Comments on: How Much is Philanthropic Advice Worth? http://tacticalphilanthropy.com/2008/08/how-much-is-philanthropic-advice-worth Thu, 08 Jan 2009 21:13:51 +0000 http://wordpress.org/?v=2.7 hourly 1 By: Dave Chakrabarti http://tacticalphilanthropy.com/2008/08/how-much-is-philanthropic-advice-worth/comment-page-1#comment-4295 Dave Chakrabarti Wed, 10 Sep 2008 13:11:30 +0000 http://tacticalphilanthropy.com/2008/08/how-much-is-philanthropic-advice-worth#comment-4295 Agreed. If anything, it bolsters your core argument; some specialized experience is likely required to be able to conduct further levels of analysis, going beyond a benchmark score (not that we have a uniform benchmarking system in place, of course). I need to spend more time around here :) I miss too much with my spotty attendance. Agreed. If anything, it bolsters your core argument; some specialized experience is likely required to be able to conduct further levels of analysis, going beyond a benchmark score (not that we have a uniform benchmarking system in place, of course).

I need to spend more time around here :) I miss too much with my spotty attendance.

]]> By: Sean Stannard-Stockton http://tacticalphilanthropy.com/2008/08/how-much-is-philanthropic-advice-worth/comment-page-1#comment-4294 Sean Stannard-Stockton Wed, 10 Sep 2008 13:05:25 +0000 http://tacticalphilanthropy.com/2008/08/how-much-is-philanthropic-advice-worth#comment-4294 You're right Dave. For simplicity sake, my model assumes static returns and ignores the fact that more funding might change future returns. That's another level of analysis, but it does not counteract my core argument. Your point about collaboration is important an interesting though. For-profit companies are barred from certain kinds of collaboration because doing so can hurt consumers. But nonprofit "monopoly practices" might actually result in more social good. Regarding "nurturing/supporting" nonprofits, there is every room for this in the model (just like there is room for venture capital behavior in for-profit markets). Again, this is another layer of analysis. All good point though. I'll think about building them into future posts (but this post was about as long as I can expect my readers to sit with me!) You’re right Dave. For simplicity sake, my model assumes static returns and ignores the fact that more funding might change future returns.

That’s another level of analysis, but it does not counteract my core argument.

Your point about collaboration is important an interesting though. For-profit companies are barred from certain kinds of collaboration because doing so can hurt consumers. But nonprofit “monopoly practices” might actually result in more social good.

Regarding “nurturing/supporting” nonprofits, there is every room for this in the model (just like there is room for venture capital behavior in for-profit markets). Again, this is another layer of analysis.

All good point though. I’ll think about building them into future posts (but this post was about as long as I can expect my readers to sit with me!)

]]> By: Dave Chakrabarti http://tacticalphilanthropy.com/2008/08/how-much-is-philanthropic-advice-worth/comment-page-1#comment-4291 Dave Chakrabarti Tue, 09 Sep 2008 23:26:15 +0000 http://tacticalphilanthropy.com/2008/08/how-much-is-philanthropic-advice-worth#comment-4291 Sean, I agree with you, but I don't think you went far enough in your analysis; the complexity here is a scale of magnitude greater. You are comparing nonprofits as if they were businesses; meaning that a free market will starve the inefficient of resources while rewarding the efficient. This translates to perfect philanthropic knowledge, leading to rational giving, which rewards the efficient while starving the inefficient. I'm borrowing and translating economics concepts from the for-profit economy heavily here, but I think they apply. The problem is that nonprofits can collaborate as well as compete, and frequently do both. For example, what if organization E could produce a +40% return if they had a strategic marketing consultant donate their services for a month? Take web development as an example. What if an organization currently has a standard HTML website, with 1,000 pages of information? This creates an inefficiency, requiring tons of paid staff time to maintain and update. A $4k donation here that introduces a CMS could actually leverage a *far* greater return on investment, if the content has value. Nonprofit efficiency may not correlate to return on donation investment. Also, what we're describing here are models of support for nonprofits; where is the space for helping / nurturing new nonprofit organizations within this model? Dave. Sean,

I agree with you, but I don’t think you went far enough in your analysis; the complexity here is a scale of magnitude greater.

You are comparing nonprofits as if they were businesses; meaning that a free market will starve the inefficient of resources while rewarding the efficient.

This translates to perfect philanthropic knowledge, leading to rational giving, which rewards the efficient while starving the inefficient. I’m borrowing and translating economics concepts from the for-profit economy heavily here, but I think they apply.

The problem is that nonprofits can collaborate as well as compete, and frequently do both. For example, what if organization E could produce a +40% return if they had a strategic marketing consultant donate their services for a month?

Take web development as an example. What if an organization currently has a standard HTML website, with 1,000 pages of information? This creates an inefficiency, requiring tons of paid staff time to maintain and update. A $4k donation here that introduces a CMS could actually leverage a *far* greater return on investment, if the content has value. Nonprofit efficiency may not correlate to return on donation investment.

Also, what we’re describing here are models of support for nonprofits; where is the space for helping / nurturing new nonprofit organizations within this model?

Dave.

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