WS: I think the most challenging thing about the transition was learning to appreciate the importance the nonprofit sector places on collaboration and sharing. I spent a lot of time structuring partnerships and relationships between organizations in my for-profit career, but the level of sharing in the nonprofit sector in terms of information, knowledge, strategies, and perspectives was definitely new to me.

PND: You joined the Tides Center as executive director in October of 2003. Tell us a little about the Tides family of organizations and how the Tides Center fits into the overall picture at Tides?

WS: Tides is really a partnership of organizations that is focused on creating positive, healthy outcomes for people around the world. We're focused on creating a world that has active and engaged citizens, a world that's environmentally sustainable, a world that puts justice above all else in the way it treats its citizens. Those are common themes across all Tides organizations.

The other common theme is that we all tend to be more focused on infrastructure, as opposed to direct service, in terms of how we think about the role we'd like to play in the sector.

PND: Does the Tides Foundation fund the Tides Center, or is the center responsible for generating its own revenues?

WS: The center generally has been responsible for generating its own revenue. It started out as a program of the Tides Foundation in the late 1970s, and then became an independent 501(c)(3) in 1996. Today, although we're a part of the Tides family of organizations, for the most part we work quite independently of the other Tides organizations. There are places that we connect, however. For example, the Community Clinics Initiative is a project of the Tides Center, and the Tides Foundation manages its re-granting activities. In addition, the foundation provided a $5,000 grant to the Tides Center to participate in National Voice's get-out-the-vote efforts by distributing "November 2" t-shirts and bumper sticks to our projects, advisors, and staff.

PND: What are your specific responsibilities as executive director of the Tides Center?

WS: My responsibility is to make sure we have a compelling vision and that our staff really understands our vision and is focused on achieving it. As I said, our vision has to do with helping organizations create social change, with a focus on the people in those organizations, because it's people who make organizations work. The other important part of my job has to do with making sure we have the resources, both financial and human, to make our vision a reality.

PND: Fiscal sponsorship is one of the services the Tides Center provides to individuals and organizations. In fact, you're the largest fiscal sponsor in the United States. How does that program work? Is it limited to a specific geographic region or subject area? And do you take a cut of the revenues generated by the projects you sponsor?

WS: The Tides Center is unusual in that our programs are national in scope. The other factor that makes us unusual is that we are very flexible in terms of the types of organizations we are willing to sponsor. For example, we've sponsored organizations that are focused on voter initiatives and electoral reforms and organizations that are focused on preserving historic gardens or building the capacity of community clinics. Generally speaking, we want the projects we sponsor to be a fit with our organizational culture and our purpose and values. And we require that new projects have funding in place. But we try to take a truly big-tent approach to our work.

As for how we afford our work, each project contributes a percentage of its revenue toward our administrative costs so that we can provide our services.

PND: Is your fiscal sponsorship program scalable, or are you pretty much operating at capacity?

WS: I would say our program has the potential to be scalable and that we are not operating at capacity at the moment. In fact, part of what we hope to accomplish going forward is to transform the center into an organization that can serve many more projects and organizations. We know there's great demand for the type of services we provide. Today, we don't actively market our services because we would have difficulty meeting the increased demand. But looking ahead, we are planning to create both an organizational structure and a technology platform that can support our efforts on a much larger scale.

PND: What will that platform look like?

WS: Basically, what we'd like to do is extend our reach. In 2003, we received a $950,000 grant from the Kellogg Foundation to evaluate our services as well as to research how the practice of fiscal sponsorship would need to change in order to become more of a field than it is today. And one of the core aspects of that transformation, we believe, is the development of a technology platform that will enable us to scale our efforts and, at the same time, be available to other fiscal sponsors. In fact, we will soon be announcing a sizeable grant that will enable us to establish this platform. In addition, the Skoll Foundation has provided a grant to us to pursue, in collaboration with other fiscal sponsors, the work of building an actual field of fiscal sponsorship, including standards, operating guidelines, and convenings.

Now, in terms of the platform itself, we envision an integrated system. By that I mean a system that makes it easy for the projects and organizations we sponsor to access their financial and HR reporting, their grant tracking and reporting, and all the other administrative reports they might need. It would also provide a means for our projects to communicate among themselves, as well as with us. In short, we envision a platform that would allow us to move all the things we do offline online, which in turn would reduce our costs and increase the efficiency of our operations as well as the operational efficiency of our various projects. And other fiscal sponsors that choose to use the platform also would be able to offer similar benefits to their projects.

PND: As you know, there are roughly 1.4 million nonprofits in the United States. Earlier this year, you came forward with the somewhat controversial observation that the growth of the sector over the last few decades may not be serving society's needs. What did you mean?

WS: A couple of things. First, I think the sector is full of organizations that don't have adequate resources to accomplish what it is they are trying to accomplish. Part of what we've been doing at Tides in the past year is to take a hard look at all our projects, with an eye to identifying the ones that, if not for our help, would not be viable. By keeping those projects alive, we compromise our own ability to take on new projects that have the potential to advance our vision and, at the same time, use resources, financial as well as human, that might be better deployed to help other organizations.

My own personal feeling is that many organizations out there are too small to really make a difference. Yes, in some cases a small organization can make a difference, and we certainly sponsor projects that are small. But we also believe that most of the small projects we support are in a position to accomplish the things they set out to do. On the other hand, there are lots of small nonprofits out there that manage to secure just enough funding year after year to stay alive but that are not really effective. And yet there's no real mechanism within the sector to address that kind of situation. We think that by encouraging fiscal sponsors to collaborate more, by encouraging mergers within the sector, and yes, by encouraging some organizations and projects to close, we can help provide some much-needed discipline in the system. And because we're one of the few organizations well-positioned to make that happen in a neutral way, we're also interested in sharing the lessons we learn up along the way.

You also see very little turnover of organizations in the nonprofit sector, and that stifles innovation because it leads us, as a sector, to support unsustainable or ineffective approaches long after they have outlived their usefulness, which, in turn, results in an ever-growing number of nonprofits and the limited resources available to the sector being spread ever thinner.

PND: One of the linchpins of your argument is that a more efficient nonprofit sector is likely to be a more innovative nonprofit sector. In what way does efficiency lead to innovation?

WS: Well, efficiency frees up resources for innovation, either within existing organizations or in the form of funding for new organizations. A more efficient organization also tends to be a more sustainable organization, and that improves its chances of innovating. Part of what the Tides Center and other fiscal sponsors provide is not only the ability to tap into a scaleable infrastructure, but the opportunity for nonprofit leaders to focus on their mission. I believe that focus is critical to innovation.

PND: Nonprofits, especially in the formative stage, are known for the passion they bring to their work. Earlier, you alluded to the difficulties inherent in collaboration. Is collaboration the enemy of passion?

WS: First, let me say that I didn't mean to suggest that collaboration is inherently difficult. It's just that I was somewhat surprised by the emphasis on collaboration in the nonprofit sector. Remember, I come out of the venture capital world, and in that world the first question you ask is, Is there a market for the thing we are thinking of putting our money into? And the second is, Is this product or service truly differentiated from what's already out there? If it isn't, then you have to ask why it can be more successful than the others. It's a very different framework than the one that prevails in the nonprofit sector.

PND: Let me ask the question in a slightly different way. How do you get the leaders and staff of a nonprofit organization, especially a younger, less established nonprofit, to subsume the passion they have for their work to the vision of a larger organization that may be better equipped to do that work?

WS: I think it requires a couple of different things. First, it requires a willingness on the part of the two organizations to work together to make a difference. People and organizations need to understand that anything that enhances the ability of the sector to have an impact, whether it's fiscal sponsorship or more collaboration or even merging two organizations with similar missions, is a positive thing. But it also means that existing organizations have to be receptive to innovation and new ways of thinking. It's not a one-way street; it requires both parties to move toward each other.

PND: Are you also saying that nonprofits need to become more businesslike?

WS: No, that's not a term I would use. I would say that both sectors have much to learn from each other. There are many lessons from the world of business start-ups, for example, that might be useful in the nonprofit world. Lessons, for example, about how to partner and merge. But there's also much the nonprofit world can teach business. The kind of passion you've talked about, which really does help fuel the success of organizations with limited resources, is something you see in serial entrepreneurs but all too often is missing in more established enterprises. Especially now, in our hyper-competitive, globalized economy, to have a vision and to be able to accomplish what you set out to accomplish within a framework of constrained resources is a very powerful thing, and nonprofits seem to have this in abundance.

It's part of what I'm trying to accomplish at Tides. Recently, for example, we invited experts and advisors from various sectors — academics, foundation folks, nonprofit people, corporate people — to an advisors meeting to help us figure out how to better structure our governance, which is fairly complex. We not only have our own board, we also have a regional board in Pennsylvania and a range of different types of advisory boards of our projects, and we're trying to be innovative in thinking about the best way to deal with that structure. So we brought together people from different fields to help us look at it, and it turned out to be an extremely rich and informative conversation.

PND: The West Coast and your home base, the Bay Area, seem to be the locus of a lot of these conversations. What is it about the region that makes it such a fertile laboratory for these kinds of experiments?

WS: I really think that part of what makes organizations successful and innovative is the ecosystem or environment in which they operate, and when you think about it, the Bay Area is one of the most nourishing environments for entrepreneurs in the world. Nonprofits in this area can't help but be influenced by that. You have a new generation of donors and funders who, by virtue of their experience in technology and biotech, are focused on innovation. You have social entrepreneurs who have new ideas and are willing to take risks to turn those ideas into reality. It's all part of being in an area where entrepreneurship is valued and supported in many different ways. And it's also about having organizations like the Tides Center that can help entrepreneurs get their ideas off the ground and provide them with the support they need to be successful.

PND: Does that kind of ecosystem exist in other parts of the country? And if so, have you thought about expanding your network into those areas?

WS: Although I'm still somewhat new to the sector and wouldn't call myself an expert, I do think that kind of ecosystem exists in other parts of the country. We have an office in Pittsburgh, for example, and there are tremendous things happening in that community with regard to social entrepreneurship and new ways of thinking about revenue generation for nonprofits and regional capacity building. It's very exciting.

PND: It's funny you should mention Pittsburgh. Earlier this year, in the heat of the presidential campaign, Tides was singled out in op-ed pieces in the Wall Street Journal and the Washington Times for its support of a grassroots group called September 11th Families for Peaceful Tomorrows and for accepting funding from the Pittsburgh-based Heinz Endowments. What was that all about?

WS: We ask ourselves that every day. Look, as I said earlier, we believe in a big-tent approach, and as part of that approach we support a range of different organizations. We're proud of our support for September 11th Families for Peaceful Tomorrows. We believe in democracy and in fostering an environment in which active, engaged citizens are able to discuss, openly and freely, important issues of the day, and that's what Families for Peaceful Tomorrows is all about. It's as simple as that. What's more, Families for Peaceful Tomorrows has not been funded by the Heinz Endowments. The Heinz Endowments have funded a number of organizations through the Tides Center, but they've been organizations focused on environmental sustainability, youth issues, and other areas.

PND: How did Tides respond to those op-eds?

WS: Drummond Pike, the president of the Tides Foundation, wrote an op-ed in response that was published in one of the Boston papers. We also put out a press release, and we've tried to respond to any and all media inquiries. But, unfortunately, the media doesn't always ask for our side of the story.

PND: Did 9/11 change the way your organization does its work?

WS: Not fundamentally. Clearly, groups like Families for Peaceful Tomorrows came into existence because of what happened on 9/11, but apart from the fact that we have projects that have missions that stem from 9/11, the center's work has remained pretty much unchanged. Again, we really don't focus on an organization's programmatic activities; instead, as long as they share our vision of a healthy, just, and sustainable world, we try to support them from an infrastructure standpoint, leaving them to worry about whatever their mission objective might be.

PND: You've just completed your first year as the center's executive director, barely enough time to catch your breath. Where would you like to lead the Tides Center over the next three to five years?

WS: I really view the Tides Center as an underutilized asset, and I'd like to do something about that over the next few years. I'd really like to see us become a major player in creating a more efficient infrastructure and shared services environment for the sector, both through our own support of 501(c)(3)s and through our work as a fiscal sponsor, as well as by fostering the creation of new fiscal sponsors in places where they're needed, either through regional Tides Center offices or by supporting other entities that are well-positioned to become fiscal sponsors and simply need guidance, technical assistance, and access to an efficient technology platform.

Right now the way we do that is pretty basic: We make sure our projects are legal and follow the rules and regulations in terms of the way they do things, and we provide them with financial, HR, and other administrative support. But down the road we really hope to expand our efforts in this area by creating partnerships with management support organizations, who in turn would bring their capabilities to bear on the projects and organizations with whom we work. Obviously, this would require us to determine an organization's position in terms of its life cycle so that we could begin to recommend to them things they needed to do to move to the next stage and connect them to resources as they move along that path. It would also include working with them on governance issues — for example, a really small project might not need a big advisory board, in which case we could provide the governance mechanism, while in other cases we might recommend something that looked and acted very much like a regular board of directors but allowed us to remain engaged with the project or organization and monitor their work.

So we're beginning to look at developing a system that will enable us to provide this kind-of-soup to nuts capability. I talked earlier about the importance of healthy ecosystems for the success of any organization, and what we would like to do is help to create the nonprofit ecosystem in a more systematic fashion.

PND: It also sounds like an opportunity to work across the funder-grantee divide with organizations that are already working on these issues?

WS: Absolutely. We plan to walk our talk in terms of partnering, not least because we won't be able to do this without having strong partnerships with a number of different organizations. I've had conversations with a number of them about how they see this working and how they would like to be involved. But it's going to involve extensive coordination — with funders, with management support organizations, with other fiscal sponsors — and we hope to be right in the middle of it.

PND: Do you see the center eventually expanding its work beyond the borders of the U.S.?

WS: Eventually. We've been approached a number of times by organizations and individuals from other countries about what we can do in that regard, and the Skoll Foundation has funded a feasibility study for us to explore our options. In fact, in September we attended a meeting of Eastern and Western European leaders sponsored by the International Diplomacy Council that was devoted to this very issue.

One of the things we've done on that score is to assist in establishing Tides Canada. That was instigated by a fellow named Joel Solomon, who became more and more discouraged the more he thought about the state of philanthropy in Canada, particularly with respect to environmental issues. So he approached Drummond [Pike], and out of those conversations came the Tides Canada Foundation as well as something called the Sage Center, which is a nonprofit incubator that works much like the Tides Center. That's something we've helped to develop, and obviously we believe there are additional opportunities to either create structures like that in other countries, or to encourage the growth of fiscal sponsorship or incubation services in other countries.

One of the efforts I'm particularly excited about is the collaboration work we are doing with our fiscal sponsor colleagues. In October, we met with the leading fiscal sponsors in the country in Los Angeles and reached an agreement to work on establishing standards and ultimately building toward a convening in 2006 that will include fiscal sponsors, management support organizations, funders, and others. We believe that if fiscal sponsors can work with just 5 percent of the nonprofit organizations that have $50,000 to $1 million in revenue and help them reduce their costs by just 1 percent, $20 million would be freed up for mission work. So obviously, the work of creating and expanding the field and of creating an efficient platform that can enable fiscal sponsors to be more cost-effective has huge benefits for the sector.

PND: Well, thanks for speaking with us this afternoon, Willa.

WS: You're very welcome. It was a pleasure.

Mitch Nauffts, PND's editorial director, spoke with Willa Seldon earlier this year. For more information on the Newsmakers series, contact Mitch at mfn@fdncenter.org.