Many non-profits and foundations fall into this trap as they are more about the founders or funders than they are about the beneficiaries.

In essence, nearly all charities are one-way engines (I give money to NGO; NGO gives services to beneficiaries) with no feedback loop - like Customer Satisfaction in the business world (which became standard with JD Power).

The best social enterprises, citizen-sector organizations (the new name for non-profits), and sustainable businesses focus on two-way systems — that is the beneficiary/customer is first, all is organized around satisfying them, and typically there is a revenue stream that someone is paying for. e.g. public charter schools paid for by the school district, health care services paid for by foundations or the user, environmental carbon offsets bought by business revenue.

In addition, Human Impact is rarely tracked (like Health, Wealth, Earth and Equality). Since there are few outcome measures about results, there is no scorecard. Without tracking impact, or even customer satisfaction, it is hard to judge efficiency or effectiveness (other than outdated metrics like overhead).

HIP Investor (my firm) created a scorecard for business, social and government organizations to measure their outcomes/results, link it to profit or economic viability, and how one relates to the other.

Until we have comparables about who best serves the beneficiary/customer, how that is financed by revenue not grants, and how to track impact per invesmtent unit, the non-profit/foundation world will struggle along.

Kudos to Warren Buffett for not setting up yet another independent unit with a unique mission, but pile on to Gates Foundation to accelerate work that is at scale and quite focused.

Thanks to Cheryl for Fast Company’s Social Capitalists that will recognize for-profit businesses as well as non-profit social entrepreneurs.

Ok, I’ll admit to straying into a bit of a rant there. I do not mean to say that foundations do not play a worthwhile role or their work is not meaningful and worthwhile. What I’m saying is that foundations doing business as usual is a tough sell as a story. Business as usual means that the organization is giving away money and it’s having an effect.. that is the EXPECTED course. That makes it a tough sell, as the whole premise of newsworthiness is based on:

–is it unexpected?
–is it unique?
–is is biggest or first?
–are there famous or celebrity players involved (I hate this one, but is IS a lens)
–is the impact greater/better/different?

That last one is the toughest to prove, which is why you’ll see more reporters hanging stories on the other four criteria. (And, by the way, that is why the scandal story is the easiest sell. The counterintuitive hook of a “do-good” organization running afoul of ethics in some way is a slam dunk.)

In order for me to write about a foundation’s good work, I need to be able to set it apart. In theory that would require looking at its whole portfolio and being able to draw conclusions about their overall impact, compared with other foundations. The lack of transparency of the field prevents me from individually making that kind of comparison in a meaningful way. And so far, no external analyst function or shared performance metrics let me get at it.

So, I would say this: foundations need to help reporters figure out how to sell these stories of good work in a way that meets newsworthiness criteria. Help build a context …. and be willing to provide on the record sources willing to speak comparatively. This has been a big sticking point for me. I’d have written a story about the above points long ago, but (not surprisingly) few want to go on the record sharing their critiques of foundations… particularly if that’s how they’re funded.

Hope this is helpful. I would be open to a further conversation on how to help foundations sell stories.

I would probably write about foundations more frequently if I more commonly stumbled across innovation among their ranks. In the almost ten years I’ve been covering social entrepreneurship and the non-profit sector, I can name very few potentially game-changing innovations that have come out of foundations: venture philanthropy, venture funds (a la Rockefeller’s ProVeNex Fund or Google Foundation), and more broadly the movement toward http://blendedvalue.org/media/pdf-money-meets-mission.pdf/” rel=”nofollow”> investing endowments to eliminate the hypocrisy (PDF) of funding non-profits to fight social and environmental ills while buying the stocks of companies contributing to those problems.

The number of foundations engaged in these practices is pretty small. The bulk of the sector seems content to be:

–Completely unaccountable for the “social returns” on its donations. How many foundations develop sound metrics for the progress they’re accomplishing — without a wrongheaded transference of the burden onto the non-profits in which they invest?

–Completely unresponsive to their “customer base” of non-profits. The cost to non-profits of chasing money – because the sector has not made a significant enough effort to streamline grant application, share information, or cooperate in any meaningful fashion – is shameful. Add to that the degree to which foundations tug organizations off mission to satisfy internal agendas, and you begin to see how much damage foundations actually cause.

–Unaccountable for the overhead they spend to find and make investments. I know of no other industry that re-invents the wheel with such relish. How about sharing some due diligence? Anyone?

–So afraid of failure that they continually play small, hide unsuccessful investments (which could produce great lessons learned) and virtually conspire to overlook terrific opportunities for collaboration.

–More interested in building their own brands or bolstering their own flavor of the month approach to investment than in building great non-profits that can scale. (The whole movement around investment in capacity building is an antidote to this.)

Here’s what I’d like to write about:

–A coalition of foundations who decide their next big thing is to choose the best solutions in three areas — homelessness, early education and climate change –- and then pool their fund behind common metrics and organizations. These would be big bets…at least $50 mil grants.. and organized much the way that so-called non-profit private placements have been set up. Find the proven solutions. Scale them. Fail gloriously in some cases so we can figure out what to try next.

–More spend-down foundations. I would love to see more foundations incented by making the boldest change and biggest leap forward they can in a short period of time than a fleet of organizations motivated to stay in business by playing small.

–Rampant socially responsible investing (SRI). In an age when so many hybrid organizations and for profit organizations with social missions are languishing for lack of capital, it’s criminal that foundations manage their endowments as they do.

All that being said… I agree with you that there are some smart foundations making wise investments in good programs. But handouts that wind up in the right pockets (without a game-changing approach) isn’t really a story to me.

I would be delighted to hear about good stuff I’m overlooking.

You’re right that talking to foundations is a good place to start. But since they also have a vested interest in their grantees looking good, it is just a place to start. The next step is looking at metrics, comparable organizations, theories of change, etc. All of which is doable.

One of the hitches there is that doing this sort of due diligence requires expertise that most publications do not encourage a reporter to spend time accruing. Learning about the telecom business? Knock yourself out. That’s a *real* industry. Want to research microfinance and its impact on poverty? That’s “soft” stuff.

There are a whole set of knee-jerk reactions that editors and writers have to certain topics as “soft” or not real reporting. If you write about good news, you’re seen as being a PR person or a patsy. Criticism is unfortunately equated with critical thinking, which it clearly is not.

I often wonder not just how media would be different, but how the *world* might be different if every newspaper or magazine had a social innovation beat…

I’m not sure a taboo against criticizing non-profits (at least on the part of the media) is as much of a problem as the fact that defining “success” (and crediting the cause) in the world of fighting social ills is much more complex than it is to keep score in the business world. As a business reporter, when I write about for-profit companies, the stock price, the profits, these “hard” measures of quantifiable progress are easy to use as proof of performance. (Though it is true that they are not perfect measures, either.) So the evolution of metrics that can quantify social return is critical. That takes some energy on the part of non-profits to tell their story differently, as well as on the part of the reporter, who must be willing to understand the framework of a social problem and the theory of change behind any given effort.

It also takes money from foundations and other places to put into the studies and projects that can produce accurate metrics. Longitudinal studies tend to receive about the same level of enthusiasm from some foundations as capacity investment.

I think one of the bigger problems, actually, is that reporters don’t know how to write stories with good outcomes using a storytelling method that incorporate compelling narrative. Negative stories have built-in conflict. You have to search harder with positive stories for the drama. (By the way, I am collecting a file of examples of these types of stories done well, so anyone with suggestions, please pass them along.) Most reporters don’t try.. so they hand in the fluffy and uncompelling “Do-Gooder Does Good” piece (YAAAWN!!), the editor grimaces and gets another reinforcement to the “let’s leave this stuff for the holidays when people need their annual dose of saccharine” attitude.

But I’d like to see coverage go one step further, and discuss not just activities but results. Instead of hearing about how much Gates is spending to fight malaria, let’s hear about whether malaria is getting better or worse.

I think that covering charity in this way would make it interesting, relevant, and newsworthy more than once a year. I think the reason this isn’t currently happening is because of a seemingly universal taboo on *criticizing* charities.

A success story isn’t interesting unless it could have been a failure story (see sports). As long as charities are immune to controversy … they’re also going to be boring. Charities’ fundraising materials and press releases consist of generalizations and glosses over all failures … then they whine that nobody finds this interesting. Can’t have it both ways.

I would argue that if enterprising journalists took more time to explore the foundation world by looking at what individual institutions are doing, and made the effort to learn what separates one foundation from the other, as well as what they are accomplishing (or not), how they go about their work, etc., they would see a sector that merits far more coverage than it receives today. There’s no reason the news media can’t make a larger effort to do for the foundation sector what they do for other sectors of our society: examine, probe, report, comment, and generally try to help the broader public understand what these organizations do and why they do it. I also believe if that kind of concerted effort was made, journalists would find some very good and compelling stories worth telling, and stories that go far beyond the more typical reporting about how much foundations are giving to which causes.

At the same time, I don’t blame journalists for their lack of interest or reluctance in covering foundations. We in the foundation world know we haven’t done the best job we can to invite that kind of routine coverage and scrutiny. But, I promise we’re working on that!