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Made to Stick--Interview with Chip Heath

When Funding Priorities Change

An article in this morning's Marin Independent Journal about the impact of Marin Community Foundation funding cuts led me to this article on the Foundation's recent decision to change their funding priorities:

The foundation announced in June that its board of trustees had decided to split its giving equally between sustaining and initiating grants. As a result, nonprofit organizations that serve some of Marin's neediest residents will have to reconfigure their operations or face the possibility of losing millions of dollars in funding.

The change will result in a shift of more than $35 million from sustaining grants to fund new initiatives over the next four years. The foundation gave nearly $26 million to Marin organizations during the fiscal year that ended June 30.

Among the reasons they cite for their decision are the proliferation of nonprofits with similar missions and programs and the desire to have a bigger impact. Not surprisingly, this policy change has upset a lot of people from the nonprofit community. But I see it as a change that is actually moving in the right direction.

One of my all-time favorite books is Built to Last: Successful Habits of Visionary Companies. In it, the authors argue that in visionary organizations, there is a tension between the need to preserve the core and stimulate progress.

Preserving the core means that an organization is very clear about its organizational mission and values and sticks to the strategic and tactical decisions that support their core organizational culture. A strong core gives everyone in the organization a sense of purpose and clear guidance for making decisions and taking action.

While preserving the core is important, there's also a need to stimulate progress. Organizations will not grow and flourish if they do not continue to take new action in light of changing circumstances. Recognizing that there's a tendency to stick with the "tried and true" even when the world is changing around you, the most visionary organizations have developed policies for themselves that force their organizations to change and adapt. 3M, for example, requires that a percentage of its business each year must come from new products and services. They will never completely rely on what they've done in the past--no matter how successful--because they know that eventually this will spell their demise.

From what I can see, the Marin Community Foundation is attempting to put this strategy into practice within the nonprofit/social sector environment. They recognize that their continued funding of existing programs will ensure the continuation of the same old same old and discourage innovation or change. They want to be more strategic in their support and to drive greater innovation and collaboration. This is a bold move, one that other foundations and nonprofits themselves should consider. Ongoing change is a fact of life. Developing strategies and policies that encourage the change cycle can have great benefits and create an environment that allows changes to be more strategic and coordinated. I'll be curious to see how things turn out.




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