Presented by AVA Keeping the Doors Open "dialogue"...with Gary Yates https://www.avaintl.org/profession/garyyates.html [Vol. 7, October 2003] "dialogue" is a free, on-line monthly publication of the Association for Volunteer Administration, the international professional organization promoting excellence in the effective management of volunteer resources. The "dialogue" series is funded under a generous grant from the David and Lucile Packard Foundation. The series provides AVA the opportunity to dialogue with authors, advocates, and leaders across multiple sectors about the profession of volunteer resources management and our mutual goals to build a more engaged and sustainable society. In keeping with its name, this publication was created by AVA to stimulate thought and discussion, and to present viewpoints to practitioners from thoughtful individuals they may not otherwise hear from on this topic. Please feel free to forward "dialogue" on to your colleagues, executive directors of nonprofit organizations and other nonprofit advocates whom you believe would value its content. ********** Keeping the Doors Open "dialogue"...with Gary Yates Gary Yates is the President and Chief Executive Officer of The California Wellness Foundation, which was founded in 1992 to improve the health of the people in California through grant-making in the areas of health promotion, wellness education, and disease prevention. As one strategy for improving the health of the people of California, the Foundation strives to conduct its grant-making in a manner that strengthens the nonprofit organizations it funds. One philanthropic priority that Gary and his colleagues are currently championing is private foundation funding of core operating support. In this issue of "dialogue", Yates shares his convictions with AVA about the funder-grantee relationship, the value of volunteer resources, the importance of taking a stand and communicating organizational principles, and the ways in which truly strategic grant-making not only strengthens the grantee, but the foundation and the sector as well. A Friend in Deed Over the years, The California Wellness Foundation (TCWF) and other private foundations have achieved excellent outcomes through traditional, initiative- or project-driven funding practices. Nevertheless, a few years ago, Yates and his colleagues at TCWF sought to further increase the effectiveness of their grant-making by making the foundation's dollars truly "count" in building capacity and creating more sustainable organizations to serve the public. To accomplish this goal, TCWF took an unusual step. Foundation staff invited grantees to share information and ideas about what they most needed, and then TCWF staff acted on what they learned. The outcome of that learning process resulted in a stunning declaration in July 2001: TCWF would begin to focus up to fifty percent of its annual grant-making efforts on core operating support. TCWF's advocacy and public communication about why they made such a shift in their grant-making priorities have helped raise awareness and expanded the definitions and boundaries of what strategic grant-making really means. Championing Core Operating Support Core operating support is defined on the Foundation's website as funds that are used to provide "day-to-day administrative, infrastructure, and overhead costs." In other words, core operating support represents unrestricted funds that can be allocated to any of the ongoing costs that contribute to an organization's mission. It is defined as nearly anything other than support for new project development or management. Nonprofit organizations typically use core operating support for strategic planning and to cover part or all of the salaries of key administrative personnel, staff and/or board development, and the normal costs of doing business, such as rent, phones, copies, supplies, equipment, software, and other expenses that might be challenging for an executive to acquire or support. Traditionally, nonprofit organizations have relied on government and local United Ways for a significant portion of their unrestricted funds. However, cutbacks in government funding programs and a United Way shift toward project-based funding in many communities is making core operating support increasingly difficult for nonprofit executive directors to secure. Although TWCF's 2001 decision to provide core operating support to grantees was designed to address this increasingly urgent need, the Foundation had in fact been moving in this direction for several years, as a result of ongoing dialogue with their grantees. "We knew," says Yates, "that funding core operating support was some of the most effective and strategic grant-making we could make. In looking at our mission, which was to improve the health of the people of California, it was absolutely clear to us that having strong not-for-profits doing the work to improve the health of Californians is important for us to achieve our mission." In other words, Yates understands that in order fulfill their philanthropic mandates, foundations need effective, strong and sustainable nonprofit organizations. The experience of TCWF's leadership and staff were instrumental in the decision to shift its funding priorities. Yates already had 25 years of management experience forged in the nonprofit sector when he joined TCWF, and many of the Foundation's board members either work in or manage nonprofit organizations, or have had intimate experience with the nonprofit world. These connections give the Foundation staff a keen understanding of the needs and pressures that nonprofit leaders face - and what they can do to address these needs most effectively. Taking a Stand When TCWF announced its new funding priorities, many colleagues in California and throughout the nation thought the Foundation was making a mistake. Within the larger funding community, core operating support is generally considered as the antithesis of a strategic grant-making practice. Many funders believe that providing core operating support breeds dependence on individual foundations and ties foundations too closely to a nonprofit's long-term outcomes. Historically, foundation funding has tended to focus on funding new projects or innovations, as opposed to sustaining and strengthening pre-existing projects with proven successes. In the delicate dance and unwritten rules of philanthropy, "other" funders - such as government or individual donors - are supposed to pick up and support worthwhile program services once foundation sponsorship has ended. According to Yates, however, changes in the funding landscape mean that those rules and unwritten agreements no longer apply. "Many people thought we were going in the opposite direction by funding core operating support. Some funders even thought we had lost our minds, but it was not a difficult decision for us to make. We were really trying to learn from our grant making experience...and what we learned was that some very powerful outcomes could be affected with the initiative style of 'project' funding, but there is a real need in the sector for just keeping the lights on and the doors open." In fact, Yates believes that the constant challenge to cover core operating costs is counterproductive to building strong organizations and a strong sector. Day-to-day efforts to keep the overall operation running forces executive directors to disguise and mask as much of their core operating costs as possible under project-related expenses, or to inflate their "allowable" overhead requests in project proposals. That ultimately weakens the sector because no one is operating with a true sense of what it costs to conduct a nonprofit enterprise. The time spent struggling to make an ongoing operational expense sound like part of a "new and improved" service would be far better spent in managing the daily operations of the organization and working to improve its performance and effectiveness. Yates says around 10-11 percent of private foundation funds are currently provided for core operating support. He predicts that if that figure could be pushed to 20 percent, the amount of unrestricted money in organizations may begin to make a real difference in the sector. TCWF, along with a handful of other foundations and advocacy organizations such as Independent Sector, are working to spread the message and increase the level of dialogue about core operating support and other forms of strategic grant-making. According to Yates, it is important to watch the top 120 foundations over the next two to three years to assess how successful this message and the dialogue with funders has been. Will the percentage rise from 10 to 20 percent or not? "Only time will tell," he says. The Challenge for Grant Makers: First, Do No Harm Yates challenges funders to take an honest look at what has been sustained as a result of their grant-making two to three years after a grant ends. Evidence throughout the sector, as well as from Yates' own experience, indicates that many of the projects or services that received foundation funding are no longer in place. Not only is that outcome decidedly non-strategic, Yates observes, but it "also often weakens the not-for-profit...and as funders we need to be aware of that and take responsibility for it." Yates describes an all-too common scenario, where the lure of potential project dollars often "causes the not-for-profit to move either slightly or significantly away from its mission in order to meet funding criteria." Then, the organization has to "hire up new staff...and within the three years...the money just goes away." In the extreme, core operating support may very well have a "zero impact on strengthening organizational operations," but at least, says Yates, "we won't have a negative impact." Talking about whether a grant helps or hurts a grantee in the long term is an important conversation to have in the philanthropic world. "We always want to know what our value-added is, but we rarely want to look at what our value-minus might be." Funders must also be willing to encourage honest dialogue with grantees. Both parties have a great deal at stake to produce positive outcomes that result in improved living conditions or to enhance the overall quality of life. Yates believes that a willingness to unflinchingly assess both sides of the value equation will increase the probability that more private foundations will provide core operating support as a strategic grant-making practice. As a result, he believes philanthropy will be better positioned to help grantees develop a stronger, and ultimately more sustainable, nonprofit sector. Opening Up the Grant-Maker/Grantee Dialogue Gary Yates believes in a more equitable relationship between grant-makers and grantees than many nonprofit organization leaders have been lucky enough to experience. That is because Yates and his colleagues respect the contributions and knowledge that both parties bring to the relationship whenever a grant is "awarded." Yates also suggests that the type of conversation the two parties should be having requires a higher degree of trust, and therefore carries a higher degree of risk. Many grantees are concerned about how honest they can be with funders about their needs and the real costs of doing business. There are, however, a number of questions that both sides would do well to consider asking, and to answer for themselves. Self-awareness of the answers can then help to guide a thoughtful and more open dialogue. Some of the questions that both grant-makers and grantees could begin to ask and answer--first alone, then together--might include: - What does the grantee really need? - What is the best use of grant money coming in to this organization? - Are human resources - paid and unpaid (volunteer) - allocated to maximize grant funds and to expand the capacity of the project? The organization overall? - Are new and improved projects or new services really "new"...or are they designed to fall within the threshold of the funder's grant-making requirements? - What is the feasibility of the work supported by any new project-related funds being sustained/continued at the end of this grant? - How does this grant really help the grantee in accomplishing its overall mission? - How will the foundation, and the grantee, assess whether the grant money contributed to a value-added or a value-minus outcome? (At the end of the grant, will this be a "stronger" organization?) - If the grantee had a choice between foundation funding for a new project, or receiving an equal amount of core operating support, which "award" would yield the most significant impact for the organization? - What positive outcomes related to the grant do both the foundation and the grantee want to be accountable and responsible for? - Is this a strategic grant for the foundation as well as for the grantee? The Challenge for Volunteer Resources Managers: Provide Evidence of Value On the whole, Yates says that executive directors of nonprofit organizations do an incredible job of managing the myriad resources and challenges they must juggle on a daily basis. One of the many challenges they face is deciding how to negotiate the competing demands for the limited amount of unrestricted funds available to them. This competition for funds poses a unique challenge for volunteer resources managers. For some nonprofits, unrestricted funding means the difference between having a paid volunteer resources director or not. Accordingly, access to core operating support represents both an opportunity and a potential threat for volunteer resources managers, based on the answer to one key question: How much are volunteers and the core function of volunteer resources management valued in the organization? The more the volunteer resource management function is valued, the more likely it is that the nonprofit's executive director will make this function an integral part of the organization's human resources and overall resource development strategy. Conversely, the less this function is valued, the less likely it is that even the volunteer manager's salary will be covered, and the less likely it is that volunteer resources management will survive a challenge from other competing demands for core operating support. According to Yates, many organizations recognize "the importance of having a funded position or positions to have an effective, viable volunteer program" that provides irrefutable value to the organization. Yet, "for a lot of folks the missing piece is the understanding that there is a cost, an organizational cost, to having an excellent volunteer cadre." That is why it is imperative for volunteer resources managers to engage in strategic communication to ensure that their role is understood and valued within their organization. Clearly, assessing and communicating the value of volunteer resources management is easier said than done. Yates advises volunteer managers to document how volunteers are being utilized, their retention rates, job effectiveness, and the costs required to recruit, train, retain, and manage an effective volunteer cadre through case studies and other methods to showcase their value. He concludes, "I don't think it [volunteer resources management] is a well-recognized expertise in the philanthropic world." Like the need to provide core operating support, and for the foundation community to engage in more strategic grant-making, the importance of volunteer resources management must be clearly communicated to the public. In fact, the two are inevitably connected. Volunteers and volunteer resources management are essential to the nonprofit sector's success, and so they deserve the support of philanthropic organizations. Similarly, the nonprofit sector deserves to be supported through whatever mix of project and core operating support may be required. The bottom line, as hard as it is to achieve, is as simple as that. ********** Getting the Message Out Pursuing a public education strategy can help an organization to leverage its communication opportunities to achieve a desired goal. This strategy is especially helpful when you have a challenging message or idea that must be communicated, or a change in behavior or policy that you want to influence. 9-Step Process 1. Agree on the purpose and goals, or the agenda, for your campaign. Why do you need to spread this message? What do you want to accomplish? 2. Identify your audience(s). How broadly will you cast your net? Who are your primary, secondary, tertiary audiences? 3. Develop key messages/talking points. What are the 2-3 most important, compelling, and persuasive points you need to make? 4. Gather data & stories, and/or conduct research that "paint a picture" and make the message come alive. What clarifying points or stories will help to "flesh out" your key message and personalize it for your listeners? Is the data readily available, or will you need to conduct independent research? 5. Determine your message distribution. What are the best ways to reach your target audiences? 6. Mobilize your primary messengers. Who are the best conveyors of your message? How will you train them? 7. Invite feedback, discussion, and/or debate. How will you engage listeners in identifying their "self-interest" and allow their voices to be heard? What actions or venues will prompt people to think and talk about your message? How will you enlist the strongest, most supportive voices emerging from the debate to help you disseminate the message? 8. Reassess and re-craft messages and other campaign elements based on audience feedback, as needed. Gauge your success in getting your message across and make necessary adjustments to improve performance and leverage future opportunities to make your case. 9. Continue to work your plan. How will you define success, or what is the "end point" for your campaign? ********** FOR MORE INFORMATION... Resources The following resources provide Information about how grant-makers can invest in volunteer resources management, and the costs associated with volunteer resources: Association for Volunteer Administration www.avaintl.org A Guide to Investing in Volunteer Resources Management: Improve Your Philanthropic Portfolio The Grantmaker Forum on Community and National Service www.gfcns.org The Cost of a Volunteer: What It Takes to Provide a Quality Volunteer Experience Websites and General Information Foundation Center http://fdncenter.org Independent Sector www.independentsector.org National Committee for Responsive Philanthropy www.ncrp.org The California Wellness Foundation www.tcwf.org ********** Did you find this "dialogue" informative? Would you like to know more? AVA would love to hear from you, so let us know what you think: dialogue@always-write.com ********** Do you know someone who might find this "dialogue" valuable? Forward this article to a friend or colleague: https://www.avaintl.org/profession/archives.html ********** The California Wellness Foundation was created in 1992 as a result of Health Net's conversion from a nonprofit to a for-profit entity.The mission of the foundation is to improve the health of the people of California by making grants for health promotion, wellness education, and disease prevention. TCWF has given grants in excess of $412 million since 1992, has assets of approximately $900 million, and is one of California's largest private foundations. ********** Coming soon to "dialogue"... - Michael Moser, author of "United We Brand" - special two-part feature on "Voices from the Field...The Future of Volunteer Resources Management" - Peter Block, author of "The Answer to How is Yes" ********** Privacy Policy: Your privacy is important to us. Any personal information collected for the purpose of subscribing or unsubscribing to the "dialogue" mailing list will not be rented, leased, sold, or otherwise disclosed to any third parties. Use the following link to subscribe to our mailing list and receive e-mail notification of future "dialogue" publications: https://www.avaintl.org/profession/subscribe.html If you wish to be removed from our mailing list, please use the following link to unsubscribe: https://www.avaintl.org/profession/unsubscribe.html Already a subscriber and need to update your email address? Use the following link: https://www.avaintl.org/profession/changeemail.html ********** AVA grants permission to reproduce or share the contents of "dialogue" articles in whole or in part, provided AVA remains cited as the original source. copyright © 2003 by the Association for Volunteer Administration - all rights reserved -