​By Robert Meiksins, CEO

Recently I had the honor of serving on a panel with Janel Hines, of the Greater Milwaukee Foundation, and Scott Gelzer, formerly of the Faye McBeath Foundation. We had been invited to talk to the Association of Fundraising Professionals of Southeastern Wisconsin about trends we see in philanthropy and how nonprofits might respond. This blog draws from some of my comments on that panel.

The nature of the relationship between nonprofits and organized philanthropies, such as foundations and corporations, is evolving. The latest trend in that evolution is the rise of “activist donors” taking the lead as the initiators of local grants to nonprofits, with nonprofits in the role of the responder. The activist donor decides what they think is a critical issue and what should be done about it. Organizations have to come up with a way of responding to that in order to access local grants to nonprofits. Some call it strategic philanthropy; others think it is worse than that.

Often, the process starts out innocently enough with a donor, let’s call it The Foundation, thinking about all the grants it has made over the years. “You know what?” says The Foundation to the nonprofit community in general.  . “We see an issue that is facing our community. A really, really important issue. We need to do something about it. Say,” says The Foundation. “Don’t they have an issue very similar to this in Philadelphia? What are they doing there? Or San Diego, or Baltimore, or Portland!” Leaders of local nonprofits who are already doing something to address that issue suddenly have a sinking feeling, knowing what is coming next. “I know!” says The Foundation. “We need to do some research and exploration.”

The next few months see a decrease in funding from The Foundation as they invest in research which may be led by consultants who have no knowledge of the field and so believe they are inventing the wheel for the first time. There might even be a few meetings in which local nonprofits are asked to bring their ideas on the subject. Without pay, of course.

The Moment We've All Been Waiting For

Then it happens. The Big Shiny New Idea is unveiled. “This,” says The Foundation, “is what we are all going to do to address the issue.” Initiatives that fit the Big Shiny New Idea are given funding. Initiatives that cannot fit their square peg into the round hold of the Big Shiny New Idea are not funded. Other foundations and corporations see the Big Shiny New Idea, get excited, and start sending their funds over in support of its almost certainty of success.

This really is all well intentioned. The Foundation in question is doing this for all the right reasons, wanting to have an impact on a significant issue. The impact can be big and it can be positive. But there can be unintended fallouts from this kind of process. Let me count the ways why I am hesitant about the Big Shiny New Idea.

For one, those organizations that had already been involved in the work are sometimes forgotten. It's dangerous when "people who are most affected by issues are not funded and trusted to lead the efforts to address them," writes Vu Le in a recent post on his blog, Nonprofit With Balls. There is only a certain amount of money available in this community to support work on any issue. If a large slice of the pie is suddenly sent to the Big Shiny New Idea, it means that the organizations that have been in the trenches all this time will see a reduction of their slice. In some cases, it might be a good thing, because they simply were not getting the job done. In other cases, it is a bad thing, because the funding was decreased just because the existing organization did not fit easily into the Big Shiny New Idea, even though they are doing good work.

Trickle-Down Philanthropy

The concept behind the Big Shiny New Idea is similar to the trickle-down theory of economics. The large agencies receive the money because the donors can have confidence that there is infrastructure in place to manage the volume of work that needs to get done. The intent is for the big agency to partner with and share the work and the money with small, community-based agencies. But, as with the trickle-down theory of economics, the practice is not always the same as the theory. Rich people don’t get rich by giving their money away: they get rich by keeping it. The big agencies did not get big by subcontracting and partnering. They got big by getting the grant, keeping the money, and doing the work themselves. And that’s what happens often in this scenario. Not to mention that the large agency is often a white agency and they “partner” with agencies of color but don’t share the work or the money.

Finally, the Big Shiny New Idea is never intended to last forever. It is intended to get something started that would lead to significant change in the way we address the issue. In other words, the money will stop at some point, often when the next Big Shiny New Idea comes along. What then? Too often, neither the donor nor the nonprofits have taken the time to think this through and develop ways to make the initiative sustainable when that original seed funding comes to an end. Both the donors and the nonprofits are guilty in this case. Often it is the nonprofits that are most culpable when they choose not to hear or heed the donor’s warning that the funding has three years, two years, one year left to go.

Honoring What's Working Well Locally
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It used to be the case that a nonprofit would see an issue, come up with a solution, go to the donor, and ask for financial support. The nonprofit was leading the process. Then came “donor-centered fundraising,” which sees the process as a partnership. Nonprofits and donors each have priorities, and the question is whether or not they match. If they do, the funds are made available. The activist donor is a new element of the process. It’s not a bad idea, as such, to have activist donors and their Big Shiny New Ideas. I just hope we can remember, respect, and continue to support what we already have that is working well. 

I would like nonprofits to be comfortable in speaking up, identifying what is working and what is not. What are your stories of agencies, people, and ideas that have benefitted from the Big Shiny New Idea, and those that may have been left behind? Please use the comments link below to tell your story.