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The Truth About Funders and Nonprofits

I’ve always appreciated that Pablo Eisenberg has spoken his mind about philanthropy and the nonprofit sector, a refreshing voice of wisdom and candor in a sector rife with politics and back-scratching.

I’ve always appreciated that Pablo Eisenberg has spoken his mind about philanthropy and the nonprofit sector, a refreshing voice of wisdom and candor in a sector rife with politics and back-scratching. Eisenberg’s recent WSJ article, “What’s Wrong With Charitable Giving, and How to Fix It” was as thoughtful and provocative as ever, as was Brian Reich’s response here on Fast company.

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I’m going to jump into the fray with my two cents as well.

My message to funders/investors:

There is a beautiful groundswell of donors of a variety of ages and from diverse backgrounds who are in many cases offering valuable expertise as well. At the same time, foundations are shifting their approaches to being more strategic, purposeful, and innovative.

Your challenge: There is no lack of superb causes, nonprofit enterprises, and social entrepreneurs who are doing important, productive work, as well as newer dreamers who have great ideas.

My strong advice: Ground your giving decisions in expertise and experience. If you want to advance missions that are making a difference in our communities–regional, national, or global–you will need to get your hands dirty, do some work to find the people and organizations that are effective, and figure out together with them how you can be most useful. Invest in people and organizations that are actually out there doing serious, hard work and who have begun to learn what works and doesn’t work through trial and error; built relationships with communities they are serving; and having an impact.

My message to corporations:

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Bravo to the leaders of companies who are finally integrating service and philanthropy, including nonprofit board service among your executives and professionals; this is a more powerful way to integrate and leverage your business’s good will.

And bravo for aligning your corporate engagement with your company’s mission; you have to be able to make the case to shareholders that your CSR initiatives are designed strategically to advance your business. Corporate philanthropy and service will only be sustainable and effective if designed to yield a win-win for companies and communities.

My message to nonprofits and their funders/investors:

Invest in strengthening nonprofit boards.

Nonprofits will never maximize their potential without highly effective nonprofit boards of directors. Boards are not only essential for oversight (and we have seen organizations fall because of board failures in oversight), but boards play an even greater role by working with the nonprofit’s CEO to envision the organization’s greater potential in serving the community, creating the revenue model to achieve success, and then playing their part in ensuring fulfillment.

Furthermore, in order for the board to be fully effective, the board needs to build itself with people with the mix of backgrounds and perspectives, and the skills, experiences, and expertise that is needed for that particular organization to soar.

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By the way, when I say that the role of the board is to help a nonprofit to achieve its greater potential, that does not necessarily mean quadrupling in size; for example, it might mean merging with another nonprofit that provides complementary services in order to provide greater value to the community, or for greater efficiencies.

People and institutions who seek to invest in making the world a better place, through social justice, the environment, education, alleviating poverty, or other powerful causes will need to dig in and work with experts on the ground in order to really matter.

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About the author

Korngold provides strategy consulting to global corporations on sustainability, facilitating corporate-nonprofit partnerships, and training and placing hundreds of business executives on NGO/nonprofit boards for 20+ years. She provides strategy and board governance consulting to NGO/nonprofit boards, foundations, and educational and healthcare institutions.

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