Last month Mike Nellis delivered these rousing remarks to an enthusiastic crowd of 2,000 nonprofit professionals in Austin for bbcon2015, an annual conference put on by Blackbaud, a leading provider of nonprofit software and services. On the morning's agenda Mike followed local social entrepreneur Suzi Sosa who proposed that social enterprise was undergoing a seismic shift and the boundaries between nonprofit and for-profit work are falling away.
I’ll start by saying that I’m a social worker. I’ve spent my entire career in the nonprofit sector. I love the sector. The fact that I get to work with incredibly smart and talented people to create vibrant communities for everyone is simply amazing. I am a complete believer in the power of the nonprofit sector.
At the same time, I largely agree with what Suzi has said. There is a sea change happening. You can feel it in the sector. An entrepreneurial spirit is taking hold and new methods of service delivery and funding mechanisms are taking root.
However, from where I sit, one thing remains constant. One thing rises above all the chatter. An organization with a strong and focused mission that can produce significant measurable outputs and outcome measurements is well positioned to receive investment to help them scale. Whether you are a traditional nonprofit or a private sector social good company, your mission matters most.
As a philanthropic partner, Austin Community Foundation seeks to work with those creating sustainable community change. What we and other foundations do well is grow and deploy capital. We are proud to have been part of projects like the Butler Hike and Bike Trail and Boardwalk, the Long Center, Dell Jewish Community Center, People’s Community Clinic, Capital Area Food Bank . . . And many other sites and services that make Austin a great place to live, play, work and learn.
At Austin Community Foundation, our mission is essentially to connect donors to the causes that they care about. Sometimes I wonder: is that enough? Are we really doing all we can? Are we mission focused?
Sure, we have eight Community Impact Areas: Animals, Art, Community Engagement, Education, Environment, Health, Human Services and Recreation. We care deeply about the status of women and children in our community. We invest in STEM education. But are we doing the right things?
Looking out at this room now, you represent hundreds of nonprofits from around the country. I’m curious: how many of you have a theory of change? How many of you know for sure you are actually having the positive mission-driven impact you aspire to make? I’m sure many of us in the room do.
But isn’t it time all nonprofits have a clear strategy to affect change?
And how many of us are tracking not just outputs, but outcomes? It is a tough thing to do, but it is a necessary thing to do.
I was recently talking about this exact topic with a board member who said, “Of course we are making an impact. We deploy $25 million each year. That has to do something.” Yes, I hope so. But my response was, “How do we know?”
And the question I have for you today is, “How do you know?”
The social and environmental change space is no longer just the domain of the nonprofit sector. As Suzi Sosa said, in 2050, the concept of a nonprofit and a for-profit may be irrelevant. New models of funding under the header of “impact investment” will create new types of capital, new types of organizations, and new requirements for performance.
This new type of thinking is being driven by changes in our communities. Let’s take Austin for example. Austin is doubling in population every 20 years. In fact, we are estimated to be an MSA of 7.5 million people by 2050. As we grow, it will be essential that our community become more connected. As the most vulnerable among us are being pushed to the fringes of our city, we need to be able to transition our services to meet their changing needs. Nonprofits, government, the private sector, religious institutions and others will need to become more interconnected than they ever imagined. And, I believe, we will need to use technology and data to create these connections to serve those in need.
So, what does this shift in the nonprofit sector require of nonprofits and foundations? What do shifts in our changing communities, including a growing wealth divide, require of us? I believe nonprofits and foundations will need to evolve how they work:
- We need to have a long-term mission to create change. Yet, we need to have evolving strategies. We need to take risk, fail quickly, and recover quickly. We need to be able to clearly articulate what we are trying to accomplish and use data to demonstrate effectiveness.
- We need to invest in outcome measurement. Foundations need to invest in outcome measurement for the nonprofits programs they help fund. Output measures are great. But we need to look at outcome data if we really want to move the needle.
- We need to rethink capital and how we are investing in organizations. Different organizations need different types of capital at different times in their life cycle. Debt isn’t a horrible thing. It is another tool we can use to create results.
- As a sector, we have the opportunity to leave behind the scarcity mentality once and for all. We can invest in capacity building. We can stop worrying about arbitrary overhead percentages. If an organization has a great mission and can demonstrate clear impact, who cares what their overhead percentage is!
So as you go through your day at this conference, think about your mission. Is it relevant and focused? Are you achieving results? And most importantly, how do you know?