Late last year, the Fieldstone Alliance, a national nonprofit organization spun off from the St. Paul-based Amherst H. Wilder Foundation, announced the launch of the Kellogg Action Lab, a joint effort with the Nonprofit Finance Fund in New York City to improve the performance, effectiveness, and financial sustainability of W.K. Kellogg Foundation grantees. With more than $9 million in funding from Kellogg, the project will make available an array of resources, including publications, training, benchmarking and management tools, access to capital, and expert consultation, to participating grantees.
McKinley, a Native American, has spent his adult life at what he calls "the intersection of nonprofit activity and philanthropic resources." In addition to serving as director of the Wilder Center for Communities, he has served as executive director of the National Network of Grantmakers, vice president of the Saint Paul Companies Foundation, founding director of the Minnesota Minority Education Partnership, senior program officer for the Minneapolis Foundation, and president of the Minneapolis Planning Commission.
Philanthropy News Digest: What was the genesis of the Action Lab project?
Ron McKinley: When we began to have conversations with Kellogg, the folks there were excited by the work that both we and the Nonprofit Finance Fund were doing with respect to organizational capacity, as well as the potential for connecting their grantees with consultants and other resources around the country that could build capacity. We weren't really sure how to make the arrangement work, and after several months of conversations it was decided that Kellogg would make a grant to Fieldstone, and that Fieldstone and NFF would subsequently form a partnership to design and roll out the Action Lab in a way that was both collaborative and participant-driven.
PND: Does the project have an underlying premise?
RM: It does. The Fieldstone Alliance, which has been around for twenty-five years, first as part of the Wilder Foundation and now as a freestanding nonprofit, and the Nonprofit Finance Fund, which has been around for more than twenty years, entered into the partnership with different approaches to organizational capacity building. NFF approaches the problem through the lens of an organization's financial structure and how that structure contributes to its overall health, while our approach involves a more broadly-based organizational assessment that looks at six characteristics of a healthy organization. What we've done in designing the Action Lab is to take NFF's long-standing experience with capital financial structures and our own experience with the broader structures of a healthy nonprofit organization and have devised an approach around organizational stability that basically looks at the interrelationship of three things: mission, capacity, and capital. Our underlying premise is that for an organization to be truly healthy, it needs to strike an appropriate balance among those three things. If one of those things changes in some way, then the other two have to change in order to maintain that balance.
PND: What kind of resources do you plan to make available to Kellogg grantees?
RM: There are four different kinds of products and services, ranging from low-intensity/high-use at one end of the spectrum to high-intensity/low-use at the other. The first is what we're calling knowledge resources — resources which an organization can use to better understand itself and what it can do internally to increase its own capacity. In most cases, these are items that can be purchased — books, subscriptions to magazines like The Nonprofit Quarterly, membership in their state or regional nonprofit association, registration fees for different kinds of courses and learning opportunities, and so on. A basket of those kinds of resources, up to $750, will be made available to eligible Kellogg grantees with operating budgets under $1 million a year.
The second product we're offering — although we haven't designed it yet — involves convenings of various sorts, including face-to-face gatherings and webinars. The idea is to identify, through conversations with grantees, common needs among various lab participants that we can help to address by bringing large numbers of them together in settings where they can learn from each other.
The third thing we plan to provide is the one that has the highest intensity and cost, and therefore is likely to be used by the fewest number of organizations, and that's consultation. That could be anything from an in-depth organizational assessment to a more focused consultation where an organization might be ready to develop its first strategic plan and needs a consultant to help them navigate the process. Or they might have a new executive director and need an executive coach who can spend some time with that person as they're settling into the job. It could involve any number of things, as long as it involves external human resources being applied to strengthening some aspect of the organization's work or operations.
And the final piece of the puzzle, which we're calling the Innovative Practice Fund, will be based on what we learn from our early work with lab participants. Essentially, it's a pot of money that allows us, when we identify a need among grantees that isn't being met by the products and services I just described, to commission the development of something to meet that need. So, for instance, if we see there's a need for a monograph on a specific aspect of nonprofit management, we might commission a writer or team of writers to develop the manuscript and then publish and distribute it in book form to participants as well as the broader sector. We see it as an exciting part of what we're doing, because instead of trying to suggest we already have all the answers, we're saying there are promising practices on the horizon that, if we're able to put resources behind them, could result in more capacity in the sector.
PND: Is participation by Kellogg grantees mandatory?
RM: Absolutely not. The program is totally voluntary. Every eligible Kellogg grantee will get an e-mail from us alerting them to the existence of the program, and they're free to ignore it. But they're also welcome to participate at a level that makes sense for them — and that we can support. We don't have limitless funding, so part of our learning curve is going to involve figuring out the kinds of capacity-building services most needed by grantees. We may have a number of grantees that only want to purchase knowledge resources because they don't feel they have the time or energy to attend a convening or do an organizational assessment. But we also believe there will be organizations that want to take advantage of each and every opportunity available to them. The key for us is to acknowledge that a single size doesn't fit all, and to create a mechanism so that organizations can take timely advantage of the type of help they need at whatever point in their development they happen to be.
PND: Is this the most challenging environment for nonprofits you've seen during your thirty-year career in the sector?
RM: Well, I try to stay away from saying anything is "the most" or "the least." I do believe, however, that the nonprofit and philanthropic sectors face an extraordinary challenge at the moment — and it's a complex one. One of the major contributors to that complexity is the fact that we've got this huge demographic cohort called the baby boom that is starting to age out of leadership positions in the sector. At the same time, there are a lot of questions about the long-term sustainability of nonprofit organizations that had different answers ten years ago. As a consequence, nonprofits are going to have to make an awful lot of decisions over the next five to ten years that they've never had to make before. And if they aren't paying attention to their capacity to respond to change, we could, as a sector, end up in crisis. Right now, I think we all need to engage in a process of surfacing what those new questions are, and I think our project is an opportunity for the broader sector to really learn from nonprofits in terms of what they require in the way of capacity building so they remain viable over the long haul.
— Mitch Nauffts