Some Pain, More Gain

In March, we focused our monthly update on Impetus-PEF, a London foundation “walking the talk” of high performance–not just by investing in the performance of its grantees but also by looking introspectively at its own performance.

After we wrote that profile, we got respectful pushback from a colleague in London. While offering praise for Impetus-PEF’s focus on impact, he wondered whether Impetus-PEF’s hands-on processes are too tough on grantees.

So with Impetus-PEF’s blessings we reached out to Jo Rice, managing director of one of Impetus-PEF’s core grantees. Impetus-PEF’s leadership team made it clear to Rice they wanted her to share the truth, the whole truth, and nothing but the truth.

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Before we do the reveal, here are the basics on Rice’s organization, Resurgo. Its main program, Spear, helps disconnected young people find their way into jobs. It focuses not only on preparing young people for the world of work; it also focuses on helping employers create a culture where formerly disconnected young people have a real shot to succeed.

Impetus-PEF’s first grant to Resurgo came in 2009. “The due diligence took almost a year,” says Rice. “They talked to every single member of our staff. [The accounting firm PwC] trawled over all of our accounts and contracts.”

After Impetus-PEF made the grant, things got far more intensive. Impetus-PEF’s investment directors manage just two or three grants at a time, far fewer than the typical foundation officer–allowing them to spend a day a week on average with each grantee.

And then there was the Driving Impact workshop, a grueling multi-day effort to help grantees clarify their mission, target population, and outcomes. “I was in tears within about four minutes,” says Rice. Notoriously unvarnished consultant David Hunter, who led the workshop, “went for the jugular.” Even so, Rice and her team could tell Hunter was asking the right questions. “‘You know this question you’ve been stuffing under the rug for years? I’m going to ask you that question!'”

Is all this rigor a true value-add or just a lot of hoop-jumping? In Rice’s view, it’s not just worth the pain. It’s indispensable.

“Our experience has been so outstanding,” she says. “They are by far the most invested funder of ours, not just in terms of money but in terms of all forms of support…. It’s fair to say that money was the reason we embarked on the relationship, but it quickly became clear that the real value was …. in the relationship with our investment director…. I’m not afraid of her seeing our data. She knows everything. I trust her. And she trusts us to deploy their resources where we see fit.”

Rice said that she and her Impetus-PEF investment director, Chiku Bernardi, have difficult conversations without negative consequences. “She can tell me ‘you didn’t bring your A game to that meeting,’ and I can tell her that I think Impetus was out of balance in placing too much focus on impact without paying equal attention to sustainability. We can have those robust conversations without me fearing that they will pull the plug.”

Rice shared a story that illustrates just how reciprocal the relationship between Resurgo and Impetus-PEF has become. Impetus-PEF’s CFO Richard Lackmann decided of his own accord to take Resurgo’s five-day leadership training. He was impressed by the training, especially the way Resurgo teaches and promotes “emotional intelligence.” Lackmann asked Rice if she and her colleagues would provide similar training for every member of Impetus-PEF’s team, from the CEO to the newest intern.

Rice believes that all of this trust has translated directly into improved results for Resurgo–and she has data to back up that belief. Rice sent us employment, education, and training outcome data culled from the organization’s Salesforce performance management system. Prior to a series of staff and programmatic changes prompted by Resurgo’s work with Impetus-PEF, around half of the young people in its Spear program were achieving all of the intended outcomes after 12 months. Today, more than 75 percent of participants are achieving them.

In the coming weeks, we’ll reach out to more Impetus-PEF’s grantees and other stakeholders to collect their insights. We’ll share what we learn, in the hope that others will find inspiration to give Impetus-PEF’s high-touch, high-value approach a try.

Keep the faith (and reason),

Signatures: Mario and Lowell
Mario and Lowell

Mario Morino is chairman of the Morino Institute, co-founder and founding chair of Venture Philanthropy Partners, and author of the lead essay in Leap of Reason. Lowell Weiss is president of Cascade Philanthropy Advisors, co-editor of Leap of Reason, and advisor to the Leap of Reason initiative.

Updates From Around the Leap Community

Kudos to our colleague Ingvild Bjornvold for her great work in sharing the work of positive-outlier nonprofits putting performance into practice. In “When WINGS Leaders Fly High, So Do Children,” Bjornvold illustrates how an out-of-school-time program uses disciplined, people-focused management to help its staff become effective instructors capable of producing great outcomes. Look for more profiles in the coming months.
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Frank Bruni‘s “Lifting Kids to College” represents a rare and much-needed good-news story on the New York Times‘s Opinion page. Bruni documents the many ways the elite University of Southern California is anything but aloof from the disadvantaged young people growing up in its U.S.C. is achieving significant progress in helping disadvantaged Angelenos prepare for, gain admission to, and succeed at U.S.C. “Although U.S.C. has often been caricatured as a rich kids’ playground–its nickname in some quarters is the University of Spoiled Children– itoutpaces most of its peers in trying to lift disadvantaged kids to better lives. Those peers should learn from its example.”
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Homeless Find a Champion in Canada’s Medicine Hat,” another good-news story in the once-again-thriving New York Times, tells the story of the evidence-based “housing-first strategy” that is saving money and lives across Canada. “Housing first” means that advocates offer men and women homes even if they have not yet addressed substance-abuse or mental-health issues. The theory is that if you don’t have stable housing, you have little or no chance of addressing deeper challenges. Canada is not only implementing the evidence-based program; it’s rigorously studying what works and what doesn’t. According to the article, “The results were startling, validating the housing first model and showing that the cost of housing the homeless was far less than the cost of the emergency services needed by the homeless while they were living on the street.”
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We’re eagerly awaiting our colleague Rick Wartzman’s new book, The End of Loyalty: The Rise and Fall of Good Jobs in America, due for release at the end of this month. Based on our conversations with him, we know the book will shed light on a topic of first-order interest to both of us: the erosion of the corporate social compact and its effects on social mobility. According to a glowing advance review in Publisher’s Weekly, “This impeccably written treatise asserts that it’s imperative for Americans to ‘share our prosperity more broadly once again’ and reinstitute a stronger social contract between corporate executives and the workers who make a company successful.”
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For those of you following the growing field of Social Impact Bonds, we recommend Steve Goldberg‘s Scale Finance: Industrial-Strength Social Impact Bonds for Mainstream Investors, recently published by the Federal Reserve Bank of San Francisco. Goldberg’s report is a good overview with many useful insights. We love the SIB concept, but we fear that the promise of this innovative financing vehicle won’t be realized if we don’t increase focus on meaningful outcomes, invest in evidence-building, and stop glossing over the difficulties of implementation. For more on this topic, see “SIBs: What’s Missing?,” by the Leap Ambassadors Community.
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Events/Webinars for Raising Performance

June 7 webinar Journey Towards Improving Outcomes
Council on Foundations
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Sept 12-13 Stanford, CA Nonprofit Management Institute: Leading Social Change in Turbulent Times“;
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Oct 19-20 Seattle BoardSource Leadership Forum“;
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Oct 25-27 Detroit Our Common Future” conference;
Independent Sector
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Nov 2-3 Washington, DC Feedback Summit“;
Feedback Labs, Fund for Shared Insight
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Nov 6-11 Washington, DC From Learning to Action” conference;
American Evaluation Association
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