Attracting — and Keeping — Talent in the Nonprofit Sector

7 12 2010

In my previous blog post, I described the Tom Barron’s ideas about empowering youth.  I have spoken to several people about this concept, and it has generated significant enthusiasm.

Recently, I traveled to Boston and had the pleasure of meeting with Mark Kramer, Managing Director of FSG Social Impact Advisors.  Mark has been an advisor to major foundation, corporate, government, and nonprofit organizations and leaders.  He had a different approach to the youth empowerment idea.

Mark said that attracting young people into the nonprofit sector is much less a problem than it was in the past.  In the 1990s, many of the brightest young people were attracted to the Silicon Valley or Wall Street.  According to Mark, the bursting of the tech bubble followed by the great recession has changed that phenomenon significantly.  Mark asserts that a significant percentage of graduates from the best business schools in the country are not only willing – but are motivated – to work in the nonprofit sector.  These people are not willing to work for $30,000 a year, because they want to raise a family and be able to send their own kids to college.  They are, however, willing to work for $80,000 or $100,000 per year in the nonprofit sector, even though they could make many multiples of that in the private sector.

As Mark explains, “the $80,000 or $100,000 salary range is what enables one to raise a family and send their kids to college – with great frugality to be sure, but without sacrificing a comfortable life.  Somehow we feel that people must make great personal sacrifices to work in the nonprofit sector and help solve social problems – however, there is a category between making sacrifices and getting rich, where the rewards of helping others are compensation enough to attract many of our country’s most talented youth.  And the added cost to our society of recruiting this talent would, I believe, be more than made up for in the greater savings from faster progress solving our social problems.”

The challenge in Mark’s view is the fragmentation of the nonprofit sector in the United States.  There are currently some 1.3 million nonprofit organizations in our country.  Mark asserts that we don’t need leadership development to get the brightest young people to run these organizations as much as we need fewer nonprofit organizations that offer more generous salaries and can attract the best management talent.  Among other things, Mark would advise The Denver Foundation to devote some resources to addressing this issue.  What do you think?

— David Miller, President and CEO, The Denver Foundation

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If I Had a Billion Dollars… (Part One)

7 10 2010

In the early 1990s, when my kids were young, they introduced me to a song called “If I Had a Million Dollars” by the Canadian music group Barenaked Ladies.  Lately, that song has been going through my head, with one letter changed: “If I Had a Billion Dollars.” 

Most people are probably aware of the challenge issued by Bill Gates and Warren Buffett.  They have asked all billionaires to commit to giving away at least one half of their money.  At last report, more than 40 individuals have made this pledge. 

A few weeks ago, a friend asked me what I would do if I were one of these billionaires.  At first, I hemmed and hawed a bit, saying it depended on many factors.  My friend pushed a little harder and said, “Suppose a donor wants to give away $1 billion per year for the next 10 years.  What would you advise that donor?”

Instead of answering off the top of my head, I decided to sleep on the question overnight.  The next morning I typed up the following email.

Among the threshold questions for the donor to ask and answer are the following: 

  • Time horizon.  How long are you willing to wait to achieve success—5, 10, 20 years?  Do you want the impacts to last in perpetuity?
  • Risk tolerance.   Analogous to private equity, the size of the impact generally varies inversely with the likelihood of success.  For example, the impact of peace in the Middle East would be enormous, but the likelihood of success is small.  How will you feel if you work on something for 5 or 10 years and it fails?
  • Passion. What are you most passionate about?
  • Deep vs. broad.  Would you prefer to have a huge impact on thousands of people or a smaller impact on millions or billions of people?
  • Demographic subgroups. Do you want to concentrate more on the U.S. or on other countries?  Do you have a special interest in children, women, the elderly, the ill, or some other group?

 Ideas to consider 

  1. Solicit ideas in a retail manner. Have a very public, web-based competition to suggest ideas for how to use the money.  Billions of brains thinking about this are better than a smaller number.  Make it a wiki process so that people can see and improve upon the ideas of others.
  2. Solicit ideas selectively.  Spend a few months interviewing and picking the brains of the 100 or so most intelligent and creative people in the world from all walks of life: scientists, artists, clergy, philosophers, inventors, etc.  Also, get advice from Bill Gates, Warren Buffet, and other philanthropists who have been doing this for a while.
  3. Focus on climate change. A persuasive case can be made that the biggest challenge facing the human race is climate change and that we must act immediately.  Consult Al Gore and other experts to determine where you could make a difference.
  4. Focus on solar energy. The world’s energy needs require the equivalent of a new nuclear power plant every day for the next 40 years.   The only way to meet those needs is to get a significant portion of the world’s energy from the sun.   There is more than enough energy from the sun to provide for all the world’s needs if we could only figure out how to convert it to usable energy cost effectively.
  5. Adopt a city. Pick a struggling mid-sized city in the U.S. and provide their current residents with funds for greatly enhanced public education, universal health care, infrastructure, job training, and human services.  Use money to induce employers to relocate to this city thus providing jobs and a new economic base.  As Maimonides said, the highest form of charity is to give a person a job or the means for self sufficiency.
  6. Adopt a country. Do the same thing described in #5 for an underdeveloped country.  In this case, funds might also be used for immunizations, clean water supplies, and other basic human needs.
  7. Don’t reinvent the wheel.  Pick a handful of organizations that are doing outstanding work and give them a huge infusion of funding— an endowment or a guaranteed revenue stream for 10 or 20 years.  At the international level, this might include organizations like Ashoka, which funds social entrepreneurs, or the Central Asia Institute, (created by Greg Mortenson who wrote Three Cups of Tea) which builds schools in Pakistan and Afghanistan.  At the national level, this might include organizations like Teach for America or Geoffrey Canada’s Harlem Children’s Zone.
  8. Cure a disease. After consultation with experts from places like the CDC and NIH, select one or two diseases that might be cured in the next 10-20 years.  Get researchers from around the world to work both independently and collaboratively.  Give a large prize to the researchers who succeed.  Keep substantial funds in reserve to produce and distribute the cure in case it’s in the form of a drug or a vaccine.
  9. Provide universal preschool in the U.S. Evidence is overwhelming about the importance of early childhood education.  It’s essential in brain development and the key to bridging the achievement gap between lower and higher socioeconomic groups.  Every child should have access to a high quality preschool education with well-compensated and trained teachers.
  10. Replace the National Endowment for the Arts. Create a national endowment for the arts so that government doesn’t have to do it and so that politics will be removed from the arts.  Concentrate funding on new plays, new music, and new works of visual art.  The arts are one of the key differences between civilized and non-civilized societies.  We need food for the soul as well as food for the body.
  11. Buy out a dictator or two.  Pay a couple of dictators a lot of money to give up all power and leave the countries that they rule.  Then give many times that amount of money to the country to build a democracy.  

Needless to say, this is only a partial list of hundreds of ways to spend this money wisely.  Additionally, I still have not decided what I would say if I were forced to pick only one idea.

I think this was a valuable exercise as it relates to The Denver Foundation’s upcoming Strategic Planning process.  Even though it will probably be a very long time before The Denver Foundation has $1 billion a year to give away, and even though our geographic focus is more limited than many of the ideas on the above list, the thought process involved is similar.  We at The Denver Foundation would welcome your ideas about what you would do if you had $1 billion – or, for that matter, any amount less than that.

David Miller, President and CEO, The Denver Foundation





Words of Wisdom from Peter Goldmark

6 08 2010

Readers:  This is Part 2 of a Blog Post about David Miller’s meeting with Peter Goldmark.  Click here for Part 1.

Peter Goldmark did not know what I was going to ask him, so he did not do any advance preparation. Essentially, I asked him what areas he might get involved in if he were running The Denver Foundation in the next several years. He rattled off a large number of ideas in a remarkably short period of time. All of his ideas were off the top of his head, so they were general concepts.

Here are some of the main suggestions Peter Goldmark made for The Denver Foundation to explore:

1. Americans have become very polarized. Do we really want Americans to be fighting each other when the economy is so bad, when millions of American children are in poverty, and when we are facing intense economic competition around the world? The United States was founded on a variety of compromises. For centuries, people in other countries have admired how we govern ourselves – our Bill of Rights, our checks and balances. There is a huge hunger in this country to overcome the growing partisanship. We should encourage our elected officials at all levels to reach across the aisle, make compromises, and work together.

2. Forty percent of carbon emissions come from buildings. We need to reduce the carbon that buildings emit by retrofitting old buildings and building new ones that are cleaner.

A model that might be useful in this regard is the Community Development Corporations (CDCs) of the 1970s and 1980s. CDCs did not just improve housing in blighted areas. They reintroduced social values.  In one building, a middle-aged woman in the Bronx got fed up with the drug dealers. She organized tenants, kicked out the drug dealers, fixed up the building, and became fierce in protecting the building and making people pay rent on time.

The CDC model was successful in part because there were some national intermediaries such as the Local Initiatives Support Corporation (LISC). Intermediaries will probably be necessary for energy efficiency and retrofitting because it is technically complex. These intermediaries can be a buffer between large sources of money and all the local churning. It also is helpful to have a progressive utility company. Such a project could provide jobs, reduce carbon emissions, and use energy more efficiently.

3. The Environmental Defense Fund has organized a project involving business school students and energy efficiency. Twenty business school students are selected for an internship and given a short training program on energy efficiency. Each intern is then assigned to a different company with the task of analyzing the operations of the company to save energy. The first group of 20 interns saved their companies a total of $30 million through energy efficiencies!

4. In today’s world, every foundation, including community foundations, should have an international component. One part of this should be helping to reduce the local carbon footprint, to reduce the global impact of carbon emissions. However, that is not enough. There also should be international engagement. One way to do this might be through the arts and arts exchanges.

5. We need a place where anyone throughout the world can be a citizen. We need a place with no boundaries and no military, a place that transcends nationalism. Perhaps this could be Antarctica. The current treaties regarding the non-militarization of Antarctica expire in a few decades.

6. We are losing newspapers. Think about the value and the skills of the people in the traditional newsroom. How can we preserve that? Perhaps The Denver Foundation could make grants to journalists and young people to deliver independent, high-quality news in the community. You could establish and support what would be the equivalent of a local bureau of the Associated Press.

7. Look for successful programs around the country and bring them to Denver. One example might be a project in Boston called The Community Builders. This organization provides financial coaching for families in low-income housing. It assists them with job connections and seems to be effective and efficient.

8. Work with the state government to create a public authority that buys energy efficient HVAC systems for public buildings of all kinds.

9. Get successful charter schools involved in reducing childhood obesity. These schools are already models for education reform. Use their leadership to help show how school-based programs can be used to reduce childhood obesity.

As you can see, these ideas are both broad and deep. I’m sure if I had another hour with Peter Goldmark he could have doubled the length of this list. These ideas provide great food for thought. I welcome input from readers as to which of these ideas are most worth exploring.

David Miller, President and CEO, The Denver Foundation





Should The Denver Foundation continue to fund arts and culture?

3 03 2010

I just returned from a trip to the San Francisco Bay area, the first of what will be several trips this year as part of The Denver Foundation’s Next Decade Project.  In the Bay Area, I met with several leaders from the private, nonprofit, and foundation sectors.  In future blog posts, I’ll talk more about a variety of the issues we discussed.

This post addresses the question of whether The Denver Foundation should continue to fund arts and culture.  Of the people I consulted in the Bay Area, one individual felt that arts and culture should be among our highest funding priorities and another individual felt arts and culture should be among our lowest priorities.  Adapting their advice to the Denver area, their main points might be summarized as follows.

The argument against continuing to fund arts and culture proposes that The Denver Foundation narrow its focus to two or three main areas.  The theory is that in order to make a real difference, we should give a few large grants rather than a lot of a small grants. If The Denver Foundation were to select only a couple of priorities, one could argue that arts and culture would not be among the most pressing needs.  Furthermore, the Metro Denver area is unique in having a dedicated sales tax for arts and cultural organizations.  Because the Scientific and Cultural Facilities District generates more than $30 million per year, some might argue that The Denver Foundation should direct its attention elsewhere.

The arguments for The Denver Foundation continuing to support arts and culture begin with economics.  The economic impact of arts and culture in the Metro Denver area is huge – considerably more than the economic impact of professional sports.  Because a strong economy is the engine that drives progress on social and philanthropic needs, it can be argued that The Denver Foundation should continue to invest heavily in arts and culture. 

Furthermore, a technology expert I consulted in the Silicon Valley stated that arts education is among the most important tools we can give to our children and grandchildren.  Yet most public schools have cut back or eliminated arts education.  This gentleman said that the workers of the future will need training in arts and culture at least as much as in math and science.  Jobs of the future will require flexibility and creativity, skills that are best learned through music, acting, painting, and other art forms.

Right now, I come down solidly on the side of believing that The Denver Foundation should continue to fund arts and culture and I think our Board agrees.  The economic and workforce development arguments are compelling.  In addition, arts and culture are an indispensable part of a civilized society.

In late 2008, as the Great Recession began, The Denver Foundation Board of Trustees courageously decided to make available the same amount of grant dollars in 2009 as were available in 2008.  This meant dipping into our corpus during bad economic times.  As part of this discussion, the Trustees also contemplated devoting more resources to immediate human needs.  After considerable deliberation, the Board unanimously decided not to change the percentage allocations among the foundation’s various grantmaking areas.  The Board unanimously voted to continue supporting local arts and cultural organizations at the same level as in the past.  As one Trustee noted, “During tough economic times, food for the soul is almost as important as food for the body.”

I welcome your thoughts and suggestions regarding The Denver Foundation’s continued funding of the arts and culture.

David Miller/President and CEO, The Denver Foundation