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Even donors who get why funding networks makes sense have concerns about the specifics.
The good news is that philanthropy is increasingly aware of the changing landscape in which they make investment decisions and is adopting strategies for increasing impact that include “activating networks.”
From the Monitor Institute’s recent (and excellent) report, “What’s Next for Philanthropy”
Simply stated, philanthropists operate today in a stressful, rapidly evolving, networked, and interdependent world. Although the individual grant is the typical unit of analysis for most foundations, the success of any grant or organization is rarely sufficient to move the needle on a complex problem. We have all felt the irony when successful programs are lauded while the system they aspire to change continues to fail. Funders are well positioned to support connectivity and to coordinate and knit together the pieces of a network of activity that can have impacts far beyond the success of any one grant, grantee, or donor. And advances in network theory and practice now allow funders to be much more deliberate about supporting and participating in networks and in thinking about how the collective impact of a coordinated portfolio of grants can produce more significant change.
Some foundations are getting smart about funding networks and are communicating lessons learned to the wider philanthropic community (among them: the Annie E. Casey Foundation, the Packard Foundation, and the Barr Foundation.
Still, many perceived challenges remain. Typical donor concerns – reasons donors may be hesitant to fund network efforts- include uncertainty about fiscal arrangements and accountability; the upfront investments needed for network development; and issues related to network operations and evaluation.
Typical Funder Concern: Who gets and manages the money?
What This Is About: Donors may only be permitted to fund nonprofits which qualify under regulations of the United States Internal Revenue Service.
Possible ways to address this concern: This is not necessarily a reason for a network to form a 501c3. But it is a reason to select a qualified fiscal agent with a track record of managing foundation grants.
Typical Funder Concern:Who is accountable for results?
What is this about: Networks are perceived to be more flexible and fluid than most organizations. Donors wonder how networks who will account for emergent decisions and actions
Possible ways to address this concern: In addition to educating funders about the advantages of network adaptation, networks may wish to prepare and share MOUs as well as network plans and budgets
Typical Funder Concern:Up front time and resources
What is this about: Creating a firm basis for effective network action may require considerable investments of time and money. It is not easy for donors to make long term flexible commitments in a results-oriented world.
Possible ways to address this concern: In addition to educating funders about network developmental cycles, members may wish to pursue some activities that yield quick tangible results.
Typical Funder Concern: New skills needed
What is this about: The set of skills that support development of networks, such as network weaving, are quite different from those for developing organizations.
Possible ways to address this concern: Sources now exist that describe the fundamentals of effective network practice. Networks can also offer examples from their own experience.
Typical Funder Concern:Knowledge capture systems
What is this about: Funders want to learn from their experience supporting networks but may not know themselves what to look for. They wonder if the knowledge capture systems that a network employs will surface lessons learned that are transferable to other networks.
Possible ways to address this concern: One way to address this concern is to develop robust knowledge capture systems (see below: How to evaluate)
Typical Funder Concern: How to evaluate
What is this about: Some donors may not support networks (or support networks at higher levels) because they believe it is difficult to measure a network’s impact.
Possible ways to address this concern: Ways to assess a network’s impact and evolution include network mapping, network health monitoring and other specialized network evaluation approaches.
Networks, like organizations, wrestle continually with the question of how to keep going. But networks, by their very nature, require different kinds of care and feeding and are presented with unique financial sustainability challenges.
If you are a network with social change mission, your principal resources are likely to come from a combination of sources, including: operating grants, member fees, project fund raising, earned income and/or in- kind contributions. Here’s a description of each source:
Source: Operating Grants
What this is: Grants from donors to cover network operating costs (e.g., coordination, communications, F2F meetings )
When & Why: Funders who play a role in convening a network may underwrite the network’s operating costs for an initial period. But longer term donor commitments – beyond one or two funding cycles – are typically more difficult to secure.
When approaching any donor, be prepared to make the case: What do you achieve as a network that individual member organizations could not achieve alone?
Source: Member fees
What this is: Fee that individual members agree to pay to support network operations (e.g., Annual Membership fee)
When & Why: However small the overall contribution to network budgets, networks should consider this strategy. Member fees signal to outside donors that members are committed and that they derive value from their participation in the network. Some networks use a sliding scale for fees, to address differences in members’ ability to pay.
Source: Project/program grants
What this is: Funds from donors that are project- or program- specific
When & Why: Most donors will support network projects/ programs that are in line with their own mission and strategies, rather than backing network operations.
Projects grant funds can be used to pay part of a network’s general overhead costs.
Source: Earned income
What this is: Fee for service; sales of products produced by network
When & Why: When a network’s members produce value for others (individuals or organizations) it may be able to charge a fee. For example, information products and analysis can be sold.
Source: In-kind contributions
What this is: Non-monetary contributions from members, whether in the form of sweat equity or the result of more formal network agreements.
When & Why: Individual members with specific capacities may enter agreements to provide resources (e.g., space or services) as in-kind contributions to the network.
Many networks calculate the value of in-kind contributions and add this to members’ fees when reporting members’ total contributions to donors.
Intentionally managing members’ connections can strengthen your network.
A network’s connectivity–the number and quality of links between nodes, and the structure of those links–changes over time. To support a network’s development, network stewards intentionally manage this evolution, instead of just letting it happen.
A year ago, we started working with a start-up national network with about 60 members. The connectivity among members, which we measured and then, using special software, mapped graphically, was fairly low–not a surprise since it was a young network. But there was a core of about 11 members who were more densely and intensely connected to each other. The network maps, which place the most connected members at the center of the map, revealed this core of members, as well as those members at the periphery with few connections to others. As a result of the connectivity analysis the network stewards initiated activities aimed at increasing connectivity.
A year later–we just reported in a “state of the network” presentation at the network’s annual meeting–the connectivity building efforts have been a great success. The average number of links among members more than doubled. The intensity of links–what members transact with each other–also increased substantially. And new network maps revealed that the core of highly connected members also more than doubled–even thought there had been a 33% turnover in network membership. Now 25 members form the core or central hub of the network. All of these changes indicate strengthening of the network, revealed and made visible to the members through the use of network mapping.
Why use a network? When it comes to policy-change networks, there are many reasons.
In our work with networks that aim to develop and advocate for public policy changes it’s been useful to lay out the many ways in which building connectivity–networks–can provide change agents with advantages. Here’s an analysis of the ways that building policy networks can help with each of the key steps in the policy-change process:
1. Defining the Issue. Networks can–
• Scan for/retrieve/distribute information and perspectives about issues
• Identify issues that are outside a “mainstream” perspective
• Connect to “distant” expertise that is needed
2. Articulating policy alternatives. Networks can–
• Scan for/retrieve/distribute information
• Assess hypotheses for policy change from multiple perspectives
• Connect to “distant” expertise that is needed
3. Navigating the political rapids. Networks can–
• Identify policy decision makers and movers
• Identify stakeholders/allies, including networks of stakeholders
• Build relationships that allow coalition building and “horse-trading”
• Reach/connect to decision makers and movers in variety of ways (publicly, privately, one-on-one, in mass)
• Increase presence in formal policy making bodies (e.g., government advisory boards)
• Find others to “own” the policy change and lead the charge
4. Recognizing the window of opportunity. Networks can–
• Scan for “early warning” about local policy developments
• Scan for national issue agendas and policy trends that reveal windows
• Maintain contact with key players in policy deciding processes (agenda setters, etc.)
5. Managing mobilization and implementation. Networks can–
• Mobilize critical mass of advocacy voices
• Monitor implementation and effects of policies
• Raise visibility of implementation with stakeholders and media
An evaluation plan recently prepared by Network Impact shows how assessing a network does–and doesn’t–differ from assessing an organization.
The assignment: evaluate the impact of a loose network of 100s of people around the US–on its members and on other people and organizations.
First step–as with an organization evaluation–is to establish the purpose of the network. But then it’s important to understand the form/structure or “shape” of the network, a matter that veers away from organization evaluation. The shape of a network–the ways in which connections/transactions among members distribute and concentrate–affects the functionality of the network. A network built around “key hubs” may be most effective in spreading ideas rapidly and widely whereas a network built around a dense cluster of connections can facilitate the transfer of complex information and promote peer exchange.
What matters next is to determine what the members hold as value propositions for participating in the network. This, too, diverges from an organization evaluation. Even though an organization’s employees will hold value propositions for their work in the organization (they love the mission of the organization; the organization fits their professional path; they need a job), the types of value propositions will be different from those of people voluntarily associated with a network.
Then, it’s on to what is being transacted by members with each other and the degree to which transactions are leveraged through the network to other members. This sort of analysis could be applied to an organization, to learn more about its culture, and the implicit ways in which work gets done. But with a network, it’s an absolutely necessary part of the evaluation, while in an organization it’s more of a discretionary practice.
When looking at the connections among network members, in other words, it’s essential to ask:
• How are connections configured?
• What flows through the connections?
• What is the strength of the connections (intensity, regularity)?
• How to the patterns of connection structure, content, intensity, and outcome evolve over time?
Answering these questions, along with those about members’ value propositions, provides the basic data for evaluating the network. Quite a bit of this data and analysis is not what you’d need to evaluate an organization’s impact.
Third in Network Impact’s series about network evaluation.
Monitoring changes in a network’s member-to-member connections is integral to network evaluation, especially when a network’s performance depends on its evolution (e.g., from low levels of connectivity to higher levels of connectivity, conversion of weak links to strong links, etc.). One way to display information about a network’s evolution is to create network maps We use special mapping software to analyze and visually display the information that we gather about network connections and changes over time. We’ve found that network maps generated in this way reveal patterns that are hard to “see” in the raw data and that are difficult to summarize narratively. (Read more about network structure/shape.)
Network mapping for evaluation purposes can be challenging, however. I was reminded of this recently when I set about mapping ties among homeless service providers in Massachusetts. In this case, pilot efforts to reduce rates of homelessness in the state are being implemented through ten new regional partnerships of many organizations. From the start, our evaluation envisaged the production of ten sets of “before” and “after” regional network maps to demonstrate and compare patterns of network change in relations among the partnering organizations.
We started on the right foot. We added a set of “network connections” questions to an online Network Health Survey that was already in the pipeline (network mapping practice #1: don’t over-survey). We discussed the potential utility of the results with network coordinators – not just the value to the evaluation but also to network members who, we thought, might use the visually compelling network maps to publicize and promote their new ways of working (practice #2: establish salience). We encouraged coordinators to publicize and promote the mapping project (practice #3: pre-notify and follow up with reminders). But, in the end, we were hampered by a low survey response rate from some networks.
In certain kinds of quantitative research, one can make do with a statistical sample. However network mapping of the kind we do requires close to a 100% response rate. We mapped “before” and “after” connections in 6 of the 10 networks and found some interesting patterns. In the other 4 networks, critical information was missing. Any story told in a graphic based on incomplete data would have been misleading.
What went wrong. We delivered our survey by email which has some advantages: people tend to provide longer open-ended responses to e-mail than to other types of surveys; research shows that responses to e-mail surveys tend to be more candid than responses to mail or phone surveys. In this case, however, many of our intended respondents were “fed up” to start with email and, as service providers, were already “over-surveyed” from other sources. (Turns out the problem is wider. The U.S. population as a whole is over-surveyed; response rates in the U.S. for all types and manner of survey are declining as a result). This is something we will pay closer attention to in the future.
At Network Impact, planning starts with network-centric questions.
We’re often asked to help an existing network to plan its future. “”What should we do next?”–to strengthen or expand or sustain the network. Helping networks answer the question–devise their strategies–depends on developing an understanding of the network’s condition. Here are some of the basic questions we ask the network (by interviewing its coordinators and stewards and surveying its members).
• What’s the purpose of the network? Yes, the same question you’d ask if you were working with an organization: Vision, Mission. Some networks have multiple purposes. A network’s purpose may evolve rapidly as its members come to know each other and realize what the potential value may be. If a network says its purpose is peer exchange/learning among members, it’s worth considering that as the network matures this value proposition may by superseded others. When you know the purpose, you can also consider whether the network’s structure (shape of connectivity) is the best one for the purpose.
• What type of network is it? It’s useful to classify a network as either being a connectivity or alignment or production network. (Learn more about these distinctions in Net Gains.) These different types provide different value for members and require different “enabling infrastructure” to support members’ activities.
• What stage of network evolution has the network reached? We have two ways of thinking about the “life cycle” of a network. One is a cycle of birth-to-growth, growth-to-stabilization, stabilization-to-turbulence, and turbulence-to-either-decline-or-transformation. Start-up networks have different needs and potential from mature, stable networks. Our second framework goes back to the connectivity-alignment-production model. All networks have a foundation of connectivity, but some of the evolve into alignment networks, and some alignment networks evolve into production networks. (Learn more about this model of network evolution.) An alignment network that is expanding requires a different set of strategies than a production network that is in turbulence.
• What are its members most important value propositions? How good do they feel about the value they are getting from participating in the network?It’s essential to be clear about members’ value propositions–the motivating forces behind the network’s energy–and to know how members feel their VPs are being addressed. (Read more about identifying and measuring value propositions.)
• What degree of connectivity do its members share? And what is the “shape” of the connectivity? Connectivity is the lifeblood of a network. But connections among members will vary. Some members will connect frequently with each other. others will connect infrequently. Some will connect with many other members, some with just a few. The patterns of connectivity can be mapped and analyzed, and this becomes the basis for strategies to strengthen connectivity. With one network, we asked members if they had talked with, met with, or collaborated on a project with other members–different intensities of connection. This allowed us to map not just who linked to who, but also some of the quality of the connectivity.
• What is being transacted (what flows) between members? When you know what the network’s members are doing with each other–whether it’s a network-sponsored activity or something some members just decided to do, the network can decide whether it wants to dedicate resources to enabling others to participate. If, for instance, a national network finds that some of its members are working on creating local networks of the same sort, it can decide to help them and others do this, or it can decide not to. Members’ transactions reveal opportunities for the network to provide more value.
To help networks do some of this planning work on their own we developed a self-assessment tool, the Network Health Assessment Scorecard, which can be used by network members to provide feedback and generate a where-do-we-stand conversation within the network.
At Network Impact, we’ve been arguing for this for several years. A fascinating new report from the Monitor Institute picks up the theme.
The Monitor Institute’s recent (and excellent) report, “What’s Next for Philanthropy,” describes the changing strategic landscape in which foundations make their investment decisions–and urges philanthropists to adopt a new set of practices for increasing their impact that includes “activating networks.” Monitor’s reasoning: “Advances in network theory and practice now allow funders to be more deliberate about supporting connectivity, coordinating networks, and thinking about how the collective impact of all of their efforts can produce change far beyond the success of any single grant, grantee, or donor.”
Yes, indeed! Madeleine Taylor and I made this point in our first report on networks,”Network Power for Philanthropy and Nonprofits,” in 2004. With financial and intellectual support from the Barr Foundation in Boston, we identified numerous examples of social innovators using network approaches to generate impact, dissected the theories of networks, framed the practices of network building, and suggested ways that the social-change sector could accelerate and spread the use of networks to increase social impact. More recently, as we’ve seen foundations become more interested in network building, we wrote a short paper on what foundations should worry about and expect when they start investing in social change networks.
Monitor’s report offers a compelling, spot-on paradigm shift for foundations:
Simply stated, philanthropists operate today in a stressful, rapidly evolving, networked, and interdependent world.
Many of philanthropy’s core practices and principles remain essentially unchanged from the way they were a hundred years ago, when Andrew Carnegie and John D. Rockefeller first created the foundation form. As we and other observers have been noting for some time, the world around philanthropy is changing much, much faster than philanthropy itself…
…Where the cutting edge of philanthropic innovation over the last decade was mostly about improving organizational effectiveness, efficiency, and responsiveness, we believe that the work of the next 10 years will have to build on those efforts to include an additional focus on coordination and adaptation. Coordination, because given the scale and social complexity of the challenges they face, funders will increasingly look to other actors, both in philanthropy and across sectors, to activate sufficient resources to make sustainable progress on issues of shared concern. No private funder alone, not even Bill Gates, has the resources and reach required to move the needle on our most pressing and intractable problems. And adaptation, because given the pace of change today, funders will need to get smarter more quickly, incorporating the best available data and knowledge about what is working and regularly adjusting what they do to add value amidst the dynamic circumstances we all face.
Monitor’s summary of why networks matter in this changing world focuses on the need for greater coordination and leveraging of resources to achieve systemic impact–and what a big change in practice this is for foundations: Although the individual grant is the typical unit of analysis for most foundations, the success of any grant or organization is rarely sufficient to move the needle on a complex problem. We have all felt the irony when successful programs are lauded while the system they aspire to change continues to fail. Funders are well positioned to support connectivity and to coordinate and knit together the pieces of a network of activity that can have impacts far beyond the success of any one grant, grantee, or donor. And advances in network theory and practice now allow funders to be much more deliberate about supporting and participating in networks and in thinking about how the collective impact of a coordinated portfolio of grants can produce more significant change. These very advances in network practice–the art of building, growing, and maintaining various types of networks–are the focus of our consulting, tool-building, and research work at Network Impact.
Clay Shirkey, a champion of network approaches, sees a new revolution coming.
Here is Shirkey’s fascinating insight, offered in an interview in the June 2010 issue of WIRED:
“People have had lots of free time for as long as there’s been an industrialized world. But that free time has mainly been something to be used up rather than used, especially in postwar America, with the rise of suburbanization and long commutes. Suddenly we no longer lived in tight-knit communities and therefore we spent less time interacting face-to-face. As a result, we ended up spending the bulk of our free time watching television…
Someone born in 1960 has watched something like 50,000 hours of television already–more than five and a half solid years…”
Somehow, watching television became a part-time job for every citizen in the developed world. But once we stop thinking of all that time as individual minutes to be whiled away and start thinking of it as a social asset that can be harnessed, it all looks very different. The buildup of this free time among the world’s educated population–maybe a trillion hours per year–is a new resource. It’s what I refer to as the cognitive surplus.”
Shirkey further argues that as watching television, a solitary activity, is replaced by the use of technologies that promote social connection, there is a growing demand and ability for shared and productive activity.
“When someone buys a computer or mobile phone, the number of consumers and producers both increase by one. This lets ordinary citizens, who’ve been previously locked out, pool their free time for activities they like and care about. So instead of free time seeping away in front of the television set, the cognitive surplus is going to be poured into everything from goofy enterprises like lolcats, where people stick captions on cat photos, to serious political activities like Usahahidi.com, where people report human rights abuses.”
In short, the cognitive surplus will feed the process, already begun, of social networks of various sorts using technologies that support/enhance/ease connectivity to align around particular ideas and identities and then produce value. An idea that Shirkey explores in his new book, Cognitive Surplus: Creativity and Generosity in a Connected Age.
But what a network’s members care about can be complicated. Just ask the Urban Sustainability Directors Network.
Knowing what network members want from each other and want to give to each other, and delivering on these “value propositions” makes or breaks a network. “If there’s no value,” says Bill Traynor, one of our favorite network builders, “people will start to exit. It’s a self-regulating system.” That’s pretty straightforward, but actually understanding and monitoring the members’ value propositions (VPs) is quite complicated. A member may embrace more than one proposition; different members may embrace different propositions; and what members care about may change over time. Given this complexity and dynamism, it’s worthwhile to check in on a network’s value propositions fairly regularly, not just when starting up the network.
One network we work with–the Urban Sustainability Directors Network (USDN), with about 70 members, each in a different city in the U.S. and Canada–conducted a value proposition check earlier this year. It asked members about nine distinct value propositions (VPs) that had been previously identified by members during their annual meeting. First members were asked to select and rank their three most important value propositions for continuing participation in the network. Then they were asked to score how well the network had been doing in the past year on delivering on their top-priority value propositions.
The results were illuminating and significantly influenced the network’s strategy for the next year.
• Of the nine VPs, 2 collected most of the #1 priority votes: “Getting to know many colleagues with similar jobs and with whom I can share” and “Having access to trusted information about issues and models.” As the summary of findings reported: It’s all about connecting to peers and quality information. Period. Nothing is in 3rdplace even. And this result was consistent with what the members had said a year earlier–a good sign that the network was on the right track.
• When it came to those two top value propositions, majorities of the members reported that the network was “delivering very well for me.” But nearly a third of members said the network’s delivery “could be improved”–and that triggered alarm bells that led network organizers to focus on improving and increasing specific network activities.
• Looking at several of the lower priority value propositions, it was noticeable that sizeable minorities of the membership reported they saw opportunities for participation but were not using them. That finding also prompted a refocus on members who had not become very active in the variety of network activities. They were contacted to find out more about how the network could better meet their needs.
As a result of its survey of members, the network has solid baseline information about the VP drivers of the network–and was able to tweak some of its plans to boost the network’s response to what its members value. It created a new service, the “small group discussion marketplace,” because some members wanted more opportunities to interact in smaller groups.