 attending weekly services at the megachurch’s southern California campus in 2011. Its growth and sustained participation have been driven by the strong ties that are nurtured through small clusters of members who regularly come together. Small efforts to connect and empower people today could be transformative in just a few years.

Understanding such network projects and the practices that are enabling their success was the focus of a Monitor Institute and Knight Foundation study, which resulted in the report, Connected Citizens: The Power, Peril, and Potential of Networks. We studied over 70 projects —mostly in the United States and some in other countries—that are helping individuals make the change they want in the world. We focused our inquiry on efforts that are embracing a network-centric approach, a way of working that is open and decentralized. Many of them are technologically enabled. Others are rooted in in-person relationships. Most combine online and offline interaction, as well as insights from the open-source movement and grassroots organizing. All of them are about making connections.

We gleaned from our research a set of “network-centric practices” that enable citizen-centered change and capitalize on the increasingly connected and interdependent world in which we live. Like the projects we studied, some of these practices are long established, others are newer, and all represent alternatives to traditional ways of getting things done.

These are not stand-alone models. Projects using a network-centric approach are likely to embrace many such strategies at the same time. The point here is not to create a dichotomy, suggesting the common method is bad and the network-centric alternative good. We believe that skillfully blending the two will be an important leadership ability in the coming years. For example, city officials in Chicago mounted a campaign called “Give a Minute,” asking all citizens to contribute suggestions about how to increase walking, biking and the use of public transportation. They pledged to read every submission, give direct responses and incorporate the voice of the public into their decisions, while still making the final policy choices themselves.

While the field of network-centric civic action is rich, it’s still in its early days. Most of the projects we looked at are experiments, just a year or two underway. We have articulated these emerging practices in the hope that social change makers will use these observations to grow and evolve this high-potential field.

The question to ask yourself is: where are there opportunities to break out of default ways of working and experiment with network-centric approaches to scale your impact?

WHERE: Hosted online by Leadership Learning Community – click here to register

For six years, the RE-AMP network—comprising 125 nonprofits and funders across eight states in the U.S.’s upper Midwest—has been focused on just one audacious goal: reducing regional global warming emissions 80 percent (from 2005 levels) by 2050. And it’s working. Much has been written about the power of collaborative networks and shared leadership to increase social impact. For nonprofits and funders that want to go deeper on the tactics of how to build an effective network—and what kind of unique leadership is needed within networks—it is useful to understand how RE-AMP has done it.

RE-AMP’s process was grounded in the tools of systems dynamics and multi-stakeholder facilitation. But RE-AMP combined these well-known “best practices” with network-centric “next practices”—including different leadership at different stages in the network’s evolution. During its two-month study of RE-AMP, Monitor Institute identified six key principles that RE-AMP members followed in building their network and described them for other social-sector leaders in a case study, available on the Monitor Institute website.

Join us to learn about those six principles—with a particular focus on network leadership—and for a conversation about how to build aligned action networks powerful enough to move the needle on major social challenges.

Speakers

Heather McLeod Grant – Author of the report and a senior consultant with Monitor Institute.

Rick Reed – Original funder of RE-AMP with the Garfield Foundation.

So I tapped my inner Francis Ford Coppola and decided to break out the video camera to make a short (but obviously masterful) video about the “Top 10 Things We’ve Learned about Networks,” using conference participants—the “people formerly known as the audience”—as the stars.

(You can also watch it on YouTube.)

After spending a couple days with nearly 150 smart, network weavers at the GEO/ Monitor Institute “Growing Social Impact in a Networked World” conference, I am reminded of one of my favorite quotations:

“The more you learn, the more you realize how little you know…” (Socrates, according to Plato)

One of many ‘ah-has’ came early during the well facilitated conference.   It was just an off-hand comment from June Holley that the basic building block of network weaving is the “closing of triangles.”

As June’s colleague Valdis Krebs explains in a 2006 blog post on “Network Weaving 101”:

“An “open triangle” is where there is an opportunity to introduce two people by the third person who knows them both — it is a triangle with one missing link like in the diagram immediately below. A “closed triangle” is where all three people know each other.”

I’ve always been fascinated by how and why some people “see” open triangles and “act” to close them – while others do not.  It was good to see how different people are aligning sector culture, systems, and incentives to encourage individuals and institutions to take the extra time to magnify their impact by closing triangles.   We saw evidence of it in the networking.  We see it when people share documents/templates.   We see it through curation and what Beth Kanter called sense making.

It is ultimately to everyone’s benefit when we see ourselves as a node within a network … and that network as a node within a larger movement.

And this collection of innovators certainly tended to see much larger and more complex “triangles” than most others.  That ability to envision and view themselves as movement builders is what made this an especially rewarding gathering.  People recognized that we are all knowingly stumbling through the fog of innovation – and it’s helpful to have peers help identify where the blind-alleys are located.

So the week left me appreciative of what someone called the power of the “people formerly known as the audience”.  That is, we each of us contribute our small piece of what we learn and when we share it with others, we help them, ourselves and our movement.   And because so many diverse perspectives were represented, we were all enriched by the insights that can only happen at the intersections of cross-subsector, cross-functional role gatherings.

How fitting, for a conference on networks.

The wisdom of crowds, the insanity of crowds.

Mention the word “network” to most people and their reactions tend to sway between these two polar extremes. It’s either “crowdsourcing is the answer to everything” –or it’s a complaint that social networks like Facebook and Twitter are just “too full of chatter.”

If I have one takeaway from the GEO/Monitor Group conference on Networks earlier this week, it’s about how crucial the curator is in determining the difference between a successful network and one that simply makes lots of noise.

Disrupting Business as Usual

This insight hit home for me when serial entrepreneur Lisa Gansky talked about innovative businesses like CouchSurfing (http://www.couchsurfing.org/), Zipcar, and AirBnB.  Gansky calls these “Mesh” businesses (http://meshing.it/)—enterprises that leverage data and social networks to allow people to share resources conveniently (a car sitting idle, an extra room in your house).  And she argues that they represent the future of our economy.

Gansky may well be right- but it’s not just in the for-profit world that these kinds of start-ups are disrupting business-as-usual.  Some of the most promising innovations in the non-profit space are using substantially similar models. Donors Choose (http://www.donorschoose.org/), for example, allows people to pool small donations to help enterprising teachers get funding for classroom projects. Ushahidi  (http://www.ushahidi.com/) allows people to pool information into online crowdmaps with diverse uses—for example, allowing aid workers to see where resources are most needed after a natural disaster.  And Kiva (http://www.kiva.org) builds on already existing networks (including that network of networks we call the Internet) to give people the opportunity to loan money to entrepreneurs in the developing world.

The Value of Specificity

Of course, Kiva, Ushahidi, and Donors Choose and hardly the only non-profits trying to bring people together for a common purpose- one might argue this is embedded in the mission of almost every non-profit.  And they’re certainly far from the only non-profits trying to take advantage of online networks and the access they provide to reach new supporters and constituents.

What does distinguish these organizations, though, is the specificity of what they ask people to do when once they’ve brought them together in conversation. They don’t just say, “You’re here now, talk amongst yourselves.” They give community  members a very concrete piece of information to take advantage of.  A woman in Kenya (replete with name and photo) who could use your $50 to start a corner store.  A car at the intersection three blocks away which you could use to take the trip to Target that you’ve postponed for two months.  A specific classroom in rural Ohio that needs $200 for a science project.

To produce this high-quality information, these organizations have to make early and careful editorial decisions about the format and kind of information that will or won’t appear on their site—making sure it’s easy to use, (relatively) easy to source, and easily actionable.

Finding the Right Balance

It’s always tricky to find the right balance of specificity and openness–directing people toward action but still giving them room to be creative.  But time and time again, this is what successful network leaders do, whether online or off.  In their effort to catalyze networks of young Jewish innovators to revitalize American Jewish culture, the folks at Reboot (http://rebooters.net/) bring together a group of leaders for a in-person summit every year.  Not only do they very carefully select who will be in the room, so as to maximize the chances of creative chemistry.  They use the ‘open space’ methodology for the conference—allowing participants to set the agenda, while also giving some structure to their explorations.

As philanthropy takes up ‘network thinking’ as its next frontier, there is the danger that we’ll get too caught up in the technicalities.  We’ll focus on the fancy tools of mapping and graphing; we’ll have debates about terminology and definitions.  All of this is very important. But at the end of the day, when you bring people together, the key to spurring collective action isn’t just about our technical sophistication with network theory.  It’s about how well we frame the opportunity.

In other words, the secret to thriving networks boils down to one thing: good curation.

Lists. I am a list maker. To do. To followup. To call. And at a conference like Growing Social Impact in a Networked World, I made several lists–in my notebook, on my iPad, emails to myself, and on those very cool hexagonal Post-its. I will work through all of them over the next week or so but the list that will keep growing is the one of insights and new ideas I gained from hearing fellow participants share their knowledge, experiences, and tools.

I was very fortunate to be a part of the early Network of Network Funders community of practice. And it was amazing to be at this meeting and see and connect with real examples of foundations struggling and succeeding with networks in ways that were just notions (yes, hunches) a few years ago. I entered the community as a foundation evaluator wanting to find the best strategies and tools for documenting and learning about networks but also for measuring those difficult-to-pin-down outcomes and impact.

Catalyzing Networks for Social Change: A Funders Guide laid out a framework for assessing networks and their effectiveness and the discussion at this meeting confirmed the usefulness of the frame for looking at impact at 3 levels: connectivity, network formation, and field-level outcomes.

The funders here this week also validated the different purposes and approach in evaluating networks–the importance of patience and timing, the perspective inside (versus outside) a network, the balance of attribution and contribution, the network’s value and use of learning and assessment, and the developmental nature of both the network and the evaluation.

My list of new ideas and followup items gained from colleagues this week challenges me to think harder about not only WHAT to evaluate with networks but also HOW and WHY.

Action: In the struggle to define and measure networks as means or ends focused on process or outcomes, several people offered examples of networks that took smaller actions that could be observed as evidence of progress and network health and as interim steps towards creating the conditions for greater impact later.

Value and Values: We’ve often defined network participation in terms of the value that network members identify for themselves. And we’ve underscored the importance of networks articulating their values and keeping themselves accountable to those shared values. Being result and outcome-oriented is also a value that networks can hold for themselves and evaluators can look for evidence of networks holding themselves accountable internally and externally.

Space and Boundaries: As foundations (funders, investors), we struggle with how much control, authority, influence, accountability, and expectations we exert with networks that need to grow and sustain themselves. But funders can contribute more than just check-writing by seeding the environment and space with the basic infrastructure and impetus to get started (without micromanaging) as well as suggesting boundaries that can help focus networks who struggle with too many opportunities and ideas. Evaluation can also help foundations get the feedback they need to modulate their role and influence.

Communication: The words we use. People are struggling with how to describe the messy processes and life cycles of networks in ways that non-network members (the resource decision makers called trustees) understand but also in ways that analyze network function and experience that contribute to real-time learning. We need case studies that are prospective, real time, and that analyze the different choices and components of network action (and not simply a story). And as Eugene Kim pointed out, we can’t simply read the case study about violin playing, we have to use case studies as the prompt to actively reflect, experiment, and learn.

We’ve all been in a meeting where someone new to the field sits down at the table and says, “Wow – why don’t you all do it this way? Haven’t you ever thought of this?” about a topic where yes, the rest of us in the room have been thinking about this for a long, long time. Maybe we have our own special name for it, our insider’s jargon, and the newcomer just hasn’t learned the code yet. Or maybe it’s an idea that’s been tried before and failed. The old timers may respond wearily that this ‘new’ idea isn’t really new at all, it’s just unknown to the freshman. Where, they wonder, are the really ‘new’ ideas – brilliantly original concepts or things that have never before existed and will change the world the second they come into being? That’s the kind of ‘new’ funders like to fund.

The Network Funders meeting this week crackled with excitement. I overheard comments like: “my brain is in overdrive,” “I can’t wait to try this in my work,” and “I wish the conference were longer.” Funders were fired up. But the anthropologists and social scientists in the room were a bit more blasé. Measuring relationships? The importance of reciprocity? That’s Anthro 101. Today’s tech tools just make it easier for more of us to appreciate, track, and measure the qualities social scientists have been investigating for years.

So maybe this idea of network thinking isn’t really ‘new.’ It’s was just unknown to the philanthropy community. But that doesn’t mean it can’t be transformative. You’re introducing an idea into a new environment, where it may be adapted, absorbed, and morphed by people who are looking at this old knowledge from a new perspective. By getting to know these ideas, we blend them into our own frame of reference, creating something that is changed, if not wholly new. And by taking this leap into the unknown as a group, we’ve built relationships that can lead us into new territory, or combine into a really good idea, like two of Stephen Johnson’s turtles [link to video here].

Will network thinking be the new happy accident for philanthropy? At the very least, it’s a reminder to be patient and less world weary when we encounter an enthusiastic new colleague. Who knows what their experiments will lead to, if we give them room to explore instead of just telling them the old answers.

One of the themes raised up as the GEO/Monitor Institute conference came to an end was the importance of  trust and relationship building in networks. Indeed, that was my theme for the day given that I facilitated a couple of morning conversations on that topic and then in the afternoon heard Ify Mora from the Barr Foundation talk about how they use social network mapping to capture the relationships that have been built through their innovative Fellows Program.

So, as I leave the conference I’m wondering how storytelling might be combined with social network mapping to make the broader case within philanthropy that relationship building — and the spaces and processes that support it — matter. It’s an important challenge to meet because I think that unless relationship building is broadly recognized as a key measure of impact, it will continue to be under-resourced (to the detriment of achieving the larger goals and outcomes people are working toward).

The philanthropic exploration of networks potentially offers a new platform or frame to talk about the need to explicitly value process and relationship-based work. And that opportunity links to the other top two network themes raised up in today’s final session: the value of values (naming what’s important) and the need for funders to see themselves as changemakers within networks rather than just funders. In short, what might be gained by funders taking off their organizational hats and bringing our whole selves into the equation?

I think if more funders do step outside of their traditional roles it will be through different kinds of relationships with both grantees and other funders. And, as was apparent throughout various conference discussions, those relationships will blossom if they are built on trust, humility, and a willingness to be both vulnerable and generous with each other.

So, a percolating question for me going forward, both individually and organizationally, is: How do we walk our talk when it comes to operating with a network mindset where process and relationships truly matter?

For a while I’ve been puzzling over what makes a good network leader. The traditional models of organizational leadership clearly don’t apply, but then, which models do? The Grantmakers Gathering on Networks provided a few a-ha moments for me about network leadership:

1. The first leader or leaders in a network are like first responders at the scene of a crash—they’re in charge of making things happen until the structures get set up to fully address the situation. No one tells them to take on this role—they do it because they see the need, or the crisis, or (best yet) the opportunity. (With apologies to the woman in Rafael Lopez’s network leadership discussion group, who offered this great analogy and whose name I didn’t catch!)
2. From Leslye Louie of Encore Fellowships (http://www.encore.org/fellowships), network leaders “Seed, then cede.” They find other great leaders within the network, then step back and let them lead.
3. Developing talent within a network fuels innovation. If you don’t share the leadership, the network won’t remain relevant, and it won’t survive.
4. When you start building networks, you won’t be out of there by lunch. It takes time, and leaders had better commit to be there for a long time. Years, usually.
5. Network leaders have to earn their authority within the network. No one is going to hand it to you with flowers and a box of chocolates.
6. From Marty Kearns (http://www.network-centricadvocacy.net/): Networks empower resilience and redundance in leadership. No one should be irreplaceable in a network.
7. From Eugene Eric Kim (http://groupaya.net/): the route to change is people.
8. When it comes to network leadership—and everything else in networks, for that matter—there’s a limit to how much you can prepare. You just have to do, because experience is the best teacher. As Eugene Eric Kim said this morning, “What can you do to start practicing, without having to wait to know what the answers are?”

So, what are you going to do next to lead, in whatever networks you find yourself?