A Bifocal Lens: The Value of Investing in Both Networks and Organizations

(Paul Connolly is Chief Client Services Officer of TCC Group, a 33 year-old consulting firm that provides strategy, evaluation, and capacity-building services to foundations, nonprofit organizations, and corporate community involvement programs. In a previous post for Transparency Talk, he wrote about the Packard Foundation's "see through" filing cabinet.)

What do the Arab Spring uprisings, the Tea Party, Al Qaeda, and Occupy Wall Street have in common?  They all stem from flexible networks of people and groups, rather than just a single organization. And, they all have powerfully influenced society lately. As technology has enabled more connection and coordination, networks are playing a greater role in tackling social and environmental problems, galvanizing change, and enhancing civil society.  At the Grantmakers for Effective Organizations' "Growing Social Impact in a Networked World" conference a few weeks ago, funders discussed how they are changing their perspectives and practices to support and participate in networks.

One foundation leader remarked that observing a network is like looking at a Monet painting: up close, the brushstrokes can be blurry and seem disconnected, but when you stand back, the power of the full and nuanced picture becomes clear. Another speaker advised that funders need to view networks with a different type of lens than what they use for organizations. Networks tend to have more distributed ownership and expertise, less linear decision-making processes, more fluid boundaries, and results that are harder to measure. Funders therefore need to tailor how they assist networks, such as by investing at multiple levels, providing for additional improvisation, letting go of some control, and focusing less on causal attribution of outcomes.

The Robert Wood Johnson Foundation, for example, has provided funding to foster a widespread network of activists across the nation to decrease childhood obesity by improving eating habits and increasing physical activity. In doing so, the foundation has learned that shifting from a mostly one-way broadcast mode to a more robust and interactive dialogue with constituents who are connected to the coalition has required more effort, openness, and trust. Foundation staff members have strived to listen actively to network participants and create authentic feedback loops — both online and in-person — to help advance the collaborative movement.

Likewise, the Jim Joseph Foundation has nurtured Reboot, which aims to engage a younger generation in a vibrant Jewish life through a selective network of a few hundred culturally influential Jewish people. The Foundation's strategy was to get the right mix of people in the right space and then allow for serendipity. With a bold over-arching goal to steer the way, it backs the network's process and does not try to micro-manage the specific means that members choose or the content they produce.

The Packard Foundation studied their existing portfolio of grantees and realized they already had a broad spectrum of models, about a third being networks for wide-ranging causes, with varying types of needs than organizations. As Packard Program Director Stephanie McAuliffe exclaimed, "Our grantee The Ocean Conservancy did not want to strengthen their organization's brand, but the ocean's brand." The Packard Foundation has improved its own network approach through an online wiki, transparently sharing data about certain programs and engaging others in their strategy development and evaluation work. [More about the Packard wiki at Transparency Talk.]

Although networks have many distinctive features, they also coincide with organizations extensively. In fact, many networks are actually collections of organizations, or at least are comprised of individuals who see their participation through a specific organizational perspective. So, networks can be both capable in their own right, as well as reflect the performance of the particular organizations involved. TCC Group's research on nonprofits and coalitions have found that the highest performing ones share such central characteristics as distributed leadership, inclusive mindsets and practices, cross-fertilized programs, learning cultures, and adaptability.

Specifically, we found that the strongest nonprofit organizations:

• have a clear vision,
• understand community needs and services well,
• are deeply engaged and forge alliances with external stakeholders,
• encourage reflective inquiry, and
• amplify their impact by not only expanding their own programs, but also disseminating replicable practices and models and by influencing policies and systems.

Our study of coalitions for The California Endowment determined that the most successful ones:

• have a lucid mutual purpose and value proposition,
• collaborate and manage conflict well,
• conduct ongoing assessment,
• have transparent decision-making processes, and
• are action-oriented.

Far-sighted grantmakers see that scaling social impact will not happen just by expanding high-performing nonprofit organizations, one at a time. Strong networks will be increasingly needed, too, and their respective efforts will intersect more and more. Meanwhile, nonprofit organizations are still the predominant vehicle for receiving philanthropic support and many networks involve sets of them. To view organizations and networks — the individual brushstrokes as well as the full painting — clearly, rather than through two different sets of optics, funders need better bifocal lenses. Without them, they will be hampered by fuzzy vision and blind spots, reducing their potential to magnify positive change.

There is much more to discover about harnessing the combined potential of organizations and networks. What tools, frameworks, and training are needed to sharpen the needed bifocal vision?  How can we learn more about organizational and network effectiveness and their intersections — and do a better job applying what we already know? How could grantmakers support networks' efforts to build superior shared learning systems and performance measurements within particular fields? With better answer to these questions, funders can help increase social innovation and impact.

— Paul Connolly