Category: Resource Development

How to talk with funders about nonprofit effectiveness

By on July 30, 2015 under Financial Management, Resource Development

Credit: Ron Mader / Photo from Flickr

Credit: Ron Mader / Photo from Flickr

“Don’t bite the hand that feeds you.” This maxim has long served as an excuse for nonprofits to avoid having honest dialogues with their funders. However, behind closed conference room doors, listen closely and you may hear a grumbly grant writer whisper or disappointed development director lament, “Where, oh where, are the funders that provide general operating support?”

I agree that we shouldn’t bite the hand that feeds, but what if it’s not feeding us what we need? How can we become more comfortable talking to funders about what would be most impactful to our nonprofits’ success?

There’s been a noticeable shift in the funding community over the past decade. Funders are increasingly focused on results and want more evidence of their social return on investment. This is a positive shift. Nonprofits should be holding themselves accountable for their performance and making investments and adjustments where needed to maximize their impact. The big question is, do they have the capacity to accurately evaluate their performance and, if so, can they obtain the capital needed to make the necessary adjustments? (continue reading…)

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Venture capital and competition in the social sector

By on May 29, 2015 under Culture, Resource Development

Philanthropitch 2015

Philanthropitch 2015

The lines have long been blurred between for-profit businesses, not-for-profit organizations, low-profit social enterprises, and other forms of making money and doing good. In fact, if you look inside a nonprofit, you’ll see that many operate a lot like start-ups: cautious spending, accountability to investors (or a board of directors), trying to make a difference, doing something meaningful and inspiring.

A recent controversy around a “Shark Tank” style competition proposed by The Council on Foundations has called in to question this blurring of for-profit and nonprofit lines. The idea behind the competition is that nonprofit leaders are asked rapid-fire questions about their programs, awarding cash grants to improve and grow their services. Critics allege that such a competition for funding was “humiliating” and “degrading.” The firestorm caused such ire that the Council on Foundations canceled their grant-making contest. (continue reading…)

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Social Impact Investors Provide “Creative Capital” for Nonprofits

By on May 26, 2015 under Financial Management, Resource Development, Strategy & Planning

This is a guest blog post by John Thornborrow, a Greenlights supporter and Chair of the Greenlights Alternative Financing Taskforce which helped spearhead the recent Easter Seals Central Texas social impact loan.

Social impact investors seek to invest in social ventures or socially responsible businesses that have the ability to provide both a social benefit and a financial return (even if it’s a small financial return). In order to provide such a financial return, an organization needs to have a Fee for Service model or an Earned Revenue Stream – in other words, it needs to charge for a product or service.

For nonprofits with an Earned Revenue Model, we’ve seen an emergence of social impact investing options such as loans, impact investments, and Program-Related Investments (PRIs) that provide new funding alternatives for organizations willing to seek them out.  

Let’s face it; this type of funding source doesn’t make sense for all non-profits; some may never have the ability to repay an investment or loan.  And many organizations will (and should) continue to leverage traditional philanthropy as they have for many years.

What is social impact investing and where does it fit with non-profit fundraising?

(continue reading…)

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From “Breakout Idea” to Business Plan

By on May 21, 2015 under Leadership, Resource Development, Strategy & Planning

Accelerator Mentoring

Jack Nokes, Greenlights’ Consultant and Brad Carlin, Managing Director at Fusebox (2014 Accelerator)

Accelerators first appeared in the early part of this century as a response to the intense competition and rapid pace of change in the technology industry. Success for tech entrepreneurs depended on (1) getting to market quickly (2) with the right idea or product and (3) scaling quickly before the idea became yesterday’s news. While business accelerators have been around for a decade, the concept is just beginning to be applied to the social impact arena.

For nonprofit entrepreneurs, similar stakes are on the line. Enterprising organizations that are set out to address complex social issues and find themselves with a proven program that they want to scale or grow for the biggest impact, may find that an accelerator can help get them there. The benefits of accelerator participation are largely the same for businesses and nonprofits; i.e., shared learning around new tools and ideas; access to people with experience launching and scaling products and services; and an accelerated path to market.

With Greenlights’ second Accelerator class just getting underway, I wanted to give a look at what a nonprofit accelerator looks like and how you can use practices and theories on your own personal mission. (continue reading…)

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Trends in Social Financing: Pay for Success

By on May 15, 2015 under Evaluation & Measurement, Resource Development, Strategy & Planning

Goldman Sachs - Click to view full infographic

Goldman Sachs – Click to view full infographic

What if there was a way to grow successful nonprofit programs, improve the lives of the less fortunate, and save taxpayer money all at the same time? That’s exactly what the Pay for Success model aims to do.

Greenlights’ recent research on Austin’s nonprofit community confirms what we’ve all suspected: nonprofits are struggling to meet an ever-growing demand for services. Nonprofit leaders see long-term sustainability as both a challenge and a priority, and are exploring new financing and business models, with Pay for Success being a compelling new option.

Pay for Success (sometimes called social impact bonds) is a financing method that is becoming increasingly popular, and is now being explored as a solution for Austin organizations.

How does Pay for Success work?

The Pay for Success model can get complicated quickly, so here’s a basic look at how it works. (continue reading…)

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