Rusty Stahl, founder and CEO, Talent Philanthropy Project
Most nonprofit executives know their people are their best assets for achieving program goals and building a strong organization. Committed professionals, board members, volunteers, and consultants bring a vision to life and create value with their skills, passion, sweat-equity, relationships, creativity, grit, and endurance. It is “human capital” that crafts strategies, goods, and services that meet community needs. The Donor’s Forum of Illinois makes this point in their “Real Talk about Real Costs” video. No empty building or database provides goods and services without the people who bring it all to life.
Given this widely-accepted truth, it would make sense for foundations—which are deeply concerned with the effectiveness and sustainability of the organizations they fund—to pour significant resources into developing nonprofit “human capital”. Right? It would seem reasonable that funders would understand the many positive short, mid-term, and long-range ripple effects of investing in the people who create, manage, and sustain the programs and organizations that the funders support. Right? Sadly, this is not the case.
Beyond gambling on the person in charge of the organization, most foundations put little to no money into “building the bench” of talent in their grantees, or helping grantees to build a better bench to support their teams.
The goal of Talent Philanthropy Project (now known as Fund the People) and the idea of our framework is to increase funder investment in the human capital of grantee organizations.
Talent-Focused Grantmaking by the Numbers
Here’s a brief overview of how much foundation money goes into nonprofit talent. (Don’t worry, it’s such a small amount that it won’t take long to describe.) Research by Talent Philanthropy Project and the Foundation Center in 2013 found that:
- The 20-year (1992-2011) annual average of investments in nonprofit talent by the one thousand largest U.S. foundations was 1.24% of total grant dollars.
- Out of the nearly $287 billion dollars granted over those 20 years, only $3.5 billion was spent on supporting leadership in grantees or the community.
- Of the 2.4 million grants made during that period, only 24,000 included some form of talent-investment.
- In 2011 (the latest year for which numbers were available), funders distributed 147,872 grants totaling $24.5 billion. Of these, only 1,111 grants went to talent development, for a total of $179 million or 0.7% of total grant dollars that year.[i]
These data show that, despite lots of handwringing over at least the last decade about a looming leadership crisis in the nonprofit sector, organized philanthropy is not taking the steps needed to support and strengthen the nonprofit workforce.
Yet, all is not lost. There is a small cluster of funders who are deeply committed to the art of talent-focused grantmaking. Unfortunately, you can count these exemplars on your hands–with a pinky to spare. I want to lift them up to inspire others and make current examples of talent-focused grantmaking visible. So here’s my list![ii]
Nine Funders Who Invest in Nonprofit Talent
- American Express Philanthropy – American Express Philanthropy is the charitable arm of the credit card giant. According to their website, they “appreciate the impact that talented leaders can have on business and society as a whole and we dedicate significant resources to attract, develop and retain talented employees. We are seeking the best methods, programs and partners that provide current and future nonprofit leaders with practical opportunities to learn and build leadership skills.” Their efforts include running their own Leadership Institutes, funding programs that help develop diverse emerging leaders, and sponsoring efforts like the White House Forum on Nonprofit Leadership that took place in 2012. Read more here.
- Annie E. Casey Foundation – A private national foundation that stems from the founding family of UPS, Casey’s comprehensive Talent and Leadership Development department manages several fellowships and trainings; provides grants to groups that study and/or provide nonprofit and government leadership development; and engage in internal leadership development for Casey staff. They have co-authored or sponsored a series of seminal monographs and reports on nonprofit leadership, and were a co-sponsor with American Experts of efforts like the White House conference mentioned above. On their website, they explain: “making things better for kids takes people with the skills, persistence and experience to work together to find solutions. We work with partners around the country to develop current and emerging leaders in the social and public sectors.” Read more here.
- Barr Foundation – The Barr Fellowship offers unique fellowships to executive directors of Boston-based nonprofits. Two of the key assumptions of the program are that “leadership is a key lever in making social change; the leaders we need for the future are already here.” And that “organizations are stronger and more sustainable when executive directors are given the opportunity to step away, and new leadership the opportunity to step forward.” The Fellowship begins with a three-month sabbatical. Fellows spend the first two weeks traveling together to the global south to find inspiration in vastly different places from Boston. Additionally, the Fellows’ organizations and interim executives are provided their own support, and Fellows are networked together into a peer community. Read more here.
- Bush Foundation – The goal of the Foundation’s leadership funding is to inspire, equip and connect leaders to effectively lead change that makes a difference in 23 Native nations, Minnesota, and the Dakotas. They do this by investing in individuals through Fellowships and their Native Nation Rebuilders Program, as well as investing in organizations that themselves develop leaders. Investment in the development of leaders has been at the core of the Bush Foundation for nearly 50 years, dating back to when founder Archibald Bush was guiding the Foundation. The Foundation believes that “communities are collections of individuals. For our communities to make progress on the critical issues we face, we need more individuals to see themselves as leaders able to drive action and make an impact. Leading change in an environment with complex challenges that cut across many cultures, sectors and disciplines requires a different, more adaptive set of leadership skills than the traditional model of ‘top down’ leadership.” Read more here.
- Community Memorial Foundation – A private foundation dedicated to improving health in 27 western suburbs of Chicago. Through their Building Organizational Effectiveness Initiative, “CMF provides non-profit organizations with continuous learning and improvement opportunities. This, in turn, creates great leaders, effective management, and sound governance.” Currently, CMF offers their grantees access to skills workshops featuring trainers from preeminent groups like BoardSource; access to membership in the Management Association of Illinois (a statewide HR-focused network); technical assistance grants; and executive coaching. Their latest addition is Ladders to Leadership, a cohort-based leadership development experience for middle managers with training from the Center for Creative Leadership. Read more here.
- Durfee Foundation – From their website: “Many leaders in the Los Angeles nonprofit sector work under conditions of unrelenting stress, potentially leading to burnout. The enormous demands of their jobs, often combined with financial pressure, can prevent them from taking time off for much-needed rejuvenation. In an effort to replenish the stores of energy and inspiration for our community’s most gifted leaders, the Durfee Sabbatical Program offers up to six individuals stipends and expenses of up to $40,000 to travel, reflect or otherwise renew themselves in whatever manner they propose… Subsequently, secondary leaders in organizations participating in the Sabbatical program are provided with a residency opportunity designed to allow deputy leaders to deepen their knowledge, expand their collegial networks and gain a wide-angle perspective on their work by placing them in a short-term residence, typically one to two weeks, at a peer organization in Los Angeles… Additionally, support of up to $5,000 is made available to successful candidates’ employing organizations that are willing to establish a permanent, revolving fund for professional staff development. The purpose of the fund is to make it possible for other staff to have access to training programs or short-term leaves that might enhance their professional capacities. In recognition of Durfee’s commitment to the professional development of all nonprofit staff, the Foundation’s contribution starts up the fund. As cash is drawn down, it is expected that the recipient organization will replenish the fund on an annual basis, and maintain it as a permanent line item in its budget.” Read more here. [Note: closely aligned to Durfee are the Rasmuson Foundation and Virginia G. Piper Charitable Trust, both of which offer sabbatical programs to grantee executive directors. These three foundations and others are highlighted in a great report that offers evaluative data on the return on investment of sabbatical funding.]
- Evelyn and Walter Haas, Jr. Fund – “Strengthening leadership is a key grantmaking priority for the Haas, Jr. Fund. We believe that organizations and movements need strong and capable leaders at all levels in order to achieve their goals for social change, whether they are working to advance immigrant rights, achieve marriage equality or reduce the achievement gap in education. In contrast to the business world, however, the social change sector still invests very little in figuring out what works to develop and support effective leaders. The Haas, Jr. Fund launched the Haas Leadership Initiative in 2005. The goal of the initiative is to support leaders so they can more effectively advance the goals of their organizations and the movements in which they work. Through the end of 2012, the Fund made grants totaling $21.6 million in this program area… The Initiative’s work is organized into three programs. “The Fund’s Flexible Leadership Awards (FLA) program has provided substantial leadership development support to more than 50 key social justice grantees. The Fund has established two signature fellowships that address critical leadership challenges in the immigrant and gay and lesbian rights movements. And The Fund shares lessons with philanthropy and the sector on supporting nonprofit leadership.” Read more here.
- Meyer Foundation – Meyer identifies and invests in visionary leaders and effective community-based nonprofit organizations that are working to create lasting improvements in the lives of low-income people in the Washington, DC region. The Foundation also works to strengthen the region’s nonprofit sector as a vital and respected partner in meeting community needs. Meyer supports work that: strengthens the leadership, impact, and sustainability of our grantees; enhances the visibility and influence of the nonprofit sector as a whole; and increases philanthropy in the region. In 2001, 2006, and 2011, Meyer partnered with CompassPoint, a leading nonprofit consulting firm, to conduct national research on the challenges and professional development needs of nonprofit executive directors. The reports on this research, published under the title “Daring to Lead,” drew national and regional attention to the importance of supporting and sustaining nonprofit executives. Following the publication of the 2006 edition of Daring to Lead, Meyer created the Exponent Award to support outstanding executive directors of grantee organizations. Read more here.
- Omidyar Network – Recognizing that “nothing in the world gets done absent human relationships” and “money alone cannot solve every problem or bring about the positive social impact we seek,” Omidyar Network’s Human Capital department acknowledges that “the leaders of the organizations we support face complex challenges in building successful organizations while delivering on their missions to improve society. Omidyar Network serves our investees by providing a range of human capital capabilities. Our investment professionals often assume board roles and consult on business strategy. At the request of our investees, we provide executive leadership coaching and talent management training, and our full-time recruiting team identifies top-tier C-level talent to help our investees achieve their growth and performance goals.” In the last four years, their team of five professional recruiters has helped dozens of mission-based organizations fill more than 100 executive positions. Read more here.
These funders are very different from one another.
- They include family foundations, corporate foundations, and health conversation funds.
- They are variously focused at the global, national, regional, and hyper-local levels in very different communities (Chicago suburbs, Minnesota, Native American nations, DC, Boston, Los Angeles).
- Investment approaches take place in vastly different contexts; the foundations have very different mission statements, work to address different social issues, and support diverse types of nonprofits.
- For some, investing in nonprofit talent is baked-in to how they make their core grants; others prefer to manage learning programs such as fellowships or trainings in addition to dollars.
- For some this work is framed as leadership development, while for others it is organizational capacity building.
- These efforts target different pain points along the career cycle—from early-career emerging leaders to long-serving executives seeking renewal or transition.
Across all these variables, these funders recognize that investing in nonprofit people – and creating systems that support people – are central and essential to the effectiveness and longevity of the nonprofit programs and organizations they support.
It’s unfortunate that there are so few bright spots in the funding community to include on this list. In future posts on this blog, we will explore the barriers to increasing the amount of talent-focused investing.
If you know a foundation that deserves to be included on this list, email us at info (at) fundthepeople (dot) org! If you want to help your foundation earn a place on the list by exploring the potential of talent-focused grantmaking, we’d love to connect!
Today’s post has been brought to you by the letter P and the number 9.
[i] Source: The Foundation Center, 2013. Based on all grants of $10,000 or more awarded by a sample of approximately 1,000 larger foundations (including 800 of the 1,000 largest ranked by total giving). For community foundations, only discretionary grants are included. Grants to individuals are not included in the file.
[ii] This list is not neither exhaustive nor scientific. I am hopeful that it is actually missing a good number of funders who should be included in future lists.