ICT4D Consulting

on March 2, 2016

Take advantage of over two decades of experience planning, executing, project managing and evaluating technology projects in a variety of issues areas (education, media, the arts, human rights, education, healthcare, conservation, etc.) and across 75 countries.

These experiences were detailed in the book The Dynamics of Technology for Social Change – Understanding the Factors that Influence Results recounting lessons learned in the field. The Principal created and managed one of the earliest strategic Internet initiatives to facilitate open democratic societies in the developing world.

https://en.wikipedia.org/wiki/Jonathan_Peizer

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Philanthropic Consulting

on February 23, 2016

The Principal at Internaut Consulting worked for over a dozen years as the CIO / CTO and Global Internet Program Director for one of the largest International foundations based in New York. While there he held concurrent senior management positions in both the program and administrative areas. This required him to develop and execute initiatives and serve clients both internal and external to the foundation. It provided a unique holistic insight into how the two areas worked together in a foundation. As he developed the organization’s IT function he also used it in his program management work as well.

Internaut Consulting can assist with internal administrative initiatives or issues that need support as well program development, project management and program evaluation initiatives.

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Nonprofit Consulting

on February 23, 2016

The Principal at Internaut Consulting spent ten years as a senior department manager overseeing the global technology operations for one of the premier educational exchange nonprofits, AFS International. In addition, he founded the sustainable technology services nonprofit Aspiration almost twenty years ago, and is the Board Chairman of that organization. He has written scores of grant proposals, evaluated thousands of grants in his foundation career. He  has raised over 25 million dollars in funding for foundation, third party NGO, and his own projects.

Internet Consulting’s experience with nonprofits and their operations is therefore rather expansive, and it has supported them as clients for the last ten years, (see the Internaut Consulting portfolio of projects).  It can assist you with a variety of issues including organizational and program strategy, project planning, project management, governance and grant research and writing, with a specialty in technology related projects.

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Nonprofit Philanthropy: More Charles Darwin than Adam Smith?

on September 12, 2013
in Blog

In a recent survey of 121 nonprofit leaders, the Center for Effective Philanthropy found that nearly half (48%) of nonprofit leaders say their foundation supporters are blind to the biggest challenges charities face and could do more to help them meet rising demand for services, train leaders, and deploy new technology, according to a poll released this week. Ellie Buteau, vice president of research at the center and author of the report, says foundations’ lack of awareness of their grantees’ challenges stems from poor communication.

I beg to differ on foundation blindness to needs, but do believe communications are a problem. Specifically too many nonprofits don’t understand how foundation’s operate and thus don’t position themselves for support in a way that best serves their needs and those of the foundation as well. Foundations aren’t blind to nonprofit needs, they simply have different objectives. I describe how to best understand them below:

After a dozen years in philanthropy, I believe Darwin’s Theory of Natural Selection has more relevance to the nonprofit and donor grant negotiation process than Adam Smith’s ideas of supply and demand and the theory of Natural Price. A nonprofit organization’s perception of funding needs often differs significantly from those of the donor it is trying to convince. The nonprofit by necessity must understand what factors drive donor decision-making to obtain support successfully.

Natural selection is a process that affects the capacity of individual entities to survive as the result of heritable traits that give it the upper hand. Natural price theorizes that all products have a value intrinsic to what is involved in producing them and factors of supply and demand determine cost and, ultimately, real value.

Let’s consider a nonprofit homeless shelter. From an economic perspective, the assumption is that nonprofit shelters exist, and their services are valued, because of demands posed by homelessness and other factors that cause people to seek refuge. For supporters of supply and demand, this all makes sense. The problem is that the money needed to support those shelters fully does not come from the people using them but from third party donors. At this point, the 800-pound gorilla in the room tips its hat to Darwin. What motivates an institutional donor to give? Is it really supply and demand? Or rather, is it ‘perceived’ demand that facilitates a peculiar form of natural selection requiring potential grantees to create survival strategies aimed at obtaining support for their projects?

In our homeless shelter example, we assume that the shelter is functioning properly and satisfying a real need. If true supply and demand were at work, a donor institution would sense a need for a shelter based on demand. It would either start an operational program to create and manage shelters or form a separate nonprofit whose mission was to do so. That process sometimes occurs. However, in the more common scenario, a committed individual who sees a need for shelters, forms a nonprofit on his own to create and manage them. The nonprofit then seeks money from third party donors to support the project. In this defined ecosystem, an entity (grantee) with few resources satisfies a real demand and then turns to another entity with resources (donor) for support. The issue then becomes if the donor evaluates the request based on real demand or perceived demand created by their selection process.

Donors typically have well defined initiatives with specific criteria supporting some projects while excluding others. For example, ‘We only give to shelters that house over fifty adults, or that remain open more then 12 hours a day, or exist in X geography, etc.’ Government programs defined by divergent political constituents also operate with a variety of programmatic and administrative criteria that accomplish the same type of exclusionary exceptions. Why do donors do this? The answer is simple and rather logical if not particularly gratifying. There is a lot of need out there. All donors have a finite amount of resources they can dedicate. This necessitates some type of criteria and process to distinguish support of one initiative over another. Consequently, there are two things donors inevitably create, allocation parameters for their funds and gatekeepers to insure that defined parameters are met. Hence Institutional donors define their funding criteria separately and are one-step removed from the nonprofit providing shelter services despite the fact that they are critical to resourcing the endeavor.

Philanthropy is a very personal and subjective undertaking especially for institutions supported by living donors or family boards. How well donors define their selection criteria to meet real demand is a function of two primary factors; their actual understanding of the problem they are trying to address, and their real interest in actually fixing it. Other objectives may exist, for example size of tax write-off, extent of recognition or kudos, satisfaction of a political constituency, and so on.. Whatever these factors are, one can express how far a donor support criterion digresses from the demand side of the supply and demand argument with this formula:

Divergence from Demand = Extent of misunderstanding related to need *
other factors that have little bearing on actual need * restrictiveness of final grant parameters set

The other process-helpers donors create are gatekeepers in the form of grant giving staff or grant evaluation boards. Their job is to shield the donor directly from the many grantees requesting support by conforming to the parameters on the right of our equation that ultimately decide which grants to accept and not accept. A skilled intermediary knows how to limit the negative factors in this equation to support proposers while also satisfying the parameters and the donor. An adequate intermediary conforms to the parameters and a poor intermediary exacerbates the parameters, making divergence from demand even worse. Note that poorly conceived criteria may make even intermediaries classified as adequate ultimately very poor at meeting demand by doing nothing other than their stated job of conforming to them.

This is where Darwin and natural selection come into play. Our shelter grantee assumes it has created an entity that meets a demand. It further assumes that any donor it approaches with an initiative that in some way supports shelters, will naturally see the appropriateness and justification of supporting its shelter. However, we exist in an ecosystem where donors do not operate on that logic. The donor-gatekeeper’s inclination [and job] is to check the initiative not against actual demand, as defined by the NGO’s shelter mission, but rather by perceived demand defined by the donor’s own selection parameters. Most nonprofits do not consciously appreciate this fact – or at least do not demonstrate that they do in their negotiations with donors. The typical conversation concentrates on why the donor should support their proposed initiative in its present form, rather than focusing on how it conforms to the donor’s defined selection parameters. I have often found myself reworking the argument for quality grant requests so that they conform to the perceived need of a donor initiative rather that nonprofit’s perception of demand as they see it.

Outside of an absolute disqualifying factor, (if for example, the NGO’s shelter is in Utah and only enterprises operating in California are supported), there is always room for successful donor negotiation if a nonprofit is opportunistic – or more precisely Darwinistic enough to appreciate how natural selection takes precedence, replacing demand. Natural selection favors two types of nonprofits in these negotiations.

1) A nonprofit that generates an engaging enough argument, through personal connections and relationships, (often gained through earlier successful interactions) to convince the donor gatekeeper its project matches donor guidelines.

2) A nonprofit that focuses less on marketing its initiative to meet user demand and more on promoting it to meet donor criteria. It can do this in writing or in person and relies less on a personal relationships in favor of solid marketing strategies

The critical factor for success of both types of nonprofits is their instinctual understanding of the justifications needed to bridge the gap between actual demand and the selection criteria they must meet. These qualities are often associated with the most successful nonprofits because they know how to navigate the current funding ecosystem and successfully accomplish a necessary survival challenge. They do good work on the ground and make the appropriate case for support to donors operating at 30,000 feet above the ground.

The loser in this negotiation process is often the earnest nonprofit that approaches the donor purely based on its need and not the donor’s requirements; and often comes away without life support. Unless of course the need and donor requirements actually match perfectly without any negotiation – a unique and uncommon state of Zen in the typical donor nonprofit interaction. Natural Selection overtakes the laws of Natural Price and Demand in this interaction.

Of course there are also successful nonprofit ‘spinners’ and ‘schmoozers’ who can make a successful case for support but that accomplish little of value in satisfying demand. They are not the focus of this article, although they are the gatekeeper’s responsibility to evaluate properly and cull, because they waste resources otherwise spent on needy nonprofits that actually meet demand.

It is not my intention to denigrate either the donor or grantee in this article, but to point to an existing ecosystem that affects both the funding negotiations and donor resourcing. One can try to educate donors to do two things: refine criteria so that it is demand-driven, and hire effective, inventive gatekeepers. However, donors come in many shapes and sizes and will always create limiting criteria to match limited resources. Just as importantly, they do not approach nonprofits for resources; the system works the other way around. It is therefore incumbent on nonprofits to understand the donor landscape and better navigate funding negotiations even as they satisfy real demand.

In a perfect world, donors would create actual-demand versus perceived-demand criteria. This would free nonprofits to concentrate on making a needs-based case for funding rather than telling donors what they want to hear, as many nonprofits must do to secure funding. On the other hand, for a donor to do this, it would probably need the experience gained by the nonprofit meeting that demand rather than the alternative experience it has creating the wealth and resources neccessary to grant to such activities.

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Grant Craft: The Case for Implementation Support

on June 18, 2013
in Blog

Philanthropic practice seems to have evolved a bifurcated focus at the beginning (grant approval) and the end (outcome metrics) of a grant. My question is what about the middle, or grant implementation, where philanthropic support is most likely to help a grant succeed? Is philanthropic intervention during the implementation process just meddling, or an opening to providing more useful support because of increased requirements now imposed at the front and back end of a grant?

Donor focus at the beginning of a grant, on its approval and processing, has evolved over the decades and increased in sophistication along with institutional philanthropy. New financial rules to foster transparency account for some of the additional complications. However, many philanthropic institutions don’t simply fund a grantee’s program anymore. Instead, they create a set of gate keeping parameters which amount to developing their own program criteria grantees must satisfy to be eligible for funding. This is somewhat ironic when the grantor typically only resources the effort, while the grantees are responsible for actually satisfying demand. The latter is assumed to be in a better position to understand what is required on the ground. Nevertheless with over 1.5 million charitable organizations competing for resources in the US alone, its understandable why philanthropies have evolved their giving over the decades into developing sophisticated gate keeping criteria in order not to be overwhelmed. This is not something that will change any time soon even if it’s real effect is creating two different demands that are often not completely aligned — Donor funding criteria and the local demand a nonprofit must satisfy.

The increased focus at the end of the grant and outcome metrics is a relatively new trend over the last decade and a half. It is a result of new donors with technology and venture capital backgrounds infusing their ethos into the field of philanthropy in addition to the general societal trend over the last three decades to commoditize most things from education to health. Of course there were grant evaluations in decades past and every so often a “measurement movement”. However grant evaluations were often pretty loose and often thought of as self-serving, confirming the foundations reasoning for providing a grant in the first place. Technology and the Internet have contributed to our evolution into a networked, “dashboard-friendly” society seeking easy measurements to help us quantify success — quickly. So I think this movement in philanthropy is here to stay as well. The problem of course is that in business, we base outcome metrics on the immediate straightforward business transaction, like buying a house or a car. In philanthropy however, the actual transaction is often secondary to the long term societal benefits being sought, and they often occur long after a grant expires. For example, providing housing for the homeless in order to enable someone to have an address and to find a job; bring up a stable family in a safe environment; have children connected to a school district; etc… The result is that these short term outcome based evaluations serve some purpose in better measuring the success of the immediate philanthropic transactions during the life of the grant (e.g. a homeless person receives a home), but are often no better than the earlier evaluations in measuring long term successes that might happen years later and that the grantor is often not around to evaluate. The majority of grants given have 1-3 year life spans.

Somewhere between the traditional foundation evaluation and these new outcome-based approaches is a happy medium, but we have not found it yet. Part of the reason I think is the failure of many philanthropic institutions to get involved in the grant implementation process. One of the ironies of metric or outcome-based grant making is that it does not provide what its private sector equivalent often does, intervention during execution. Venture capitalists don’t just number crunch and measure the projects they invest in. They incubate them, provide them advice as well as resources, help them network, etc. to assist them in their success during implementation, especially in their early stages. Many foundation grants are also involved in supporting innovative pilot solutions where this help is needed, and drawing upon a foundation’s network of other more mature grantees and its expertise would be useful.

Unfortunately, the traditional approach and ethos in philanthropy has been “hands off” during the implementation process, because donor etiquette suggests that doing so is overly interfering in a grantees work. The result is a rather odd situation of the grantee having to modify its program to satisfy initial philanthropic criteria to get the grant. Once the grant is received, the grantee is often in the position of additionally satisfying donor outcome metrics with limited administrative resources because the grant often caps administrative capacity needed to do a good job at it. The net result is a different kind of interference that materially impacts a grantee’s work. So why not additionally support the grantee with advice, networking, etc. during the implementation process when a donor can actually make a difference in helping a grant stay on track while satisfying all the extra requirements it imposes on its grantees.

I fully appreciate many grantees also look at philanthropic intervention during the implementation process as an intrusion – and it is understandable in the current philanthropic environment. After all, most grantors and grantees understand that the sausage making that goes into translating a donor’s grant criteria into the actual program needs followed by the additional sausage making to translate what’s really happened on the ground into satisfying donor metric requirements is often a process that neither wishes to evaluate too closely. In the traditional relationship between program officer and grantee both parties understand the realities of what must be done to overcome underfunded capacity and criteria that doesn’t necessarily match need. However, this is precisely why intervention during implementation is so important, because often the grantee’s job is made more difficult at the outset trying to satisfy both the donor’s criteria and real demand.

To intervene in the implementation process requires a different relationship between grantor and grantee. One of trust and equality were the donor understands its role as resourcer and its dependence on the grantee as implementer, in the same way the grantee understands the donor’s important role as resourcer. If both the resourcer and implementer work in concert during the implementation process there is a far better chance of a successful grant not only in meeting its early transactional outcomes but its longer term goals as well. After all, how many venture investors pour money into projects based on specific funding requirements they have defined only to disappear — and then reemerge at the end asking if their outcome metrics have been satisfied?

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