09/30/2010 01:58 pm ET | Updated May 25, 2011

Annenberg's Alchemy

Good models have good bone structure. Good nonprofits have good board structure.

And in civil society, good board structure is sexy because it helps nonprofits tackle their biggest challenge -- raising money.

Now one of the largest family foundations in the United States is considering expanding a program designed to help nonprofits turn their leadership structure into a framework for sustainable success.

The Annenberg Foundation ($1.6 billion dollars in assets, year ending June 30, 2009) has a two-year-old program called Alchemy, which offers training, resources and networking to help nonprofits do their own makeovers.

The key to the program is getting together both the paid and the volunteer leaders of a nonprofit for three intensive sessions.

"If you don't get this fundamental alignment of vision between the executive director and the chair of your board, you aren't going anywhere," said Leonard Aube, himself the executive director of the Annenberg Foundation.

(By the way, in case you were wondering if it matters what the Annenberg Foundation does, here's a salient fact: Aube says the foundation has given away $4 billion over the last 20 years.)

The Alchemy website defines the program this way:

Alchemy is a free leadership development and nonprofit capacity building program serving Los Angeles County based nonprofit organizations with operating budgets of up to $2 million. Among the central issues addressed are fundraising, board effectiveness, public involvement and accountability.

"They are trying to build up the nonprofit community here in Los Angeles County," said one of the Alchemy program's alumni, Bruce Greenspohn, board chair of the Environmental Charter School. "They've taken 400-500 nonprofits through the training, really focusing on what they need most, which is board governance... [they also] really focus hard on fund-raising, getting your board active and involved in it."

I had a chance to observe a meeting of the Alchemy program just a few days ago, held fittingly at the site of one of the foundation's success stories, the Annenberg Community Beach House.

(The city of Santa Monica says it is the only public beach club in all of California, built on 5 acres of beachfront that once was used for parties by William Randolph Hearst and Marion Davies. The project was inspired and funded by Wallis Annenberg, the foundation's chair, CEO and president.)

Called Peer to Pier, the Alchemy gathering is intended to be part celebration and part inspiration -- congratulating program participants and furthering their exposure to useful ideas. I had a chance to talk to participants and one of the guest speakers, Harvard's professor Michael Sandel, here are some of the highlights of my experience:

I asked Prof. Sandel, known for his very popular "Justice" class at Harvard and the book by the same name, how we could achieve a serious and civil discussion of important issues if our culture valued consumption over connection. This was his answer:

There is a tension between our identity as consumers and our identity as citizens. And too often our identity as consumers gets the better of us and crowds out meaningful citizenship and deliberation. I think we have to strengthen those institutions that encourage and equip us to think of ourselves as citizens rather than consumers.

And that requires building up of the institutions of civil society including the nonprofit organizations that are represented here today. It requires strengthening the social fabric of neighborhoods, communities and social movements so that we have more occasions to talk to one another as citizens because if we don't -- in the absence of meaningful democratic citizenship, the illusion of consumerism is likely to get the better of us.

I talked to Bill Fox, board chair of Grandparents as Parents, a Los Angeles-based nonprofit which has served 2,000 families in the region. I asked him what Alchemy did best.

"Eliminate the BS. ... Alchemy looks at hundreds of nonprofits. Then it tells us: here is what the successful ones do."

The executive director of Grandparents as Parents, Madelyn Gordon, added a few stats to give perspective. She said that in Los Angeles County, half a million children are being raised by relatives other than their parents. She also said that the organization's latest fundraiser brought in $50,000 compared to $15,000 the year before. She credits the help from Alchemy -- which inspired her board to move from 100 percent foundation-based funding to more diverse sources.

I met Zaid Gayle, executive director for Peace 4 Kids, an organization that provides programs and services for foster children in South Los Angeles. He told me that African Americans make up nine percent of the total population of Los Angeles and 30 percent of the foster children. He and his board chair have joined the year-long followup program Annenberg provides called Alchemy Plus. He said small nonprofits often worked in a "silo" without time to network with others in the nonprofit community. Alchemy, he said, offered him a chance to dialogue and collaborate.

Bruce Greenspohn, of the Environmental Charter School, told me that one of the valuable things he learned at Alchemy was how to define and craft his nonprofit's elevator pitch. "How do you convey that message to funders. How do you convey that message to the community." Then he demonstrated his pitch:

The Environmental Charter School is in the worst-performing part of LA County for public education... Eighty percent of our kids qualify for a free school lunch. That means for a family of four they're earning $28,000 a year or less. Fifty percent drop out from 8th grade on.

But we got 95 percent of our graduates into a 4-year university last year with 10 percent going to UCLA. We've made a tremendous difference in that community giving parents a choice of an excellent education. We've enabled these students to concentrate on science, technology and math, integrating an environmental focus throughout.

Wallis Annenberg gave an address where she honored the nonprofits present, thanking them for their "vision-driven leadership" and for "advancing the human condition by putting the needs of others above your own."

Santa Monica Mayor Bobby Shriver, easily the most entertaining and inspirational speaker of the day, offered his politically Incorrect suggestions for nonprofit leaders. Given his success with the Special Olympics, fighting debt and AIDS in Africa and co-founding the innovative (RED) campaign (which raised $150 million in two years, by the way), they might be worth remembering:

1. Stay mad
2. Show people your anger. It motivates them.
3. Be relentless

Annenberg's executive director Leonard Aube says Annenberg is fielding requests to offer the LA-based Alchemy program in other areas.

We're contemplating an online approach [and/or] franchising Alchemy out into communities if they feel like it could be valuable. The thing that is important is the quality of the trainers... I think that for us anytime you get into a franchise situation then you are going to want to pay a lot of attention to the capacity of each region to replicate.

No matter what happens, Aube says Alchemy will continue to focus on the organizational infrastructure that makes a good cause not only well-run but financially viable.

You can have the best program delivery design in the universe, but if you don't have the resources or the ability to sustain your resources, it's not relevant. The Annenberg Foundation's contribution [through Alchemy] is leadership development and change management. That's how we think about it.

Of course, passion is important, too. As Mayor Shriver put it at the Peer to Pier conference,

"I look at things and say, 'That's not right. I'm going to fix it.'"