Nonprofits: The Evolution to the Business Model

By John Burnett, SDSVP Partner

There’s a rumor going around that nonprofits are in big trouble. Recent numbers seem to bear this out. For instance, according to Giving USA, the total estimated charitable giving in the U.S. dropped 3.6 percent in 2009. The Center for Wealth and Philanthropy at Boston College said in its report that individual giving fell 4.6 percent in 2009 but for the rest of 2010 will likely grow to up to $227 billion. This sounds good until you realize that U.S. nonprofits need $1 trillion to operate fully.

There is also the other side of the coin. The needs for the services provided by nonprofits have increased by 30-40 percent during the period since 2008. This trend will continue as more individuals lose their unemployment benefits and suffer greater problems.

The response from nonprofits has been predictable. When-in-doubt cut costs – limit travel, count paper clips, reduce benefits; and, most painfully, cut staff, cut salaries/time, and eliminate programs. All these cuts threaten the Mission of the organization and the reason for its being. The assumption made by many Executive Directors is to wait, and things will turn around- they always have before.

Of course, there is always the possibility that the nonprofit can take action. Learning about social media is the current hot button; hiring a fundraiser, who, in turn, puts in place an elaborate program that includes finding 2-3 angel givers; recreating the Board so that it gets and gives; and organizing a new gala, are all potential components. Even a bit of token Marketing is possible. “All these changes will allow us to operate a couple more years, and then the economy will be better.”

Based on my twenty years working with nonprofits in a number of capacities, I have concluded that these band-aids are not the solutions needed. It is not the bad economy, or the donor who quit giving; it is a fundamental flaw in the nonprofit model. Organizations cannot endure if their fundamental goal is to breakeven every year or they are not allowed to delete programs/services that don’t make sense. The world has changed and nonprofits must adapt to a business model that is relevant, implementable and realistic. The process of creating such a model is well established. It starts with a review of your situation including the mission, a SWOT, objectives, strategies, tactics, budgeting, and evaluation. However, the challenge is the lack of resources necessary to create this document and implement it fully.

One possible solution for this lack of resources is for the nonprofit to connect with an organization that can guide them through this process and keep them on track. Although there are many possibilities, San Diego Social Venture Partners is one that I have recently joined and feel offers all the elements to help nonprofits succeed and sustain. Check them out at http://www.sdsvp.org/.


Click here to read more about John Burnett.

SDSVP Investees Utilize Questions to Tackle Tough Issues

By SDSVP Partner, AmyK Hutchens and SDSVP Board Member, Christopher Bush

For many philanthropic organizations it's about the check. Money is indeed quite helpful and appreciated, but what if you could take $1 and magically make it worth $9? SDSVP knows how to wave that magic wand with each and every Investee by focusing on engagement. Engaged partners are at the heart of the organization. With diverse backgrounds in business, law, medicine, human resources, finance, philanthropy, and the arts, to name a few, SDSVP leverages each dollar with our time and expertise. The engagement opportunities lead to rich dialogue, better decisions, and healthy outcomes.

In July, the Executive Directors from each of the Investees were invited to an educational roundtable discussion on leadership led by SDSVP Partner and international speaker, AmyK Hutchens. Utilizing question-based tools to raise the level of critical thinking, participants immediately tackled tough issues such as facilitating cultural change, overcoming economic challenges, restructuring a business model and how to maximize their relationship with SDSVP. Through the lens of Socratic Methodology, Partners and Investees framed specific operational and strategic issues so the problem could be better evaluated, reflected upon, and successfully solved.

There are six main types of critical thinking that the brain can perform. However, when it comes to organizational leadership, there are three levels of thinking that yield the most profitable results: reflection, evaluation and prediction. Unfortunately most leaders often ask low -level (recall) questions that simply require memorized, regurgitated responses. Very little critical thinking takes place. However, when a leader asks a more reflective, evaluative and predictive type question, critical thinking skyrockets as does the quality of solutions. For example, if a leader asks, What is our goal this year? and everyone shouts out, To raise 1 million dollars in funds, that was an easy question…too easy. If the leader changes that question to, How might we meet and exceed our 1 million fundraising goal?, now respondents have to think. They must reflect on where and how money was successfully raised in the past, they must evaluate where they are now in the process including the current environmental and legislative changes, and they must predict what their first several steps and collateral consequences will be in successfully moving toward their new fundraising goal. A simple change in the quality of your questions can exponentially raise the quality of your answers.

In an interactive workshop format, triads of Investee Executive Directors and SDSVP Partners put the Socratic Methodology to good use by evaluating their working relationship. They then identified critical factors that would contribute to healthier, more measureable outcomes. Groups closed by sharing their ideas/tweaks that SDSVP Partners and each Investee could make, that when put into practice, would create an even stronger benefit for both organizations.

Participants at this forum included ARTS, Tariq Khamisa Foundation, ElderHelp, Community Resource Center and Corporation for Support Housing. This forum was so successful that SDSVP has already scheduled Part II which will include more of the Investee staff members. For more information about SDSVP's Executive Directors Roundtable and our upcoming events, contact Mandy Sherlock at mandy@sdsvp.org.

San Diego Social Venture Partners Grows Board of Directors

SAN DIEGO (August 30, 2010) – San Diego Social Venture Partners (SDSVP), dedicated to bringing great people together to dramatically impact San Diego philanthropy, announced its board of directors is growing with the addition of three local business leaders. New members include Trevor Callan, CEO of Callan Capital, Christopher Bush, Managing Partner and Thought Engineer of AmyK, Inc., and Laurin Pause, Executive Director of Community Resource Center.

“We are thrilled to have the support of these individuals, who bring invaluable insight in areas ranging from financial to leadership development to nonprofit operations,” said Peggy Kidd, Executive Director for SDSVP. “Together, we will work toward achieving our mission of accelerating long-term social change by developing the sustainability of nonprofits, empowering them to serve the community more effectively and efficiently.”

The three new members draw from diverse backgrounds and a proven track record of success:

• Trevor Callan, CIMA, CEO, Callan Capital. Trevor co-founded Callan Capital in 2007 after a 15-year career at leading firms including Merrill Lynch, where he earned several service awards and became the first advisor to be selected to represent the Private Banking and Investment Group. A Recipient of the Five Star Award for Client Satisfaction, Callan Capital provides high net worth families with independent and expert advice in all the areas important to a significant estate including wealth management and financial planning. Callan Capital is located in La Jolla.
  
• Christopher Bush, Managing Partner, AmyK International, Inc. With expertise in leadership, sales and communications, Christopher and the AmyK, Inc. team show people the “how” of transforming average performance into brilliant, profitable growth. A leadership and sales development company, he and his firm have received five Telly Awards for marketing and training as well as the Summit International Award for creativity. AmyK, Inc. is located in San Diego.
  
• Laurin Pause, Executive Director, Community Resource Center. Since taking the helm as CRC’s Executive Director in 2004, Laurin Pause has been critical to bringing funding to the community and smart project management to social services. Considered both a fiscal and social services authority in the county, Laurin has developed and introduced innovative domestic violence and social services programs that have produced remarkable success rates. CRC is located in Encinitas.

According to Pause, “As the Executive Director of a former SDSVP Investee, I have seen firsthand how the unique model can create a plan for long-term success by providing support and enhancing productivity. I am pleased to collaborate with this esteemed group of local leaders to further the vision of SDSVP as a community-minded organization.”

Bush added, “SDSVP not only produces life-changing results with their investees in the San Diego community, they are transforming philanthropy by creating better philanthropists. Being part of SDSVP is like an immersion study in the power of giving.”

Other SDSVP board members include Mark Fackler, Vistage Chair; Marjorie Fox, President & CEO of Cultivating Brilliance Institute; JoAnne Berg, CFO of Spectrum Concepts, Inc.; Linda Bernstein, retired business owner/CEO; Peg Eddy, President/CEO of Creative Capital Management, Inc.; Ray Ellis, Principal of Ellis & Associates; David Johnson, Principal of Clearpath Advisors; David Lynn, President of Ayamba, Inc.; Steve Ness, retired business executive/philanthropist; Joyce Ross, Founding Partner of Ross Partners; Alan Sorkin, Founding Partner of SDSVP and Board Chair of SVPI; and Duane Trombly, Founding Partner of PointeBreak Solutions.

ABOUT SAN DIEGO SOCIAL VENTURE PARTNERS (SDSVP)
Established in 2001, San Diego Social Venture Partners is a nonprofit organization of professionals who invest time and money in innovative nonprofits in San Diego County while becoming more educated and involved givers. Recent Investees includeA Reason to Survive, Audeo Charter School, Community Resource Center, Corporation for Supportive Housing, ElderHelp of San Diego, Reality Changers and Tariq Khamisa Foundation. To learn more about SDSVP, call (858) 724-6065 or visit www.sdsvp.org.

Saving Donkeys?

Last month, New Philanthropy Capital, a UK-based consultancy helping funders and charities to be more effective, blogged in response to a charitable act that involved "saving" an (unharmed) donkey in Russia who was forced to parasail as part of a publicity stunt. NPC wrote that spending charitable funds on donkeys is not an effective giving strategy and money could have been more wisely spent helping disadvantaged people. All this chatter about donkeys may seems silly, but SDSVP Partner, David Lynn made it relevant by asking, "Is giving to a less noble cause better than giving nothing at all?" We thought you'd like his response too.

I prefer to think any acts of charity are better than none, whether in-kind or cash, and help promote more charitable acts and better care of the bottom tier. So whether saving donkeys, local kids, or far-off areas, it’s all better than doing nothing. As long as people have a passion and do something about it, that will help everybody in the long run.

David took it a step deeper by asking a stickier question.

The dollar cost of saving a child in the UK or US is far more expensive than saving one in the third world. So should you save one child in the UK, or ten in Africa? How do you allocate your funds?

Definitely food for thought. What do you think?

Here at San Diego Social Venture Partners, our members have the opportunity to find their passion and determine how to best invest their money and their time. We are able to stretch their dollars as they give of their expertise to nonprofit organizations. Because we encourage open dialogue with these nonprofits about what they need to achieve lasting change, we know that wherever we allocate our generosity - to people or animals or the environment - we are greatly impacting the San Diego community for good.

Learn more about San Diego Social Venture Partners

Follow David Lynn on Twitter

Learning About the Homeless

By Mark Fackler, SDSVP Partner and Board Chair

For people reading this blog entry that have not read my previous entries on the homeless, I encourage you to read Homeless Project Background. It will give you some background on my project. Briefly, I have made a commitment to give $20 each week to a homeless person and minimally ask their name and where they are from.

I have been meaning to summarize my thoughts on the homeless project since Dec 31st. After the year ended, it was strange for me not to have a $20 in my pocket at all times just in case I came upon a homeless person who I think would be interesting to talk to. I am saddened by the plight of the homeless. My views of the homeless have changed from a year ago and they also changed during the year long project. My conclusions follow.

I ended the year with $540 I did not give away. My goal was to give away $20 per week if an only if I could have a conversation with the recipient. So over the course of the year, I had twenty five conversations with the homeless. The homeless I spoke to had the following profile. They all live in La Jolla, California, an affluent area in San Diego County. They are the chronic homeless, men and women, and fifty years old or more. They are generally alcoholics. Some are mentally unstable, but stable enough that I did not feel threatened. They are nice, polite and gracious. They are filthy, weathered and wear pitiful clothes. They smell like alcohol at times. At other times, they smell nauseating.

And of course, they are real people. They are our brothers and sisters, our nephews and nieces. They are our moms and dads, our aunts and uncles. They are our children. They are our neighbors. They laugh. They cry. They bleed. They die. They are you and me.

Over the year as people have followed this project, some have told me that the homeless don’t deserve compassion or help. They tell me that the homeless are lazy. They are drunks and drug addicts. They tell me that to help a lazy drunk drug addict only perpetuates that lifestyle. I can certainly understand that point of view. Clearly there are many homeless who are alcoholics and drug addicts and some forms of help do perpetuate their lifestyle. However, what I found in my year long project is that these chronic homeless, these substance abusers are real people with life stories. So to not help them in inhumane. Please note here that there are many categories of homeless and I am dealing with just one category, the chronic homeless and substance abuser. An often misunderstood category are the homeless who just can’t afford rent for a few months and are evicted. These are often families.

Back to the chronic, substance abuse category, where we are faced with a dilemma. Help them and potentially perpetuate their behavior or don’t help them and loose a bit of our humanity.

How do we show our humanity and help them? I believe the best way is to support homeless is to support the charities that serve them. The homeless need professional help. They need medical attention, substance abuse counseling, job training, food, shelter, legal help and countless other services. If you are in San Diego, I would suggest you donate money to Community Resource Center or Corporation for Supportive Housing. San Diego Social Venture Partners (SDSVP) has vetted and supported both these non-profits. SDSVP considers them top notch organizations that help the homeless. Since I am Chairman of the Board of SDSVP, I decided to give my extra $540 to SDSVP. I like leveraging my charity donations and SDSVP has leveraged my gift for help for the homeless.

I would suggest two other things we can do for the homeless. If you feel safe, say hello to a homeless person. Again, if you feel safe, engage in a conversation. Ask them where they were born. Ask them what their favorite food is. Ask them about their family or where they went to high school. Help them feel like a human being. Be their friend just for the moment. That does not perpetuate an addictive behavior. That perpetuates love and kindness.

Check out Mark's Blog at http://facklerfamily.org

The Case for Social Venture Partners

By Alan Sorkin, SVP International, Board President & San Diego SVP, Partner

It has been said, “No amount of travel on the wrong road will get you to where you want to go.” Our most respected charitable foundations have spent billions of dollars in the last 100 years and the world’s population seems worse off, not better. Today’s intractable problems require innovative solutions. Throwing more money at the same organizations will not yield different results.

If Boston College’s Paul Schervish is correct about the $41 trillion wealth transfer that is occurring as baby boomers inherit, we have a unique opportunity if we can do something different.

Social Venture Partners (SVP) believes one of the best ways to deal with these issues is to dramatically leverage the number of donors. There is a new generation of successful business people turned social entrepreneurs. Examples like: Skoll, Gates, and Buffett. SVP attracts these same types of donors.

We are network of 2000+ engaged donors who care passionately about changing the world one community at a time. We are having a positive impact by using effective, innovative strategies to address complex social issues and our model is readily scalable.

SVP transforms individuals who in turn transform nonprofit organizations who transform their community by bringing together worlds that typically do not overlap: grant making, volunteerism, nonprofit capacity building, and philanthropic education.

A recent USC Study found “79% of SVP partners report increases in their amount of giving, 86% said they have changed how they give; and 27% report they gave more than $50,000 last year.”
Our Partners are taking on leadership roles in the nonprofit and public sectors and exerting their influence in important public policy debates including public education, affordable housing, early childhood services and youth aging out of the foster care system.

SVP is the largest network of engaged donors in the world. I believe we engage donors better than anyone else. We have 26 member organizations in 3 countries. Partners give their time, professional skills and creativity to work in partnership with hundreds of local children's, education, and environmental nonprofit organizations.

Our business-like approach is cutting edge. Major philanthropic organizations now validate much of what we began saying for 12 years. More and more funders and foundations are recognizing that building capacity is more important than funding another innovative program year after year and almost everyone is now looking for impact accountability and sustainability.

With more visibility, come more donors providing their time, talent and resources to most of our world’s problems. Imagine how many more nonprofit organizations will be dramatically impacted with SVP involvement?

With your help we can change even more in the world.

Meet New Partner, Harriet Carter

By Lori Thiel

Even though she has been a Partner only since April, taxation and business attorney Harriet Carter is well known among SDSVP thanks to her many years of volunteer service.

Harriet volunteers about 20 hours a month and has served on nonprofit boards for more than 10 years, completing her stint as secretary of the Tariq Khamisa Foundation’s (TKF) board just prior to partnering with SDSVP. Harriet, 67, also currently serves on the Board for The Monroe Institute, the Disabled Businessperson’s Association, the Alternative Healing Network, the Ralphs Prather Ranch Foundation, the Alain Ralphs Benson Foundation, and the Hogar de los Ninos.

“As I get older I realize it’s time for me to change the ratio of work I do for pay versus volunteering,” she explains. “I’ve been given so many gifts in my lifetime and I want to give them all back—and more—before I die in order to make the world a better place than it was when I was born.”


Two creative gifts she nurtures are painting and writing. She has completed about 30 paintings—primarily landscapes and animals—all acrylic on canvas. In 2000, Harriet published her book, “Guided Tour to the Afterlife: the Remarkable First-Hand Account of One Woman's Death and Her Adventures in a New Life After Death” which she co-authored with Susan E. Wells.

What she seems to take the most pride in, though, is her relationships, fostered through work and volunteer activities.

An attorney for 23 years, Harriet runs her law practice out of her home which is a gallery of her own artwork. She spends about an hour and a half with each of her tax clients every year. These sessions often include her homemade cookies and lots of catching up on each other’s lives. “I love my clients, and they love me,” she says of her more than 300 regulars. She attributes these long-term friendships to the nature of her practice. “I see them every year for tax season and sometimes know more about their finances than they do.”

In addition to legal services, Harriet provides her clients with an annual newsletter that includes information on such varied topics as politics, economics, science, social and cultural issues and book reviews. Harriet estimates she reads about 30 to 40 books a year and is currently reading Jonathan Alter’s “The Promise: President Obama, Year One.”

Harriet also takes pride in her seven step-children, 16 grandchildren and 12 great grandchildren who all live in Ohio. “People are sometimes surprised to learn I have so many children and grandchildren. But I raised a family while I worked full-time and put myself through college.”

Harriet earned her BSBA in management and her MBA in accounting and finance from Wright State University in Dayton, OH. She earned her JD (Law) degree at Thomas Jefferson School of Law in San Diego while she worked as senior financial analyst and treasury services manager for Security Pacific Finance Corp. When she completed her degree she opened her own practice as a tax attorney and began also providing business and estate planning. She is one of the few lawyers in San Diego who have experience setting up and providing legal services to nonprofits.

Harriet is invigorated by the opportunities she sees in SDSVP. Already she has joined the Board Development Resource Team, Discovery Team, Portfolio Working Group, and Investment Working Group. “And I also joined Louarn Sorkin’s knitting and crocheting group, where we are busy making hats and scarves for charity,” she laughs.

Reflecting on her accomplishments and busy schedule, she says, “Sometimes I feel I’ve lived three lifetimes in one.”

Thank You from Partner, Alan Sorkin

As many of you know, Founding Partner and Board Member, Alan Sorkin recently received a kidney transplant. Alan would like to thank his SDSVP community and friends for their support:

“I wish to thank all of you who sent cards, emails or donations wishing me a speedy recovery. I am doing really well, but will be stuck in the house for at least another month to minimize infection that could jeopardize the new organ. I am ready for visitors (especially at lunch time if you bring us both a sandwich). I the meantime, I will try and stay connected on conference calls.“

Many of you have asked about the amazing altruistic donor, Tirina who made this life-saving gift. Here is what she said on her MatchingDonors.com profile:

“I am a 23 year old female, looking to help someone in need. I do not drink or smoke. My blood type is A- . I want to do this after reading story after story of how many people are on the donor list, and how many people are forced to add their name to this list. Thankfully I do not know anyone that is in need and could not imagine knowing someone that would have to go through this scary thing, with no one to turn to.”

The Partner 4-1-1

• Partner Lori Steele is in the San Diego Business Journal and Fox 5 News! Lori is CEO of Everyone Counts, which offers systems that allow people to vote on their personal computers, telephones or personal digital assistants.


• Jewish Federation installs SDSVP Partner and community leader, Jan Tuttleman as new Board Chair. Kudos, Jan!


• Congrats to Partners Aaron Contorer and Lori Steele on their upcoming wedding in the fall! Aaron and Lori met through mutual friends in SDSVP.