Building a theory of change or an organisation that creates change

From HuffPost by Sean Stannard-Stockton

The "theory of change" concept draws on the practices of scientific discovery. Social systems, however, are relatively resistant to scientific analysis. As philanthropy attempts to affect dynamic, human-influenced systems, I wonder if we might need to give up the search for the perfect theory of change and instead embrace what might be called Capital Market Philanthropy by focusing our philanthropic efforts on building great organizations.

This is quite interesting. A lot of funding dollars in the social sector is around the "theory of change" which is the idea that for a program (like Family by Family); a specific theory of change occurs for individuals through the program. This is quite an important aspect to evaluate programs and provide funding.

The question is whether that is enough?

What Stannard-Stockton asks here is due to the dynamic nature of social change it cannot be compared to a scientific study with specific questions, hypothesis and answers. The dynamic nature means that what works now will not work tomorrow and needs to be adapted. So, do we support a specific program or the organisation that has created this program and will adapt it to the future.

For Philanthropy I think this is a great question, especially for successful businessman who understand what it takes to build a business. Can Philanthropy help in supporting an organisation to create change?


John Wood and Room to Read

From Knowledge@Wharton:

Wood devotes much of his book to explaining how he has modeled Room to Read on key features of Microsoft’s corporate culture. Noting that most nonprofits lack a hardline approach to managing costs and leveraging outcomes, Wood offers Room to Read as an example of how a well-run NGO should raise money, market its work and maximize results.

He is especially intent on data-driven accountability. For Wood, a successful nonprofit must answer to donors, who deserve to know where their money goes. He is careful to publicize Room to Read’s results continuously: Even his email signature file documents how many schools have been built, how many libraries have been established, how many books have been donated, and how many girls have received long-term scholarships to allow them to stay in school.

Moreover, for Wood, accountability doesn’t just satisfy existing donors — it creates new ones. An iconoclast when it comes to development, Wood doesn’t bother with direct mail campaigns or other standard trappings of non-profit fundraising. Instead, he relies on the human touch, travelling to fundraising parties organized by regional volunteers and convincing prospects, through an irresistable combination of personal charisma and a compelling business model, that their money will go places if they give it to him. This approach works with both individual donors — he once raised $150,000 in less than two minutes at a fundraising party when donors began matching one another’s gifts — and with foundations. One of Room to Read’s most generous and consistent funders is the Draper Richards Foundation, an offshoot of a firm run by renowned venture capitalists Bill Draper and Robin Richards Donohoe. Impressed by how Wood’s strong business sense had informed his non-profit mission, DRF finances Room to the Read to the tune of six figures a year.

Wood’s insight is simple, but transformative: Corporate savvy is not opposed to humanitarian aims, but may be used to assist them. Just because a charitable organization does not seek to make a profit, that doesn’t mean it shouldn’t bring in as much money as it can, and manage that money well. To do any less is to shortchange the organization’s mission. There is also a crucial correlative here for Wood: While donors deserve to know where their money goes, the organization should not accept money from sources that could try to dictate organization policy. For that reason, Wood told The New York Times, "We don’t seek government funding here in the U.S. We don’t want to get into a fight with the U.S. government over whether we are allowed to teach kids about condoms or AIDS."

Drucker on the social challenges in a knowledge society


From Managing in a Time of Great Change:

The real answer to the question “Who takes care of the social challenges of the knowledge society?” is neither “the government” no “the employing organisation”. It is a separate and new social sector. Government has proved incompetent in solving social problems. The nonprofits spend far less for results the governments spend on failures.

Instead of using the federal tax system to encourage donations to non profits, we have the IRS making one move after the other to curtail donations to nonprofits. Each of these moves is presented as “closing a tax loophole”. The real motivation for such action is the bureaucracy’s hostility to markets and private enterprise in the former Communist countries. The success of the nonprofits undermines the bureaucracy’s power and denies its ideology.  Worse, the bureaucracy cannot admit that the nonprofits succeed where governments fail. What is needed therefore is a public policy that establishes the nonprofits as the country’s first line of attack on its social problems.

Solved is solving Australias Social Issues

There are many different social issues affecting Australians, and one organisation is taking to the community to find solutions.Solved is the new campaign from the Australian Centre for Social Innovation, a non-profit organisation aiming to create and facilitate ideas and techniques that contribute to positive social change. The CEO of The Australian Centre for Social Innovation, Brenton Caffen, says the aim of the 6 week online campaign is to help solve Australias social problems by sharing ideas and solutions that come directly from the community to benefit the community.


Featured in story

Brenton Caffen: CEO of The Australia Centre For Social Innovation

Sarah Stokely: Solved Campaign Lead

via Solved is solving Australias Social Issues.

Business Coach

I wrote a few days back about MBA and Social Change and discussed the idea of how we need all the four aspects of


to create successful change.

At What Matters website from McKinsey there is the same discussion with some vibrant comments.

Matthew Bishop writes:

Different skills are required at different stages along the way—from the single-minded determination of the entrepreneur with an idea to the visionary and organizational capacities of the CEO leading a large corporation. Those like Bill Gates who make it all the way from the garage to the corporate boardroom as the head of their firm are remarkably rare.

Contrast this with the social sector, where the praise and reward always seems to be focused on innovative new ideas rather than the boring challenge of taking these ideas to scale. Social entrepreneurs are rightly celebrated, but we should also celebrate the social bankers, social venture capitalists, social equity investors, and so on. This is why I’m excited by the influx of suited MBAs into the world of doing good. And why, more generally, I think that those who want social change need to embrace the language and methods of business.

This is exactly my new role as Business Coach for the Family by Family project in Adelaide. FbyF has been innovatively developed by The Australia Centre for Social Innovation or TACSI based here in Adelaide. They are one of the few people I know in Adelaide who understand the need for business tools and frameworks for social enterprises.

They have created a new model of supporting @risk families to go over the hurdles by being mentored by a Sharing family. My role is to make sure that in the next year we have an evaluation of the intermediate outcomes and long term impacts, test the viability of the business model, create systems for scaling and getting the project ready for a a greater impact across Australia and may be on day across the world.

I have been lucky enough to work in my current role at Families SA and work part-time at FbyF as a Business Coach. One of the first things that has changed for me is that I have started blogging again after a long hiatus and that is a good thing.

Check out this video on the 7PM project.

Family by Family on TV from TACSI on Vimeo.

Effective management of Nonprofits

Drucker writing in Managing for the Future:

In the early 1990s, people sentenced to their first prison term in Florida, mostly very poor black or Hispanic youths, were paranoid  into the Salvation Army’s custody–about 25,000 per year, Statistics showed that if these young men and women had gone to jail, the majority would have become habitual criminals. But the Salvation Army was able to rehabilitate 80 percent of them through a strict work program that was run largely by volunteers. And the program cost a fraction of what it would have to keep the offenders behind bars.

Underlying this program and many other effective nonprofit endeavours is a commitment to management. Forty years ago, management was a dirty word for those involved in nonprofit organizations. It mean business, and nonprofits prided themselves on being free of the taint of commercialism and above such sordid considerations as the bottom line. Now most of them have learned that nonprofits need management even more than business does, precisely because they lack the discipline of the bottom line. The nonprof its are, of course, still dedicated to “doing good”. But they also realize that good intentions are no substitute for organisation and leadership, for accountability, performance, and results. Those require management and that, in turn, begins with the organizations mission.