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Philanthropy Journal of North Carolina – A better job – Retooling for the future

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By Todd Cohen

Times are tough and getting tougher for philanthropy.

Nonprofits face the huge job of tackling increasingly complex social problems with fewer resources.

Government support for social services is declining.

A new breed of donors and grantmakers wants a greater hand in guiding nonprofits they support.

And donors, angry about the way the Red Cross and other charities handled contributions to support victims of the Sept. 11 attacks, are wary of the ability of charities to manage the funds they get.

But there’s hope.

New wealth is flowing into philanthropy.

A network of groups is emerging to provide technical support both to funders and nonprofits.

And rising expectations among donors and grantmakers offer nonprofits a powerful incentive to think about the future and retool themselves to work in a new way.

In a trend known as “organizational effectiveness,” funders and nonprofits are thinking about what lies ahead, taking a hard look at how they do business and gearing themselves for big changes that are coming in the way philanthropy works.

Boosted by support groups like Grantmakers for Effective Organizations, a small but growing number of funders are investing in efforts by nonprofits to streamline and revamp their operations, create new streams of revenue and look for innovative and collaborative solutions to complex social and operational problems.

That includes sharpening their mission, strategy, management, operations, marketing, fundraising and technology, as well as investing in and training staff, tracking impact and teaming up with other charitable, business and government partners.

Funders also are taking stock of how they themselves work as grantmakers.

Critical to becoming more effective is the willingness of organizations to look around the corner and prepare themselves for big and unexpected changes that might be coming.

Equally important is the need to share with other funders and nonprofits information about what works and what doesn’t work in trying to do a better job.

As philanthropy changes, a new “ecology” is emerging that consists of “networks of networks” to support the work of funders and nonprofits, Katherine Fulton of Global Business Network, a think-tank and consulting firm, told more than 550 people attending GEO’s conference in Washington, D.C. last week.

Central to the work of these networks, and to philanthropy’s ability to change and thrive, is the development of tools both to measure the impact of efforts by funders and nonprofits to be more effective, and also to share that information with other funders and nonprofits.

The push to help philanthropy be more effective also will depend on the ability and willingness of individuals and organizations working in philanthropy to prepare themselves for a future that promises to be both tough and unpredictable.

The key is to be fit and ready for change.

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