Foundation News —Chip Edelsberg

Foundation News
—Chip Edelsberg, Executive Director

March 2009

There has been a spate of articles lately debating the advisability of non-profits embracing business practices. This discussion is not new, but at the moment it is particularly heated due to the abysmal performance of the private sector, the collapse of major Fortune 500 companies, and the much publicized avarice of any number of wealthy corporate executives.

From the Jim Joseph Foundation (JJF) perspective—one I conjecture is shared by many of our foundation peers—Jim Collins’ Good to Great and the Social Sectors offers the most penetrating analysis of the relevancy of business ethos to non-profit enterprise. Collins’ makes a persuasive case for “greatness” which he argues exists in both corporate and independent sectors. He asserts that “the cornerstone of a culture that creates greatness” is generated by “disciplined people who engage in disciplined thought and who take disciplined action.” Collins refutes the contention that the formula for non-profits achieving greatness is to emulate business: “We must reject the idea—well-intentioned but dead wrong—that the primary path to greatness in the social sectors is to become ‘more like a business’.”

We have observed that JJF grantees who are sustaining a disciplined focus on achieving intended results do, in fact, selectively adapt business tools to their work. Strategic and business planning, benchmarking, forecasting, customer/client satisfaction surveying, studying key market price point issues, systematically funding an operating reserve—these and other practices generate decision-making data that inform best practice. In instances where JJF determines that a grantee might benefit from application of a tool that the grantee is not currently using, we do not hesitate to recommend that the grantee consider its potential benefit.

Internally, in an effort to operate at a level which ensures JJF’s due diligence on every prospective grantee is rigorous, we have taken a number of steps. We involve the foundation’s CFO in reviews of financial statements that grant seekers submit. JJF’s grant making professionals read pertinent literature in the field and actively apply it to our work. We just completed a staff training with the Non Profit Finance Fund (JJF’s CFO and controller joined the program staff at this session) designed to improve our skills in analyzing non-profit organization financials.

My personal belief is that we have passed an inflection point in the evolution of our economy and have reached a watershed moment. What this means for the independent sector is not at all clear to me. What I do sense is that funders and grantees are going to have to develop a much greater functional inter-dependency if we are to mutually thrive. My hunch is that we will derive some of our solutions by reaching across sectors and creating both higher, results-oriented standards for performance and better mechanisms to measure and report our notable achievements.

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