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Philanthropy Journal of North Carolina – Change depends on trust

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By Todd Cohen

A giant hurdle facing philanthropy is equipping nonprofits to handle the job of fixing our toughest social ills.

Hooked on trendy programs and bricks-and-mortar projects offering high-profile naming opportunities, however, foundations, corporations and individual donors typically shun efforts to boost nonprofits’ internal operations.

And seeing that reluctance to invest in organizational “capacity,”  nonprofit executives and boards won’t ask for the funds they need to run more effective organizations.

Funders and nonprofits alike lack leadership and trust.

Change is messy and takes time. It involves stumbling, getting up again, shifting direction or speed, and plowing ahead.

Investing in change requires trust in the very process of change, a process that typically works by learning from mistakes.

That kind of trust is rare – and a critical part of leadership.

Leadership, or the lack or abuse of it, dominates the news these days – and the stories behind those headlines offer big lessons for philanthropy as it wrestles with gaps in its own leadership.

Because its leaders swept its sex-abuse habit under the rug, the Catholic Church is in chaos and faces the prospect of an exodus by the faithful who trusted in it to do the right thing.

The church has not trusted itself, its underlying values or the ability of its members to forgive its mistakes.

Enron and its accomplice Arthur Andersen face a business meltdown because they abused the trust of investors and employees.

The two firms did not trust the rules of a regulated marketplace that depends on the free flow of information.

And the White House, stonewalling on its ties to the energy industry, risks squandering the trust it has admirably earned in the wake of the Sept. 11 attacks.

The Bush administration does not trust citizens enough to share information about how it conducts the public’s business, or to admit that it may have made a mistake in cozying up to a powerful industry.

Charity is not immune to the erosion of trust, either. The Red Cross, for example, suffered a big hurt for its handling of contributions to support Sept. 11 relief efforts.

And now, already skittish because of the sputtering economy, foundations, corporations and individual donors risk losing the trust of the charities they support by continuing to ignore the critical need for investment in organizational effectiveness and capacity.

Funders generally are not willing to risk helping nonprofits make themselves fit, and nonprofit executives and boards generally are not willing to risk challenging funders to put their money where it’s truly needed.

Philanthropy is starving for leaders who can see ahead and are geared to take reasoned risks to make change happen.

In a global information marketplace, with social problems growing increasingly complex and competition for charitable dollars growing increasingly fierce, philanthropy must be willing to invest in helping nonprofits become strong, nimble, resourceful and collaborative.

That requires leaders willing to invest in and build organizations that are willing to learn how to grow.

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