Who Exactly are the Customers of a Nonprofit Organization?

Chronicle of Philanthropy, Mark Kramer argues that every nonprofit institution has three indispensable "customers:" the clients it serves, the donors who support it, and the volunteers or staff members who help get the work done. The failure to serve any one, while tolerable in the short run, will sooner or later undermine the organization's survival

The Evaluation Matrix

Evaluation is one of the most confusing topics in philanthropy -- in part because it embraces multiple definitions that are often jumbled together. Evaluation often refers to at least three different kinds of measures: monitoring measures that typically focus on whether grant money is being expended for its intended purpose; process measures that offer data on interim measures of grantor and grantee processes believed to be indicative of future success; and impact measures that assess whether giving is achieving the desired level of social progress. Each of these measures can in turn be assessed at three different levels: the individual grant, the program, and the grantor as a whole. Combining these measures and levels produces a nine-part matrix that begins to tease out some of evaluation's varied meanings

Scaling Social Impact

It is said that a good metaphor frees the mind . . . then imprisons it. The metaphor of business as a model for the nonprofit sector seems to be tracing this proverbial path. Over the past decade, many principles borrowed from corporate management, venture capital, entrepreneurship, and investment portfolios have been grafted onto the work of foundations and nonprofits. These new ideas have stimulated a considerable amount of innovation, bringing to the field venture philanthropy funds, social entrepreneurs, capacity building grants and the increasingly common goal of taking small nonprofit organizations to scale. It is true that certain basic principles of strategy, expertise and efficiency apply to the nonprofit sector, just as they do to every other kind of enterprise. But these broad principles need to be thought through carefully in the specialized context of the nonprofit sector if they are to be usefully applied. We may already be reaching the point where the business metaphor has imprisoned much new thinking in the social sector -- and the limitations are most apparent in this widespread ambition, shared by many funders and nonprofit leaders alike, of "going to scale" through rapid organizational growth

Collective Impact

Large-scale social change requires broad cross-sector coordination, yet the social sector remains focused on the isolated intervention of individual organizations. Substantially greater progress could be made in alleviating many of our most serious and complex social problems if nonprofits, governments, businesses, and the public were brought together around a common agenda to create collective impact. Published in the Stanford Social Innovation Review, Winter 2011

Allocating Resources in a Time of Scarcity

In response to declining investment returns, many foundations are implementing across-the-board cuts for grantees. This 2002 article argues, that there is a better approach. Particularly in tough times foundations should concentrate their giving in those areas in which their expertise, relationships, and grantees create the greatest value. It also makes the case that foundation-level, rather than grant-level, evaluation is the way to identify those areas with the greatest potential for social impact

Aggregating Impact: A Funder's Guide to Mission Investment Intermediaries

This report provides a guide to mission investment intermediaries, organizations that collect capital from multiple sources and reinvest it in people and enterprises, whether nonprofit or for-profit, that deliver both social impact and financial returns. A growing number of foundations and other funders are beginning to use such intermediaries versus making mission investments directly. This is due to a number of advantages that intermediaries can provide, such as ease of investment, reduced risk, lower transaction costs, specialized expertise, performance reporting, and an expanded deal flow. Yet research disclosed that many funders are unaware of the wide range of mission investment intermediaries that are available and of the advantages they can offer. The authors provide an overview of mission investment intermediaries and how foundations use them, the benefits and challenges of investing in intermediaries, and an analysis of available intermediaries that address economic development, housing and the environment

Better Outcomes, Lower Costs: How Community-Based Funders Can Transform U.S. Health Care

Mark Kramer and Dr. Atul Gawande discuss the untapped potential for community-based funders to transform the cost and quality of health care in the United States. Individually, these funders have the opportunity to make a profound and lasting impact on the health of their communities; together, they have the opportunity to create a national movement to achieve better outcomes at lower cost

Risk, Return and Social Impact: Demystifying the Law of Mission Investing by U.S. Foundations

Discusses in detail the legal aspects of mission-related investing, including federal and state fiduciary laws, foundations' fiduciary responsibility, and emerging practices, and makes recommendations. Includes examples of investments and case studies

The Power of Strategic Mission Investing

A growing number of foundations are offering low-interest loans, buying into green business ventures, and investing in other asset classes to advance their missions. Yet most mission investing remains haphazard and inconsequential. To bring about real change, foundations need to take a fundamentally different approach, making strategic mission investments that complement their grantmaking. Authors Mark Kramer and Sarah Cooch talk about strategic mission investing in the Fall 2007 issue of Stanford Social Innovation Review

Compounding Impact: Mission Investing by U.S. Foundations

This recently published report provides the first comprehensive analysis of mission investing by U.S. foundations. The study, funded by The David and Lucile Packard Foundation, analyzes the mission investment activity of 92 U.S. foundations, which have made a combined total of $2.3 billion of mission investments. Mission investing is a more specific type of social investing, and represents the use of financial investments as tools to achieve a foundation's mission. Through interviews with foundations and extensive data collection, FSG assembled a rich picture of current and historical mission investment activity stretching back almost 40 years. The study found that the number of foundations engaged in mission investing has doubled in recent years, and the amount of funds committed annually has tripled. Although most mission investments are still low-interest loans, foundations are increasingly using equity and other investments that generate market-rate returns. Surprisingly, most of the growth has been driven by smaller foundations with assets under$200 million