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Chapter 2: Power of Resources

Philanthropy Requires Human Talent

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People make the difference. The word philanthropy is based on the Greek words meaning “love of mankind” (humanity).

In Michigan, there was the happy confluence of mature, talented, and committed leaders in key institutions to champion the development of the third sector in the state. Where these leaders perceived problems or gaps in service, they created new institutions to focus on specific tasks. Instead of controlling these new organizations or expanding the scale of their own power, decisions were made to develop new and focused institutions. Leaders of these new institutions were embraced and mentored in the values of cooperation and collaboration. Members of the founding institutions continued to be involved as advocates, board members, and supporters of the new institutions. An attitude prevailed that conveyed these two sentiments – “this is how we do things in Michigan” and “welcome to the family.” Find out more about the history of philanthropy in Chapter 1, Defining Philanthropy.

This human capital included action in the following areas:

  1. Engagement of individuals with personal and positional authority;
  2. Empowerment and support of motivated project managers;
  3. Linked and networked relationships within a system;
  4. Role clarity and management; and
  5. Development of the next generation of leaders.

 

VideoVideo: See leaders discuss human capital in philanthropy.

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1. Engagement of Individuals with Personal and Positional Authority

Talented individuals have been involved at every level in pulling Michigan together as a philanthropic community. The depth and diversity of leadership, changes in leadership over time, the scale and complexity of the third sector, and the many initiatives and projects that were championed by different people make it nearly impossible to recognize everyone who is deserving of recognition.

Certainly, all would agree that the partnership and common vision for a strong philanthropic sector forged between the Council of Michigan Foundations (CMF) and the W.K. Kellogg Foundation (WKKF) was an institutional factor. Perhaps, more importantly, the skilled, humble, and tireless leadership of Dorothy A. Johnson, long-time president and CEO of CMF, and Russell G. Mawby, past president, CEO, and chairman of the board of the W.K. Kellogg Foundation, has had a profound impact on the philanthropic culture and its success in the state. These individuals subscribe to a power and values model that is framed in “servant leadership”. They expected no less of those working at CMF and WKKF, and drew others into the culture of cooperation through their enthusiasm and optimism.

VideoVideo: See leaders discuss Russ Mawby’s and Dottie Johnson’s leadership styles.

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A key to the success of CMF was the engagement of donors and foundation trustees as founders and board members. While foundation staff members frequently become representatives for their institutional interests, CMF was the institution of, and for, the donors and board members. In practical terms, this meant that decisions could be made at the CMF board meeting. A staff member did not need to go back to their board for approval or discussion. Because the board member or donor was engaged at CMF, they could return to their own foundation as an advocate for common action. Exposed to the same information at the CMF annual conferences, workshops, and seminars, this cross-fertilization of ideas and engagement of donors helped to build networks among donors and achieve consensus on common state agendas.

VideoVideo: See Dave Campbell discuss the value of a common exposure to ideas.

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Across Michigan foundations, program officers engaged with communities, grantees, and project initiatives. With the authority and power of a grantmaker, they generated interest in a project simply by attending meetings. As content experts, they also participated in problem solving. They helped create initiatives. Because of their education, experience, broad view, and national links to leading research and thinking, they brought new ideas for consideration. For more information on how these leaders worked together, visit Chapter 1.

Program officers (PO) demonstrated an ability to listen, to guide, and did not demand that their solution was the one to be implemented. At the table, the attitude was one of “let’s roll up our sleeves and solve this thing together.” A particular strength of the POs was the ability to discern qualities of leadership in local nonprofits and individuals that might come “packaged” in a variety of racial, ethnic, socio-economic, gender, cultural, and community “styles.” Michigan is a big and diverse state. POs had the maturity to look past regional and other differences, partly because they were out of their offices and directly involved in community action. A trust relationship was developed over time that tolerated honest failure and recast it as a learned lesson. Success was rewarded with another challenge or opportunity, and a partnership with a “can do” attitude was built.

VideoVideo: See leaders discuss the variety of leadership in Michigan philanthropy.

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Michigan governmental leaders also offered a shoulder to the work of building a successful philanthropic sector. Individual legislators, their staff members, four consecutive Michigan governors (both Republican and Democratic), the attorneys’ general of the state (regulators), local municipality leaders, and even the spouses of the Michigan governors have actively used their institutional and personal power to encourage the sector.

capitol2A particularly effective partnership was established for the passage of the Michigan Community Foundation Tax Credit for gifts to community foundations. The state of Michigan passed this groundbreaking legislation to encourage smaller donors to make endowment-building gifts to their local community foundations – which created a pool of local capital that would continue to work in communities over time.

The W.K. Kellogg Foundation challenge grant for the Michigan Community Foundations’ Youth Project leveraged matched individual endowment gifts (unrestricted or field of interest) made by local donors. Several municipalities converted their civic funds to community foundations to take advantage of the Michigan Community Foundation Tax Credit and the challenge grant program. Local nonprofits established funds in their community foundation – to build institutional endowment, to take advantage of the tax credit for their organization, and to build the capacity of their community foundation. New local donors were drawn to endowment giving for their community, either for their favorite nonprofit or to build permanent community assets.

This was the first known tax credit offered for donors to community foundations in the world. Institutional and foundation leaders in Michigan simply worked it out, took the risk, evaluated, and adjusted based on what was learned from the implementation. The passage of the Michigan Community Foundation Tax Credit brought together a combination of people, in positions of power at every level in the state, who worked together toward a common vision.

It should be noted that the Michigan Community Foundation Tax Credit was not “strategic” or “focused” or “targeted” on any one of the myriad of problems faced in Michigan. The purpose was the encouragement of charitable investments at the community level – permanently – at the discretion of the donor whether to be unrestricted/field of interest, or to be restricted to their own individual nonprofit organization. The purpose was to promote philanthropy itself.

Another extraordinary partnership was forged with the funding of the ConnectMichigan Alliance (CMA) that built a $20 million endowment from a public (state of Michigan $10 million challenge grant), private ($10 million in foundation, corporation, and individual matching gifts) partnership. What is extraordinary is that the ConnectMichigan Alliance didn’t exist as an organization at the time. It was an idea for a joint venture proposed by the Michigan Nonprofit Association and the Michigan Community Service Commission. Both the government and the foundations believed in the vision of what CMA could do for the state of Michigan to encourage and support the volunteer sector. The most difficult charitable dollars to raise (a $20 million permanent endowment), acquired in a politically complicated way (a public/private partnership), was accomplished relatively quickly and successfully. A common and clear vision, active engagement, trust, and leadership at many institutions made the difference.

VideoVideo: See Dr. John Lore talk about raising funds for the ConnectMichigan Alliance.

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Once established, the ConnectMichigan Alliance took over management of the Volunteer Centers of Michigan (championed by former Governors Romney and Engler) and Campus Compact. Thus the framework to support further infusion of human capital was created. Volunteers at the local level found a voice, home, and coordination of effort. The ConnectMichigan Alliance was merged into the Michigan Nonprofit Association in 2007.

2. Empowerment and Support of Motivated Project Managers

For every major project in Michigan, there has been at least one paid professional out in the field doing the work to implement and enhance the project. The foundation funders, senior organizational leaders, and boards created an environment that supported and empowered a group of motivated, experienced, engaged, and committed professionals.

While the boards and funders framed the vision for what outcomes would be achieved (often “big, hairy, audacious goals”), the people hired to do the work were given significant leeway for creative and formative freedom in implementation. The focus was on the outcome, not on the process.

VideoVideo: See leaders discuss the value of big vision and fearless leadership.

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It was not unusual (in fact, more common than not) for the career professionals in Michigan’s philanthropic infrastructure to have moved from one project and institution to another. With vetted credentials and histories of success, the foundations and senior leaders have had confidence in the skills of the person being hired to lead a vulnerable new venture. The career professional gains additional skills and personal capital through experience. They knew the history, the people, the relationships, the traps, and the politics. Like a patina, character and reputation is formed over time. The career professionals that have led the work appear in different places throughout Michigan’s philanthropic landscape.

These professionals continue to engage in servant leadership behavior. While hired by boards, or supervised by busy senior leaders, or engaged with active advisory committees, the staff member has more information than anyone else in the endeavor. Yet, the board, supervisor, or advisor needs to make the final and informed policy decisions. Career professionals lead by providing recommendations and information – they discuss, inform, demonstrate, and give examples; they write briefings and create charts and graphs. They make sure the policy maker has all of the information needed – and a specific recommendation to consider – when a decision must be made.

3. Linked and Networked Relationships within a System

networksMuch ado has been made in recent years about networked and linked communications and relationships. The Internet has brought this organizational model into the mainstream of management thinking – as if it were a new concept.

Michigan philanthropy has been increasingly linked and networked in a web of strong relationships for over 40 years. This human relationship web is porous, allowing for easy entrance for new players and exit for old players in the system. In fact, new foundations and nonprofits are actively promoted, recruited, and encouraged to become involved at the local, state, and national levels.

Michigan’s philanthropy and leaders of large nonprofits know one another. At the local level, the community foundations and their nonprofit leaders work together. While not necessarily personal friends, they are professional friends and colleagues. There is considerable interaction, informal communication, friendly banter, and collegiality.

VideoVideo: See leaders discuss the value of relationships and trust.

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The annual Council of Michigan Foundations (CMF) Conference provides one place where the foundation community comes together at least once a year. The annual SuperConference, sponsored by the Michigan Nonprofit Association (MNA) and CMF, provides another major event that is attended by leaders of the state’s nonprofit organizations and foundations. There are numerous projects where the same core cluster of individuals and organizations are involved, certainly in differing configurations based on the project. It is not unusual to attend several meetings with the same basic group of people, with each meeting working on a different initiative.

The four major infrastructure organizations (CMF, MNA, Michigan Community Service Commission (MCSC), and the Dorothy A. Johnson Center for Philanthropy (Johnson Center)) consciously pursue staff relationships, overlapping board service, and common project agendas in order to facilitate and nurture the bonds of relationships. Find out how all four of these organizations were built in Chapter 4.

VideoVideo: See leaders discuss the philanthropic network created by the four partner organizations.

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The four partners share knowledge regarding the work of each organization. They help shape each other’s vision/mission/program and provide full transparency of organizational business. These practices assist in managing any emergent conflict and create synergies between and among the organizations. Rather than a perception that each organization is individually the “center of the world,” there is an understanding that instead, each is a critical part of a larger and more complex philanthropic community. Each has a role to play. The health of each one is important to the other partners.

While electronic communication has increased the use of video conferencing, conference calls, webinars, and other time-saving technologies, there is still a lot of face-to-face interaction that facilitates relationships. In the bonds of relationships, there comes a level of trust that supports individuals and institutions, making it possible to take on risks together. Common work toward a greater vision. Personal and institutional trust. Transparency. Distinctive roles. Frequent communication and interaction. The networked and linked community of people is an important ingredient of the Michigan experience.

4. Role Clarity and Management

By modeling constructive behavior, Michigan’s philanthropic leaders have taught their employees and peers how to distinguish between a person (and their talents) and the roles each person may play, as assigned by their organization. It is not unusual for person “A” to be a board member and in a position of power over the career of person “B” at one meeting, and then to go to another meeting where person “B” is the grantmaker for a project that is led by person “A.” Find out more about how leaders networked and collaborated in Chapter 1 — Play Well with Others

How does it work? It works very well. It works because the individuals involved make a distinction between who they are and the roles they play. As a board member, each has fiduciary duties of care, loyalty, obedience, and financial oversight. When a person is on one of the legal or advisory boards, they put on their board member “hat.” When they are serving in a staff role, they fulfill the job of a staff member. When they are a grantmaker on a committee, they serve as a committee member. But when they are in their grantmaking role, they conduct their fiduciary and oversight responsibilities as a grantmaker.

VideoVideo: See leaders discuss wearing “multiple hats” in philanthropic leadership.

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When there is a common agenda and everyone is working toward the same goals… When there is transparency of information… When there are personal respect and trust relationships… When there is maturity and experience… When it doesn’t matter who gets the credit and everyone is oriented to service… THEN individuals can play a variety of roles within the overall complex and large statewide collaborative system.

There are times when the network doesn’t work perfectly. Some people have difficulty adapting to the give and take that this working environment requires. Some people need to be seen as “the leaders” at all times and in all situations. Others find the role changes disorienting. For those folks, working in Michigan’s charitable sector can be confusing and they can fail.

The system also works because it isn’t a closed network. On a board of 24, for example, two or three people may be networked and have overlapping roles to one another and the organization… but the other 21 board members will be totally outside of this particular network of relationships. A funder may have a grant with one of the nonprofits and serve as an advisor… but there will be other foundation folks who are not funders who sit on the same advisory committee. In other words, there are natural checks and balances on behavior that assist the function of the network by being outside of the network.

5. Development of the Next Generation of Leaders

In a field dependent on the talents, knowledge, values, and experiences of individuals, it is imperative that each generation of leaders has the opportunity to learn what they need to know in order to succeed. As they succeed, so will the field.

VideoVideo: See leaders discuss the value of mentoring the next generation of philanthropic leaders.

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Michigan has created a system supporting an individual’s participation in philanthropy from kindergarten through old age. At each stage in life there is a supporting structure or institution that mentors a volunteer or donor, appropriate to their age and experience.

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The Council of Michigan Foundations (CMF) works with family foundations, including children at the very youngest ages. CMF also is implementing a K-12 curriculum in philanthropy that is deeply infused into the core curriculum of schools. The Michigan Nonprofit Association implements the Michigan K-12 philanthropy education program called The LEAGUE Michigan. Since 1988, Michigan’s young people have learned hands-on philanthropic leadership with their local community foundations through permanently endowed youth advisory committees launched by the Michigan Community Foundations’ Youth Project (MCFYP). Every year, another cohort joins their ranks. CMF also offers a special opportunity through the Mawby Fund for Kids Summer Internship, providing a paid position and responsibility for planning the summer leadership training for members of community foundation youth advisory committees.

The Michigan Nonprofit Association provides opportunities for mentorship at the college level for young adults in a higher education setting through Campus Compact. For college students interested in a career in government or the nonprofit sector, there is an undergraduate program in nonprofit leadership; a master’s degree in public administration with a concentration in nonprofit studies; and a master’s in philanthropy and nonprofit leadership from the School of Public, Nonprofit and Health Administration at Grand Valley State University. Mawby Fellowships become available on an annual basis for Grand Valley State University faculty and undergraduates through the Dorothy A. Johnson Center for Philanthropy. Orosz and Agard Fellowships also fund young scholars and future nonprofit leaders at the Johnson Center.

The Michigan Community Service Commission engages young adults through AmeriCorps and VISTA opportunities, made available for people of all ages who wish to commit to a year or more of service. The non-college bound young adult has the alternative to volunteer and to be supported by either AmeriCorps, VISTA, or their local volunteer center.

Volunteer centers, a component of the Michigan Nonprofit Association, support volunteering for all adults. Continuing professional development for foundation staff is available through The Grantmaking School at the Johnson Center and through CMF’s professional development workshops. Continuing education for nonprofit board members and staff through the Johnson Center’s Herbert H. and Grace A. Dow Foundation Nonprofit Services and the Michigan Nonprofit Association (MNA) is provided on a regular basis. There is a commitment to the transfer of the philanthropic tradition, and the essential skills of leadership, to the next generation. Find out more about the development of each of these projects, their growth, and expansion in Chapter 4.

VideoVideo: See leaders discuss the mission of the Michigan Community Foundations’ Youth Project.

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Over the past 40 years, these efforts have resulted in “home grown leadership” that understands and values the charitable sector. The Michigan Community Foundations’ Youth Project (MCFYP) has been replicated nationally and internationally. Learning to Give is underway in Japan, Korea, and Bulgaria. AmeriCorps and VISTA are nationally-led programs being implemented in Michigan. The Johnson Center is a member of the Nonprofit Academic Centers Council (NACC), representing the formal academic programs in nonprofit leadership and philanthropic studies in the nation.

Philanthropy is a “people” business. Literally, by definition, it is about loving people. Michigan has benefited from having organizational leaders who used their positional power with humility, strength, and maturity. Everyone was brought into the decision process. Everyone received credit. A sense of “team” existed at all levels.

Issues Involved in the People Business

In a system dependent on individuals, hiring, orientation, and ongoing professional development becomes even more critically important than it might be in another type of endeavor. Only recently has a philanthropic professional track emerged in the academy. Still, nonprofit and foundation leaders typically come from very divergent backgrounds. In particular, many recent recruits at the board and staff level have backgrounds in the for-profit sector, bringing with them a different mindset than that of individuals who have worked within the charitable sector. While this diversity can lead to creativity, it also can result in misunderstandings and conflict.

By definition, the nonprofit sector handles issues for which there is not a profit motive, profit incentives, or even enough money to make a profit. Yet those new to the field, coming from the competitive world of business, enter with a belief that profit is a major goal for an enterprise and a major motivating factor for change. The language of business has permeated the charitable sector. Individuals in need, or major funders, become “customers.” Marketing, public relations, and sales are underscored. A numerical standard for efficiency and a quantitative measure for success are emphasized. The “mental model” developed in competitive business has been allowed to trump the compassion model of the charitable sector.

VideoVideo: See leaders discuss the balance between giving and the business model.

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At the launch of Learning to Give, one high school classroom teacher gave an example of this problem. One of her students had gone to the high school guidance counselor for career and college advice. The counselor asked the student what he wanted to do in his life. The student replied that he was called to be a protestant minister. The high school counselor replied, too quickly and thoughtlessly, “There’s no money in that.”

Who participates in the charitable field… What experiences and mental models they bring to their work… Their natural skills, academic backgrounds, and understanding of the philanthropic field… ALL make a huge difference in the character of the third sector for future generations. It’s all about the people.

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