THE BLOG
01/09/2015 12:57 pm ET Updated Mar 10, 2015

What Philanthropists Can Learn From Hollywood

Well managed nonprofits around the world are working right now to respond to a request-for-proposal (RFP) from a funder. A government, a foundation, "the funder" is looking for a specific type of impact and so they are outlining exactly what they are looking for from applying organizations.

RFP's work optimally in the private sector because profit-making organizations have the margins necessary to afford the operational capacity to infinitely scale up and meet demand. The nonprofit sector doesn't work like that. Foundations and Governments fund programs all but exclusively and the capital is heavily restricted to program related activities. There are only nominal allocations for operational support and they are usually defined as contract staff or technical assistance. Nonprofits often spend those dollars on consultants out in the capacity-building market.

This misalignment reminds me of an inefficiency that Hollywood studios have found a way to correct. Studios will fund a project and for any number of reasons it might fall apart before it hits the big screen. Those funded initiatives have a rider in the agreement that allows the studio to pull the project into "turnaround." They will push pause on the funds not yet distributed and take a closer look to see if the investment continues to be viable. Often times they bring in outside experts to get it back on track.

Every day at Dandelion, we see nonprofits struggling to deploy funded initiatives effectively and often at all. It's really not their fault -- restricted revenue and an insufficient marketplace of capacity builders that are often peddling pre-packaged products and preconceived ideas, leave nonprofits in the unenviable spot of having to prioritize the needs of their beneficiaries over the outcomes that their funder had originally sought.

If civic and social funders could see their way to include the concept of "turnaround" in their grant relationships and have a go-to contingency plan, they would be more insured that their investments would result in the most impact-per-dollar while simultaneously supporting their grantee with a safe working environment to course correct unstable projects.