Investing in talent: How and why foundations are supporting professional development

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Anyone who knows anything about the nonprofit sector knows that nonprofits attract passionate, committed, caring people – but that those people must operate on a shoestring budget, where needs perpetually exceed resources. This “nonprofit starvation cycle” is described by the Stanford Social Innovation Review, as quoted in a sector white paper:

[Not-for-profits are] so hungry for decent infrastructure that they can barely function as organizations — let alone serve their beneficiaries. The cycle starts with funders’ unrealistic expectations about how much running a nonprofit costs, and results in nonprofits misrepresenting their costs while skimping on vital systems — acts that feed funders’ skewed beliefs.

To break this cycle, the article suggests that funders must take the lead. Traditionally, grant-making organizations have funded nonprofit projects and programs, but in recent years, some innovative donors have begun to see that investing in talent and leadership development is a key piece to capacity building in the nonprofit sector.

James Temple, director of corporate responsibility with Pricewaterhouse Coopers and Leader for PwC Canada Foundation, has this to say: “Programs and priorities are the easiest to measure and foundations want to see results. But if we don’t invest in smart, strategic people, how would our money be used effectively anyhow? There is a critical need for foundations to fund human resources and for grantmakers to say funds can be used for salaries because this will create stronger more vibrant charities.”

While the majority of funds will continue to support overhead and the work of organizations, Nadien Godkewitsch, manager of programs at the Toronto Community Foundation (TCF), says, “It is important to set aside funds for strategic professional development to help nonprofits move beyond day to day activities.”

Challenges in the sector

The TCF was one of the first foundations to take this approach. In 2004, the foundation began to see a looming leadership crisis in the nonprofit sector. “A lot of charitable organizations in Toronto were being run by founders. We were concerned that as those founders retired, there wouldn’t necessarily be people behind them to handle succession,” says Godkewitsch.

Charitable organizations were also “increasingly squeezing their limited funds into programs and were not able to do what private sector does - helping employees become stronger leaders, ensuring professional development.” In response, the TCF launched the Vital People grant in 2004 to provide opportunities for professional development for talented people within the nonprofit sector. In the nine years since, the TCF has provided 83 Vital People grants with total investment of close to $400,000.

Katherine van Kooy, president & CEO, Calgary Chamber for Voluntary Organizations (CCVO), says “Most nonprofit organizations are pretty sophisticated in their approach to professional development but the budget set aside for staff development runs out pretty quickly if travel or significant conference fees are involved.” She adds, “We know from work we’ve done that funding for professional development in our sector does not come close to demand. For organizations that would like to make an investment in their staff, it’s a real challenge to put together funding.”

Professional development

Like many nonprofits, the CCVO is a relatively small organization engaged in diverse work. Van Kooy says, “When we hire someone, they may have new areas of responsibility that they’ve never dealt with before. Our work also changes depending on issues emerging in sector. To allow staff to deepen or expand their skills enables them to do a better job.”

In the past, funders have sometimes invited nonprofit staff to join their own staff for workshops so the nonprofits can benefit from corporate knowledge and expertise, but new partnerships for professional development are emerging.

Innoweave is an initiative of the J.W. McConnell Family Foundation that helps community organizations learn about, assess and implement new tools and approaches that can help them achieve greater impact. Managing Director (SiG@McConnell) Aaron Good says, “Many leaders have been to great workshops but came away without knowing what to do next. It’s important to help people figure out what they will do after a workshop or training session. We also try to connect them with a coach who can help them answer key questions and work through their plan in a way that allows them to fulfill their mission.”

Some support for professional development is more indirect: PwC sponsors one of the aspects of CCVO’s annual conference that brings together multiple stakeholders including nonprofits, government and the corporate community. A number of other organizations, such as the United Way, support this conference by paying for opportunities for nonprofits to participate.

Still, some funding directly supports professional development. In early 2013, Todd Minerson, executive director of the White Ribbon Campaign, the world’s largest effort of men and boys working to end violence against women, applied for a Vital People grant from TCF. After six years as executive director, Minerson wanted to test an idea with peers and received funding to attend the Harvard Business School in July.

Minerson says, “The Vital People Grant enabled me to access a strategic nonprofit leadership opportunity at Harvard Business School that was simply inaccessible to us otherwise. White Ribbon is looking at developing social enterprise innovations that I was able to test with professors and peers at Harvard, along with exploring case studies of real organizations facing similar challenges. This grant enabled us to build a win-win for the future.”

Hiring great people

Sometimes funding means that nonprofits can hire talented staff they would not otherwise be able to afford. The Educational Outreach department of the Perimeter Institute for Theoretical Physics in Waterloo, ON was able to hire a YouTube science content star and to second a physics teacher as a consultant for a year, thanks to a FedDev grant which included funds to support talent. Greg Dick, director of educational outreach with thePerimeter Institute sees this grant as a significant investment and says, “We are very fortunate that both the private and public sectors recognize the need for, and support the development of talent.”

Advice to nonprofits

“We know we do important work in the nonprofit sector but it’s tough to identify ourselves as leaders,” says Godkewitsch. “But seeing ourselves and staff in our sector as leaders driving change, addressing trends, and building on assets in our community should encourage us to think more about professional development.”

Katherine van Kooy notes that “People feel differently when they have an opportunity to grow and develop their skills, to be exposed to different perspectives. It may not pay back immediately but it shapes thinking and provides a toolkit that can be used at different points along the way, in ways that are sometimes hard to quantify.” Van Kooy’s experience has been that investing in professional development for staff helps with retention, but she also notes that, in a mobile market, some organizations may also be concerned that if they invest in someone’s skills, that individual may be more marketable to other employers.

Temple encourages nonprofits to understand the philanthropy arm of their funders, and their corporate strategy for the next few years. “Be bold and curious,” Temple says. “Build relationships and partnerships and find out what your nonprofit can do to help the funder.

Advice to funders

“We are at a time of great change and enabling people to step back and focus on what they are hoping to achieve and how they will do so is really important,” says Aaron Good of Innoweave. “We can’t just keep doing the same thing as funders.”

To funders who may be hesitant around the idea that supporting talent may be less quantifiable, Good says, “This is all about mission and impact – how will you measure success in the next 3-5 years, how will you get there, what processes will you put in place to make sure you get there.”

Temple suggests that capacity building is “patient work” that “typically requires an investment of three to five years before meaningful improvements can be achieved. The benefit — enhanced outcomes and sustainability — is worth the investment.” He suggests that taking 20% of funds out of operations to invest in talent is “not wasteful. It is strategically in alignment with our goals and helps create a more effective impact.”

Van Kooy says, “Investors should be prudent and mindful of ROI, but funding specifically for development opportunities for leaders is often not a massive investment.”

Van Kooy also emphasizes that “a one-thousand dollar grant should not cost a thousand dollars of time to apply.” She notes that some professional opportunities arise quickly and suggests a need for some shorter grant cycles to meet this need.

According to Good, “There is definitely room for other approaches and room for other funders to benefit from this type of program.”

Moving toward partnership

For a long time, Temple says, grantees and grantors have spoken two languages and have sometimes worked at cross purposes. This new approach to funding people allows a change from a sponsorship model to a partnership model, where both nonprofits and funders offer benefit to one another.

“It’s no longer about dollars and cents, but shared values between charities and communities and foundations.”

Susan Fish is a writer/editor at Storywell, a company that helps individuals and organization tell their story well. She has written for the nonprofit sector for almost two decades and loves a good story.

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