05.03.05 NOTES: Tuesday@REI Exploring New Models of Funding the Civic Space

Submitted by Norm Roulet on Fri, 05/06/2005 - 10:45.

The topic of the 05.03.05 Tuesday at REI was "Exploring New Models of Funding the Civic Space" - a panel discussion at the Cleveland Museum of Natural History about what are the existing models, how can we improve effectiveness, and what are some of the challenges we need to address for the future? Attendees represented the community of practitioners, research and philanthropy.

Panelists were:
Ensign Cowell, Greenleaf Capital & Giving Back Gang, member
Henry Doll, Founder, The Giving Back Gang - a Giving Circle
Stuart Mendel, Assistant Dean and Co-Director, Center for Nonprofit Policy and Practice, Maxine Goodman Levin College of Urban Affairs, Cleveland State University
Georgia Reash, CEO, Institute for Creating Community
Chris & Judy Schenk, Tinamou Consulting
Linda Springer, Executive Director, Cleveland Social Venture Partners

Georgia Reash explained she has a history of working with non-profits and a few years ago formed a philosophy of adding to the base of non-profit funding by creating an EPSO – Enterprising Public Service Organization – her Institute for Creating Community is the world’s first EPSO – combination of socially funded organization, fee based service provider, and small business enterprise developer. She expects under her umbrella to launch many small enterprises. She will hire and nurture entrepreneurial staff to launch strategic ventures, which will bring in revenues and create distributed opportunity. She will use technology at a world class level. She will truly partner – she may step on toes – she will challenge people to think differently – she is pursuing a sustainable model – she has found the non-profit and foundation worlds are receptive to this vision.

Tinamou consulting – Chris and Judy Schenk work as couple – here in response to Cleveland having the highest poverty rate in the nation – we have the wealth and brainpower here, but need to build bridges of collaboration between for profits and non-profits. As an example of the possible here, they speak of a friend in another state who is a real estate developer who previously gave money to many individual non-profit organizations but did not see impact. He wondered how he could make a bigger difference and realized he had lots of available warehouse space and that businesses he works with have excess inventory and usable waste products, so he combined his warehouses with the surplus assets of his associates so that instead of overage goods going in garbage they collect that at a warehouse and give them away to non-profits - has distributed $ millions in goods as “Hope for the city� – formed partnership between not-for-profits and looked at how to differentiate with purpose and coordinated effort. He and Tinamou have been quite bold to challenge clients to think bigger – “our biggest mistake is not to think that now is the critical moment�.

Ensign Cowell and Henry Doll speak of the Giving Back Gang – part of national movement of “giving circles� to commit an amount of money into a self-awareness education and philanthropy process, where members truly learn about needs in their community, and then act on their collective knowledge by giving money into the community. The local Giving Back Gang started with talks in churches about 2.5 years ago – most important part is idea of educating people in the "gang" that they have power in their own philanthropy – they find that if people know more about the issues they may address they may get more involved and volunteer more. There are many giving circles around the country - state of Washington has a giving circle of 400 people who each commit $2,500 per year – other end of spectrum is group of young people meeting at bar and putting in $25 each. The Giving Back Gang giving circle is $500 per participant (although most members appear to give more) – they meet regularly to discuss needs in community and this year chose the topic of regional economic development – want to put their money in 2 or 3 initiatives each year where they can make a difference.

Linda Springer speaks as Executive Director of Cleveland Social Venture Partners, another local giving circle where each member puts in $5k per year, which is held in trust by Cleveland Foundation until distributed. They ask for proposals from area non-profit initiatives they deem worthy and then they conduct due diligence – mission is related to combining financial contributions with support of capacity building – partners want to get involved in projects with investees to help strengthen their operations – see need for such support as most non-profits don’t have the resources to grow like a corporation, and Cleveland Social Venture Partners members have broad experience in for profit world. Another part of their mission is related to education on philanthropy and civic engagement – last meeting had focus on economic development – in April they partnered with Spaces to explore arts as economic development. They are part of a network of 25 related giving circles around country, started in Seattle during IT boom. They started in Cleveland in 2001 – choose 1 investee per year, like Near West Theater, which provides arts and education to the public. The Cleveland SVP meetings are open to the public.

Stuart Mandel explains he wears two hats to this forum. One is in leading a project of the Urban League for the Cleveland Mayor’s office to support venture development. His realization is there are over 37 initiatives in area to help small ventures get started and develop yet they tend to be very isolated – separately funded and managed. Greater Cleveland Partnership for example has 7 initiatives which don’t tend to work with others. All these initiatives are well intended and funded and produce outputs and so form the basis for strong collaborative opportunities. The need for greater output is clear, as the 1990 census showed Cleveland had 23,273 business of all types, which when compared to Columbus, Cincinnati, Pittsburgh, means we’re small – consider # of businesses compared to # of people who may own a business and realize we are at the bottom... up to 50% behind peer cities. Of 23K businesses in Cleveland most are sole proprietorships, so the employment impact is minimal – yet there are many organizations and significant funding here for business developments. As Georgia said, the way to grow a business is to find people in neighborhoods who are able to start and grow businesses. Stuart then points out the other hat he wears is Assistant Dean and Co-Director, Center for Nonprofit Policy and Practice, Maxine Goodman Levin College of Urban Affairs, Cleveland State University – they’re working with non-profits developing learning organizations – help people learn from their mistakes – help people learn to use information more effectively.

An observation from the forum so far is there are all sorts of needs to meet in Cleveland and innovative ways to find funds... more collaboration is required for greater impact.

Q. Asked of Stuart Mandel – when you look at Cleveland vs. Columbus how do numbers compare, especially considering Columbus has annexed surrounding area to have a large footprint, rather than just an urban core.
A. That makes huge difference - looking at Cuyahoga County and region vs. Cleveland urban core, the region has been very successful – city has not.

Q. If we’ve got prosperity in the region and country, what is the cultural aspect blocking growth of small businesses here?
A. Stuart asks “How long have you got� for my answer? There’s a lot of competition in our region and some is healthy and some is not – businesses are trying to grow and profit but they are not based on the same leadership as 25 years ago – ours are not leaders of corporations but units. Also points out unrealistic expectations of area investors - if a case can be made to VCs to invest in business opportunities that will get a lower return than has been the traditional model, that would help. (Note, VCs traditionally look for a 10X return on their investments)

Q. For years Cleveland leaders have worked in blocks and not made any progress – e.g. Cleveland Tomorrow – why?
A. Stuart says that is a question of leadership and that many leaders here are successful meeting their personal goals but many leaders don’t look beyond their self interests – city government has never been strong here and business leaders have traditionally filled in the gaps – but we don’t have the level of business leaders here that we once had and non-profits are having to step in, and they have their own self-interests and weaknesses.

Q. How does that compare with other cities?
A1. An audience member points out we have an inferiority complex – we’re better than 25 years ago – media has become sensationalist – we have wonderful resources – how can we collaborate together to build better networks? NEO has considerable assets and is making progress. Every non-profit has the same problems – not usually money but organization is the problem.
A2. Georgia thinks there are hidden issues she doesn’t believe are easily measured – imbalanced of power – race and gender gaps and ceilings inside and outside organizations, based on history of how organizations have made decisions – hierarchical model that is power based – non-profits may be outside usual bases of power – for long time there has been a group of 10 or so organizations calling most of the shots for the community.
A3. We don’t have sense of community in NEO – how leadership lives, inner city is “over there� while power base lives in suburbs – need leadership and wealthy interests to take more of a sense of ownership in the overall regional area, including urban core.

Q. What is panelists assessment of our use of IT to build community.
A1. Ensign says if we were effective at the community level at connecting communications and problem solving, resources, decision making that it could make a big difference. Asks how to connect and where? The distillation of that would make a huge difference. Let’s get wifi up everywhere – everyone on the net – given computers, people do incredible things.
A2. Springer says view from the ground is IT is a huge hurdle for all organizations – keeping non-profits from experiencing the success they can have – get them access to equipment and training.
A3. Another attendee says there have been successes but not with IT – library card is example of success with IT infrastructure.
A4. Mandel says must take systems approach – there should be a centralized solution

Panel points out a big issue for non-profits is succession planning. Non-profits need to think in new ways for their sustainable futures.

There is wealth among us but we don’t think about it – the ethic of giving has to be taught – as a society and as individuals many have enormous wealth – the more people who get excited about social consciousness and giving the better – there aren’t many of us who get vested – more may get interested

Q. Holly Harlan of Entrepreneurs for Sustainability (E4S) asks foundation representatives if E4S begins spinning out for profit ventures (like in Georgia’s EPSO model) would that impact funding opportunities
A. Foundation representative in audience responds it is good to diversify sources of funding so they would see that as a positive development.