The future of philanthropy is mission-aligned investing and general operating support - Generocity Philly

Funding

Apr. 18, 2018 12:52 pm

The future of philanthropy is mission-aligned investing and general operating support

The second annual Women in Nonprofit Leadership Conference covered funding trends. In sum: Philanthropists, take risks.

Lorina Marshall-Blake, Beth Dahle and Patricia Wellenbach during a Women in Nonprofit Leadership Conference panel on funding trends.

(Photo by Melissa Simpson)

Generocity is a media partner for the Women in Nonprofit Leadership Conference.
When there’s a room full of women looking for ways to improve and grow the nonprofits they run, it makes sense that a panel discussion on funding trends would be led by other women who collectively have over four decades of experience in both securing funds for and donating funds to various nonprofits.

At the second annual Women in Nonprofit Leadership Conference last week, attendees heard such insights from the “Inspiring Giving” panel, moderated by Please Touch Museum President and CEO Patricia Wellenbach and featuring:

  • Lorina Marshall-Blake — President of the Independence Blue Cross Foundation and VP of community affairs of Independence Blue Cross
  • Beth Dahle — Executive director of Compass and cofounder of giving circle Impact100
  • Laura Kind McKenna — Trustee and the former managing trustee of the Patricia Kind Family Foundation
  • Jodi Rosen — Senior manager of Vanguard Charitable philanthropic services

Three themes surfaced during the discussion: mission-aligned investing, general operations support and authentic relationship building.

Mission-aligned investing can hit harder than impact investing.

Philly’s social impact community has been talking about this for yearsImpact investing — aka capital investments in social enterprises or other social impact organizations with the goal of earning back both a profit and seeing social or environmental returns — is bold, but it can’t include every type of funder.

Instead, foundations should consider mission-aligned or mission-related investing, which are riskier, often below-market-rate investments that are less concerned with financial returns; they’re more similar to a loan than a grant. Barra Foundation, for instance, has been involved in this type of investing for the past two years.

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As she’s stated before with gusto, McKenna believes impact investing’s focus of financial return has the potential to distract funders from the mission of the nonprofit they’re funding.

“That is one of my biggest pet peeves about the term ‘impact investment,'” said McKenna. “Impact investment [as] used by the financial institutions is a very different thing than what us as philanthropist, donors, individuals who care about our mission should be using.

“When you read a definition of impact investing, they often say ‘make money and do good,'” she said. “What I want you to consider is ‘do more good with your money.’ Put mission first, if you really care.”

Audience questions.

Audience questions. (Photo by Melissa Simpson)

General operating must be funded.

Regardless of a nonprofit’s mission, money for general operating — along with a well-trained staff and volunteers — is essential. Period.

“A lot of funders don’t want to fund capacity building,” said Dahle, whose Compass connects nonprofits with pro bono business consulting. “They want you to be able to demonstrate outcomes and they want you to have leadership development and they want you to retain your staff but they don’t want to pay for it.”

Some local funders do offer general operating support, such as Barra Foundation and Impact100, and some are discussing the idea publicly.

Nonprofit leaders, note: Be real in your relationships with funders.

All nonprofits need to fundraise. Even beyond the tedious grant-writing process, executive directors and other nonprofit leaders can feel overwhelmed with the need to identify donors who align with their mission.

McKenna believes that wining and dining potential donors is unnecessary, but starting and maintaining organic conversations and relationships is essential to finding key partners.

“A lot of times, people will say to me, “What do we like to fund?” McKenna said. “Don’t ask what I like to fund, tell me your passion — I want to know what you’re doing. Read our website. See what our mission is.”

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