Guest Post: Ruth Richardson, Co-Founder, Small Change Fund

Small Change Fund: Deceptively Modest. Quietly Powerful

“Who’s going to do it?” Phil Buchanan, President of the Center for Effective Philanthropy, posed this question at the recent Philanthropic Foundations Canada conference in Calgary. “Who’s going to fund solutions to our most pressing social and environmental challenges?” It’s a good question. He asked it because of the stark realities of the economic downturn, of governments looking to foundations to support essential services, of foundations looking to the private sector to fund innovation, of the private sector scrambling to cope with the shifts in their financial forecasts. “So who’s going to provide the investments in critical social change?”

My answer is, we are. All of us. Individual Canadians. Evidence shows that in tough times Canadians will step up to the plate with sleeves rolled up and pocketbooks open. But today’s tough times call for especially creative measures if we are going to achieve lasting social change. We face unprecedented complex problems and at no other time in history have Canadians been more connected with each other and with the rest of the world. Therein lies the opportunity.

Small Change Fund, an initiative that will launch in December 2009, is an answer to Buchanan’s question – a solution that not only makes it easy for Canadians to share resources with each other, but also gives us the opportunity to invest in local solutions in a global world.  Small Change Fund is a contemporary approach to philanthropy that harnesses the culture and power of social networking. It’s a space online where we can connect with local leaders doing amazing things to better communities across Canada. It’s a deceptively modest and quietly powerful tool enabling investment in the most high-impact grassroots action across the country. Its potential lies in facilitating a philanthropy that is at once micro and global, grassroots and open.

It’s grassroots philanthropy. Small Change Fund helps Canadians put their money into the hands of people on the ground, people who are best able to figure out and fix the problems in their communities. Judy Rebick says in her new book Transforming Power that what works in realizing transformative change is bringing communities of people together to produce something new; building a movement from the bottom up; sharing experience, knowledge and wisdom; emphasizing co-operation and consensus over confrontation and political partisanship. “Meaningful response to the environmental crisis and social injustice requires substantial, sustainable change at every level, which can only come through building power from the grassroots, from the people most impacted.” Hear, hear.

It’s open philanthropy. Small Change Fund uses the power of the Internet and new media to break down the walls of old-world philanthropy and engage everyone at their own level of ability to share with others. Each contribution combines with others to have more of an impact that we could ever have alone. It’s “bottom-up” philanthropic activism made possible by all the amazing technological tools we have at our disposal. Small Change Fund is a place where those with some critical dollars for sharing can meet people with some creative ideas for helping to make the world a better place. We open up the philanthropic process to all Canadians so they can have a hand in solving the problems they care about most.

It’s micro-philanthropy. At Small Change Fund we believe that people can make change without long studies, thick reports, and big money. Modest investments can make a profound difference. A computer, a camera, agricultural training, legal advice, a water test kit – these things can change the world. Not by themselves but in the hands of committed, passionate people trying to transform their communities. In the words of one our veteran advisors, Mauro Vescera, “After 10 years of grant-making, it has been the small grassroots projects that have stood out as the most positive initiatives. Small projects that unite local residents and give voice to important issues in their communities are often overlooked yet they are critical to moving the environmental agenda forward.”

It’s global philanthropy. Small Change Fund is part of an international alliance of micro-funders. Like us, there are others across the globe from Siberia to the Philippines to Brazil using the power of micro-philanthropy to transform their communities. We are working with them to identify global priorities, like climate change and indigenous peoples’ rights, and figure out how best to translate those priorities into local action. Our alliance is a rich resource of vision, experience, and expertise driven by collaborative energy and a shared vision of a healthy planet.

“So who’s going to do it?” I am. You are.  We are going to do it together. “And how?” By engaging in the business of philanthropy differently. By believing that people know how to figure out and fix the problems in their communities, their cities, their countries. By believing that people can make change without long studies, thick reports, and big money. By believing people want to help each other. And by making that simple. We can start something big with small change at www.smallchangefund.org. Look for us in December 2009.

Singing the evaluation blues…

I mentioned in an earlier blog that evaluation could be fun but I am not sure that I convinced many of you on this. So here is a unique and funny perspective on “Output Outcome Downstream Impact Blues”, courtsey of the International Development Research Centre and Terry Smutylo. Who knew IDRC nurtured such creativity.  It should be part of  every new funder staff training. ‘Nuff said, this speaks (or sings) for itself …

Interview with Hilary Pearson, CEO Philanthropic Foundations Canada

In this, our first guest posting, we have the pleasure of a Q&A exchange with Hilary Pearson, President and CEO of Philanthropic Foundations Canada (PFC) a national membership organization for Canada’s independent grantmaking foundations.

J/S: Hilary, thank you so much for agreeing to this interview. We know our readers will be interested in hearing how Canada’s largest and most relevant foundations are faring through these tumultuous times. We’d like to start off by asking you how the global financial situation from last year affected the assets of Canadian foundations?

HP: There’s no question that Canadian foundation endowments took a hit in the last part of 2008 and early 2009. Experiences varied among our membership depending on the investment allocation formulas used, but endowment values generally went down anywhere from 15% to 20% on average.  Assets are starting to rebuild now, but it will take a while to replace lost value.

J/S: What has been the strategic response of your members to this? Has it affected the size of their grantmaking portfolio?  Have some encroached on their capital to stabilize their grantmaking efforts? Has there been any effect on multi-year commitments?

HP: We know that the response to the downturn has been at the forefront of our members’ preoccupations this year. So we decided to help by conducting two surveys, one in January and one in June of 2009, to gauge what was happening both to investments and to disbursements (grants or expenditures on charitable activities). The main conclusions from these surveys is that foundations have tried very hard to hold the line on their grants in 2009, and not to cut back, even though the investments returns have been reduced. By and large, foundations have accomplished this without going into capital unless they are recently established foundations that don’t have reserves. For them, it has been very difficult. But for most others, including some of the largest foundations in the country, the grants budget has not decreased significantly. What may have changed is strategy. There is more reluctance now to accept multi-year grant requests, or new requests. Foundations are trying to protect their current commitments without making new ones for a while longer.

J/S: We are hearing some anecdotal evidence that some foundations are broadening their non-financial contributions such as convening, organizational capacity development, and sometimes even program loans. Are your members reporting such changes to their strategic mix?

HP: Yes, I would say that there is a renewed commitment to providing assistance beyond the grant to make the best use of their resources. Many foundations were already doing it before the recession and are maintaining their efforts. Others are looking at it for the first time. There is a lot of interest in convening and getting charities and grantees together to support information sharing and perhaps brainstorming of solutions together. Some funders have taken the initiative of building more structured groups of charities and funders to collaborate on an ongoing basis.  Ideas are being floated around about sharing resources, working on projects with common goals and identifying greatest needs in the community together. One example is the effort being led by the Lyle Shantz Hallman Foundation in Kitchener which has really taken on a major role in convening local funders to think through the needs of Kitchener-Waterloo. I think this kind of activity could last beyond the recession.

J/S:  Maintaining a small operational costs to grants ratio has always been a tenet of Canadian foundations.  If grantmaking is being reduced, are you seeing a corresponding reduction in operating costs?

HP:  It’s true that Canadian foundations are very careful with their administrative costs. It is rare to see any foundation with a large staff or significant overhead. So there isn’t much to cut back from.  We have heard from our members that some of them are cutting back on travel and professional development as some of the only ways to reduce costs. I hope this is not a trend that lasts!

J/S: What about staffing? There was an article in the New York Times in the spring that indicated the major American foundations were undergoing significant layoffs. Are you seeing that here, or are most Canadian foundations recognizing that maintaining their own intellectual capital is an important longer term objective?

HP: No I don’t see layoffs happening. Again, staff size tends to be very small to begin with and many people who work in family foundations are unpaid.  But I think the commitment to people remains strong and there is reluctance to go to actual layoffs, although open positions may go unfilled. There is a commitment to continuity. But it may not be perceived as a commitment to foundations’ intellectual capital per se, but more to relationships with grantees and to community connections.

J/S:  There has been some optimism in the financial sector of permanent restructuring. Do you think there will be any lasting restructuring in the foundation world of a positive nature? What do you think legacy of this recession will be in the foundation world?

HP: I think restructuring is always a creative response to a crisis. That said, I don’t see much restructuring happening or even being necessary in the foundation community. Foundations are not created as small businesses but as organizations with a long-term view. Most boards are still strongly committed to the vision of a perpetual endowment, as were most of their donors or founders. And, unlike the United States, we have relatively few foundations that are explicitly committed to spending down endowment. Anywhere from 10% to 20% of foundations in the U.S. have such a commitment or are actively considering it. We don’t have data for the Canadian foundation community but anecdotally, this doesn’t seem to be a preferred strategy, certainly not for family foundations. So there is an instinct for preservation of things as they are (unless the crisis is truly dramatic).

On the other hand, for foundations that have experienced major reductions in capital or those who tend to be very strategic in nature, there may be more focus on strategic restructuring. One such foundation that has sharpened its focus recently is the Walter and Duncan Gordon Foundation of Toronto whose board and staff took the time to re-think their future.

J/S: Although this blog is intended for funders, do you have any words of wisdom for those seeking support from Foundations?

HP: My advice to grantseekers and would-be foundation partners is always ’do your research’. While it is sometimes not easy to find out what a foundation’s goals and preferences are, it is worth trying to investigate to make sure that there is a good match.  It is painful both for a charity and for foundations to see the waste of effort resulting from a scattershot approach to grant applications. The best approach is one that has been well prepared and where there is some dialogue. Some foundations such as the McConnell Foundation of Montreal requests a one-page statement as a preliminary step, to try to avoid time and effort wasting on the part of charities who write a long application only to have it refused because it is not in the foundation’s priorities. It’s not easy but it’s necessary to do the research!

J/S: And finally, where and when can our readers find PFC’s report?

HP:  The full PFC survey reports are available to members only; however, I can make the executive summary available to anyone who requests it. Your readers can just drop me a note at hpearson@pfc.ca and I’ll send one off to them. We have many other resources also available freely on our web site. I would also like to extend an invitation to your readers to our upcoming conference “Pulse of Philanthropy” in Calgary on October 28 to 30, 2009.  It’s going to be an inspiring few days, and also a chance for PFC to celebrate it’s tenth anniversary.

J/S: Hilary, thanks from both of us for this insight into the workings of Canadian foundations during these challenging times.  We look forward to more updates and thoughtful analysis from you in the future.

Other resources:

Grantmakers for Effective Organizations (GEO) has some interesting reports on how US foundations are responding to the economic crisis.

This may be ’so 2008′, but if you are still wondering what the financial meltdown is all about, check out this clear and enlightening PBS documentary.

The Yin and Yang of Scaling-up

I was on my way to meet Sheherazade for a meeting with a client yesterday and thinking about how to frame my section of our interim report when I thought of Frank Gehry. A few years ago I went to an exhibit at the Guggenheim that featured his work and what fascinated me at the time was that his creative process did not start with the building, but with understanding the space and flow of the project. His early stage drawings, starting with squiggles on a cocktail napkin or random pieces of paper, were about the energy and nature of the space itself; and even after he started to design the structure, his spacial thinking would run parallel, merging finally with the design. What made me think of this is because, in our small way, that is how Sheherazade and I approach our work. Long before we produce the ultimate product we spend considerable time understanding the nature of what we are working with, what ‘flow’ looks like, what ideas underpin the project, and what matters to the people involved. In this case, the task is to build an evaluation framework for the funders of a national scale-up of a successful local project. So one of the questions we’ve been asking ourselves as we mull around in the project’s ’space’ is, what is scale-up? Is it replication? Is it a community of practice? Is it social innovation? Is there a difference between those? Does that matter? We reviewed the literature, we talked to stakeholders, and we realized that yes, those are very different concepts, and yes, it does matter.  We ultimately settled on two models that capture the essential differences, one which we call replication and and the other (for lack of a better term) ‘knowledge transfer’. Continue reading ‘The Yin and Yang of Scaling-up’

The power of stories

More than twenty years ago I told a story at a conference on work/family policies about a personal experience that happened the year I adopted my daughter after the death of my sister. It was a very painful and poignant story, but also a powerful example of the dilemmas we face as working parents. The story was picked up by the Globe and Mail and occasionally, even after all this time, I run into someone who remembered the story, and for whom it resonated. I was reminded of that while reading this month’s Maytree Foundation’s monthly opinion newsletter which talks about the role stories play and how they can be used in effective organizational communications to promote social change. As Chair Alan Broadbent says:

“Stories do a number of important things. They can set a human context for the work we do, so that it is not simply about 1,000 exploited workers or 500 struggling farmers. A story can tell how the impact of exploitation on a woman can affect her children’s day at school, her relations with her community, her health. It can follow a farmer from sodden fields to a reluctant store buyer who doesn’t want his crop, back to the family home where the bad news permeates dinner hour and lasts until he goes back to the field the next day. Through stories we see the worker and the farmer as our neighbours, and we want to see something change to make their life better.” Continue reading ‘The power of stories’

Five questions on your Competitive Intelligence

One good thing about being a “recovering” lawyer is that it I still access the latest trends and developments in the legal field. It’s part of our commitment to T-Shaped learning and it’s why Julie and I really enjoy working together, exploring and adapting ideas and trends from across all sectors.

This month’s issue of  the Canadian Bar Association’s magazine “The National” has an article on a trend I have heard little about before, how law firms are using competitive intelligence to grow their business. CI helps determine a clients’ needs by researching and analyzing data on emerging industries, prospective clients and their market environments. This helps clients, but also helps the law firm figure out where to invest its own business development efforts. It also adds a financial lens on existing and potential clients with a view to understanding “who are the ones that are keeping the lights on.” The use of CI in this context is primarily to build business.

But it got me wondering how this function relates to the foundation and corporate philanthropy work we do.  A  few things jumped out: Continue reading ‘Five questions on your Competitive Intelligence’

Balancing risk and opportunity

One of the first questions we explore with clients who are thinking about a new funding program is their tolerance for risk. And by that we mean not just whether they are willing to take a chance on an important issue or program with high potential that might not succeed, but what other factors might drive the decision (implicitly if not explicitly). For some, the primary risk issue will be the potential to have an impact on the issue itself and the opportunity cost of not succeeding. For others, like a recent corporate client, it was the impact on corporate reputation and brand image, understandable for a corporation that is just starting out in grantmaking in a volatile industry.

We probed a bit at the meeting, but later over coffee Sheherazade and I realized that what they needed was a simple tool they could use now and in the future to help them assess the risks of the options they were considering – a tool that was compatible with their overall corporate goals and risk strategy. We have found that without clarity on risk tolerance funders will either find themselves in hot water with a program or will, by default, be so cautious that their granting program does not make a significant impact.

The tool we developed  balances risks with opportunity to avoid over-caution; and although it was developed for a particular corporation, we thought it would be of interest (hopefully of use) to others working in the field. Note that this tool is designed for issue or program selection, not for individual granting decisions.  (We will be addressing grant decision tools in a future posting.)

So here it is, feel free to use it however you wish:  Risk Tool

The power of curiousity

As foundations have become more effective at seeding and developing social initiatives, the issue of scaling upward to sustain change on a more widespread basis has become a critical strategy. But scaling up is only one approach in a foundation’s strategy toolkit, reserved for those programs with significant transferable learning and a broader demand. This post is about something quite different – at the other end of the strategy continuum actually – the small, one-off grant for experimentation and innovation that may or may not lead to an on-going program, but will almost certainly result in important learning and ideally, changed systems and social perceptions.

I am not referring to the graduated grants we are used to, which start small but are intended to evolve into a larger grant, (a common capacity-building or risk management tool) or grants for small things such as conference attendance, or high-leverage grants such as micro-credit. But rather, small, focused curiosity-driven grants for the illusive ‘good idea’. For sure, almost all of us working in philanthropy have at one time or another developed an innovative grants stream. When Sheherazade and I were at Trillium we had a funding stream called ‘Really Good Ideas’. I would say we mostly got pretty good ideas, because it is hard for grant-seekers who are desperate for funding for their core programs to think about small experimental initiatives. And those with the really good ideas are often not connected to eligible organizations or don’t have the credentials to pass the review process. Also the solid, often iterative, review process that works for competitive grants can be death for the experimental grant requiring timely support and a great deal of trust and empowerment of the grant recipient. And yet foundations, particularly private foundations, with their capacity for flexibility and somewhat less requirement for public accountability are best placed to encourage and fund the experimental grant.

Continue reading ‘The power of curiousity’

Philanthropy in a Brave New (but smaller) World

I just finished reading Jeff Rubin’s new book, “Why Your World is About To Get a Whole Lot Smaller”. His message that the way we currently live in a global economy is not sustainable is not new to the grantmaking community.  But it is a good reminder that we all need to revisit everything we take for granted from the bananas on our breakfast table to the weekend jet-away trips or visits to family in different corners of the planet.

His thesis that we will turn back to local from global got me wondering about what this means for grantmakers. I thought of at least three themes out of his analysis:

  1. Local communities will become a stronger anchor than ever before for ensuring there is a vibrant local economy that replaces the imported global economy we currently rely on. And local will need strengthened human connectivity as our ability to jet to far-away places to build community connections becomes more difficult and expensive. The quality of life in neighbourhoods will be a dominant factor in the more closely-knit communities we are going to experience. Funders who are working on neighbourhood development strategies are ahead of the coming curve as more and more of us come to realize the value of maintaining and building strong, vibrant and safe local communities. But it also raises the spectre of increasing neighbourhood striations related to income and class with the potential to increase protectionism and decrease broader integration and tolerance for diversity.
  2. Continue reading ‘Philanthropy in a Brave New (but smaller) World’

Getting the long view

Years ago when Sheherazade and I were working as executives at the same organization, on days when it felt like the walls were closing in on us we would take a walk over to the Royal Ontario Museum to get some perspective. Yes, there is nothing like thousands of years of beauty, drama and brilliance to get a sense of one’s place (one’s teeny, tiny little place) in the universe. We would get refreshed, and more often than not, inspired. Sometimes the only way to deal effectively with an issue or problem is to get outside the situation – the farther the better – and let solutions come to you from anywhere and everywhere.

We still use the technique when we start a new project. First we satisfy ourselves that we understand the context and expectations of the new challenge, but then we give ourselves time for non-linear, chaotic and serendipitous reflection that inevitably informs our direction. So we are always delighted to find places of inspiration – TED is one – and now another called Ask Nature. Holycrow, this is cool! The idea behind this site is based on the notion of biomimicry, that natural genius is all around, with so much to teach us. The site draws on “3.8 billion years of design brilliance… to connect innovative minds with life’s best ideas, and in the process, inspire technologies that create conditions conducive to life”. You  can find answers in nature to your most compelling questions. Try it out. Go into the site and complete the question: How would nature….. and see what comes up.

And speaking of TED, according to the Globe and Mail this morning, a TED-like conference is being planned in Toronto on September 10th.