Don’t Forget the Small Guys

Friday, July 9, 2010

By Miguel Bonilla
Director of Strengthening New York City Nonprofits
United Way of New York City

Sometimes it’s easy to forget how much nonprofits touch people’s lives.

Reflecting on the ways my life has been touched by nonprofits, I realize I would be very different without them. I remember getting bags of canned food and warm jackets at our church from kids not much older than myself; I remember making smores during a Boy Scout camping trip; and I remember making pens filled with shredded money to learn about entrepreneurship from Junior Achievement. In college, I was active in Amnesty International and eventually earned a graduate scholarship through the Woodrow Wilson National Fellowship.

Each one of these organizations provided me with life-changing opportunities that might not have been available to the son of poor farm-raised immigrants from Puerto Rico and Mexico. Each organization was also a big risk for someone to start and to support financially.

It’s funny how the very institutions who are most able to take risks can be some of the most conservative when it comes to taking chances, especially during the recession. As Bill Somerville states in his book Grassroots Philanthropy, “It is one of the ironies of organized philanthropy that for all our talk about transforming the world, most foundation directors and trustees pride themselves on their balance, sobriety, and stability.”

During a recession that has disproportionately impacted poor communities, several grantmaking colleagues have admitted to me that they are more likely to fund large, older, “tried and true” nonprofits than to take chances on new, innovative, “riskier” small nonprofits. According to them, pressure from trustees and senior leadership to invest in “stable” organizations creates environments where new organizations are less likely to get funded. You have to wonder where we would be if these same risk-averse mindsets existed when Junior Achievement or the Boy Scouts were starting off. You could almost hear the trustees saying, “Yes, they sound interesting, but I’ve never hear of them. Let’s pass on this one.” At some point in the history of these organizations, someone had to take a risk and invest in them.

How can we take more risks? One of the simplest changes philanthropy can make is in looking closely at the way we relate to potential grantees. When I read the Center for Effective Philanthropy’s report Working With Grantees, I was inspired by a young African American program officer who saw his role more as a collaborator than the authoritarian expert we sometimes experience in the philanthropic community. In the report, Justin Laing from The Heinz Endowments talks about using his own voice to gain trust and insight when working with his grantees. Several studies have indicated healthy grantee-funder relationships are critical to an organization’s performance, yet we cling to authoritarian structures that only emphasize the power dynamics inherent in nonprofit funding.

During my 17 years in the nonprofit sector, private foundation site visits, for example, were something you feared. You would receive a memo from the CEO asking all staff to tidy their desks, wear their best business attire, and maintain noise levels to a minimum. The message was clear: someone with power over you was going to judge you, so you’d better be on your best behavior.

It’s true: small organizations are more likely to struggle with infrastructure issues, such as controlling founders or unstable funding streams, yet their small size also makes them more nimble, open to environmental changes, and exciting places to work. These are dynamics that come with any new or growing enterprise. I’ve met some fantastic small organizations, for example, that are using social science research to promote advocacy or filmmaking to help youth express their emotions. They take risks that large “tried and true” organizations may find it difficult to do.

Perhaps program officers like Justin are hard to find, but there are certainly things all of us can do to promote a culture of risk-taking in our institutions. If we don’t take risks, who knows how many gems we miss out on? Here are a few things you can do:

  • Make the case for taking risks—During these tough economic times, government officials are beginning to put more pressure on private foundations to fill in the gap declining tax revenues have created. Foundations have to clarify the role they play in our society. They are an independent voice that can take risks the corporate and government sector will not take. If we don’t make this argument, someone else will decide for us.
  • Bring everyone to the table—Risk aversion may be a result of long-standing implicit organizational values. You can change some of these static behaviors by bringing your stakeholders together in one room. Grant administrators, marketing departments, HR staff, even fiscal department staff all contribute to old behaviors. Let them know that a new environment requires new thinking. Large, focused discussions can have the dual impact of committing more people to taking risks and creating a more collaborative work culture.
  • Encourage more grantee interactions—During a recent grant process, United Way of New York City received close to 400 applications for a limited amount of grants. We can’t always engage the nonprofits we work with at a more personal level, especially during the current environment, but it should be our goal as much as possible. A dry, fact-ridden proposal is no replacement for the experience you get when you meet enthusiastic, passionate, or driven individuals committed to a social cause.

I realize that as individuals representing donors who wish to see their dollars spent effectively, we must ensure we are applying the highest standards to our due diligence processes—yet funneling resources to known entities doesn’t necessarily mean impact. This is the wrong time to take a banker’s stance on social investing. This is exactly the time when we should rethink our relationships to our grantees and cast a wider net, so that organizations like the ones I grew up with have the opportunity to help our communities in a time of need.

Miguel Bonilla, the Director of Strengthening New York City Nonprofits at the United Way of New York City, holds a M.S. in Urban Policy from the New School for Social Research and an M.A. in Organizational Management from Antioch University Los Angeles. He is also Vice President of the Organization Development Network of New York (ODNNY) and a member of Philanthropy New York’s Increasing Diversity in Philanthropy (IDP) and Philanthropy Connects committees. Mr. Bonilla can be reached at mbonilla at uwnyc dot org.

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