Thursday Thoughts - March 10, 2022: How do Funders Fund?
What in the world do funders look at when making funding decisions?
Trying Something New….
I am going to try something different for the readers of this page; not a new newsletter, per se. Maybe it’s best to think of it as a new feature. “The Rundown” has become immensely gratifying to develop and I have received a lot of great feedback, but something is missing.
That something tends to be my own personality, my own thoughts on some of the deep issues facing the world of nonprofits and philanthropy. Also, for those that know me, they know that I am an elected official in local government. Those worlds often collide, but those world collide in what I see in a very fixed context. The pre-requisite conditions that create what I see may not be universal, so I have been hesitant to share in my newsletter. Especially when the Friday newsletter has amassed a world-wide following (there are great individuals from the United Kingdom, Kenya, Italy, Canada and Australia) that have subscribed.
So with that introduction, I am adding a new addition to the Pinnacle Strategies family, Thursday Thoughts. These are my ideas, my insights, my thoughts on what is happening in the arenas where I work. I am certainly not out here trying to prod or provoke, but I also realize that for a myriad of reasons, this may not be everyone’s cup of tea and that’s okay.
I also want to be clear that I can’t promise something every Thursday. Things will conspire to prevent me from pouring out to you things every week; however, if I get some good ideas out there two or three times a month, I will be happy.
Of course, input and comments are always welcome. Feel free to drop me a line at pinnaclestrategiesltd@gmail.com.
As always, be well….
A Meeting of the Minds
Here I was in a meeting at a local community center with a couple dozen of the community’s most dedicated leaders. Some were from government, others from foundations, others from front line non-profits. It’s in these environments, I feel confident. My experience in local government (as an elected official) and the non-profit world (running one of the largest non-profits in my home county) allows me to have both feet firmly planted in both worlds. I know the people involved, I know their work, I can speak their language.
It was towards the end of the meeting where a local foundation leader was talking about the development of a potential new nonprofit and she said, “We fund over thirty-one feeding projects in this county.”
While the rest of the meeting went on, I couldn’t help but get hung up by that seeming large number. 31. Mind you, I live in a county of about 108,000 people; by no means large, but not exactly rural either. To put this in to a little more context, there are more feeding programs than supermarkets, grocery stores and maybe even gas stations combined in the entire county. That’s a lot.
Thirty-one Programs and not a Drop to Drink
The rest of the meeting went on without a hitch, but I kept on thinking about what those 31 feeding programs were and how a funder decides how those 31 feeding programs are funded. These programs are funded no doubt due to the fact that food insecurity is a pressing issue in our county. Supermarkets and groceries stores, while available, are largely inaccessible in a safe manner to those that don’t have a vehicle at home and the public transit system in a small county doesn’t run on a fixed-route system.
I will be the first to admit that I don’t know for sure, but I would think nearly every feeding program that asked for money from this foundation got it. Maybe I am wrong, but 31 seems like a pretty high number and seems like even if not every feeding program was funded a clear majority are.
And if we get down to it, are all 31 of those programs serving the same number of people? Of course not. Are they serving special populations? Perhaps. Are they serving redundant populations? I am almost certain.
How do funders decide which of the 31 fund? Is it just an easier political decision to fund everyone? Do the metrics executive directors pour over and report on year-end or program-end performance reports actually matter?
Price’s Law In Action
I have written about Price’s Law in this place before. Briefly, Price’s Law states that half the output comes from a square root of the participants. Huh? Think of a baseball team. If you have twenty-five players on a baseball team, collectively the top five of them have all the team’s hits. Have sixteen spices on your spice rack? You probably use four of them half the time and those other twelve sparsely.
Why wouldn’t the same hold true for these feeding programs? If you have 31 feeding programs, five of them are doing the lion’s share of the work. What about the other 26? Do they get funded out of convenience or out of relationships? It’s hard to argue that they are being funded strictly out of effectiveness.
Are we funding for effectiveness?
So, if five of 31 programs are getting half the results are these five programs getting half the money? I honestly don’t know, but I wouldn’t surprised if the answer is yes. But, the problem arises when the other half is doled out to the other 26 organizations. Are funders really being effective when half of the dollars for an activity are being thrown to 26 organizations that we know aren’t being as effective as we would hope? Are the checks cut to these organizations more like participation trophies rather than a calculated investment in the community?
Perhaps a better approach would be to look at the five organizations and give them them up to 80% or 90% of the dollars allocated specifically for that activity and hold the rest of those dollars for new or innovative programs that come from up from time to time.
I know it’s harsh to say that not funding 26 programs is the way to go. And maybe there is a good argument for funding the ineffective program from time to time? I fully understand that showing a wide net of supported organizations funders can show they are working to cast a wide net to solve difficult programs.
But, the workhorse organizations in a community that for year in and year out provided valuable service aren’t served well in a “participation trophy” world.
Funders should be in the business of funding programs…..not organizations.
What do you think?
Feedback is always welcome. Feel free to drop me a line at pinnaclestrategiesltd@gmail.com
And of course, if you have found these thoughts interesting or insightful, please feel free to share them with your colleagues and friends.