Timing denial

Theo Jansen, artist and creator of Strandbeesten explained in a TV-documentary about his work that in his creative flow every problem that presents itself immediately comes with the dream to solve it.  I so admire optimists!

Seeing in a crisis the opportunity as the famous saying goes requires you – at least temporarily – ignore the pain of failure and problems, and be a dreamer. But what if the problems are existential? Existential as in exit.

“Look on every exit as being an entrance somewhere else.” – Tom StoppardRosencrantz and Guildenstern Are Dead

Exits, transformations and radical cut-backs in not for profit organizations are profoundly painful processes for all those who are affected. Yet some degree of denial of the pain may allow you to see the opportunities. But productive denial requires good timing. In the world of funders and not-for-profits I also see a lot of denial of organisational pains that allows crucial problems to fester and lead to crises. So how do you time your denial well?

Over the next months I expect to be immersed in issues faced by not-for-profits from which funders exit.  None of the NGO’s involved has been part of a formally planned exit by a funder(s). Questions like: How long do you keep on trying? What did we miss, should we have seen this coming? What about the future of the paid staff and (unpaid) volunteers? Do we scale back? Liquidate?  Go dormant?

Funders of not-for profits have serious problems with exits, planned entrance in a country or field on the basis of an entrance and an exit strategy. I wrote about exits for funders in a GrantCraft publication.  Emulating venture capital practices, the venture philanthropist are very keen on preparing for exits and sustainability and EVPA also collected lessons learned and provided guidance to their members through and EVPA guide on planning and executing an exit.  Many funders circumvent the exit problem by suggesting from their side there is not real entrance: they provide funding on a project by project basis and do not really strategize about the field or sustainability of the continuity of the capacities and organizations that implement the projects they support.  It is an opportunistic approach, but unless a complete field collapses none of the crises that exits cause will affect them.

But awareness and commitment does not provide guarantees. What if NGO’s and their funders both underestimate or even deny the financial fragility of the causes and organizations they support. Problems of financial fragility are rarely a crisis that hits out of the blue. The problems tend to creep-in very slowly: how to manage growing budgets changes into making ends meet, into chronic deficits. After a bad year, if there is a financial reserves, extensive discussions about their use to stop-gap ensue. And a lot of effort and dedicated capacity will be invested in gettin fundraising back on track, but do you revisit your fundamental strategy?  Or do you delay that discussion until the next year. Will doubt vis a vis the fundamentals undermine the effort to get back on track?

Ironically, denial of structural problems can also be fed by unexpected large gifts that hide more strategic issues.  And another factor that allows for financial fragility to remain unaddressed is the urgency of the cause as it stimulates a focus on fixing things instead of managing with a long term perspective.

So how do you manage to balance optimism and realism? The guides for funders referred above encourage funders and charities to work together and face financial sustainability at every stage of their relationship. But equally important is  how the management and board members of NGO’s can support each other to face this issues at the right moment and see the opportunities, the new spaces opened by the exit doors.

New Year-looking back and looking ahead

Another year gone by. Last year I made little time for blogging. My standard excuse: too busy with my work for clients or with my volunteer work. That explanation suggests that one excludes the other, which may not be the case. The synthesis of working and sharing is called Working Out Loud (WOL). As defined by John Stepper WOL is “making your work visible in such a way that it might help others….. when you work in a more open, connected way – you can build a purposeful network that makes you more effective and provides access to more opportunities.”

It has been buzzing around WOL on internet for some time now, so I have some catching-up to do. The  basics I learned from this blog by Sahana Chattopadhyay and you will find some practical, critical thoughts on the subject by Nigel Young.

Particularly Young’s first point is relevant: “WOL is about working in a visible space not preparing and presenting in that space”.  Unfortunately not all the work I do for clients can be be done in a shared, let alone public space. So how do you manage that? Can you do part of your work out loud and be quiet about other parts?  Would that still be WOL? Anyway, I am going to try an find out this year how I can WOL and be discrete, protecting the interests of the organisations I support.

But even if I end up working really quietly in 2016,  I will steal ideas from the WOL-community. For example, I will follow in the footsteps of the “writer who draws” and makes “art with words and books with pictures”,  Austin Kleon  and be creative and Steal like an Artist (thank you Russell Kerkhoven)

Stealing, sharing and amplifying or endorsing: often my own experiences are not at all unique, and others formulate much more eloquently the issues I come across in my own work. A good example is a blog on non-profits by Vu LE I started followng in 2015. Check out this one for example on  lessons learned in 2015.  I particularly like the one about the danger of ignoring the elephant in the room:

An elephant in the room is most destructive when it is ignored. Every organization has an elephant. Or an 800-pound gorilla. Or whatever large animal is representative of a problem that everyone knows exists but no one wants to wrestle with. Deal with it head-on, because ignoring it usually makes it worse.

Next year I hope to become better at dealing with elephants large and small. Will keep you posted!

Grants, returns and dividends in philanthropy

Are grants the most efficient means to achieve a foundation’s philanthropic mission?  And what is the best strategy when it comes to investing an endowment?  Last week at the European Foundation Centre some practitioners convened as part of a series of peer exchange events around social investment. Participants in the event reflected on the practicalities involved in changing practices in their organisations.

Already many foundations deliberately invest ‘green’, or screen their portfolio to eliminate investments in companies that abuse human rights, or consciously invest in assets that may give a much lower return but contribute towards achieving their foundations philanthropic mission, or all the above.

Also at the programming side practices are changing. However, when it comes to investing financial resources the main transaction type in private philanthropy continues to be the grant.  These days that would be usually a project grant with a duration between 12 month and 3 years, sometimes renewable.  On very rare occasions foundations still give core funding that is not tied to a specific project. The emphasis is on providing resources for salaries, fees, and expendable materials. Philanthropist rarely use funding modalities like loans, guarantees, or equity stakes. And even when private philanthropist invest in capital goods they usually do it through grants and gifts.  For example the first micro-credit schemes in the eighties and nineties of the last century were sponsored with public and private grants, only recently they enjoy the interest of impact investors.

A useful image depicts the range of options that you have between making a grant and investing in tradable assets that give the highest financial return.

SocialFinanceWheels

From:  Making Your Money Work(harder)book, EFC (forthcoming)

Social investment – which, by the way, does not per definition has to be an investment in a social enterprise – would be anything in the green circles at the left of this image: from providing funding for capital goods (in support of operations) expecting no, or only partial pay-back, to investing with the expectation of a minimal financial return.

The arguments for using these alternative funding and investment tools may vary.  Some suggest that charities, NGO’s, social enterprises and civil society organisations have a need for – and can absorb – different kinds of funding. For example, sometimes they may need an advance as workingcapital which they can pay back later from raising funds, grants or other income. Or they may need capital to procure critical pieces of equipment or to invest in infrastructure, saving recurrent expenditures down the line.

Others would argue it is all about unleashing the innovative force of the market into the realm of the public good, and that the social enterprise model – supported through loans and equity – is the best, if not only sustainable way forward.  And yet others believe on a macro scale that financial returns – even minimal – on (social) investments have the potential to attract on a massive scale the private capital we need to solve today’s social problems.

Sometimes I think funders stick to grants as the only tool to promote social change only for the sake of simplicity or tradition. Giving a loan can be administratively and legally quite complicated if you are set-up as a private foundation.  And as a foundation do you want to own a stake in a social enterprise?  You have to know what you are doing. Which is why understanding the various tool can be helpful. Thus concluded the practitioners that met at EFC: by all means, in your programming do not shy away from using other funding tools, but if you are a beginner, keep it simple and small, and stick to your field of (thematic) expertise.  And maybe most of all: learn from your experience!

At the EFC event an interesting discussion evolved as to whether the partnerships between funders and recipients would be different if the transaction was not a grant, but a loan or an investment  in equity. Some suggested the relation between borrower and lender would be stronger, closer and/or more equal than between grantor and grantee.   In my view it is more complicated.  Closeness in a partnership comes from shared goals and ideals, and from shared realities, personal interaction and trust.  Talking about the limitations of grants as a funding tool, someone suggested that funders “use the grant to buy a project outcome”.  I think it is this ‘buyer-seller’ dimension of the relationship – as if it is a utilitarian transaction – that is problematic.  But is that inherent to the grantor-grantee relation? And how does a loan agreement makes the partners more equal?

Find out more about social investment on the site of Social Finance UK and – also drawing on the UK experience – check out this comprehensive study by ClearlySo.  The EU is also busy fostering social investment in Europe.  Additionally, the Center for Global Development has been investigating and promoting the idea of Development Impact Bonds. These novel financial arrangements could connect different partners in a different role in the context of development coöperation, thus generating a stable flow of income for the actors on the ground, security for government institutions that are accountable to taxpayers to get results, while private  – philanthropic – investors assume and share some of the inevitable risks involved. I will get back to that in another blog.

New challenges: GrantCraft

My consulting practice is on hold because I dove into a new project. It is called GrantCraft, a joint venture of the European Foundation Centre and the – New York-based  – Foundation Center. GrantCraft collects practical wisdom from grantmakers and philanthropist and turns it into guides, workshops, videos, and other tools to help philanthropists hone their craft.  Grantcraft is not about blueprints or recipes. It explores how practitioners deal with dilemma’s and tradeoffs. It helps you organize yourself and your  work and provides tools to make grant-making more strategic, and benchmark effectiveness.  GrantCraft delivers these materials through its website www.grantcraft.org

When I started out as a consultant in 2008, I was ready to head where my clients were leading me.  Without a detailed plan, just like Yogi Berra warned – indeed, I did end up some place else. But I very much enjoyed the trip.  I definitively will not miss having proposals rejected, the umpteenth tender failure….  But it was certainly very gratifying to explore and address a variety of organizational problems with clients: from mainstreaming gender in international coöperation,  to supporting good governance of a Women’s Fund in South Africa, addressing age diversity in HR policies in Dutch municipalities and measuring effectiveness in attending to victims of commercial sexual violence in Latin America. With GrantCraft I will still be working very much around learning with those who try to promote social justice.  But it will no longer be in a personal, advisory capacity.

I may be blogging here but you do check the GrantCraft blog!

Sharing experience in evaluation

With my colleagues from evaluation 5.o we wrote a paper for the upcoming INTRAC conference on monitoring and evaluation entitled Fifth generation Evaluation of a HIV/AIDS prevention programme among LGTBIin 15 countries Africa and Latin America”. In the paper we describe how we used constructivist evaluation methodologies to facilitate the evaluation of the International Programme of Schorer Foundation, Amsterdam generating a process that produced real learning among all involved 

blogging

I have been too busy for blogging lately. Actually since September I have worked and traveled, supporting three non-governmental organizations in Nicaragua, Bolivia and Brazil who work with commercial sex-workers in the process of learning from their doing. As part of an evaluation process I also wrote case stories on prevention of HIV/AIDS among young gays in Honduras and among transsexuals in Ecuador. And I am involved in the evaluation of the woman’s rights component of the programme of grants covering several countries in Latin America, a major evaluation project with 8 other professionals from Costa Rica, Honduras, Haiti, Uruguay and the Netherlands.

It is very frustrating when you spend more time on report writing for clients than on blogging. If only because some of those reports will never be read by more than 5 or 6 people. But I did get to meet some interesting and courageous people: activists for LGTB-rights and other human rights defenders a variety of street workers and activists who relentlessly fights for the interests of those who are marginalized and excluded. Courageous because some of the actually received threats. And there was a lot of learning:
– in Nicaragua we tried to set-up a simple monitoring system that actually informs about how the clients are doing and not only on what the organization is doing with the grant money. From the reports and evaluations I have read over the last few months – piles of them – what the receiving organizations does with the grant money seems to be the overriding concern. Surprisingly few pages are actually dedicated to how all this affects and changes the life of the beneficiaries.
– it was also nice to work with a Dutch organization that makes grants to organizations in developing countries and that actually invited a group of them to tell them face-to-face how they do as funders. They were really very open. Based on some case stories written by external people, in the group we looked the concerns and issues that arose from that funding experience. All the organizations got a lot of “food for thought” out of that open and frank debate, which they most probably will use to improve on what they are doing: something that is not the standard for evaluations in the context of development coöperation.
– and I also learned a lot myself: about the need to improve my skills as an interviewer and about my strengths in facilitation, about the situation of women’s rights and women’s rights defenders in Latin America, and a neat technique to “dissemble” controversial statements with a group: with some colored cards and some magic you can bring in different experiences and look at what is the essence of the problem, instead of a traditional exchange of views.

And before you know it fall is over and we are all heading for winter…………. Brussels is freezing cold, but with some luck my strawberries will come back in the spring…

It actually snowed tonight:

strawberries in the snow

Changing lives – Cambio de Vida

ICCO, a dutch development organization collaborates with three different partner organizations in Latin America that support children who are exploited in prostitution and women who want to step-out of commercial sex work.  With resources from he Dutch government they fund the work of their partners and promote collective learning from experience.  The title of the program is Cambio de Vida – Mudando de vida because the ultimate aim is enable women and children to drastically change their lives.

Collective learning among different organizations with different approaches, using two different languages, working in three different countries: that forms quite a challenge. But there is more to it. When talking about sexuality there are other language barriers to cross not only grammatical ones. In prostitution or sex work semantics are a critical issue. Prostitution has negative connotations as an immoral act. Also there is a difference between being a prostitute, or being prostituted.  Are you being immoral, or are you an innocent victim of immoral people  – pimps, brothel owners or traffickers (all M/F)?

Compared to prostitution, the label “sex work” describes the activity in a seemingly neutral way as an economic activity in which sexual services are provided in exchange for money.  The term emerged among sex workers who wanted to combat the stigma of immorality, who wanted to rid themselves of stigma of being guilty and claim their rights as workers not as victims.

Another option is to talk about minors or women whose sexual and human rights (as migrants) are being violated.  In this terminology children and women are also victims but they do not need to be saved from immorality but they suffer injustice and need support to claim their rights.  No one is guilty in the moral sense, adults can be voluntary sex workers whose human rights are being violated. For example,  when sex work is legal (like it is for adults in f.e. Bolivia) sex workers may suffer discrimination and violent harassment by the police.

So in choosing your words you are choosing positions.  But not all positions are being disputed. With all this debate on semantics, everyone involved agrees that minors should never abused to provide sexual services in exchange of anything.  Article 34 of the Convention on the Rights of the Child is quite clear on this.

Article 34

States Parties undertake to protect the child from all forms of sexual exploitation and sexual abuse. For these purposes, States Parties shall in particular take all appropriate national, bilateral and multilateral measures to prevent:

(a) The inducement or coercion of a child to engage in any unlawful sexual activity;

(b) The exploitative use of children in prostitution or other unlawful sexual practices;

(c) The exploitative use of children in pornographic performances and materials.

Language differences – in terms of grammar or politics – do not have to preclude collaboration of collective learning. In Bolivia the ICCO partner organization, the Hermanas Adoratrices work with “children and women that are prostituted”. But they collaborate in fighting trafficking and exploitation of children with the Bolivian  “Organización Nacional de Activistas para la Emancipación de la Mujer (ONAEM”) who also advocates for sex work to be included in the nations Labour Code.

Besides the attention for children, in the ICCO program Cambio de Vida there is a focus on women choosing voluntarily to change their lives.  The team of the Hermanas Adoratrices will share their experience with portuguese speaking activists of Sodireitos based in Belem, Brazil who fight to defend human rights,  in particular sexual rights and the rights of migrants and women that are involved in sex work in Surinam.

So an awareness of the politics of language and respect and acknowledgement of the differences is important for learning. And you also need some tools.  ICCO is a global organization and actively uses social media to promote learning. In this program we are using a limited access wiki-space to share and comment on the reports and papers and documents we produce and we use delicious to tag and share resources we find on the net. With these tools and a sensitivity for language we aim to share and learn. But, as Mileny Matos, project coördinator for Sodireitos one of the participating organizations puts it in portugese, it also needs a sense of community.

Business models in not-for-profit

Recently I worked on strategic planning with a women’s fund in South Africa that supports local grassroots women.  We took an approach that looks at not-for-profit organizations as a social enterprises that offer value to both grassroots women and to donors, people, businesses or institutions committed to support women.   The business model we mapped  includes value propositions to grassroots women that generate social benefits and value propositions to donors that generate revenues for the organization.  For an organization to be sustainable those two types of propositions need to be compatible and balanced. And not only the propositions have to be compatible, also the values that drive the relations with the two groups of “customers”.  How often do you see in not-for-profits that the fundraisers are completely out of sync with the people in the field and vice versa? The model highlights the connections.

The methodology is exiting to work with.  For the ‘enterprise’ to work, we need to make sure that we know on an on-going basis what grassroot women (and donors)  need and what works.  In this model being participatory, client-oriented and responsive is not an add-on feature, limited to a stakeholder event or something similar;  being responsive is build into the venture right from the start.

The standard approach in planning development coöperation is the LogFrame.  This is a detailed action plan incorporating goals, results, outputs and inputs, based on an analysis of the problems, root causes and possible solutions.  You can do it in a participatory way, but there is nothing in the methodology that requires that.  Also, the approach is quite rigid and tends to start from what is wrong, what is missing. In my experience, LogFrames works well for quite straightforward, discrete projects. LogFrame and organizational change on the other hand do not really mix very well.

Contrary to the LogFrame, this approach of mapping a business model directly builds on what the organization has done well in the past. The point of departure are the services  – intended or not – that beneficiaries and donors responded well to. You draw on that positive core to come up with your value propositions.  This makes change inspiring for the team and the organization’s stakeholders. And that is something change processes in organizations can never do without: inspiration and motivation.

To map the business model we used an approach developed by Alexander Osterwalder c.s. For more information go to the businessmodel alchemist , thank you Josien Kapma for introducing me 😉

The women’s fund whose business model we mapped is WHEAT.  WHEAT is a venture of a great group of women in South Africa supporting grassroots women who work to improve their livelihoods and to build their communities. WHEAT has shown to be very effective in reaching out and supporting these women. The fund supports women by making grants to invest in (leadership) skills and by providing tailored advise.  A few years ago  a small grant enabled a group of women in a township to start producing their own soap – instead of simply retailing soap they bought wholesale at considerably higher costs.  WHEAT also encourages women to get together to discuss local problems at so-called “convenings”.   WHEAT is non-partisan.   Check out the website for more information.