The statistics are abysmal when it comes to the urban dropout crisis. Every 26 seconds, a student gives up on attending high school in our country. Approximately 1.2 million students are dropping out every year, and half of these dropouts come from 12 percent of our schools. The cost of these dropouts to the nation over the next decade is estimated at $3 trillion. As U.S. Secretary of Education Arne Duncan shared, this is the “civil rights issue of our generation.”

Yet, amidst the dreary statistics, City Year provides hope by articulating today a bold, yet believable goal focused on reversing the trends and addressing this issue at the magnitude that it exists. Its bold goal:

Students who progress to 10th grade with their peers are three times more likely to graduate than students who fall behind. The goal is to ensure 80% of the students in the schools City Year serves reach 10th grade on track and on time, and to serve the majority of at-risk students in the locations where City Year serves. City Year will focus that service in the communities where the dropout challenge is most concentrated, ultimately serving in the cities that account for two-thirds of the nation’s urban dropouts.

As our experience suggests, finding the right balance between bold and believable in creating a goal and strategy is a critical starting point to achieving transformational change.  City Year has done a great job of laying out a precise strategy for how they would achieve their long-term goal by harnessing the talent and energy of City Year’s corps members to help students in struggling urban schools. One can see that it is possible. See it for yourself by viewing a video summary or learning more on the City Year website.

Congratulations to City Year for all that you have accomplished and will accomplish on behalf of our nation’s youth!

1. What steps are you taking to build an organizational culture centered on performance and what metrics will you use?
2. What investments are you making to diversify revenues in preparation for the inevitability of drastic cuts in government funding and increased competition for philanthropic grants?
3. How have you prioritized talent and leadership and how is this reflected in way you budget finances and your time?
4. Is your hard work leading to incremental progress or transformational change?

These are exactly the key questions we grapple with at Community Wealth Ventures. Learn more about our work  at http://www.communitywealth.com/

Morino’s speech can be found at http://www.vppartners.org/sites/default/files/cityclubspeech_web_0424.pdf

Summarizing the main points from his book, Leap of Reason, Morino challenged the nonprofit community “to take a hard look in the mirror” and focus on performance. He cited the need for nonprofits to respond to continued and even deeper constraints in funding, the need for building high performing institutions and a performance culture, and the need to leverage a network of community support for nonprofit leaders.

“The whole system sets up nonprofits for struggle and starvation, not for solving social challenges” Mario asserted.  As a result their work is “incremental, month-to-month, hand-to-mouth.”

Predicting that competition for grants will skyrocket when the inevitable cuts in government funding occur, he warned nonprofits “Your survival is on the line.”

And in response to a question, Mario put his finger on a central flaw in current philanthropic funding decisions: “We give to the best story, not the best result.”

Because Mario was one of the earliest and most significant investors, in Community Wealth Ventures, and because he was a client for many years, using Community Wealth Ventures for much of the original conceptual and design work on Venture Philanthropy Partners, it’s not surprising that much of Mario’s diagnosis and prescription, and our work, align.

Characteristically, Mario had concrete recommendations for what can be done to address these issues, including the need for funders to do more than programmatic funding, to break their fixation on overhead ratios, and invest in great leaders.  Most memorable of all though was his sense of urgency.  As someone who “grew up poor, but just didn't know it” every word of his speech was imbued with the conviction that the lives of children are at stake in our willingness to rethink the work of the nonprofit and the public sector. “The challenge for all of us is to determine whether our hard work is adding up to the kind of opportunities that I had … that you had …that every parent here wants for his or her own children.”

Sustained applause greeted the speech. Mario is listened to not only because of what he says, but because of who he is: someone who made a fortune in business, but unlike so many others didn't think that it entitled him to tell nonprofits how to go about their work. Instead, he worked around the clock for more than two decades to learn about the sector first-hand, and about what works and what doesn't, while investing as much or more sweat equity as cash, and always with consistent generosity.  If he’d written an autobiography he could have titled that RELENTLESS also because it captures his own approach to making the world a better place.

So then why are there still so many mediocre nonprofits out there? 

Why are there so many organizations that year after year raise money, hire staff, pay rent, hold meetings, and run programs and events without any clear evidence that they are getting real results?

People in the social sector often give lip service to wanting to put themselves out of business, but how many of their organizations are genuinely designed to solve the social problems that their programs are meant to address?  How many of them actually believe that the programs they are currently running will put them out of business?

It’s not to say that these programs are bad.  They may very well be doing good things, but are they good enough?

When each month that goes by means more children who can’t focus on their schoolwork because they haven’t had anything to eat and more families living in shelters because there isn’t enough affordable housing, how is it possible that we, as a sector, are not devoting all of our limited resources to those strategies that we know work, or those organizations that are pushing themselves to get real, long-lasting results?

A couple of key reasons:

• Lack of accountability.  It is incumbent upon funders and boards to ensure that the organizations they support and oversee are setting measurable goals, tracking progress, and demonstrating results (or reassessing their strategies if they aren’t getting the desired results).  Too often, funders and boards either fail to ask the hard questions or, perhaps more commonly, ask the hard questions but then don’t follow up to demand strong answers.
• Insufficient management training. Nonprofits' leaders bear some of the responsibility, too.  They must hold themselves and their staff accountable, and this is no easy task.  Too many nonprofits are being led by people with incredible passion and programmatic expertise, but who lack management skills or training.  Getting the kinds of results that excellent nonprofits need requires deft navigation of finances, interpersonal dynamics and change management.

Part of the mental shift that must happen to turn mediocre nonprofits into great ones is to stop seeing data as something that will be used to award a “good” or “bad” grade, and instead see it as something they can use to assess and improve strategies.  We say we want to improve the lives of children in our communities.  Are we really doing that?  We say we want to reduce the spread of HIV in our city.  Are our programs really showing a decrease in the numbers?

Inspiring and managing this kind of change is hard.  But it can be easier if we do it collectively.  If we work together to combat the culture in the social sector that “good is good enough.”  If we push ourselves and each other to ask the hard questions, use data to find not just satisfactory but compelling answers, and then ensure that our money is going where our mouths are, so that we really are creating the kind of change that will put us out of business.

While he described a number of factors, we were most intrigued by the use of data to drive culture change throughout the department – and its drastic implications for the reduction of crime in the city.  Specifically, the creation of a system called CompStat changed the way the city handled its daily business with regard to crime.  Bratton broke down the philosophy of the CompStat process into four parts for us, saying that in order for data to effectively solve a problem, one must have:

1)      Timely, accurate information to allow trends to be identified quickly.

2)      Rapid response based on that information, enabling resources to be mobilized in a highly targeted manner before trends escalate.

3)      Effective tactics for the situation, which rely on the data to inform the selection of the best strategy to solve the problem at hand.

4)      Relentless follow-up, to create an ongoing loop that analyzes the efficacy of the strategy deployed based on new information about the problem.  This triggers the rest of the CompStat process and maximizes its effectiveness.

While the process seems straightforward, Bratton himself admits that prior to the 1990’s the police force in New York City had a bad habit of letting powerful data go to waste.  In truth, police officers are in a unique position to capture a lot of data and information - after all, they do everything from book criminals to issue parking tickets.  But prior to Bratton’s tenure as police chief, this data was merely shipped to Washington D.C. to be analyzed by federal agencies.

Essentially, Bratton created discipline around the use of data through CompStat, and by so doing, gave new life to his police force.  Ultimately, the results created a sense of accomplishment that led to a culture that embraced the discipline of data collection and analysis -- they used the data to celebrate and perpetuate success. 

The significance of the CompStat transformation is that the lessons are widely applicable to any social change effort.  The Police Department didn’t have to make a big investment in technology to acquire perfect data and devise new strategies to address problems.  They simply leveraged their assets in new ways: they used data they were already collecting , applied known strategies to address the problem, learned from their attempts, made changes based on the data, and repeated the cycle.  That's a strategy we can all use to transform our work and communities.

As Amy Celep noted in an earlier post, “changing the conversation” can be a powerful tool toward creating the change we want to see in the world. 

I was reminded of the validity of Amy’s claim during a recent lunch meeting with Jim Down, a wonderful strategic thinker who led Mercer Management Consulting until retiring at age 50. Since then he has played a critical role in the nonprofit sector, advising organizations ranging from OxFam to the Centers for Disease Control.  Jim is on the board of OxFam and I asked him what he thought their most impressive accomplishment was so far.

“Changing the conversation. Changing the dialogue.  Whether with the coffee industry, or mining, the most important thing we’ve done is to get people to think and talk differently about what the real issues are in the developing world, and to help them understand that there are policies that can be put in place to enable people to have the means to support themselves."

That squared with my own sense of the most important thing that OxFam or any social change organization could be doing, as well as our experience at Share Our Strength.  With our No Kid Hungry campaign we shifted the conversation from emergency feeding and how we can afford to feed more people to how we ensure that people access existing, already paid for federal food and nutrition programs.

As an example, the government official in charge of the food stamp program in Arkansas told me how No Kid Hungry’s focus on access caused them to shift from focusing mostly on compliance with regulations to access and outreach, with the result being an increase in enrollment from 71% of the eligible population to 84%, and a workforce of state employees a lot more fulfilled in their jobs.

Once you change the conversation, you have won more than half the battle. The rest becomes execution, and “how to” not “whether to”.  This allows nonprofit leaders to focus on the core of their work – building solutions to solve social problems – rather than convincing others that that work is needed or possible.

1. Put our differences aside in pursuit of the mission.

In his speech, President Obama pointed to the military’s ability to put aside differences and focus on the mission.  On many military missions, it’s life or death for those involved. For much of our work in the social sector it’s life or death, too. While there are some bright spots of organizations coming together in pursuit of a common agenda, we still have a long way to go.

The call to action for all of us, social sector or not, is to do the hard, personal work that brings our individual, unconscious biases and fears into consciousness so we can move beyond them and join with others to accomplish our missions.  As I explored in my post earlier this week, those who have successfully created big, transformative social change have been skilled at finding common ground among unlikely partners.

2. Advocate for the voiceless, those who can’t even dream of the American dream.

President Obama’s speech called for keeping the fundamental American promise alive. As he said, it’s the “promise that if you worked hard, you could do well enough to raise a family, own a home, send your kids to college, and put a little away for retirement.”

I’m in full support of restoring this promise, but we must not forget the millions who can’t even dream of this most fundamental American dream because it’s so far removed from their reality.

Realizing the American promise assumes that one’s most basic physiological needs—those at the bottom of Maslow’s hierarchy of needs, such as the need for food and water—are met, at least to some extent.  The reality: One in five children are at risk of hunger in America.  They wonder where their next meal will come from. Their families likely aren’t thinking about owning a home, going to college or saving for retirement. They are thinking about survival. Our great opportunity in the social sector is to make sure their voices and plight are heard.

Politically, it may have been smart for President Obama to talk about the American promise, which speaks to the country’s middle class, but the independent sector has the chance to do what isn’t always politically smart yet is morally right. Our call to action is to get even smarter about how best to advocate for and put pressure on our elected officials to do what is morally right.

3. Assume our responsibility to change the system.

Numerous times throughout his speech Obama referenced the many ways in which our federal government, systems and institutions aren’t working.  This was brought to light as he talked about Jackie and her journey to get a job. He shared his agenda to “cut through the maze of confusing training programs, so that from now on, people like Jackie have one program, one website, and one place to go for all the information and help that they need.”

In this case, he was talking about the clutter of information around training programs, but there are countless federal programs, designed to help people in need, that are rendered ineffective in reaching and engaging the very people they are designed to help.  If we take, for example, the federal income tax system alone—with which we all interact every year—there is a virtual labyrinth of tax breaks and credits that were set up for the express purpose of helping us!  Every year, I find myself irritated, on the verge of anger, when it comes to tax time. That’s because even I, who have received a good education, can’t interpret some of the tax policies and determine whether or not I am eligible. Consider those who don’t have the luxury of the same education, or for whom the money at stake, if they can’t take advantage of a particular tax credit, makes the difference between putting food on the table for their family, or helping their children enroll in community college.

If we want big change to happen, we have to get savvy about the massive systems in which we operate, and advocate for public policy and structural changes to the systems and processes that keep so many from accessing the very programs that can positively impact their lives.

I would love to hear whether these calls ring true for you or whether the President’s address brought something else to mind. Please share your thoughts below!

In the US, as we enter an election year, we are being bombarded with messages of difference, disagreement and opposition. As the American people are asked to make a choice about political candidates, it is important for us all to consider the similarities and differences among the slate of contenders. But, when it's time to get the real work done, the challenge is for our leaders, and all of us, to focus on the areas where we do agree.

Through our research of major social transformations efforts – those designed to eradicate or make dramatic improvement on a social problem – we see that those who have successfully created real change have been skilled at finding common ground among unlikely partners. They have a true commitment to taking the time to explore and identify areas of agreement rather than focus solely on all the ways in which they disagree.

For example, in their quest to instill “designated drivers” as a new American social norm, the Harvard Alcohol Project was able to rally an incredibly diverse set of institutions and individuals in the interest of reducing alcohol-related traffic fatalities.  The partners and evangelists they mobilized included TV network executives, Hollywood producers and writers, the New York Times, two US Presidents, the Department of Transportation, the Center for Substance Abuse Prevention, and a number of brewing companies!

So, as we enter this new year, we at Community Wealth Ventures renew our commitment to focusing on similarities rather than differences in our work with change agents, as we together seek to solve some of the world's most pressing social problems. This takes hard work, time, and patience. Yet while we work, youth continue to drop out of school at alarming rates and children go to bed hungry night after night, and it's clear that there is just too much at stake for us if we don't seek to find and leverage the many ways we are all the same.

The Chronicle of Philanthropy, which conducted the survey revealing this troubling statistic, attributes this job dissatisfaction to strains caused by the economic downturn.

While those pressures are real and surely play a role, our experience working with hundreds of nonprofits since founding Community Wealth Ventures is that much of what can be debilitating about working for a nonprofit comes from self-inflicted organizational wounds, summarized by these Five Failures:

1. Failure to diversify revenues.
2. Failure to be accountable to specific goals that can be measured by stakeholders.
3. Failure to pay talent what it is worth.
4. Failure to invest in management training and staff development.
5. Failure to look beyond short term gains in favor of investments that may not pay off until the long-term.

We rely heavily on charitable organizations to fill the gaps left by government cutbacks in social services, education, health care, community development and anti-poverty work.

We rely heavily on charitable organizations to fill the gaps left by government cutbacks in social services, education, health care, community development and anti-poverty work.  We must have strong resilient organizations, with committed and highly skilled staff, to meet such pressing needs and expectations of the communities we serve. When 4 out of 5 employees of these critical organizations want to leave their jobs, at a time when they are needed the most, we have a national epidemic of crisis proportions.

Nonprofit leaders and those who support them have an alternative to being so totally victimized by economic downturns. But it means challenging themselves to totally re-invent the way they go about their work. Rather than pack it in they need to challenge themselves to completely re-think how they go about their work, their willingness to invest in capacity, the skills needed to marshal support for such investments that may not pay off until the long-term.

Solving social problems will always be hard. But it need not seem so futile that so many talented staff of charitable organizations want to give up.

Share Our Strength and Community Wealth Ventures worked together to ensure that Share Our Strength took the steps that resulted in its greatest growth ever during and after the recent recession. We’d been guilty at times of each of the five F’s above, but we changed and it’s not too late or others to do the same.

2012 Resolutions for the Social Sector:

1. Funders make decisions based on outcomes over relationships.
2. Nonprofits increasingly consolidate and partner with each other to achieve greater community outcomes.
3. Organizations value community-wide impact more than their individual outputs.
4. Leaders set time aside to stop to think about their long-term goals, and consider how their daily actions contribute to those goals.
5. Nonprofits take more control of their financial future and think boldly about new revenue streams such as earned income.
6. The social sector achieves greater integration with the public and private sector, which leads to better sharing of capital, skills, and understanding of community needs.

We are excited about the possibilities for 2012 and our team is eager to do its part to make these resolutions a reality.

What are your resolutions for the social sector this year?