Having a powerful network can bolster a nonprofit’s donor base and open access to additional funding sources. But what happens when the Executive Director and Board Members do not have a powerful network?
I attended a half-day summit at LinkedIn’s San Francisco headquarters in November on The Network Gap. As LinkedIn defined it, “The network gap is the advantage some have based on where they were born, where they went to school, or where they work.” I was intrigued by the purpose of their summit: to create an “opportunity for nonprofits, companies, social impact practitioners, and civic leaders to come together and discuss how we might build a future where people with equal talent have equal access to opportunity.”
While the summit focused on access to jobs and economic opportunity, the same concept could be applied to nonprofits, their ability to fundraise and how sustainable their financials can be on a long-term basis. If you are a nonprofit founder or executive director who grew up in a zip code with a median income over $100k, according to LinkedIn’s research, you are three times more likely to have a stronger network than a nonprofit leader in a lower income zip code. It also matters where you went to school. You are twice as likely to have a strong network if you went to a top school*. So, if you’re a nonprofit leader who grew up in Hillsborough, CA and went to Stanford University, you have a significant advantage when it comes to accessing high net worth donors and contacts for your nonprofit.
These stats are further supported by the research cited in Raghuram Rajan’s book The Third Pillar which posits that the well-heeled flock together in living communities for the betterment of their children’s education. In 1970, the book states, only 15% of U.S. families lived in “sorted” communities of either rich or poor. By 2012, 34% of U.S. families lived in sorted communities.
Take for example the Eastside College Preparatory School located in East Palo Alto, California. The school was founded by two Stanford alumni, and at least one of whom grew up in a more affluent area and attended private school. While the school started with humble beginnings in 1996, they amassed an endowment and property portfolio in the multiple millions due to generous donors. There is no doubt this school is providing an incredible service and helping to close the network gap for hundreds of youth from East Palo Alto as the tuition is free, the academics such that youth are attending top colleges. Would this have been possible without the network these school founders had?
Let’s look at another example. Mercy High School in San Francisco, California recently announced it’s closing this June after nearly 70 years and was one of the last remaining all girls’ Catholic schools in San Francisco. The administration and trustees pointed to many factors in its closing such as: declining enrollment, lack of a significant endowment and rising operating costs. Reading between the lines, one also must imagine the rising costs of living in San Francisco and the decline of interest in both same-sex education and catholic education were factors in declining enrollment. However, the point that most struck me was “lack of a significant endowment”. Unlike all-boys schools such as Bellarmine in San Jose or Serra High School in San Mateo, California, Mercy High School in San Francisco did not have a large endowment or board funds to draw from. Bellarmine’s endowment is in the multiple millions and well-funded by a strong, wealthy alumni base and a committed development team. But could one factor in all of this be a network gap of donors, alumni and board directors for Mercy High School? While the school was not primarily serving low income, at-risk youth, they still offered reduced tuition for some and scholarships for others in order to provide a diverse learning environment.
Full disclosure: I went to an all-girls catholic school in San Francisco which closed in 1991 and during my high school years I saw 2 other all-girls catholic schools close in San Francisco. Presentation High School followed soon after, so Mercy High School and Convent of the Sacred Heart were the last remaining all -girls’ schools in San Francisco. Many attributed it to the fact that several former all-boys schools in San Francisco went co-educational and to the changing times. So, I have a personal stake in watching these systems unable to raise necessary funds and ultimately close. Yet I wondered at the time and still wonder if there is a network gap impacting these schools, their staff and their students?
Women still make 42 to 78 cents on the dollar compared to men so it makes sense that women may have less to give to their alma maters than men. Women also have a harder time asking their networks of other women for money. We are willing to discuss intimate details around our health, but we are unwilling to discuss money matters with our female peers.
Further compounding these issues, according to the Lilly Family School of Philanthropy, women donate more to women’s and girls’ causes. However, when men perceive that other men and women are donating to these causes, they are more likely to donate. So not only is there a funding gap in how much women are able to donate, but there is also a network gap further compounding the ability of nonprofits to fundraise and maintain financial stability when they are less connected to networks and people of influence.
All is not lost. The Lilly Family School also cited that younger women influence household charitable decisions more than their older counterparts. So, times are a changing. More importantly, how do we solve the network gap for nonprofits? For this article, we are discussing fundraising and access to high-net worth donors and influential board members. Yet, the network gap impacts nonprofit leaders, their staff and their clients in a myriad of other ways too: job promotions, job opportunities, salary & wages, foundation grants, civic engagement and influence. We will address that in future articles around the network gap.
For now, here are a few immediate actions we as board members, donors and service providers can do to help close the network gap for nonprofits:
1. Listen for The Network Gap. If you are a board member or service provider, ask the nonprofit leaders and staff you work with how they feel about their networks and whether they feel there is a gap. Ask how you may help. Consider how you may be a connector or to close The Network Gap.
2. Consider “Out of Network” Board Position. Look around your current board and see if there is an opportunity to diversify your board. Does the current board represent the community you serve? While some boards have a “Give or Get” policy towards fundraising, can this be optional for community members to participate and grow their personal network?
3. Use Your Megaphone. Use your voice and your network to educate prospective volunteers and donors about smaller, lesser well-known nonprofits in your area who do great work. According to a Giving USA report in recent years, the 400 largest nonprofit organizations collected more than $1 of every $4 raised for charity in America. Donors tend to give to names of organizations they have heard about or read about.
4. Take the #PlusOnePledge. LinkedIn is offering an opportunity to use your network to help others. Check it out or use their framework to implement your own #MyPlusOnePledge.
Where there is challenge, there is also opportunity. I view closing the network gap as an opportunity for us to build a stronger, more cohesive community. By extending a hand outside our closed networks, we are working towards a society that includes more than it excludes and opens our world to more innovation and improved happiness.
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