Doug Stamm's Blog

I had the honor of speaking at the Willamette Valley Development Officer’s conference last week, which gave me an opportunity to reflect on the next five to 10 years in the independent sector. I thought I would share an abbreviated version with you here, in hopes of encouraging dialogue that will help better position us all for the future. The full version, with illustrations, is available here.
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If the past 5-10 years have taught us anything, it's that revolutionary change is happening on a larger scale and more rapidly than we would have imagined, let alone predicted. And the pace and scope seem to be growing ever faster. Some would say I would be on a fool's errand to predict the next 10 years. Being made a fool has never stopped me before, so I’ll give it my best shot looking at some big picture themes and strategies on the horizon for the independent sector.

There are a lot of reasons to think we are in, or shortly headed to, the most challenging and possibly worst of times. We see upheaval all around us – high unemployment/underemployment, many jobs have become obsolete, lack of accessible credit and impact on housing, pushing earth’s limited resources. excessive consumption, peak oil, global warming, wild/weird weather… do any of you remember singing, or your parents singing along to the Temptation's early 70s song Ball of Confusion. Those lyrics seem to still describe the world today.

I’ll focus on three themes: Disruption, Impact and Empathy. It's not lost on me that the acronym I've created here is DIE. But bear with me and let's see if we can end up a long way from dead. However, what I’m about to say is not for the faint of heart.

Disruption

I'm starting with disruption because it's the most obvious and most pervasive theme in our world today. The only thing we really know is that everything will change. For example, the degree to which the world is connected today – and the effect it has on society – is hard to overestimate.
 
This year the equivalent of 87% of population of the earth have cell phones. What country has the most mobile subscribers? China (more than 1 billion), India second (around 900 million), with the U.S. a distant third (fewer than 325 million). There are more than 1.2 billion active mobile broadband subscriptions worldwide – in the US 25% of web users are mobile only. We are indeed connected virtually anywhere, at all times.
 
The effect the Internet has had and continues to have on traditional institutions and markets is revolutionary. For example, today's music business is unrecognizable to the one in 2001, when iTunes launched. Remember classified ads? Those who came of age after Craigslist have no idea they were once a vital source of revenue for newspapers. We are beginning to see great disruption in higher education. For example, recently Harvard and MIT announced edX, which will offer their curriculum and classes free across the globe. Do you know about UniversityNow?
 
Geopolitical disruption is rampant – in many instances facilitated by technology and information. During the past year we have seen governments replaced, reformed and reshaped around the globe. With declining tax revenues and growing national debt, Americans are heatedly debating the role and value of government. As Diana Aviv, CEO of Independent Sector aptly put it, "The social compact is on the table in a way that it hasn’t been before."
 
It seems everything is on the table. Even in our world of “do-gooders.” As tax revenue has declined and politicians look to refill diminished public coffers, alongside what some might call a taxpayer revolt, we better believe everything’s on the table, including taking close look at tax exemptions for nonprofit organizations.
 
Citizens/taxpayers are asking questions: why should well endowed institutions get tax exemptions, especially hospitals, universities, YMCAs, etc. These institutions get many public services but pay no property taxes, which fund local services. See, for example, The Case for Making Harvard Pay Taxes.
 
Those of us in the nonprofit sector need to join in – actually lead – that discussion rather than just put forth a knee jerk reaction to protect the nonprofit status quo. We all need to seriously consider what makes sense, what is defensible. I read this blog post in NPO Quarterly – BlueCrossBlueShield: Does It Act Nonprofit – as a healthy sign that these conversations are happening within our sector. They should be happening here, on a local level and each of you in the room should be helping and pushing the Nonprofit Association of Oregon to provide a voice for our sector.
 
A recent report from Bridgespan describes the especially daunting challenge ahead for nonprofits that rely on government funding, with the sobering title The View from the Cliff. When human services are poised on the edge of a cliff, it affects all other kinds of nonprofits because many foundations tend to prioritize for emergency and basic human needs. We are indeed interconnected in the independent sector and need to start focusing on how to best leverage those interconnections as a whole, rather than competing among organizations or causes.
 
Another disruption is crowdfunding. A few weeks, two Kickstarter campaigns passed the $1 million mark on the same day.  Last Friday (May 18), one raised more than $10 million. But the good news about this disruption is the existence of Kickstarter-like platforms tailored to nonprofit fundraising. These tools make charitable giving easy for Gen Xers and millennials, who represent the future of donations. The challenge for you as fundraisers is that fact that these generations are more globally aware, more inclined to support projects in other parts of world than prior generations. You can’t just assume or take for granted a local connection, you need to nurture and develop those connections.
 
The most successful nonprofits dealing with disruption will:

• Embrace technology and tools (at the most recent Council on Foundations conference, one leader said every organization should have at least one staff member who intuitively understands the power of new technology and tools and how to apply them)
• Analyze and effectively apply data – funding will be based on performance/outcomes, not just effort. (Oregon’s Cradle to Career is an example of this)
• Form innovative partnerships that deliver via multiple sectors (i.e., private, public, and nonprofit)
• View the sector as a system, where all parts are interconnected and impacts are collectively measured
• Be comfortable with increased diversity and complexity
• Take both short and long view – need to look beyond short term funding to develop strategies that are required to take advantage of disruptions

We see something striking in the Kickstarter trend: people want their money to make a difference, see the good it does, see the outcomes, results. They want to watch what happens.

Impact

We are seeing an unprecedented demand for impact. Outcomes. Metrics. Data. Effectiveness. Evidence that what we as a sector are doing works. Are nonprofits having the effect their mission lays out? Or just the effect of staying in business? Donors are looking for return on investment. They want to know which nonprofits are effective. Which spend money wisely.

Cynicism toward institutions is at an all time high, and nonprofits are not guaranteed the public’s trust. They must earn it and keep it through two key strategies: transparency and accountability.
 
With this growing pressure, many foundations are narrowing their focus and adopting strategies to fund fewer but “proven” impact-generating organizations. The pressure is especially strong on general purpose responsive foundations like Meyer Memorial Trust, and part of what led us to adopt strategic proactive grantmaking and initiatives as part of our portfolio. How do you measure outcomes when you make grants based only on community requests? Is it really enough to just ask grantees if they did what they said they would do? How do we know what the cumulative effect is? If MMT wants to contribute to a flourishing and equitable Oregon, how do we determine that? Even if we have data, how do we show cause and effect? These are questions our trustees and staff ask every day.
 
Data is coming at us like there's no tomorrow. It’s exciting, but we need to analyze it and use it to make smarter investments. For example, one state found that 11% of people in health and human services account for 43% of the cost. That data should be examined to develop targeted strategies to get at what causes these issues for the 11% so we have more funds to address health issues for the 89%.

Another important issue testing our effectiveness is the increasing demographic diversity of our state. How do we need to expand and alter our knowledge and approaches in order to be culturally competent in the present and future Oregon. Do our organization boards and staffs reflect that growing diversity?
 
We also need to make sure the growing movement toward transparency and accountability among foundations, in which MMT has been a proud pioneer, does not actually lead foundations to take fewer risks in supporting promising new ideas. To the contrary, we need to be risk takers to help bring about large-scale changes and impact these times call for.
 
Nonprofits also need to take risks and be imaginative. If your organization is not having any noticeable/measurable impact on the reason you exist, why would you expect people to keep giving you funds? If your organization delivers service, but the numbers of people needing that service continues to rise, do you know why? Do you know your own data? If a solution requires systemic change, are you doing policy advocacy? Providing service is probably not enough any longer. We need to study the data and use it to inform us to put pressure on points of failure in the system. On a local level, we should expect Nonprofit Association of Oregon to lead and provide voice for our sector.
 
When it comes to impact, the most successful nonprofits will:

• Be effective: Know your data, show evidence of success
• Earn trust: Be candid about failure, learn from it and adapt
• Advocate: Address policy issues, not just services & programs
• Prepare for and embrace growing diversity
• Network with others doing good
• Buiid a movement, not a franchise

This is a lot of work. And it’s hard work. Sometimes it feels overwhelming. But hold on, we're about to get to some good news, I promise.

Empathy

Let’s begin with this quote:
“In this time of hardship, political instability and rapid technological change, empathy is the one quality we most need if we’re going to survive and flourish in the 21st century.”
– Arianna Huffington
 
The author of Wired to Care contends that a major flaw in contemporary business practice is a lack of empathy inside large corporations that rely only on quantitative research. It’s interesting to think of leaders/nations/societies from this perspective. Do people presently in power have enough empathy?
 
What happens without empathy? Look at list of narcissistic personality disorder traits: (adapted from wikipedia/DSM IV)

1. exaggerates achievements and talents, expects to be recognized as superior without commensurate achievements
2. is preoccupied with fantasies of unlimited success, power, brilliance, beauty, or ideal love
3. believes that he or she is "special" and unique and can only be understood by, or should associate with, other special or high-status people (or institutions)
4. requires excessive admiration
5. has a sense of entitlement
6. takes advantage of others to achieve his or her own ends
7. is unwilling to recognize or identify with the feelings and needs of others
8. Is often envious of others or believes others are envious of him or her
9. shows arrogant, haughty behaviors or attitudes

Have you noticed any of that lately? Have you been watching political campaigns ads? Do you think there is an unusually high representation among the people who make policy for the rest of us? What about in big business, our financial institutions, corporate moguls.
 
Let's face it:  we as a society – and as a world – will be debating some really difficult questions in the years ahead, e.g., questions like these in health care:

• What medical intervention should be done (not just what can be done)?
• How long should people live?
• Who should get service and who will not?
• What if a client cannot pay?

Do we want people presently in power at of some of our largest and most powerful institutions and corporations to be the ones to answer these questions? Don't we want people who are the very best at empathy to have major representation at the table when those questions are discussed and answers sought? And when we look around our state, our country, our world, where do we find empathy as one of the most highly prized qualities: in nonprofits and non-governmental organizatons.
 
If we know how to do anything, we know how to do empathy. In fact, I dare say that it's the single most important thing that brought each of us to this work, and to this room today.
 
And what business are development officers of nonprofits in? The business of marrying outcomes and empathy. So the entire future of the century is in your hands. :-)
 
Geneticists have traced the origins of all humans alive today to a single male and female in  Africa… so we in the room and everywhere on earth are members of the same family.  Humans are wired for compassion, a trait that is most evident in family members for one another. As Jeremy Rifkin asks in his book The Empathic Civilization, “Is it possible we could actually extend our empathy to the entire human race as an extended family and to our fellow creatures as part of our evolutionary family and to the biosphere as our common community? If it's possible to imagine that then we may be able to save our species and save our planet.“

I think it’s not only possible, it’s what we were built to do…It's really just getting back to our neurological basics. We can all tap into our empathy when we are reminded to do so. That’s why storytelling was invented.
 
We need to collect and share stories that inspire empathy. If we connect those powerful stories with data, and tap into the technologies at work in disruptive ways everywhere, there will be no stopping you. Us.

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Before I go, I want to tell you briefly about something specific to give you reason for hope about Oregon's future.
 
Meyer Memorial Trust is looking beyond traditional foundation strategies to contribute to a flourishing and equitable Oregon.
 
We're calling it Oregon Unlimited, because if we all work together, we think there are no limits to what we can accomplish. Our project is in beta phase right now, we are refining the technology and building community to serve as a foundation for future growth and will open to the public next January. [To stay abreast of developments, subscribe to MMT's news alerts in the box near the bottom of our home page.]
 
Oregon Unlimited will provide an online space where everyone and anyone in Oregon can connect online (and offline) and work together to make Oregon a place that Sen. Betsy Johnson aptly describes as "a place deserving of its scenery." We discovered the need for an online service like this when we asked for ideas for how to spend the first $1 million of the next $500 million Meyer Memorial Trust grants.
 
Oregon Unlimited gives Oregonians a place to tell their stories and ideas or needs or hopes and dreams so that other Oregonians who share their vision or have a resource to contribute to their issue can connect. But the goal isn't just talk, it's about mobilizing our resources to take action to make our communities and our state better.
 
Oregon Unlimited is a place where people can be personally connected to a purpose and cause and take action that gets things done. A place using disruptive technology where Oregonians can express and act out their empathy and together create impact. A trifecta for Oregon’s future.

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