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Posts from the ‘Best Practices’ Category

OPAL Panel on Successful Philanthropic Partnerships [video]

November 1st, 2020

Richard Marker

https://drive.google.com/file/d/1Yy_DAQA1tIFgrah-pPsNSLkFeBgA5mJm/view?usp=sharing

#394 Must Scale Be a Precondition for Sustainability? [Corrected]

October 13th, 2020

Richard Marker

This is a hardly a new question. [Long time readers may recall several previous articles raising similar questions: “Right Sizing…” Dec 2016; “Winning Small….” July 2018; et al.]

Most for-profit businesses rely on scale. Nonprofit business models struggle to achieve scale. Funders, deciding on the viability of their non-profit grantees, should ask the question. Is scale a precondition for long term sustainability? Should it be?

The issue is more poignant and pressing today than ever. The viability of many in the non-profit sector, the conceptual and capacity challenges to funders everywhere, the recognition that philanthropy can never be separated from public policy all converge to raise questions about whether the operative business models for non-profits of the last period of time can still be valid.

For the last couple of decades, the assumptions about non-profit viability has been heavily informed by b-school thinking. Funders of established organizations have pushed organizations to be less dependent on philanthropic giving and more on earned income as a measure of long-term viability. Start-ups are often rated by their likelihood of achieving disruptive scale.

Scale does matter: one needs look no further than the US embarrassment regarding COVID-19 testing. Literally millions of people have found it difficult to get tested – and when tested to get timely results. [Even though this is the political season, for this piece, I will exercise restraint in my opinions about why that is. I am sure any regular reader knows my feelings.] The inability to provide testing at scale has limited the ability of many in the USA to make safe and reasonable plans for their own behavior, and businesses, schools and communities have been handcuffed in knowing how or if to develop a new normal.

The same will be true when a genuine scientifically reliable vaccine or treatment becomes available. We will return to normal, whatever that will mean, only when they are available at scale.

Another example, about which the literature is overwhelming, is about food insecurity/hunger. In the USA, There is simply no functional alternative to SNAP funding to reach scale. [Perhaps a guaranteed income on which a family can really live would be an alternative but that requires major systemic re-thinking.] Food pantries, soup kitchens, and other local efforts are still indispensable, sadly, but none can systematically assure that the millions of families, children, undercompensated receive essential and basic sustenance.

We see this assumption in funders’ responses to innovation in both for-profit and not-for- profit sectors. On the for-profit side, a new idea doesn’t have to be as disruptive as an Uber or Lyft or Airbnb or any of the other disrupters to warrant initial or mezzanine funding; but to receive funding, it would have to have a credible business model which would bring it to self-sustainable scale in a reasonable time frame. There are capital markets at every stage of the process that make those risks viable, and there are even tax incentives to give those risks even a little extra push.

This is true on the social impact side of this as well. It is certainly acceptable and reasonable to achieve social good through for-profit investments. To take but one example: Once upon a time, support for solar energy fit neatly into the grantmaking side of a foundation’s portfolio, especially for a funder with a commitment to environmental sustainability. Today, such funding fits comfortably on the investment side since its financial viability and its positive impact are so clear to all but some recalcitrant deniers. [Full disclosure: we are personal investors in solar energy development projects both in the United States and Africa.]

It is far less easy on the not-for-profit side. Very, very few not-for-profits ever reach the stage where they can generate sufficient fees for service or endowment income to be fully self-sustaining without dependence on grants and charitable gifts. It is somewhat easy to get limited start up funds for an innovative project but the larger a new organization gets, the greater the dependence on more and larger gifts. There is a very limited identifiable capital market for mezzanine and second stage not-for-profit organizations. The problem is that all too often funders have drunk the venture capital or impact investing Kool-Aid. “Will you be the disrupter that addresses hunger or poverty or homelessness or illiteracy? [you know, the little things.] And if not those, will your new project be sufficiently compelling that it will reach the scale, scope, and sustainability justifying the aspirations of both funders and creators? It is a rare not-for-profit that can credibly claim that business model.

The last 6 months have challenged those assumptions of what success should mean. Organizations that had built their business model around fees-for -service or government reimbursables have suffered greatly. The higher the percentage of reliance on those income sources, the harder it has hit. Organizations that relied more heavily on traditional grants and contributions had more reliable income, even if more variable than in “typical” years.

Moreover, as funders have become more committed to responding to a radically changed reality, many of us have frontloaded our giving, reduced our reporting requirements, and eliminated our restrictions. [How permanent those changes remains an open question – but for another time.] Locally/placed based grantmaking has resurfaced as a high priority for many, especially to direct service organizations.

What is evident in these changes is that scale can no longer be the primary driver. Of course, there may well be organizations that can deliver more, better, faster, and more efficiently even on the local level, but that doesn’t guarantee that they can do so everywhere and to everyone. If there are racial inequities, food deserts, uneven economic prices to pay for the pandemic, efficiency only takes you so far. Community based organizations may know the needs of their communities, and especially of micro-communities, that larger, more efficient organizations don’t.

I would hope that this corrective represents a welcome rethinking regarding sustainability. There are circumstances when sustainability cannot ever be based on program generated or endowment income.

There are even circumstances when scale becomes a counterproductive criterion. Permit one very real example to suffice: When I was CEO of a foundation 20+ years ago, we were involved in numerous funding collaboratives. One was in support of a very wonderful innovative program for and by young adults. Its ambitions were aligned with its capacities; its commitment to quality a reflection of the thoughtfulness of the founders; and its success commensurate with both. One of the funding partners believed that this was such a wonderful model that it should be scaled up. They persuaded the rest of us to hire a consultant who specialized in this kind of non-profit scaling. Sure enough, you are not surprised to read that at the end of the consultant’s extensive analysis, they came back with a series of recommendations about how to bring this boutique organization to national scale. [I was on record as disagreeing, but was outvoted, and if one is in a collaborative funding arrangement, there are ground rules.] Shortly thereafter, a development staff was hired, a new executive was selected, and a national roll-out was initiated. A year later the organization went out of business.

What happened? When the organization was small, local, and controlled by those who were peers of the target market, it worked great. When those folks were essentially relegated to program staff but no longer making the big decisions, it didn’t. Why? Because once it attempted to reach scale, it became a competitor to much larger, much better capitalized organizations. The agility and responsiveness that made it successful on the local level became impossible to achieve on the national level. While I know that I am not giving readers too many details here, suffice it to say that it was a classic case of funder overreach and the idealization of scale as a goal. We were simply wrong, and a jewel of a program became worthless.

Let me return to where I began. Scale does matter in addressing systemic issues; in fact, it is a sine qua non. There are times when anything less is not enough. But implementation is almost always local. And how to implement often requires local knowledge that a big picture funder may not have. We don’t always solve our most pressing problems if we only look at financial sustainability, equate capacity with scale, or dismiss the value of local innovation. Our funding commitments must include the vulnerable, smaller, and local if we truly want to bring impact to all.


The Institute for Wise Philanthropy has been teaching and advising foundations, philanthropists, families, and philanthropy organizations around the United States and the world since 2002.

#392 When You Stop Learning, You Stop Knowing

August 17th, 2020

Richard Marker

It has happened in the past; it happened three times in the last 2 weeks: I had registered for a number of on-line networking and educational seminars. When a couple of the other participants, and in one case, a presenter, saw that I was participating, they asked me [in “chat” as we do these things these days]: “Why are you on this? Shouldn’t you be speaking/teaching this?”

A decade or more ago, after I had been an educator and speaker about philanthropy for a few years, I started hearing these questions when I would attend conferences where I wasn’t a speaker, or regional association and affinity group meetings as a member and not as a presenter. It is not up to me to decide if I am or was a thought leader in our field, but it was evident that many others thought of me that way.

This is flattering, to be sure, and I daresay, perhaps immodestly, that they were correct – I could easily have been a presenter in the recent sessions alluded to above, and quite often in comparable settings a decade ago. But just because I could have doesn’t mean that I was wasting my time – or theirs. I learned a long time ago that the minute you think you know everything is the minute you start to become irrelevant.

Different people have different learning styles. Speakers and educators have different presentation styles. Vocabulary [and jargon] change over time. Context matters. Underlying agendas are fluid. Just because one knows something doesn’t mean that one knows all there is to know. Even if I could easily have been a presenter in all of the sessions alluded to above, that doesn’t mean I didn’t learn from each. I could pay attention to what other presenters emphasized, how they said what they did, what questions were posed in the “chat”. They made me consider whether their approach was more on target than mine would have been – or less. They made me consider whether some of my business model choices were on target, or seriously flawed.

Even more crucial than affect or style is the recognition that our field, any field, is constantly evolving. Sometimes those evolutions are simply “old wine in new bottles”, but other times there truly are transformative ideas that can profoundly impact one’s thinking. If one rests on one’s “expertise” laurels, it doesn’t take long for that expertise to become dated.

A good example that transcends the philanthropy world is social media. Many organizations originally thought that they would become au courante if they simply developed a website or had a Facebook page but made no other changes in the way they communicated or operated. The proverbial “old wine….” Others, though, recognized that social media is not simply a new marketing tool but a transformative mode of epistemology and human experience. We know now that some of that transformation has been very welcome and some of it quite destructive, but there is no doubt that our world is as different now as print media was to the masses 3 centuries ago.

Expertise, even when legitimately earned, can still be very limited. This is often true of those in the academic world. [I used to be one, so I am not exempt.] One example: Some of you may remember the short-lived L3C fad of some years ago. For those who don’t – it was a pre-B-Corps experiment, heralded as the solution to solving social challenges through a private sector structure. At the time, as part of the curriculum for a course I was teaching for “Advanced Funders”, I invited someone who was considered to have done the cutting-edge legal work on L3C’s to present. No doubt the presenter knew more about L3C’s than anyone – until the funders began to ask questions. What became clear was that this “expert” had NO contact or discussions with anyone who might implement them or include them in their philanthropic problem-solving strategy. I scratched my head wondering how this person could have written what was considered the definitive document without talking to anyone.

Expertise can also be deceptively insular. Examples of this abound in our world of funders. Those who have done very interesting work or developed suggestive new models are often asked to present at conferences and courses. Often [not always, of course] there is no doubt that the work is worth learning about, but the presenter has done so at only one foundation or organization. When asked to extrapolate how to apply it to other situations, perhaps where the resources were more limited or the intended scope was different, the presenter could only report what had been done in the single place. [You can tell, I hope, that I am being as general as possible to avoid naming names or giving identifiable examples. Suffice it to say that it is not a unique phenomenon.] This does not mean that the presenter did not have genuine expertise but the breadth to know how to apply it to other settings was lacking.

Let me be clear that it was not my inherent wisdom that has convinced me of the need to be a lifetime learner. Rather, I learned this being an educator of literally thousands of fellow funders in many countries for two decades – through our own Institute for Wise Philanthropy since 2002, at the now defunct NYU Academy for Funder Education, and at the prestigious high end UPenn Center for High Impact Philanthropy Funder Education program, has taught me that breadth without depth can be too shallow and depth without breadth can be too limiting. Parochialism is an easy trap and recognized unique expertise can be intoxicating. Both have their place in our ecosystem, and I fully respect those who make those choices. But, I have learned, not my choices.

So, the next time you see me on a Zoom seminar, or someday in the future sitting next to you in real physical space as a fellow attendee at a conference, know this: when you suggest that I could have been the chosen presenter, it will always flatter me, and you may well be correct. But that doesn’t mean that you and I are wasting our time. There is always more for us to learn, and I truly hope that I will never cease being a learner.

After all, the day one stops learning is the day one stops knowing.

#391 The Elusiveness of Excellence – We Funders are not Exempt

August 10th, 2020

Richard Marker

A couple of years ago, my accumulated professional careers crossed the half-century mark. Knowing of my untypical journey, a number of people asked if I was planning to write an autobiography. While I don’t believe a full autobiography is warranted, I have written a pamphlet-size retrospective built around lessons learned. It will be published sometime this Autumn.

While writing, I was reminded of a number of influential episodes, some of which are applicable to current developments in the philanthropy world. This is the second such article; you may find it helpful to read #390 prior to this. Others will be posted periodically.

In this article, the applicability to those of us in the philanthropy world comes toward the end.

It was not that many years ago when Jim Collins “Good to Great” and its follow up “Good to Great in the Social Sector” were on everyone’s canon of required reading. It may still be but if so, I am not hearing it spoken about. Primarily built on retrospective examinations of what seemed to characterize those companies [and, subsequently, nonprofits] that have excelled over time, Collins challenged some B-school orthodoxies, and reminded everyone that it takes disciplined work over time to achieve that greatness.

I suspect that the book is less celebrated today because the dozen or more years since its publication have not been particularly kind to all the winners of which he wrote. Now, it is quite true that it was published before the recession of 2008-2010, and certainly before the current upheavals in the economic and social sectors, but many of his lessons are still valid, and worth the read.

When I look at his books from the retrospective of my own career, I see a divergence between what I accomplished as an executive, and how those related to my own personal accomplishments. They are overlapping, but not the same.

Before proceeding with the extrapolations to our philanthropy world, let me share a very significant personal story that made a difference to my own career and to my understanding of what “Good to Great” can really mean.

Many of you know that over the last couple of decades, my skills as a speaker and educator have been celebrated and nicely compensated. Verbally communicating to audiences small or large in 40 countries around the world became a key source of my compensation. I am a proud Legacy member of the National Speakers Association/Global Speakers Federation – membership in which is only open to those who can demonstrate that we are actually paid to speak.

Those who have known me only for the past 23 years may not know that I wasn’t always so excellent at this. My professional life had always required me to speak in public. I was always comfortable doing so, and always thought that I was good at it. Indeed, I had overflowing files of letters thanking me, and I had my share of standing ovations and plaudits. If you had asked me before 1997, I would have said I did it well.

Yet, I often wondered why I wasn’t being invited to give certain speeches that I felt I was as least as appropriate to give as those who were chosen. It was Mirele, to whom I have been joyfully married since 1995 and who knew me in professional contexts even before we became a couple, who set me straight. After we were married, she began to see that I was more frustrated by this than she had realized. Finally, she told me the truth: “If you really want to know, you are not consistently so good. You have great mastery of the content, and wonderful rapport with audiences, but your talks are, well, not consistently great.” [Admittedly this is a paraphrase, but a fair one.]

She said that if I was serious, I should work on my speaking skills. Now this may seem strange, but until that time, I had never had a course in public speaking, and, more important, no one had ever given me negative feedback.

And now we are getting to the crux of the message:

It appears that I was never so bad that it was worth it to anyone to tell me how I could have been better. I was sometimes only “fair”, maybe sometimes “excellent” but mostly “good.” No one had anything at stake in telling me that I could or should have done better. Until Mirele did.

I signed up for a mentoring program at the National Speakers Association and discovered something very quickly – I was undisciplined. I had all of the skills and knowledge and presence and I thought that was enough. But then I learned the discipline of how one organizes a presentation. I discovered that I still talked like an academic even though I had mostly left academia over a decade earlier. People did not want to know how many syllables I could have in every word; they did want to hear stories that illustrated what I was talking about. They didn’t want to be impressed with how much I knew; they did want to know how that knowledge could make a difference to them. [You know the old mantra: “nobody cares what you know until they know that you care.”]

Within 6 months I began to have evidence of the transformation. I started getting invited to more places, but more to the point, invited back! The character of the thank you’ s was markedly different.

I look back on so many squandered opportunities over the years and wince. I asked myself “why didn’t anyone tell me?” If I could go from just “good” to “excellent” in only 6 months, think about what I might have been able to do had someone held a mirror to me, or had the courage to tell me.

And now the message: the only person [other than a loving spouse] who really cares if you go from “good to great” is yourself. If you want to excel, you have to make it clear to others – and safe for others – to tell you! For most others, “good” is good enough. As I said above, what stake do they have in pushing you to excellence? Most of the time, your personal aspiration is at best only incidental to them or their work.

It also made me rethink prior parts of my career: I am pretty confident that I pushed organizations that I headed or was a trustee of to become high quality performers; I am less confident that I helped colleagues and supervisees reach that level in all they ways they could. Or maybe should have.

Having learned that skills and knowledge are insufficient without the discipline to apply them means that one has to work hard to not become complacent. One of my favorite, if embarrassing, cases about my own complacency goes back to a time when we were invited to Buenos Aires to give some lectures. One of the talks was to university students at 10 pm on a Saturday night. Shockingly, it drew a very large crowd – I learned that I was the entertainment before a night of dinner and dancing. Before speaking, I did my homework, and learned the names of all the hot spots that young adults frequented. I peppered my talk with those references, and I was a star! Two years later, we were invited back, but I was complacent and didn’t bother to update those references. They were all passé. And, while the talk was more or less well received, my star quality was seriously diminished. I have been back since for other audiences but not for the young adult crowd. Serves me right.

At the present time, the foundation and philanthropy sector are doing a lot of soul searching about our decision making, about our governance, about our priorities, and about our role in society. Groups such as CEP, NCRP and others are pushing us to go beyond our long-term self-satisfied [and often self-congratulatory] complacency to respond to systemic issues of racism and economic inequity. Impressively, many in our sector are taking these challenges seriously. Good enough is simply not good enough anymore.

The challenge, though, is if we can sustain this attention, momentum, and operational change over time. In the midst of a pandemic of public and of persuasive challenges to the social weal, it is evident that we must respond. But when there is a vaccine or a change in administration or a recognizable sense of normalcy, will we as funders find it all too easy to become complacent? Or will our commitment to endemic and systemic change propel us to internalize the discipline to sustain excellence?

That discipline will prove the harder challenge – one from which we must not back down.

#378 Whatever Happened to Noblesse Oblige? Have We Gone too Far? – A COVID-19 Takeaway

May 15th, 2020

Richard Marker

This is our 12th article for funders, philanthropists, and foundations regarding COVID-19. As always, we welcome your thoughts and reactions to any and all.

Two decades ago, noblesse oblige was still the standard rationale for funders to be charitable and philanthropic. If asked why one gives, the answer was likely to be “to give back.” With riches come responsibilities.
The underpinning of that thinking is that there are those less fortunate who need something that a generous gift might provide. While most funders had opinions about which organizations or causes they cared most about, on the whole giving had a social context, in every sense of the word. Some of that social had to do with communal leadership responsibilities; some had to do with responding to peers’ requests. Most funders didn’t assume that they knew better than those who worked in the fields they funded about how best to use the money, only that the recipients certainly needed it.

Approximately two decades ago, a mostly healthy corrective began to supersede that rationale. For all sorts of reasons, the subjects of all too many books and articles that one can read on this subject, loyalty was summarily discounted as an imperative for supporting organizations, and measuring impact became the new value-added. After all, why continue to support a literacy initiative year after year if people still cannot read? Why do organizations dealing with homelessness warrant support if there are still so many homeless? The motivation for giving thus morphed from altruism to efficacy.

At first, there was denial from legacy institutions. Despite the growing anecdotal and statistical evidence to the contrary, those 20th century institutions convinced themselves that this was simply a temporary or transient aberration. When people got older, got married, got jobs, had kids, their giving patterns would revert to the past practices of their parents and grandparents. As time went on, as the change became more pervasive, it also became more persuasive, and many of those organizations had to pivot to find ways to catch up to the zeitgeist. Some did and some never did.

In the meantime, newer funding models emerged, all of which were based on some sort of measure of impact. There are a variety of models of those systems, often differing on what the true bottom line of effectiveness is, how far out a longitudinal perspective must look, which stakeholders or sectors have the greatest claim, how subjective the giving might allow or how comparatively demanding the objective claim, how “profit sector” they behaved, and more. Not only did funders not feel any assumed loyalty to organizations, but their giving was increasingly conditional. “We will fund this – IF you do that” or “We will fund that as long as you can demonstrate that our metrics are being met.” Not only did it reflect the changed motivation for giving, but it changed the way organizations had to deal with funders.

Implicit in all of these changes was a set of assumptions that have proven all too specious. It assumed that funders knew better than the experts what would work, how to do the work, and what constituencies deserved service. After all, funders made their money in the for-profit world; that alone, they believed, demonstrated that they must know more than those who are stuck in the non-profit world. [Need I say more?]

Over time this led to the institutionalization of attempts to develop standard ratios – such as “overhead” to program, or appropriate balance of sources of income, or cash reserves. Using these new metrics, some organizations began to rate nonprofits, and woe to one whose rating slipped. Eventually, though, most of the raters saw that they were imposing a very limited and limiting set of metrics to a very complex field. Did it really make sense to use the same rating system for a local food pantry as for a university? And if that food pantry were to have a mediocre rating but was the only one in a food desert neighborhood, would that be sufficient reason to discontinue funding it?

Thus, over the last few years, more sophisticated means of determining impact have been developed. [including, inter alia, the cutting-edge methodology developed by the UPenn Center for High Impact Philanthropy with which I have a part time connection.] These looked more deeply beyond simple-to-measure efficiency and to longer terms effectiveness as a means to decide where to put substantial funding. There is no doubt that our funding world was developing ever more useful way of making sure that our resources were used to bring about the changes we hoped for and in the ways that made the best use of our money.

Then COVID-19 hit.

And, suddenly we recognized that, for all of our sophistication, for all of our rigor, those non-profits on the ground doing the daily hard work were certainly better equipped to know where the immediate needs are, where the preferred interventions should be, how to spend precious dollars, and which skills are most applicable. Our field – or at least 700+ foundations and philanthropy support organizations – avowed [or perhaps acknowledged] that our reporting systems, our proposal systems, our laser focused funding approaches [and perhaps even our investment policies] were no match for the needs of the moment.

Maybe, we had strayed too far from the long standing, seemingly dated noblesse oblige rationale for giving. Maybe our demand for metrics, too often based on our categories, contingent on our priorities, reflecting our own systems overwhelmed the reason for philanthropy in the first place. Maybe, we are being reminded, that altruism is a social value, and that our own demands for systematic analysis everywhere along the line may be handcuffing those whose real job is to provide services to those in need.

Over 20 years ago, my first published article on philanthropy was entitled: “Hubris vs. Humility”. At that time I was the CEO of a major foundation, and I learned how easy it is for us to think we know everything, how fortunate we are to have the resources to try to make a difference, how seductive the power imbalance – and how arrogant so many of my colleagues appeared. [Of course, I never was. 😊] But I also recognized that, not only was that ethically problematic, but it was also pragmatically wrong. After all, it meant that grantees were less likely to be fully honest, that it allowed us to pretend that we are never wrong, and it allowed us to function in a self-referential bubble.

Over the last couple of decades, our field became so committed to the efficacy of impact and results that we often forgot about the nobility of “giving back.” COVID-19 seems to have forced a rebalancing. Perhaps a bit overdue.

Endnotes: I know my colleagues in the field quite well and can anticipate some rebuttals, so permit some addenda:

• Yes, funders sometimes do have perspectives or expertise their grantees lack. But even when a funder is more “right”, implementation should rarely be top down and requires a relationship that allows the “right” and the “real” to become aligned.

• Yes, of course there were always funders who wanted results – even in the days of noblesse oblige. But before the days of impact and metrics, the norm was more typically that funders gave, nfp/npo’s spent.

Yes, due diligence and program evaluation is indispensable. But too often due diligence and the post program evaluations go way beyond gathering information that will truly inform our decisions. If we as funders don’t need the info, why impose extra work on grantees?

Yes, there is great value in research as a basis for sophisticated decision making – but… One admittedly extreme contrary example: in an Advanced Grantmakers course I taught a few years ago, I invited a guest speaker who was considered the national expert on a particular then- hot initiative in the field. It turned out that the expert whose work was widely published, had never met with any foundation, never worked in a foundation, never spoke with any practitioners. I am sure that no one knew more about the research or the laws related to that initiative than the guest speaker. However, the “expert” was fully unable to answer a single question on its functional application from the room full of very experienced funders. Surely this is indeed an extreme example; it does, though, remind us that research that isn’t rooted in real experience is simply a contribution to general academic knowledge, but of questionable value to those who must make decisions on its basis.

Yes, I agree that there are certain times when a restricted gift serves the grantee organization. 2 examples: when a non-profit wants to explore an initiative beyond its core budget; or, perhaps, when it is for a capital project. But in general the tendency of some funders to give only restricted gifts, to be unwilling to fund infrastructure of that same organization, to give for a year at a time, to give less than the amount necessary for the project to succeed, etc. typically handcuffs the recipient organization and limits the ability of that organization to bring the impact the funder claims to want. Our funding should enable the greatest likelihood of the success of a project. That doesn’t mean there should be no limits; it does mean that a funder must make sure the relationship with grantees is open, honest, and trusting. Given the power imbalance, that relationship only works if we as funders enable it to.

Final point: Yes, it is true that I have been teaching and advising funders on how to make good decisions for a long time and hope to continue to do so. So, I don’t want to appear disingenuous in my statements about overreach in due diligence. My hope is that we as funders “right size” our processes and decision making – to make our own lives and the lives of those whom we empower with delivering services easier.

#373 A Courtesy Offer to Fellow Philanthropists and Other Funders

April 30th, 2020

Richard Marker

This post announces a new, fully gratis, offering to philanthropists and other funders.

Over the last 3 decades, the philanthropy world has been my professional home. I have had the honor of leading foundations, advising many funders from around the world, and teaching or speaking to many thousands more in 40 countries. As with so many of us in the philanthropy and foundation world, I feel that it is a crucial time to give back.

Many of us have increased our financial giving despite – or perhaps because of – the sharp economic decline.

This offer goes beyond that and builds on my expertise: I am now offering a FREE problem-solving session of up to 30 minutes to any funder who wishes [to the extent that my schedule permits, of course.] All you have to do is send a message to [email protected]

[The “fine print”: This is not intended to replace a full consultation that many philanthropy advisors offer; it is ONLY to coach through a specific problem. Also, I am not an attorney so I don’t offer legal advice – but I am happy to respond with best practice advice. Finally, I know virtually nothing about fundraising so please don’t schedule a time hoping that it will help identify funds for a project, investment, or organization.] #philanthropy

#372 – Some Thoughts on Volunteer Leadership – Does the Pandemic Change Anything?

April 27th, 2020

Richard Marker

Please see sections #3 and #6 for comments related to COVID-19. You may wish to read a number of our other posts for thoughts on philanthropy’s unique role at this time. I want to thank Lewis Flax, an expert on board performance and an NSA-DC colleague, for his constructive suggestions for this revision.

I recently accepted an invitation to join a board. That is hardly newsworthy or even report-worthy, except perhaps in a Chronicle of Philanthropy trivia page. After all, it is my 61st. [I only know that number because a couple of years ago, I was asked about my board experience over the years, so I reached back and did the arithmetic. I also calculated that I have chaired 12 of them. These boards have ranged from local to national to international, and included a wide variety of topics, styles, and roles.]

Clearly at this stage of my life and career, I don’t join boards for the purpose of résumé padding. In fact, I more often politely say no to such invitations than say yes. For example, I say yes to foundation and grantmaking boards [my field and expertise] and say no to those that are primarily looking for help in fundraising [which is most assuredly not my field or expertise]. I am more open to boards where it is clear that board members play appropriate governance roles and less open to those where one is expected to be a sycophant. And, unless I can see that my participation will actually be utilized and I’ll find it gratifying, there is no reason to say yes at all.

Boards are indispensable to the entire voluntary sector. Indeed, I considered that role so essential that, when I was the CEO of a large and multi-faceted non-profit, I strongly urged every professional of that organization to sit on a board of their choosing. My feeling was that there was a double benefit for that: not only did it help those many non-profits have their expertise, but it also made them better professionals. The experience honed their understand of how board members should best be treated, utilized, and empowered. [All of us, I know, have seen too many examples when board members don’t really know their roles, and professionals don’t either.] Underlying these expectations was the affirmation that we were all beneficiaries of the voluntary sector, and we should, therefore, model our commitment to it.

There has been no shortage of excellent material about the roles of board members and the indicators of successful boards. One very valuable source for that is BoardSource, and there are many more. So, I will take a pass at simply redacting or repeating what is otherwise available.

I do though want to comment on some of my learnings from my own experience, and to share a couple of very preliminary observations about the implications of our current reality.

1. Hard Questions: Board governance requires board members to be willing to ask hard questions, even at the risk of seeming unpopular. Permit a real-life example: In one of my own board experiences, something seemed wrong to me about the way the Conflict of Interest statement was written and being applied. I raised the issue in a board meeting when we were asked to fill out our COI forms. The CEO was adamant that I was wrong in my concern, and the rest of the board supported him. A year or so later, the CEO was dismissed for cause, and afterwards it was discovered why the CEO was so insistent: he had abused his role and never reported certain funding practices that would clearly have been prohibited had the COI been applied appropriately. It doesn’t give me pleasure to say “I told you so” but it does reinforce the importance of good governance. [We all can only imagine how much money nonprofits would have saved had board members asked harder and timely, though uncomfortable, questions about Madoff type investments?]

2. Appropriate Behaviors: Having said that, there is a difference between asking good governance questions and being “a pain in the butt” [not exactly a technical term]. Good board membership is not about micro-managing or assuming supervisory roles of various staff members. Staff of non-profits are not board servants, nor are they there to do board members’ private bidding. In my role as a funder and foundation trustee, and also as an educator of funders, I see how easy it is for power imbalance to creep into role misalignment. Most of the time it is not willful, but it is always unhelpful and counterproductive.

3. Meeting Attendance and Role: Historically, there has been a real difference between the activity of boards overseeing locally based organizations and of boards overseeing national or international organizations. A local board can have more functioning committees, meet more regularly, depend more on board voluntarism, and have a more direct relationship to the work. A board of a national or international body certainly cannot meet be expected to meet as regularly, nor to have the same level of direct connection with the daily work.

Another example from my experience: A member of a somewhat famous and even wealthier family had been encouraged to join one of the most prestigious boards in the world. By the time they came to me, they were frustrated and annoyed: this was an international board that gave only the broadest policy questions to the board; this family member would have much preferred, and would have been more gratified to sit on a less prestigious board where their involvement could have been both more robust and more textured. The board probably was acting consistently and coherently given the kind of organization; this particular board member simply should not have been on that kind of board.

Having said that, I wonder if the zoomification of meetings might begin to radically change the character of all organizational interactions, including board meetings. Currently, we are communicating with colleagues and fellow board members around the city, the country, and the world more easily than scheduling board meetings ever was in the past. Indeed, when the quarantine is over, most folks will have mastered the medium and may be reluctant to allocate the time or money to have as many in-person gatherings. It certainly has made attendance at the boards on which I sit, none of which is here in Washington, much easier and efficient. Not sure about all of this, but it seems quite likely that this is one of the changes that will become part of the next normal.

4. Term Limits: I have become a big believer in term limits. You might be surprised how many organizations don’t have them. Those organizations that don’t have them have a tendency for board members to age in place and become all too stuck in dated thinking. In one example I have written about some years ago, I was asked to keynote the annual gathering of the international board of a very prominent and respected non-profit. At the meeting, their top “young leadership” was honored. One of those honorees was a 50-year-old retiree; another was a 48-year-old mayor. I guess they weren’t old enough to sit at the grown-ups table, but more to the point, there was no space for them since there were no term limits.

Let me be clear that I am not saying that experience is irrelevant or that there is no wisdom that comes with longevity. I am, though, saying that a board that doesn’t structure its own rejuvenation is more likely to become stuck than one that has to include new thinking, has to explain itself anew, and integrate new members with experienced ones. 6 to 9 years in a board capacity is quite sufficient to make one’s thoughtful and meaningful contribution, and if one is that indispensable, it is always possible to start anew with a year’s sabbatical. To take another personal example: I was chairing an organization without term limits. After 6 years, I insisted that the organization find a successor. They tried to persuade me to stay until they found the “right” person – open ended.. My response was that they had a maximum of 6 months to do so. Sure enough, it motivated the leadership to identify both a successor and a succession plan. It has proven healthier for the organization and has made my continued involvement more viable.

5. Hard Decisions: Participation on foundations boards is quite different than serving on public charity boards. In the latter, in public charities, the fiscal stability and sustainability of the organization is a constant agendum. Even if one is on the board primarily because of one’s knowledge [Wisdom] and commitment [Work] and not one’s personal Wealth, underlying most decisions is a recognition of board responsibility for financial support.

Private foundation boards have a quite different starting point. Most private foundations are already funded, or the source of their funds is determined, so the primary board challenges are to choose how to use those funds responsibly, ethically, and wisely. [In prior essays, I have written about the issues of serving on a board if the family funder/founder is still in the room vs when it is a successor or independent board, a topic to which we can return on another occasion if readers wish. For this post, it is an ancillary question.]

Having sat on numerous boards of both types, I can attest that the character and balance of the board agenda are quite different. What is true of both, though, is that responsible board participation requires a willingness to make hard decisions. Pushing the hard questions down the road, an all too frequent tendency of reticent boards, ultimately is counterproductive and weakens the impact of the foundation or the NGO/NFP

6. Strategy and Implementation: Another essential role of board members is to set the strategic direction for an organization, and then endorse how that strategy can be implemented. Strategy without an implementation plan is simply abstract desiderata and implementation independent of a strategic overview is simply programs.

These distinctions are crucial to bear in mind at this COVID-19 moment in history since all bets are off for implementation plans for almost all non-profits and most foundations. For many non-profits, this is a time of existential challenge, so all that pre-planned programming is difficult at best. Human service organizations have more business than they can handle; arts and culture organizations have less. What we have seen in this past month is that the organizations with the greatest clarity of their strategic thinking have been able to pivot and adjust better than those that don’t. For better or worse, now that so much is happening virtually, the differences are pretty striking. We can observe organizations all over the world and we can see which have applied their thinking in coherent ways quickly and which ones haven’t. I am not commenting here on the relative quality of those responses – after all, there is a great disparity in accessible resources, but rather the evident quality of the underlying thinking.

Some have argued that foundations need to make immediate changes in their strategies in order to respond to the COVID-19 pandemic. I don’t agree – what I do believe is that if they have to change their basic strategy it means that they didn’t have adequate strategy thinking built into how they operate. Implementation can be agile and if there ever was a time for agile implementation, it is now. But hopefully they are making those decisions consistent with their understanding of their role, their distinct positioning, and a grasp of their capacities. It is in this realm that a board earns its keep. Agility and long-term thoughtfulness must go hand in hand, and that requires both courage and stability in times of disaster or crisis.

The voluntary sector is essential and crucial in every country and every society around the world. The roles and expectations may vary from place to place given governments, cultural histories, and local practice. But each of the 6 board categories above make the difference between a well-run and sustainable nfp/ngo and a more vulnerable one. At this time in history when this sector is asked to play an outsized role with shrinking resources, effective boards and effective board members can and will make the difference to what our multi-faceted sector will look like at the other end of quarantine.

#365 We’ve Been Here Before – Lessons from Past Challenges to the Philanthropy Field in the Time of COVID-19

March 18th, 2020

Richard Marker

“Everything that can be said has been said, but not everyone has said it.” This expression has been variously attributed to Winston Churchill, Abba Eban, and who knows who else.

As I have written and re-written this post over the last week, I have tried hard to avoid saying what so many of my colleagues in the philanthropy space have been saying. I do want to humbly express my admiration to our field for stepping up so quickly, thoughtfully, and, yes, even eloquently. The assertive actions and ambitious outreach I have observed demonstrates that our field is acting in assertive and proactive ways rarely seen in past crises.

Therefore, rather than reiterating those recommendations, these few comments are intended to underscore or articulate a few thoughts that seem understated by many. They are informed by what we have seen and learned from past crises – some caused by human behaviors and misbehavior, and some caused by acts of nature.

Among those lessons:

1. Our field has both short term and long-term capabilities.

a. If there has been one consistent message from this field, it is this: In the short term, our grantees face short falls, diminished contributions, and, depending on the grantee, increased demands for services. Since the US government and even many States have shown themselves to be pokey payers, many direct service agencies face the dilemma of long time wait for reimbursements. Contributions will be diminished and delayed. This is not the time for our grantmaking to be clever; it is the time for us to be flexible. To reiterate, I want to applaud our sector in affirming this point in so many ways.

b. Less stated but very important: We have also learned that we need to keep at least some of our powder dry. There are unanticipated demands, organizational re-alignments, and systemic dislocations that deserve attention – long after the crisis, whatever crisis, has passed from the headlines.

2. Our field needs to underscore our flexibility and agility in our spending policies.

We have just emerged from 11 years of a bull market. Any foundation or private funder would have had to be remarkably counter-trend to have earned only 5% each year over these years. In past economic downturns, some foundations adjusted their “base” corpus to a prior date or number so that there would greater ability to respond to genuine challenges faced by their grantees. This may be one of those time. For US based foundations, the recent change in the excise tax calculation makes this kind of spending adjustment much easier.

3. Our field needs to use all the arrows in our quiver.

a. If organizations are struggling with cash flow for reasons beyond their control, a revolving loan fund may prove useful. For US foundations, this would qualify as a PRI and can be a very effective support vehicle.

b. If the fields we are funding are suffering because of short-sighted public policy, advocacy can/must be a powerful tool to get the attention of policy makers. We know that the entire philanthropy capacity can never solve major systemic challenges alone, especially of the sort we are now facing, we can only accomplish what we are committed to with a concerted affirmation of the need for responsive and responsible public policy.

c. Our field has made great strides over the last few years in learning how to collaborate with each other, and with those who are directly responsible for implementation – sometimes called grantees or partners. The current reality – with both extreme economic dislocation and profound human vulnerability – calls for us to continue to model this welcome change in our behavior.

d. All of this is happening at a time when civil society has been at risk in the USA and elsewhere in the world. [The subject of a longer and more in-depth conversation, to be sure.] We must accept a mandate to become a stabilizing force at a very fragile moment in history.

This list is not intended to be complete nor to replace the extraordinary advice offered by so many, especially about how we work with grantees. It is simply an attempt to emphasize a very few of those recommendations that may not have been as widely articulated as some others.

The current challenges are not short term. Recessions, even those that are short lived, have always had severe implications for the most vulnerable. Add to that the recognition of how universal our human vulnerability is. Our work is only just beginning, and we will be called upon to rely on our depths of empathy and test the range of our sector’s capacity to continue to provide a source of support. We must.

#362 20 Years Teaching Funders from Around the World: Lessons Learned

February 17th, 2020

Richard Marker

Let me get the self-congratulatory stuff out of the way at the beginning. Feel free to skip to ¶ 4:

In 2000, while still the CEO/EVP of a foundation that closed in 2002, I was invited to begin teaching funders at a new [now closed] NYU department, the Center for Philanthropy. At the time, I was only marginally better trained in the philanthropy field than those I was teaching [although by then I already did have 32 years of family, trustee, academic, and professional experience], but I had become convinced that such education mattered – and still does. After all, what arrogance that those of us in the foundation field that we could have all the power, have only self-authenticating wisdom, and no independent barrier to entry to ethically and responsibly give away billions of dollars. [see # 7 below] When invited, I felt a tremendous sense of responsibility not only to dig deep into my own diverse and relevant personal and professional background, but, more important, to include the accumulated knowledge of the key institutional players in the field at the time, all of whom I consulted.

Since then, I am proud to say that, on a very part time basis, I have taught well over 2000 funders from about 35 countries at NYU’s Academy for Funder Education [now closed] and, since 2016, at UPenn Center for High Impact Philanthropy. In addition, I have lectured in 40 countries and in many States, been a guest presenter at innumerable conferences and associations, and advised a significant number of families. The folks I teach are peers: philanthropists and foundation professionals and others of us on the funder side of the table.

Over these 20 years, I have worked hard to fine tune a helpful methodology for both teaching and giving, to articulate key philanthropy ideas, and to continue my own learning as our field expands, evolves, and matures. Moreover, there is no doubt that my work as a quondam philanthropy advisor, now much reduced, has been influenced by my experience with so many hundreds of funders from so many places. It has provided a massive internal database that could never be replicated were we to have developed a more typical philanthropy advisory practice.

¶ 4: In looking back at these 2 decades, here are some lessons learned:

1. Interrelationship between Public Policy and Private Philanthropy Matters: Anyone who has heard me lecture or teach over these 20 years knows that philanthropy cannot be fully understood independent of public policy. Moreover, it is almost impossible to ignore how crucial advocacy is to setting those policies once one is aware of how they impact the role and effectiveness of our philanthropy. I am delighted that this conversation has now finally moved to the center of discourse surrounding philanthropy’s role in society and is being led by many more well-known than I.

2. Every Funder is Unique and Every Funder is the Same: This apparent oxymoron is the reality of our field. People become philanthropically involved for all sorts of reasons. Those individual narratives need to be acknowledged and heard. But once beneath the surface, all philanthropy decisions prove generic. The challenge, as an educator or advisor, is how to get there.

On the international level, this is even more true. Everyplace has its own culture, history, ethos, and legal system. If one doesn’t honor or understand those differences, funders will never pay attention to the classic and generic core competencies that define our field. As mentioned above, I have had the honor of speaking in 40 countries. One must learn to listen very carefully in order to teach effectively and to be taken at all seriously.

3. The Need Continues: A few recent meetings with individual foundations and at speaking engagements have persuaded me that we have only begun scratching the surface of structured and impactful funder education in our sector. The questions of behaviors and practices, roles and responsibilities, expectations and impact that some have been fine tuning for many years are still brand new for many. Far too many philanthropists and funding organizations still function in isolation with little awareness of recommended norms, decision making methodologies, ways of evaluating what or why they are funding, and their larger potential as thoughtful self-aware contributors to a community’s wellbeing. The emerging field of “Philanthropy Service Organizations” [of which we view our Institute for Wise Philanthropy to be an integral part] still only represents those funders who have chosen to affiliate.

4. The Gratification of Helping Funders Learn Best Practices: One of the thrills of teaching is helping the entire potential of our field open up to those who had only a limited understanding. After 20 years, there is a wonderful litany of funders from around the world who have told us what a difference our teaching has made. Needless to say, how we teach has become fine-tuned, and what we teach continues to evolve, but the core competencies recommended by the field in the early aughts continue to inform and frame what every funder should know and what competencies should apply no matter what values, goals, or contexts of one’s funding.

5. The Importance of Affirming Rediscovery: If one has been in the field for a long time, one sees articles offering insights many of us had years ago, or re-inventing approaches that were new many times ago. I have seen numerous articles by other experienced thought-leaders express exasperation with the periodic attention given to those who claim to have invented the proverbial wheel. I know that I myself have to take a deep breath and respect these insights as a reflection of genuine learning. Whether I – or many others – had the same insights or used the same techniques or asked the same questions 2 decades ago or longer matters little to those for whom it is brand new.

Reading articles or press releases or reports that show the most recent innovations in our field, as if they are brand new, may yield a moment of disappointment that those folks never heard of those of us who published or spoke about a lot of those ideas a long time ago, but being an educator has helped me a lot in accepting that as normal. After all, for many centuries, students have read Plato or Maimonides or Shakespeare. Lo and behold, each generation of students comes to much the same understandings as their predecessors. It is the role of an educator to foster those understandings, to encourage those “aha” moments, not to deflate the enthusiasm of newly enlightened readers that what they are now “getting” is old news.

6. The Best Philanthropy Educators have had Multi-Sector Experience: Over the years of organizing courses and attending conferences, I learned something about what kind of background is most likely to produce an effective educator for fellow funders. Of course, good communication skills matter, but beyond that is having a deep range of experience. Those who are identified with only a single, albeit prestigious, foundation may have interesting things to say to the field, but rarely have the scope of experience to respond to the predictable array of funders in any seminar, workshop, or classroom.

7. My Biggest Frustration: This has been my broken record for a long time, and I fear will be long after I disappear from this scene.

It is unconscionable that there is no credential, no formal barrier to professional entry to this field. As suggested in paragraph 2 above, we give away billions of dollars, we are responsible for the well-being of an entire sector, and we can have real influence on public policy. Yet, unlike virtually every other professional field, including fundraisers, one need not know anything about the law, or best practices, or philanthro-ethics to be hired or have a career as a philanthropy consultant, advisor, or program officer. Of course, one cannot legislate what one does with one’s own money, but I believe that there should be a widely recognized credential for professionals that shows that one has knowledge of the basics. [I am not arguing that it need be a precondition to being hired since there are many good reasons to hire folks with other competencies and expertise, but it should be an expectation of every grantmaking professional within the first few years in the field.]

So that no one misunderstands: there is no one right way to give money, no one right set of priorities, etc. But there are many wrong ways. And any of us who have been in this field for a long time know that. I may have my own opinions about what education should inform the credential I would like to see, and I am more than happy to participate in a long overdue discussion since my opinions may not be adequate or even the emerging consensus. This will only work if the field as a whole endorses the validity of a credential and buys into certain core knowledge. [End of soapbox]

8. My Second Biggest Frustration: This one is more personal. I have been surprised by how many, especially those connected to affinity organizations in our field, are suspicious of my motivations to teach, mentor, and provide career advice. I guess I must bear some of the responsibility for this in the way I communicate my commitment, but I have learned that many seem to believe that I teach funders primarily as a way to generate personal business. It is certainly true that over the 20 years, a few, but only a very few of those who took university-based courses have contracted with me for some advisory help, but if I were teaching these courses with that purpose, I certainly have failed and would have stopped a long time ago. [In fact, for a long time, until I was dissuaded from doing so, if a “student” approached me, I would insist on giving the names of at least 2 other advisory firms to whom they should speak.] In any case, after 20 years, I wish I understood why that suspicion seems to persist.

9. Teaching is a superb discipline for keeping your thinking fresh, your knowledge up to date, and your ability to communicate well honed. No, this is not limited to philanthropy education – it is descriptive of what every good educator knows. In my case, teaching has had a salutary impact on my role as a funder, trustee, advisor, and speaker – and each of those roles has had a positive impact on my teaching.

Our field of philanthropy really can and does matter a lot, well beyond what our combined financial assets can accomplish. It is important that we set standards of thoughtfulness, ethics, and self-awareness in doing so. It has been a true honor and privilege to be recognized as someone who has helped reinforce those standards by imparting knowledge in and to my own field in so many settings around the world.

20 years…and counting.

#361 Two Real-Life Lessons for Funders

February 10th, 2020

Richard Marker

Long time readers know that I don’t ever name names. In the case of this post, I had to think about it for a while but then decided that, even this time, I won’t. Trust me, you would know them, and it would make the anecdotes I am about to share more real, but it might derail from my main points. So…

Anecdote #1: I went to an office supply store to pick up a couple of items. The amount wasn’t that great, so I decided to pay with cash. How luddite of me! Unfortunately, the person who checked me out miscounted the change by a few dollars. Thus, began an episode worthy of an old comedy skit.

The aforementioned salesperson couldn’t figure out how to get the register open again or even how much the correct change was supposed to be. She assured me that she has a PhD [she mentioned a first-rate university – also not named here in order to save them embarrassment] and since she only worked at the store part time, she didn’t know how the system worked. [Nor, it appears, did she know basic arithmetic.] So, she called a supervisor over to help. This new person needed to get the receipt in order to proceed but it was an e-receipt, so there wasn’t one to look at. She too couldn’t figure out how to open the machine, nor could she figure out the correct change [despite taking out a pen and paper to calculate it]. The two people at the register then called someone else, a super-supervisor I assume, who started all over again. She then went to another register to do some machinations related to my purchase, and about 10 minutes later returned, entered my purchases all over again, and gave me the $4.58 change.

All told, this process of checking out 3 small items took over 45 minutes.

I found myself wondering what would have happened if this had been a nonprofit that didn’t receive the correct amount promised by a foundation. Would they be dissed if they asked? Or given the run around to protect an administrative snafu? Or go through hoops to collect what had been contractually promised? Sadly, I have seen all of this.

Which brings me to anecdote #2.

It really wasn’t my day at all. That very same day, I needed to deal with a national phone and wireless company regarding a problem with my log-in. Somehow, the code had been compromised. It took me a while to determine the cause: I had 2 separate arrangements with this company and needed to make a billing change with one. Unfortunately, I ultimately realized, the agent on the phone had made changes to the wrong account and in so doing nullified my log-in.

Thus began an even longer process of correcting all of this. First I worked hard to locate a phone number. When I called, after endless phone menu options, I finally got to a real-life agent, who asked for all of my info, and them determined that I had to talk to someone else. The next person asked for all of the same info and also then said that it was the wrong department. The final live agent informed me, after gathering all of the very same information, that the firm no longer allowed one to address my issues through a live person – I had to make all the changes online but could consult the chat line on the site if I needed help. Eventually, the password was reset, and I was able to activate service without which it would have been impossible to function in this post-modern often surreal world. Total time for this entire exchange, almost 2 hours!

I guess I have a one-track mind since, here again, I found myself imagining the experience of a small non-profit trying to get some information from a large bureaucratic foundation. Calls to their office are deflected to the website Their website affirms that their on-line process is the way in which a grant-seeker is expected to communicate but one may have to proceed through numerous menu options before, hopefully, finding out the one bit of needed information.

One often hears stories like this from npo’s/ngo’s challenged by their experience with inscrutable foundations with impenetrable fortresses. Not every foundation has yet adopted best practices or gone through a CEP type self-analysis.

Now, let me be very fair: I used to head a foundation and was regularly bombarded by inappropriate or nonsense inquiries, or by those who simply didn’t want to accept what was stated clearly about our parameters and priorities, or even by our decisions. The grant seeker is not always correct; and surely not all of us are heartless bureaucrats; nor are all of our systems arcane.

But my experience with the two household-name companies with which I was trying to do routine business reminded me that we should not automatically dismiss what we might hear from those who seek our funds about what it is like to do business with us. We need to listen. They might be right.