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I am a pharmacist's daughter. Some of my fondest childhood memories consist of weekends and school breaks spent working in my father's downtown pharmacy. That may seem strange, seeing as chemistry, biology and mathematics were not my strongest subjects. It was at this "job" that I was first exposed to business and commerce.  At an early age (elementary school) I learned how to work a cash register and count change - on a machine that didn't tell you how much change was owed; when I got my driver's license I was delivering prescriptions to seniors and those who were shut-in; and March break consisted of a weekend doing inventory for year-end.  Some really basic business and life skills were gleaned from watching how my father operated this small business.

Earlier this month the charitable sector has once again been under scrutiny... First with the CBC Marketplace Report - Canadian Cancer Society Spends more on Fundraising than on Research then the CTV report on charity CEO compensation.  What these two stories have in common is perceived lack of trasparency around how money is being raised, spent, and social issues addressed.

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I have been thinking a lot about the word "Philanthropy" lately.  Not because linguistics fascinates me, but because more and more frequently I am hearing from people how they are not "philanthropists".  This is usually in the context of the dollar value of which they donate, not their nature or charitable tendencies.

The word philanthropy comes from the Greek philanthropos, the love of mankind - Phil = Loving and Anthropos = Mankind.  Our use of the word philanthropy as it pertains to charitable donations was not brought into the common English lexicon until 1730.  At that point it time it was not associated with any value beyond someone who donated to charity.  In fact, it wasn't until major family foundations like Kellogg, Carnegie and Ford came along that the word took on the "large-dollar" value connotations. Read more »

CBC Radio One had some very interesting programs this week, all of which can be tied back to Generating Social Capital, effective community development and the interconnectedness of our social and economic systems.

Spark, a program about technology hosted by Nora Young, was discussing the use of open source software, APIs and Wikis. It is quite serendipitous that this show aired now, I am just in the middle of Dan Tapscott's book, Wikinomics. The interview and the book have got me thinking about what a new organizational system in the non-profit sector would look like.

In the Karma & Cents winter newsletter this year I talked about collaboration. This article was followed by a piece in the spring newsletter about Community Economic Development models and how the most effective ones have mulitple partners.

With ideas provided through the Wiki and Open Source communities the way we collaborate and how we define collaboration has changed. The traditional collaborative model was typically a connection between a few people or organizations around a topic/issue. In the new collaborative model we have thousands of people sharing their expertise and holding each other accountable for effective delivery of the program, project, or solution to the issue. In addition, new economic models are evolving out of this collaborative space thereby identifying new resources (human and financial).

So what would this new model look like if we expaned it to the organizational structures of today's society, specifically around the Non-Profit and Charitable sector?

I would argue that by breaking dow the silows around issues, tearing up the turf around donors, and engaging multiple agencies in program development and delivery, we would have a more efficient, effective and impactful non-profit sector.

How would this work?

1. Donors will be able to direct their resournces to a couse as opposed to an organization. The cause being managed by multiple agencies from different angles will ensure that the donor's dollars are being directed at the most effective approach at that time. This in turn will limit duplication and force organizations to address the issue and not just the program.
2. Cultural Barriers between users and supporters, rich and poor, ethnic groups, geography will be torn down (over time). This tear down will result in communities building each other up, instead of individuals directing resources down.
3. Resource Attraction to organizations will be easier because people will self-select by their attraction to solving the problem. People who have the solutions or parts of the solutions to the issue will be the ones who focus their energies in that direction. The growth the charitable sector will be by qualified, innovative people, thereby shoring up the leadership gap that is currently facing the sector as baby-boomers retire. From this we will see the creation of a new economy within the non-profit sector, not one driven by donor dollars, but one that is driven by social enterprise AND community investments (individuals and companies).

What does this new society look like?

Currently our society is built in silos. There are three of them, Non-Profit, Government and Private. Information is being passed on an inconsistent and limited basis down each of these silos and across on an even more limited basis. What this new system could look like would be a pool of individuals from a cross-section of industries, geographies, backgrounds, etc. From this pool are different tributaries pulling people by interest, knowledge, expertise down around an issue and then spitting them back out again into a different pool with a different collection of individuals looking at a different problem. Each pool generates new ideas, solutions, micro-economies, governance systems and ultimately connections.

This idea brings me to the next CBC interview from this week on Q hosted by Jian Ghomeshi. Jian interviewed Zambian author, Dambisa Moyo on her new book Dead Aid. This book reveals the negative effects that foreign aid from individuals and governments is having on African societies.

The idea that our aid is having a negative impact is not new to readers of this blog. I have written in the past how donations to some organizations overseas have unintended consequences.

Moyo highlighted effective CED funding models like Kiva, and how building businesses and capital systems ins better than aid. She also stated that she likes what China is doing on the continent, by bringing business investments, employing people and driving the economy. I think that using China as an investing company is not a good example.

China might be bringing in new businesses and thereby driving up other businesses supplying to the workers and their families, but China has some well-known distasteful approaches to business. Specifically around the blatant disregard for human life standards. It is the Chinese business in Sudan that is propping up a corrupt government, that has led to mass murder of those living in Darfur, and created an even wider socio-economic gap. Another example is one that is not so widely known about - China built much of the road infrastructure in Ethiopia. This was originally seen as a good thing because it enabled the food producers in the north to transport goods to the desert communities in the south. What these roads also provided was for flower growers from places like India to move into the country and start drawing up precious water resources for flowers to be exported out of Ethiopia. In essence, these roadways are contributing to another drought. What is even more ironic is that Ethiopia was the only African country not colonized, and today, it has more countries exploiting its resources than ever before (one might argue the exploitation is going unchecked).

I believe that if this was an effective model, this type of capitalism would be driving down corruption, not strengthening it.

There has been some good come out of China's investment and the work that NGO's are doing on the African continent. I have written about where your jeans go when you send them overseas - how used clothing is sold in the market and has provided a cottage industry for tailors. Another revenue stream provided by NGO's is the volunteer corps that arrive in the countries and stay in the guest houses (not major hotel chains... but there is an economic trickle from that too) run by families. We might not agree about how volunteers and donors should travel and work in developing countries, but let's face it, these people require services and supports that can be provided by the local citizenry.

In tying these two interviews together this is what I see:

Effective CED should be conducted in an open source, wiki manner. By doing so, a new economic system will be created: new avenues for donors (community investors) to participate, new governance and accountability systems will provide ease of growth and partnerships. This structure will integrate the private public and non-profit sectors as one system - the Human system.

On Monday Petro-Canada and Suncor announced they were merging.  These two giants of Canada's oil sands and energy production might have an industry in common, but beyond that they dissimilarities are quite pronounced.

Petro-Canada, a former Crown company has a, "risk averse corporate culture," according to Deborah Yedlin, business commentator on CBC Radio's morning show.  Suncor, a younger company both in business age and corporate practise will have to find some common ground to move forward.  One area could be around their corporate giving program.

Each company reports how much they have invested back into community.  Petro-Canada goes as far as sharing its evaluation metrics.  Donations by Petro-Canada totalling approximately $15Million (2007) were spread across several programs around the globe.  This is just slightly higher than the dollars reported by Suncor at almost $14Million predominantly in Alberta and BC.  In addition to the dollars invested, both companies have an employee volunteer program and matching program.  As well, both companies are part of the London Benchmarking Group (LBG) Canada; a group of companies using the LBG Model to improve the management, measurement and reporting of their corporate community involvement (CCI).

With giving levels near equal it boils down to social vision.  How do you take two very different approaches to community and work, integrate them while at the same time improve the social fabric of where the new company operates?  There might be some concern by the charities that are supported that their funding could be cut.  There is also the possibility that the larger company will absorb both budgets. 

What I hope happens is that the new company will look at where there is overlap or duplication and facilitate the coming together of organizations.  For example, Inn from the Cold, The Homeless Foundation and the Calgary Drop-In Centre are supported by one or both companies.  Instead of looking at these individual agencies, perhaps this new company can look at the systemic issues leading to homelessness and the value of improving the living standards of lower-income/poor Albertans.  This doesn't mean that these organizations should fold, it means that they will have to hold a mirror to themselves and ask, "Am I doing the best, or if we check egos at the door and work on the systemic problems, will we actually achieve our missions and mandates.  It might mean that in the long-run one of us might not be in existence..."

This corporate merger could mean good things for the charitable sector - it could be the catalyst for facilitating mergers within the non-profit sector as well.

 

If anyone is doing well these days - I think it is the Veterinarians.  Why?  Because my 9 year old Lab just had surgery and between that, the special food, the tests, the post surgery visits and the "little extras" this minor day surgery is not so minor.  So, in difficult financial times, I advise going to Vet School.  If nothing else, people will always have pets that they consider part of their family!  Oh - she's doing well and other than walking around dazed and confused - she will be fine.

On to the topic for today - 

My post leads off with a personal request - check out Denise Deveau's article in the Financial Post, Spirit of Giving May Be Cautiously Strong. Denise interviewed several Canadians who are working in the charitable sector as advisors and she presents an optimistic view of where things are headed for the sector.

I was listening to CBC's The Current and Anna Maria Tremonti, the host was interviewing three gentlemen who work in the financial sector as analysts, economists and advisors.  At one point during the interview the charitable sector came up as to how foundations are cutting back and corporations are cutting back and woe to the non-profit organizations that are seeking funding.  I got to thinking, is this really the case?  Should it be woeful to be in the charitable sector right now?

Jim Collins wrote in his book Good to Great (which you can order through this website be clicking here - makes a great gift!), that the corporate world could take a page out of the non-profit sector book.  Here are, for all intents and purposes, businesses, that are forced to be innovative because they run on shoe-string budgets.  You wouldn't see the United Way going to either the American or Canadian governments seeking a bailout because of mismanagement, poor planning and lack of innovation.  In fact, my hunch is that if one of the largest charities in North America were faced with that dilemma the donors would probably hunker down and ask the tough questions (which, if they were good donors they would have been doing all along - SHOW ME THE MONEY?  Where did you spend it?  How did you spend it? What impact has been achieved?). 

As I write this, perhaps our own government should look at what happens when charities fail.  There is so much duplication of services in the charitable sector that shrinkage is actually a good thing.  As long as it is controlled shrinkage.  What do I mean by this?  If donors were to start giving as investments into organizations that not only have fancy marketing materials but rather, into charities that may or may not have that budget, but have proven results the sector would be running more efficiently, more effectively and as a result with greater synergies between organizations, partners, corporations, government and individuals (users and donors).

I cannot tell the future, but what I can say is that this too shall pass.  Hopeful charities have learned from their mistakes and will start examining the "turf issues" that have cropped up over the past decade or so (since the last major boom) and decide if having 50 organizations in one city dealing with homelessness is really the best use of donor dollars, government resources and corporate sponsorship.

As donors and community investors, it is your time to lead the way by holding these organizations accountable and asking if there are others who are doing the same thing but better.