Exciting trends in foundation land – the 2012 Feri Foundation Award

Posted on May 16, 2012 by Michael Alberg-Seberich

Michael Alberg-Seberich

How to prevent obesity among teenagers? The Schtifti Foundation (Schtifti is the Swiss German word for a learner or apprentice) in Zurich, winner of the 2012 Feri Foundation Award, has developed unique answers to this question. It has turned the healthy lifestyle into something cool. The foundation has implemented a Web 2.0 campaign reaching around 1.5 million young people in Switzerland. It has brought its ‘freestyle tour’, a combination of sports, exercise and cooking classes, to more than 285 schools. The two donors, Roger Grolimund and Ernesto Silvani, set up a small endowment after they had experienced personal loss in early years. They have turned their fate into an amazing creativity and productivity. The Schtifti Foundation is a unique hub where young people do something for young people. 

Awards recognize engagement. They also indicate trends in a sector. The latter is especially true if a prize has a track record. The Feri Foundation Award wasV awarded for the seventh time on 9 May 2012 in Frankfurt. 184 foundations in Austria, Germany and Switzerland had submitted their applications. The prize is based on a two-step selection process. In a first phase a small committee of Feri representatives and their partners determines six nominees. In the second step a jury discusses the nominees and chooses the winner. The aim of the award is to recognize the civic engagement of donors and to spot innovative ways to pursue philanthropic involvement. Partners of the award are the German Association of Foundations and Active Philanthropy. Feri, initiator and organizer of the award, is Germany’s largest non-bank advisor for private and institutional assets offering financial advice, asset management, economic research and a rating service.

So, you already know the winner of this year’s award. Schtifti Foundation and the other five nominees for the prize are signposts for exciting developments in (German-speaking) foundation land. Let’s have a look at them:

This foundation is a giving circle of more than 150 like-minded donors from all over Germany. The donors are all convinced that the lever to social change is supporting social movements. The foundation has funded the anti-nuclear-power movement and helped to seed fund new measures to control lobbying. The Bewegungsstiftung has developed an innovative program to financially support people who want to commit most of their time to a cause. In addition, the foundation is one of the most transparent and inclusive ones in regards to its decision-making processes and its endowment.

The Zürich-based foundation was initiated by entomologist Prof Dr Hans Rudolf Herren after he had won the World Food Prize in 1998. Professor Herren set up the foundation to combine academic rigour, ecological principles and community-based fieldwork to support a sustainable way of life in rural East Africa. The foundation is an active advocate for the knowledge it gained in its fieldwork at various international organizations. Rigour, expertise, advocacy and community work are the levers used by this foundation for its work in Africa.

The vision of the Canopus Foundation is that people in all rural areas of the southern hemisphere can have easy access to electric light produced by solar energy. The foundation’s work is based on the principles of venture philanthropy. It has conducted a worldwide business plan competition to identify suitable entrepreneurs to fulfil the vision. The competition resulted in the set up of an investment fund that will help proven concepts to scale. Now the foundation focuses its efforts on providing philanthropic capital to those entrepreneurs with a good idea that still need to show that their technology, business idea works.

This foundation was founded in 1422 to provide scholarships for students at the University of Cologne. Over time the foundation turned into a foundation of foundations, and hosts 278 foundations today. Over the last 15 years the foundation has extended its grantmaking portfolio. Besides university students it now supports disadvantaged young people in schools. In addition the foundation has extended its services to donors to serving as a foundation manager committed to the local community. This is a fascinating example of how commitment and innovation can be based on tradition.

In the German-speaking world many people know the actor Karlheinz Böhm. He is a cultural icon of Germany’s economic miracle. At the beginning of the 1980s the actor decided to commit his life to supporting people in Ethiopia. The foundation has supported the setting up of hundreds of schools, medical centres and other services for the local population. The foundation’s long-term commitment to the country is deeply rooted in local communities in Ethiopia. The organization is an example of how celebrities can initiate and support lasting positive change.

The trends represented by the nominees can be summarized in the following way:

  • Foundations as single-issue NGOs that actively fundraise.
  • Foundations as social entrepreneurs.
  • Foundations are actively experimenting with the lever of advocacy.
  • Foundations see the potential of new investment forms and of using the entrepreneurs’ toolbox.
  • Foundations – even mid-sized and smaller ones – are concerned with international issues.
  • Foundations recognize the importance of community-based engagement.

I think these trends are exciting! Let’s hope that these and all the other smaller foundations out there will influence the way overall philanthropy is conducted in the future.

Michael Alberg-Seberich is managing partner at Active Philanthropy

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More than jargon: using the tools we all like to talk about

Posted on May 15, 2012 by Hilda Vega
Hilda Vega

Hilda Vega

We were excited to read Angela Kail’s recent post on New Philanthropy Capital’s theory of change (TOC) report, in particular because we were preparing to co-facilitate a session on using theory of change at the recent Pacific Northwest Global Donors Conference. Our session sought to make a case for using a theory of change in the best possible way, which (in the humble opinion of the authors) is whatever manner makes most sense for the user.

At the conference, we each shared our experiences with theory of change and then asked the session participants to work in small groups on one member’s theory of change (for their philanthropy, a project or an organization). As Kail noted in her post, this exercise made clear that ‘the value lies as much in the process as in the result itself’. Putting to paper one’s plans, ideas and assumptions helps both clarify intentions and bring out key questions to ensure that we are truly planning for change, not just hoping to get there on the genius of our good intentions.

Two tales of theory of change in action

When Hilda began the theory of change process for a foundation client, it was purely by chance. The foundation had decided to launch a new program area, but the board members felt they needed something very explicit to help them talk about what the foundation would and would not fund in this area. In a parallel event, this client’s grantees had asked for more detailed information on what the foundation’s specific outcomes were, so that they could help the foundation achieve them. So Hilda developed a detailed theory of change that helped the board and staff talk about this new area of funding and also enabled grantees be more involved in the larger process of what the foundation hoped to achieve in the short and long term. The client approved the theory of change and Hilda now works with board and grantees to assure its implementation and monitor the progress towards the outcomes the TOC identified.

When IDEX started thinking about its theory of change last year, they already had strong monitoring mechanisms in place for feedback and data collection, reporting and sharing information which had been developed with partner input. So IDEX decided to ask the question, ‘How do we know this partnership model is really working?’. IDEX hired an external evaluator who picked a theory of change-based method as the most suitable to test assumptions and impact. Through an easily accessible online survey and one-on-one interviews, the evaluation yielded a great deal of rich information indicating that partners gave a strong endorsement of IDEX’s model of authentic partnership and that there was strong support for the values that IDEX embodies and personifies. Results confirmed that partners consider IDEX’s model critical to building stronger alliances and linkages to other social change organizations and movements in their local areas and internationally. All of this learning now influences IDEX’s next phase of its own development and focus, and Vini found this approach to be particularly helpful to IDEX since it allowed the organization to examine its role in addressing root causes of social problems and for testing the power dynamics inherent within the grantmaking relationship.

Sometimes the process is uncomfortable

When participants engaged in this process during our session, there was clearly great interest and lots of active contribution to the exercise, but the process was lengthy and there was lots of back-and-forth within the audience and many questions for the facilitators. In reflecting on the session, members commented that the questions about the strategy and outcomes of work that they are passionately committed to seemed like criticism at some points, and the process forced them to use a different lens to analyze their vision of social change. The purpose of this type of group exercise was certainly not to criticize anyone’s strategy, but to encourage the type of questioning that engages donors more meaningfully in their philanthropy and that helps invest them in the work of their grantee partners. By understanding their own motivations and expectations, donors can better articulate grantmaking ideas with their grantees and form partnerships that allow stakeholders to achieve common goals.

Theories of change: everything and nothing

‘Take a little time to review the literature on theories of change and you’ll discover, as I did, that theories of change are everything and they are nothing,’ Albert Ruesga notes in his essay Philanthropy’s Albatross: Debunking Theories of Change. This is sad, but often true. It also doesn’t need to be the case. Our session participants wondered about the name, the format and even the cost in time and dollars of undertaking a theory of change process. All of these questions are valid and must be considered when deciding to engage in such a project. A theory of change should not be a burden, or more work than the outcomes it would produce.

We encouraged our session participants to embrace the idea that a basic map of their vision and some core steps for how to get there should help them move forward, can take various forms (narrative, diagram, matrix, etc.) and can really be called whatever seems to best fit their work. And if this doesn’t help a donor move the work along, then they shouldn’t do it.

The key to making the process work for you

At the end of our session we asked participants to pick a side and argue a defence of their position on using a TOC. One side of the room was for members who believed that some form of a theory of change would help them in their work as donors, while on the other side participants stated that the process was a drain of time and resources with little value to add to their work. Both arguments are equally valid depending on what a donor needs and how they chose to invest their funds.

Theories of change, nonetheless, can be especially useful to those new to the game, perhaps a bit less so to the experienced leaders who were the focus of Ruesga’s article. The key is to make the theory of change what you and your work need it to be, not the other way around.

Hilda Vega is senior advisor at Strategic Philanthropy, Ltd

Vini Bhansali is executive director of IDEX

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Message from SOCAP: philanthropy can help build impact investing marketplace

Posted on May 14, 2012 by Geoff Burnand

Geoff Burnand

The convening power of SOCAP  hit Malmo between 8 and 10 May, offering dozens of leading-edge keynotes, panels, workshops and co-created sessions. Billed as ‘Designing the Future’, the conference attracted delegates from as far afield as California, South Africa and Australia. It bought together valuable strangers, from young idealistic entrepreneurs to experienced investors, world-renowned scientists and academics to policymakers. It also served as an important statement about Sweden’s ambition to become known as one of the leading lights in Europe with regard to social innovation.

Perhaps not surprisingly for a conference based in Scandinavia, the core themes were to do with the best creative solutions to the complex interconnected issues of youth employment, immigrant inclusion and providing for the needs of a growing ageing population. New kinds of public–private partnership were discussed, using innovative new models of social enterprise and impact investing. The developments in the UK, particularly around social bond finance, were especially highlighted.

Despite the fact that there is no end in sight for the economic and fiscal crisis that is gripping many parts of the developed world, the growth of impact investing is a great opportunity to raise significant funds and share knowledge. However, a major challenge is the lack of absorptive capacity for capital. Many investors struggle to find good opportunities to invest in for both impact and a reasonable return. Several delegates were of the view that the sector is entering another phase of building the marketplace that may still take several more years.

Perhaps for this reason, less well represented at this conference were institutional and retail wealth managers. Contrasting views about this were expressed. One view was that while this group are increasingly seeing this market as an opportunity, they are also content for much of the hard early-stage development work and business models to be tested by the social finance sector first. An alternative view expressed by some social pioneers was that engagement with this group of investors will force an unacceptable dilution of their social mission, so alternative ways to distribute impact investments need to be anticipated and developed.

Many delegates were agreed that it is vital that the social finance intermediaries are sufficiently well capitalized to develop the range of services for the market to become more sustainable and to reach scale effectively. A proposal that all foundations should devote 20 per cent of their endowments towards programme related investments by 2020 was well received.

The conference provided many examples of ambitious social entrepreneurs choosing to take great risks for little potential financial reward but tremendous potential social value. These firms must develop and refine their models by trying them out the hard way, in an unforgiving low-margin marketplace. The role of philanthropy in closing this pioneer gap was well recognized, and there is almost certainly more potential to develop structures that combine both traditional philanthropy and impact investment.

SOCAP Malmo was a well-organized, friendly event and a great opportunity to collaborate and discuss new ideas. As might be expected, it was an inspiring environment, with many interesting conversations held off stage. Fortunately not all of these were captured by the team of videographers who roamed the conference to interview participants.

Geoff Burnand is Chief Executive of Investing for Good and Head of Funds at Social Investment Business.

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IFC and MasterCard Foundation to increase access to financial services in Sub-Saharan Africa

Posted on May 11, 2012 by Alliance magazine

The International Finance Corporation (IFC) and the MasterCard Foundation have joined forces in a $37.4 million project to bring financial services to some 5.3 million people in Sub-Saharan Africa. The project will help microfinance banks in the region expand more rapidly, particularly in remote areas; develop new products and delivery channels; and provide low-cost mobile services to low-income customers. The project, IFC’s largest with a foundation, will also create new opportunities for economically disadvantaged people to develop businesses.

The project builds on the growing presence of both partners in the microfinance sector and particularly in Africa. Part of the World Bank Group, IFC is now among the world’s top three investors in microfinance and has supported, with either resources or advice, pioneers in mobile financial services such as WIZZIT in South Africa, MTN in Nigeria and Airtel in Madagascar. The MasterCard Foundation, for its part, is becoming increasingly prominent in microfinance, particularly in Sub-Saharan Africa, since its founding in 2006, having forged partnerships worth more than $230 million.

For more information
http://mastercardfdn.org
www.ifc.org

 

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Resilience and reinvention at the Council on Foundations

Posted on May 10, 2012 by Darin McKeever
Darin McKeever

Darin McKeever

This year’s Council on Foundations conference in Los Angeles  (29 April – 1 May) did not have an official tagline, so in hindsight I would like to nominate one: Resilience & Reinvention.

True to its Southern California location, the conference gave us glimpses of Hollywood artists and their interests beyond their crafts. Those present will not soon forget Sheryl Lee Ralph’s humour and candour, Geena Davis’s data-driven mindset, or Mandy Moore’s passion for Population Services International. But beyond the celebrity spottings, networking and dancing, an uncomfortable tension ran beneath the sessions: the world in which philanthropy is pursued is shifting and we still haven’t made up our minds about how we will shift in response.

Austerity measures contemplated and implemented at all levels of government are yielding to more fundamental questions about the terms of the social contract and partnerships between sectors. ‘Big Data’ and ‘Open Data’ initiatives by public and private institutions are recalibrating the benefits and risks of transparency and even the possibility of anonymity. An ‘Aspiring CEO’ track was a reminder of the next generation waiting to take on new leadership mantles. And there was hallway talk that groups like the Council on Foundations must not only navigate leadership transitions – and I think we all wish the Council’s new CEO Vikki Spruill well – but also wrestle with more fundamental challenges to business models as social media facilitates networking and professional development opportunities that conferences and trade associations used to have more of a monopoly on.

We are frequently faced with challenging transitions – as individuals, cities, countries and sectors. The conference’s opening and closing plenaries brought that point to life in vivid colour. In the first plenary, we were asked to consider three case studies of philanthropy’s response to US cities in crisis: Los Angeles after the 1992 riots, New Orleans after Katrina, and Detroit after the slow, steady hollowing out of America’s auto manufacturing capital. At the conference’s close, the audience was treated to rapid-fire ‘Ignite’ talks, each challenging us to reconsider assumptions about the way philanthropy works in light of new technologies, insights into human behaviour, or expectations of public-minded institutions.

But beyond this reminder, the opening and closing plenaries also suggested to me something more interesting.  During times of crisis and change, both resilience and reinvention are celebrated. Sometimes we take pride in our capacity to spring back quickly into our former shape. Other times we toast our ability to transform ourselves and our institutions. As I listened to the panellists, particularly on the opening day, I was struck by how some told a story of rebuilding their city while others talked of building something altogether new.

Resilience and reinvention are not the same. Resilience emphasizes the survival of past habits, patterns and relationships. Reinvention emphasizes the development and adoption of new behaviours and arrangements.  On reflection, I don’t think the sector is of one mind about how to approach the times of crisis and change it now faces. I recognize a lot of people within individual organizations are using these times to wrestle with tough issues, but I fear that our collective ambivalence to these questions may ultimately get us nowhere. Will we embrace new ways of working and – as Marian Urquilla of Living Cities in one conference session said of one change management effort – appropriately mourn the passage of the old ways? Or will we seek comfort in the familiar, fully acknowledging the path not taken?

Darin McKeever is Deputy Director, Charitable Sector Support, Bill & Melinda Gates Foundation.

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