If They Can Be A Successful Non-Profit, Why Can’t You?

If you feel like you don’t have a clue how to run a successful non-profit and are just winging it, you probably know that you are in good company.

If you are wishing there was a book someone could give you for Christmas that explained the process to you, according to a recent piece on The Conversation, such a book doesn’t exist because no one really knows the answer.

The reason why it doesn’t exist is due to the way the successes of non-profits are studied. The author of the piece, Fredrik O. Andersson, basically blames human nature and biases for this.

When people want to know what works, they tend to focus on the successes which means they learn very little about what contributes to failures. This is known as selection bias, the most famous example being Abraham Wald’s counter intuitive suggestion to armor the parts of WWII bombers without bullet holes since presumably that is where the planes that did not return got hit.

Or as Andersson writes:

Imagine that researchers want to investigate and isolate the factors that make gamblers successful. If they study only the gamblers who win all the time, they would reach the obviously false conclusion that gambling is always profitable

Carter Gillies who frequently comments on the blog has often brought up selection bias as a problem in the mindset and approach to non-profit problems. Now here I am writing about it, validating the point he has long held. I hate it when he is right so often and identified these issues so far in advance.

Except, Carter would point out this is an example of selection bias and one of the other problems Andersson identifies- flawed memory. I am only focusing on those times Carter was right and only remembering those times because I have later come across someone else reinforcing his view.

Andersson notes that any research performed directly on non-profits only provides a snapshot view of what is making them successful (or not) at this moment of time and doesn’t really provide insight into the process leading to that success. The researchers are left to ask the non-profit board and staff  to relate what factors lead to their current state. The problem is, their memories of how things evolved is often very flawed.

This is a huge issue because everyone from founders to donors and other funders are likely to look at successful examples and determine that is the path to success that should be followed either by themselves or those they fund.

Andersson writes about working with non-profit entrepreneurs where he asked them a series of questions and then followed up 6-14 months later and asked them to recall their answers. (my emphasis)

I asked participants in the workshop about three things: why they wanted to start a new nonprofit, where they anticipated getting funding and how likely they believed it would be that they might actually launch a new organization.

[…]

Three out of 10 recalled having a different reason for wanting to start a new nonprofit than they asserted in the first survey. And both of those reasons, of course, could not be accurate.

Nearly half incorrectly recalled the source of funding they had anticipated. The expected chances of a successful launch also differed. The people who did launch a new nonprofit were somewhat more likely to say they had anticipated this success during their second interview. The people who failed to get a new nonprofit up and running were nearly 20 percent less likely to say they expected to succeed during their later interview.

[…]

Since stories are malleable, the best way to reduce the risk of hindsight bias is to observe startups from the very beginning and follow them over time.

Some people forget, others get the details mixed up and others ascribe a rationale they didn’t have in mind at the time when they’re asked about events that have already transpired.

While his sample size is admittedly small, I suspect that this general trend would be observable with larger numbers. I have written about this general issue before with artists mis-remembering the amount of work that went into their first success and attributing a big break to luck rather than effort.

Increased Funding Options For Artists Nationwide Via Springboard For The Arts

If you hadn’t seen the press release floating around social media, Springboard for the Arts announced that they partnered with the microlending platform Kiva to provide artists a loan of up to $25,000 for 36 months at 0% interest.

Springboard executive director Laura Zabel probably laid out the best rationale for pursuing a loan versus a grant:

“Grants are great, but when you apply for a grant or fellowship, you’re putting that timeline and power and agency in someone else’s hands, to decide if you get that money,” says Laura Zabel, Springboard’s executive director. “At Springboard, we like platforms or mechanisms that put the power back in the hands of the artist. It’s a much more active way that you can pursue building your business.”

Since many of you may know that many of Springboard’s activities are focused in Minnesota, I should emphasize that this program is available to any artist anywhere in the U.S.

It probably also should be noted that this is only one of a few microloan programs for artists and it appears to be the only one that isn’t limited by geography or discipline. If nothing else, Springboard is breaking new ground by offering alternative funding options to artists.

According to the FAQ about the program, as a Kiva Trustee, Springboard for the Arts endorsement means they can “provide matching funds to help artists reach their fundraising goals on Kiva’s platform and a wide network of business support to help artists build and expand their businesses.”

The way Kiva funding is generally set up, the artist needs to come up with 20% of the funding and the Kiva community covers the other 80%, thereby putting less of a burden on an artist’s family and friends. It appears that Springboard will match what an artist raises with a loan as well, providing access to a larger pool of money.

Springboard has a whole curriculum of business skills for artists, consultations and other resources to help support those looking to develop and execute a business plan, regardless of whether they are participating in the loan program.

Since you have to attach a business and a repayment plan to the Kiva loan application, those education and planning materials may be a good place to start for people.

End of An Era, Who Will Pick Up The Torch

Over the last week you may have seen mention that after 10 years in existence,  Createquity will be ceasing operations at the end of the 2017 calendar year.

This is a great pity. One of the goals founder Ian David Moss had as he developed his blogging project into a think tank was to facilitate arts administrators’ ability to understand research findings since they so often didn’t have the opportunity to review, much less finish research reports. Just last week, I cited one of his recent entries as the basis for a post.

It will probably come as no surprise that difficulty finding suitable funding for Createquity’s efforts is the basis for the decision to cease operations. Ian discusses all the options they weighed and opportunities of which they tried to avail themselves.  Ultimately, in summary he says,

These are among the reasons why the arts field has, since the 1980s, dug a formidable graveyard for failed think tank initiatives, some of which have become so buried under the weight of history that I only learned about them for the first time earlier this year.

The project I most regret seeing fall by the wayside is their effort to chart what we know about the benefits of the arts in improving lives.  Createquity graphed out research studies about the benefits of the arts on a scale that indicated the quality of the evidence and whether the research said a benefit existed.  This information is extremely important to know if you are going to advocate for arts and culture and cite research findings. Looking at Createquity’s evaluation, the evidence that supports commonly made assertions about the benefit of arts in educational and social outcomes is weaker than it is made out to be or there is a lack of corroborating research.

Think about it this way. TV news programs often have short segments where they talk about the amazing benefits of dark chocolate, red wine, acai berries, etc., but when you take the time to really examine the evidence you discover you would have to consume three times your body weight daily to realize those benefits.

Funding for arts and culture entities is already tenuous as it is, (to whit, Createquity), the sector doesn’t need to have people denouncing it for making overblown claims. (And as I have often argued, we shouldn’t be invoking the utilitarian value of the arts to justify it anyway.)

There the end of his post, Moss talks about the preparations they are going through over the next few months. They will be publishing summary articles about the work they have done.  (One on cultural equity was published today.)

They intend to make their work available to anyone who might wish to continue where they are leaving off.

Over the next couple of months, we will be polishing up our internal training materials and resources to make it as easy as possible for people in the arts community to carry on aspects of the work we’ve started in their own spaces and in their own names. And in November and December, you can expect to see some parting thoughts from our team to philanthropists and researchers seeking to optimize their investments in the arts in the decade ahead. Our goal in all of this is to activate the latent potential of our work over the past ten years into the most accessible and actionable content possible.

I think there are many who join me in hoping that someone will be able to continue the important work they have started.

Major Case Of Do As We Say, Not As We Do

Back in August, I came across the most extreme example of failing to plan for an executive transition that I have seen to date. When the executive director of MarinSpace decided to step down, the board chose to dissolve the organization rather than to look for a replacement.

The board’s vote to dissolve occurred when longtime CEO Shelley Hamilton announced she no longer wished to play that role, opting instead to take another, part-time role.

“Her skill set is so specific and unique that when she decided to move to part-time, the board decided it would be [too] difficult to move someone into that (executive director) role with that same skill set,” said interim ED Peter Lee. “Instead of trying to go through that process, we thought it would be better to dissolve and spread the wealth in Marin County.”

And the organization has no lack of assets to distribute:

After it dissolves, it will have between $2 and $3 million in assets, including a building worth $2.5 million, and these will need to be distributed. The 14,500-square-foot building currently houses other nonprofits at 20 percent below market rate.

[…]

Lee laid out three possibilities for distribution of the assets: one organization could acquire the assets and staff and run the group relatively as-is; assets could be liquidated and distributed among a number of nonprofits; or a nonprofit could acquire MarinSpace’s building and staff, but the cash assets of approximately $300,000 could be distributed to other groups.

The thing that really gets me is the disconnect between their mission and practice.  The organization’s mission is:

We believe positive social change happens best through collective effort. Our mission is to strengthen networks of community organizations by providing collaboration services and shared workspace.

and they boast

“…our CEO provides key leadership services to the Nonprofit Centers Network, both as a founding Board Member and as a senior project consultant.

They list Sustainability and Professionalism among their guiding principles.

Yet they have a situation whereby they have created a structure that they have decided can’t exist in the absence of a single person. How does that reflect best practices for leading non-profits that they were theoretically instilling in client organizations?   How have they worked toward their own sustainability?

What sort of effect might this decision have on the non-profits housed in their facility and those served by those non-profits? How does this decision and uncertain outcomes reflect their mission of collective effort?

Fortunately, they are taking a responsible course by intending to create and oversee a process of distributing their assets as part of the dissolution. As I have written before, sometimes non-profit boards will walk away from an organization and declare they have washed their hands of their involvement. In doing so, they can actually be held personally liable for anything that occurs in relation to the organization having lost the protection of director and officers liability insurance.

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