“Fully funded, now what’s our mission?”

Today our cases in the strategic nonprofit leadership course at Harvard Business School included Prison Fellowship (featuring Frank Lofaro, now president of Christian Leadership Alliance) and an interesting group of British financiers who created their own charity called Absolute Return for Kids (ARK).

An amazing fundraising event!

ARK holds a gala event each year to raise money for charity. In 2006, for example, they raised US$36 million in one night by auctioning off things like:

  • dinner with Gwyneth Paltrow,
  • guitar lessons with Chris Martin of Coldplay,
  • a game of tennis with Elton John,
  • a week on the world’s largest single-masted yacht for you and eleven friends,
  • a day of shopping with Elizabeth Hurley… you get the idea.

Unlike most charities that start with a mission and then go looking for funding, the financiers got their start in charity work by raising more money than they knew what to do with, and then had to decide what their mission should be! Isn’t that a nice way to get started!

Grants or investments?

They started off by giving grants to other charities, but felt they were not getting a big enough bang for the buck (or do Brits say Not enough punch for the pound?). So they stopped supporting other charities and became an operating charity themselves.

Now, when you read the case you can’t help but think of this group of donors as a group of control freaks on steroids. The problem they encountered was that they couldn’t find any charities that fit their criteria for how they think charitable work should be done. Perhaps, you might wonder, their criteria were unreasonable. Well, you decide. They wanted to fund charities that are:

  • engaged in measurable activities
  • achieving real world results
  • creating value
  • efficient
  • sustainable
  • leveraging their resources, and
  • scalable or replicable.

If they had come to you to talk about a grant, would you have met their criteria? It seems to me that ARK has a pretty good set of criteria that we could use to evaluate our charities and our programs.

Lots of the nonprofit CEO’s started today’s discussion with a very negative view of the ‘business practices’ these financiers were trying to impose on charities. Our group felt at first that they just didn’t understand how things work in the nonprofit sector. But as the discussion continued, I think everyone in the room came to appreciate the wisdom of their criteria. After all, wouldn’t you like to have programs where you know there are measurable real world results and that the program has the potential to become self-sustaining and could be copied all over the world? Wouldn’t you like it to be efficient and leverage your resources?

Maybe we shouldn’t be too quick to dismiss business practices. Maybe they just might be best practices for the nonprofit sector too.

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