Thursday, March 19, 2009

Random notes on philanthropy

I'm on the road again. What follows are several areas of thought, not necessarily related or coherent:

Volunteers and nonprofits
In a discussion group yesterday with about 30 foundation executives two threads kept passing one another. The first - will this economic moment be one in which the age-old trope about "too many nonprofits" passes on, as more and more npos merge or go under?* The second - commentary on the recent news coverage of waves of volunteers . How did these threads cross? One line of discussion was how to help nonprofits use volunteers well and effectively, when this particular flood of them may very well be highly transient. Another had to do with helping the volunteers stay engaged, without encouraging them to start new nonprofits. And finally, some blue sky talk about perhaps the two phenomena shouldn't just cross - new volunteers and old organizations - perhaps they were the first signs on the horizon of a new ecosystem. No one really knew what that meant, but it sounded good and was fun to think about.

Minimum viable product
Venture capitalists are talking about products that get to market with only the most basic features. These products/services - think iPhone, twitter, Flip video camera - go out to customers in a near raw state and then the developers behind them watch what happens. How do customers use them? What features do they want most, ask for most persistently? This process does several things - it allows for real-time feedback from users to be useful in product development, it lowers the cost to getting a product out there, it (theoretically) brings in revenue faster (assuming first product is not free), and it builds a customer base early on. It relies on being able to "release early and often" (in other words, to iterate fast) It also limits the "oval office" syndrome of only talking to those in your inner circle and then pretending to know what the outside world wants.

What would this look like in philanthropy? Perhaps foundations might engage nonprofits and activists sooner in designing programs and strategies? Perhaps nonprofits might listen to their constituents earlier about what they need, even trying to act as "thru-ways" for that information to get to funders? Is it too risky to do this (life-saving services are not video cameras, after all)? Where does your organization fit on a spectrum from "minimum viable product" to "analyzed ad infinitum and thus perfect in every sense except it lacks any reality testing"?

Bonus bailout conversion foundations
Several rounds of ideas, discussion and tongue-in-cheek posturing about Congress taking back the AIG bonuses and using the money to fund community investment funds, loan pools, job training programs, etc. At least one person proposed taking the $165 million and putting it in the Starr Foundation, created by the founder of AIG. Others (read the comments on the post) thought not. One person noted that taking back these bonuses and a small part of the rest of the bailout funds would allow for a per capita distribution of $1 m per American. If nothing else comes from our current moment, I find it all deeply useful and provocative for getting people to join me in my favorite topic of discussion - how does philanthropy relate to the commercial and public sectors, how is that changing, and what would better look like.

*Somewhere on twitter in the last week I saw a stat of about 52,000 +/- 501 c 3 registered by IRS in 2007 - of course, being on twitter, there was no context for that number. I don't know if its high, low or normal.


Gene Takagi said...

As always, a thought-provoking post. The IRS 2008 Data Book reports that over 79,000 applications for exemption under 501(c)(3) were received in FY 2008 (down from about 86,000 in FY 2007). Nearly 55,000 applications were approved.

Vicky Trabosh said...

Great post - thanks. I run the Itafari Foundation for Rwanda Your info is timely and excellent. I'm speaking Friday at NW University on Using Business Skills for Social Good. I'll mention your blog as one to follow. Also, just followed you on twitter. Thanks!