Network Power for Philanthropy and Nonprofits

By Peter Deitz • Posted on April 08, 2008

Yesterday, I accidentally came across an interesting report from 2004, entitled Network Power for Philanthropy and Nonprofits, authored by Peter Plastrik and Madeleine Taylor, on behalf of the Barr Foundation. The conclusions in this report are as sharp today as they were four years ago.

Here's an excerpt from the first section:

Decisions to rely on networks to more effectively generate social change are not new to philanthropy and nonprofits. Foundations have funded the civil rights, feminist, and consumer movements for decades. More recently, many have assembled “learning networks” of grantees that work together to innovate and improve their practices. And, as Jon Pratt, executive director of the Minnesota Council of Nonprofits, points out “community organizers and grass roots organizations have applied network concepts for years.”

But something new and important is afoot. The nonprofit and philanthropic sectors are under growing pressure to do more and to do better. The number of nonprofit organizations is expanding substantially, as are the tasks the civil sector undertakes in light of government downsizing. “We’re seeing growth of nonprofit organizations, but not much change in the systems they are trying to impact,” says one foundation executive. Nonprofit capacity is a “chronic problem,” writes Jonathan Peizer of the Open Society Institute. “The sector must embrace new paradigms.” In an intriguing online paper about the environmental movement, Gideon Rosenblatt, executive director of a Seattle nonprofit and former Microsoft senior manager, notes that “many environmental leaders are questioning whether the environmental movement has the right strategies and organizational structures in place.”

The movement, he says, has “over-invested in institutional overhead” and “is replicating board development, fundraising and many other functions across thousands of very small organizations.” It is essential, Rosenblatt concludes, to “un-bundle” and rebuild the environmental organizational structure using network approaches.

Foundations, a crucial capital market for nonprofits, and governments that contract with nonprofits increasingly seek improved impact, leverage, and “return on investment.” Nonprofits are routinely expected to be more strategic, entrepreneurial, and “high performing,” and to focus on producing outcomes.

In this shifting context for the civil sector, concerns expressed by the Vermont philanthropist, Lawrence activist, and Boston nonprofit director signal broader doubts about the efficiency and effectiveness of nonprofit organizations—and their decisions to rely on a network approach represent a fundamentally different response. In a similar vein, Jon Pratt argues that networks are a good fit for nonprofits:

Network strategies offer a powerful set of tools to manage the key tasks and challenges faced by nonprofits… Network thinking offers powerful analytic and strategic tools for nonprofit boards and managers to increase the stability, influence and autonomy of their organizations.

Yet another signal of an emerging deep-seated shift in the nonprofit sector may be seen in the unanticipated and rapid growth of GlobalGiving, Guidestar, Volunteer Match, and MoveOn, nonprofits that provide Internet-based infrastructure for connecting, informing, and mobilizing millions of people, and seem to do so at reduced costs.

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This report predates the launch of most of the social action platforms that contribute content to Social Actions. I wonder what Peter Plastrik and Madeleine Taylor would make of my Mashup of 29+ Social Action Platforms, which amounts to nothing less than a powerful network of networks.

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On April 9th, 2008 Rosemary (not verified) says:

I think it is not just a change in the nonprofit sector - it is a symptom of the more radical restructuring that is being driven by the need to come to grips with systemic, inter-related problems that come from the top-down "factory" or industrialized model of societal organization, as we begin to see how clearly inter-related our problems are and how they are most severely experienced by the people living at the bottom of the pyramid (but who also seem to be coming up with many of the most creative approaches to changing their situation).

C.K. Prahalad's notion of how to eradicate poverty by co-creating solutions among civil society and NGOs, private enterprise, development and aid agencies, and BOP consumers/BOP entrepreneurs, reflects the idea that we are in a time when we must facilitate solutions together. Increasingly, I am convinced that such facilitation of solutions involves a bottom-up or grassroots approach, in which good ideas at the local level are identified and nurtured and our overall structures (especially development aid ones) are restructured so as to support, nurture and build on such locally-driven solutions.

The peacebuilding and human security field has known for quite some time that the only way to build sustainable peace in conflicted societies is by achieving local ownership of the peacebuilding and reconstruction process. But we can never do that effectively with top down solutions, I think.

For several years now, I have been collecting stories of locally-driven achievement in the developing world that I found were not well known to my human security colleagues. I found and continue to find, these stories of achievement inspiring and am amazed that they are not being spread more widely around the world.

I have noticed several things as I have been carrying out this "applied research" project.

First, there is an amazing amount of person to person development, philanthropy and support going on around the world, nurtured by a peer-sharing approach between "developed" and "developing" world. This is being supported by the newest developments in internet linking of microphilanthropy, but also on a person to person individual basis, to a very large extent. No one is tracking this, because it is - just as women run businesses were for a long time - under the radar of development aid. But it is growing, and it is highly significant. CDRA in South Africa would probably call this person to person "horizontal" development and learning.

Second, a diverse variety of excellent projects are growing out of the connection of different "sectors" that can only happen when people have a strong knowledge and awareness of their local environment. So you have projects that teach women microfinance skills while learning literacy, projects that address human-elephant interaction in Africa by planting peppers around food crops and then creating a market for the peppers, and businesses that create employment and carry out environmental cleanup/preservation at the same time. I see a great deal of this in the stories on Hopebuilding wiki. And I have begun to recognize potential Hopebuilding stories, when I read them, by noticing this interconnectedness. As I said, it seems to grow out of strong local awareness of one's own community context; thus it avoids the kind of stovepiping that seems to afflict many top down approaches.

Third, while business and foundations and part of the NGO community seem to be reflecting this need for an interconnected approach that is driven by the energy of the grassroots or BOP, it doesn't seem to me that many governments or development aid or aid agencies have been reflecting very much on how such an approach would change the way they do development work.

My thinking suggests that if Prahalad's vision comes to pass, development aid workers will become much more like talent scouts whose job is to find out what is working or being developed locally, possibly suggest or facilitiate ways to bring other local people into that project, identify funding that could support such an activity wherever it might be found, and share those ideas as widely as possible so that others can be inspired and see what they can accomplish. One of the lessons learned from using story as evaluation methods pioneered by Terry Bergdall and others with CARE in Ethiopia, and now also appears as the MSC method (most significant changes), is that sharing stories creates energy to inspire further change. The story process shares knowledge and ideas widely, and inspires local people - from their own context and knowledge - to see if they can do the same, similar or something completely different.

In such a setting, development aid would become much more like a marketplace in which various aid agencies market their funding - like a stock exchange for aid. (Think of Yunus' idea for a Wall Street made up of social businesses.) Maybe there would be brokers who specialized in matching up projects and funders - an expansion of Brazil and South Africa's social stock exchange. This would completely change the way in which development aid is done, because the emphasis would be on the local, field level, and seeking out ideas at the grassroots, rather than trying to encourage the grassroots to develop ideas within the context of an overall larger program funded and driven from the top down. (I suspect that BRAC, which effectively is the world's largest development agency, has been operating in this grassroots based way for decades now, first in Bangladesh, then Afghanistan and Sri Lanka, then Africa, and now is establishing a presence in the UK and North America.)

Development agencies would have to address the programmatic and reporting changes and challenges that would come from accommodating - rather than trying to create from the top - such locally inspired and driven diversity. Such approaches work; they save money; they let people meet their own needs; and they empower people to continue building and improving their society from the bottom up. Such problem solving approaches "thicken" democracy, by creating what some scholars call new "nodes" within democracy. Such "micro-governance" changes societal governance from the bottom up, not from the top down. In many societies, especially those which inherited colonial or autocratically run societies, this is the only way change can happen effectively. Peacebuilders are beginning to realize that such local village level governance continues, even in conflict, and provides a resource in which peaceful, more equitable governance can be rebuilt (from the bottom up) in post-conflict societies. By bringing more and more people into governance by encouraging their capacity to meet their own needs, both individually and as part of a group, we make democracy something thickly rooted in society, not a thin layer floating on the top (as one evocative metaphor suggests).

I would be very interested to hear other peoples' thoughts on this. As you can probably tell from this "thinking out loud", I am just beginning to try to visualize what a development aid agency worker's role would be in such a system, how they would be compensated, how agencies would manage the finances for such an approach, etc, etc. But maybe someone else has already figured this out? If so, please share :)

Regards,
Rosemary

Re: Co-creation and networking

On April 9th, 2008 Peter Deitz says:

Thank you for your brilliant insights on co-creation and networking in th context of international development work. I'm headed to the Stockholm Challenge in mid-may to present Social Actions as a proof o

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Network Power for Philanthropy and Nonprofits

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