Net Gains: A Handbook for Network Builders Seeking Social Change

Net Gains – Version 1.0 Page 1 of 117 NET GAINS: A Handbook for Network Builders Seeking Social Change By Peter Plastrik and Madeleine Taylor Version 1.0 (2006) © Peter Plastrik, Madeleine Taylor 587 585 584 583 582 581 580 579 578 577 576 575 574 572 571 570 569 568 564 563 562 561 560 559 558 557 556 555 554 552 551 550 549 548 547 546 545 544 543 542 541 539 538 537 536 535 534 533 532 531 530 529 526 525 524 523 522 521 520 519 518 517 516 515 514 513 512 511 509 508 507 506 505 503 502 501 500 499 498 495 494 493 492 491 490 489 488 487 485 484 482 481 480 479 478 477 476 475 474 473 472 471 470 469 468 467 465 464 463 462 461 458 457 455 453 452 451 450 449 448 447 446 444 443 442 440 439 438 437 436 433 432 431 430 429 428 427 426 425 423 422 421 420 419 418 417 416 415 413 412 411 410 409 408 406 405 403 402 401 399 398 397 396 395 392 391 390 389 388 387 386 385 384 383 382 381 380 379 378 377 376 375 374 373 371 370 369 368 366 365 363 362 361 359 358 356 355 354 353 352 351 350 349 348 347 346 345 344 343 342 340 339 338 337 336 335 334 333 332 331 330 329 328 327 326 325 324 323 322 321 320 319 318 317 316 315 313 312 311 309 308 307 306 305 304 303 301 300 299 297 295 294 293 292 291 290 289 288 287 286 285 284 282 281 280 279 278 277 276 275 274 273 272 271 270 269 268 267 266 265 264 263 262 261 259 258 257 256 254 253 252 251 250 249 247 246 245 244 243 241 240 239 238 236 235 234 233 232 231 230 229 228 226 224 223 222 221 220 219 218 217 216 214 213 212 211 210 209 208 207 206 205 204 201 199 198 197 196 195 194 193 192 191 190 188 187 184 183 181 180 179 177 176 174 173 172 170 169 168 167 165 164 163 162 161 160 158 156 155 153 152 150 149 148 146 145 142 141 140 138 137 136 135 134 133 132 131 130 129 128 127 126 125 124 123 122 121 120 117 116 115 113 112 111 110 109 108 106 105 104 103 102 101 100 098 097 096 094 093 092 091 089 088 087 086 085 084 083 082 081 079 078 077 076 075 072 071 070 069 068 067 066 065 060 059 058 055 054 053 052 051 050 049 048 047 046 045 044 043 042 041 040 039 037 036 035 034 033 032 031 030 029 028 027 025 024 023 022 021 020 019 018 017 016 015 014 012 010 009 008 007 006 005 004 003 001 Net Gains – Version 1.0 Page 2 of 117 Networks are present everywhere. All we need is an eye for them. Albert-Laszlo Barabasi 1 Networks are the language of our times, but our institutions are not programmed to understand them. Helen McCarthy, Paul Miller and Paul Skidmore 2 Net Gains – Version 1.0 Page 3 of 117 TABLE OF CONTENTS Introduction The Authors Acknowledgments Part I: Is a Network Approach Right for You? 1. Starting Points 11 2. What We Mean by Network 14 3. The Difference a Network Makes 18 4. The Business Case for Social-Change Networks 24 5. Gut Check: What It Takes to Build Networks 28 Part II: Organizing Networks: Seven Decisions 6. Three Networks in One: Connection, Alignment, and Production Nets 33 7. Reasons that Bind: Collective Value Propositions 39 8. Who’s In, Who’s Out: The Privilege of Membership 45 9. Who Decides What and How: Network Governance 48 10. The Shape of Things To Come: Structures of Networks 51 11. Rules to Live By: Operating Principles for Network Building 58 12. The Different Roles of Network Builders 61 13. When Funders Organize Networks 64 Part III: Managing a Network’s Development: Five Tasks 14. Weaving Connections: Ties that Bind 68 15. Facilitating Alignment: Production Agreements 74 16. Coordinating Production: Who Does What 78 17. Operating the Network: Management Issues to Anticipate 81 18. Taking a Network’s Pulse: Monitoring and Evaluation 87 19. Visualizing Networks: Maps that Reveal 97 Part IV: Net Gains in the Social-Change Sector 20. Building the Civil Sector’s Networks: Five Strategies 102 A Network Glossary 106 Resources for Network Builders 109 End Notes Cover art: Network map of the after-school sports program network in Boston, provided by the Barr Foundation, using Inflow software. Inflow also used for maps appearing with text. Net Gains – Version 1.0 Page 4 of 117 INTRODUCTION This handbook provides the growing number of people who are developing networks for social change with practical advice based on the experiences of network builders, case studies of networks small and large, local and international, and emerging scientific knowledge about “connectivity.” It is intended to join, complement, and spur other efforts to capture and make widely available what is being learned in the business, government, and civil sectors about why and how to use networks, rather than solitary organizations, to generate large-scale impact. We start with the point of view that networks provide social-change agents with a fundamentally distinct and remarkably promising “organizing principle” to use to achieve ambitious goals. Given the complexity and enormity of social problems, the unrelenting pressure to reduce the cost of creating and implementing solutions, and the recent proliferation of small nonprofit organizations, networks offer a way to weave together or create capacities that get better leverage, performance, and results. Relying on networks to generate social change

the business, government, and civil sectors about why and how to use networks, rather than solitary organizations, to generate large-scale impact. We start with the point of view that networks provide social-change agents with a fundamentally distinct and remarkably promising “organizing principle” to use to achieve ambitious goals. Given the complexity and enormity of social problems, the unrelenting pressure to reduce the cost of creating and implementing solutions, and the recent proliferation of small nonprofit organizations, networks offer a way to weave together or create capacities that get better leverage, performance, and results. Relying on networks to generate social change is not new to philanthropy and nonprofits. Many foundations have funded the civil rights, feminist, and consumer movements for decades and more recently have assembled “learning networks” of grantees that work together to innovate and improve their practices. As Jon Pratt, executive director of the Minnesota Council of Nonprofits, points out, “community organizers and grass roots organizations have applied network concepts for years.” 3 But something new and important is afoot. The nonprofit and philanthropic sectors are under growing demand to do more and better. The number of nonprofit organizations is expanding substantially, as are the tasks they undertake in light of government downsizing. 4 “We’re seeing growth of nonprofit organizations, but not much change in the systems they are trying to impact,” says Pat Brandes, a foundation executive in Boston. Nonprofit capacity is a “chronic problem,” writes Jonathan Peizer of the Open Society Institute. “The sector must embrace new paradigms.” 5 Gideon Rosenblatt, executive director of a Seattle nonprofit and a former Microsoft senior manager, notes that “many environmental leaders are questioning whether the environmental movement has the right strategies and organizational structures in place.” The movement, he contends, has “over-invested in institutional overhead” and “is replicating board development, fundraising and many other functions across thousands of very small organizations.” It is essential, Rosenblatt concludes, to “un-bundle” and rebuild the environmental organizational structure using network approaches. 6 Foundations, a crucial capital market for nonprofits, and governments that contract with nonprofits increasingly seek improved impact, leverage, and “return on investment.” Nonprofits are routinely expected to be more strategic, entrepreneurial, and “high performing,” and to focus on producing outcomes. 7 Some efforts to increase the impact of nonprofits, such as “venture philanthropy,” have focused on strengthening individual organizations to be more effective and efficient. But, as the Maine Community Foundation notes, this approach can be inefficient, since its capacity-building resources are invested across many organizations without regard for redundancy and overlap among the organizations. 8 Meanwhile, foundations typically fund programs rather than Net Gains – Version 1.0 Page 5 of 117 methods of delivery, but more of them are forming their own networks, rather than going it alone, to develop their strategies and pool their resources. In this shifting context for the civil sector, networks represent a fundamentally different response for achieving efficiency and effectiveness. They should not be dismissed as merely the latest fad promoted by business leaders, consultants, and foundations who don’t understand the uniqueness of the nonprofit world. “Network strategies offer a powerful set of tools to manage the key tasks and challenges faced by nonprofits,” argues Jon Pratt. “Network thinking offers powerful analytic and strategic tools for nonprofit boards and managers to increase the stability, influence and autonomy of their organizations.” 9 Most of us have networking in our blood. We build personal networks and connect with other individuals or organizations to get things done that we can’t do by ourselves. But there’s much more to network building than this instinct to link. Building a network is a practice about which much has been learned from the experiences of network builders themselves and the experiments and insights of researchers in mathematics, physics, anthropology, and other disciplines. This is news to most of the social entrepreneur-network builders we meet. Networks in the nonprofit sector are rarely organized to take full advantage of what networks can do. “We in the nonprofit sector always say, ‘We connect,’ but we don’t really know much about connecting,” observes Marion Kane, executive director of the Barr Foundation. For many decades, the overriding organizing principle of the social-change sector, as with business and government, has been the stand-alone organization. This focus has driven the understanding of management and leadership; the CEO or Executive Director at the helm of the lone organization is an icon of the age. But hierarchical, organization-centric is losing its sway. Many people, even in the largest, most venerable organizations, recognize now that to gain greater impact they have to let go of organization-centric ideas about how the world works, and they are adopting network-centric thinking. The power of networks is drawing increasing attention in mass media headlines as well as in specialized scientific literatures. From the explosive growth of Howard Dean’s Internet-based presidential campaign in 2004, the frustrating resilience of Al Qaeda, and the far-flung mobilizations of the World Social Forum and Moveon.org to the connectivity evident in the spread of the Internet and HIV/AIDS, the structure of electricity grids across the U.S., and the extensive influence of a small number of linked members of corporate boards of directors—networks have stirred the interest of people seeking innovation and large-scale change. 10 In July 2006, a professor of military science announced that “we are now in the first great war between nations and networks,” referring to the battles in south Lebanon between Israel and Hezbollah, which operated through many small units that were dispersed, improvisational, and without a central control. 11 “Today we increasingly recognize that nothing happens in isolation,” writes physicist Albert-Laszlo Barabasi in Linked: Most events and phenomena are connected, caused by, and interacting with a huge number of other pieces of a complex universal puzzle. We have come to see that we Net Gains – Version 1.0 Page 6 of 117 live in a small world, where everything is linked to everything else... We have come to grasp the importance of networks. 12 What is new about this?

between Israel and Hezbollah, which operated through many small units that were dispersed, improvisational, and without a central control. 11 “Today we increasingly recognize that nothing happens in isolation,” writes physicist Albert-Laszlo Barabasi in Linked: Most events and phenomena are connected, caused by, and interacting with a huge number of other pieces of a complex universal puzzle. We have come to see that we Net Gains – Version 1.0 Page 6 of 117 live in a small world, where everything is linked to everything else... We have come to grasp the importance of networks. 12 What is new about this? Societies have long had transportation and communications networks. Social scientists have analyzed social networks for decades. Networks have been represented in mathematical thinking for hundreds of years. And the existence of networks is readily evident in the personal networks that most people build and maintain. Clay Shirky, a partner in the Global Business Network consulting firm, puts his finger on what is changing: “We understand networks better—a lot better—than we used to, and we have much better tools for manipulating them.” 13 Now, he says, people can “rely” on networks because “we can finally begin to predict how networks will behave over time.” This crucial development has happened especially because of the emergence of the “science of complexity,” which is bringing together scientific disciplines to understand the behavior of the many interacting parts of complex systems, whether they are epidemics of disease, new ideas that become crazes, failures of large infrastructure networks such as electricity grids, changes in social norms, or successful business innovations. 14 We are coming to understand the “basic organizing principles” of complex connected systems, explains Columbia University sociologist Duncan Watts in Six Degrees, and this allows us to anticipate how networks may behave. 15 Networks have unique properties and effects and tend to follow a typical developmental path. This is why it is possible to foresee the challenges that network builders will face and the options they will have when they seek to steer a network’s start-up, growth, connection to other networks, and evolution. Network builders don’t have to just fly by the seat of their pants. They can recognize that there are three different types of networks and that each requires its own unique planning and management. They can understand the simple, underlying rules of how networks work—violate them and you lose some of the power of and investment in networking. They can learn the best ways to undertake the major developmental tasks of network builders—from setting a network’s purpose and coordinating its activities to assessing its health. “As the networked approach to governance proliferates,” write Steve Goldsmith, a former mayor of Indianapolis, and William Eggers in Governing by Network, what becomes important is “learning how to manage a government composed more and more of networks instead of people and programs.” 16 They are right, and not just about government. We have crossed the threshold to what Watts calls “the connected age.” What more and more social entrepreneurs want to know now is what to do next— how to expand, fund, sustain, and assess the health of networks. There is a growing realization in the nonprofit sector—within organizations and foundations, and among social entrepreneurs—that the case for building networks is quite compelling. And those who have built networks are finding that while they may not be sure how to handle all the challenges of network building or may want to “tweak” the network a bit to improve its performance, they have become believers in the “network-centric” way of getting things done. Net Gains – Version 1.0 Page 7 of 117 In this Handbook we offer practical information and advice for people who are building or connecting networks for social change. We lay out a handful of key concepts that are essential to understanding how networks work and what they can do for you. We discuss how to build networks of all types and how to manage them as they evolve. We have written this handbook for nonprofits, so they can become more deliberate and successful in building networks for greater social impact. We believe they will find, as we have, that network approaches are as valuable to the civic sector as in business and government. We have also written for those who, like us, are working to put know-how about networks into the service of practitioners. We have drawn from their work (with full acknowledgment) and have tried to make an additional contribution: developing explanatory frameworks, raising new questions, providing new answers, and adding a directory of resources we found useful. Finally, we have written this handbook for those who are curious about networks, but are not convinced that networks will make a difference for them. We provide concrete examples of practice and easy-to-understand “translations” of the emerging theories about networks. Advice to the Reader There is no one formula for how to build a network. There are many different kinds of networks and the network-building process is neither neat nor linear. So our Handbook is not a step-by-step “cook book.” Inevitably, you must discover some of how to build your network, not just apply a proven methodology. But there is a body of know-how, about how to think and how to do, that can help you. We have organized the Handbook so you can read it from beginning to end or by dipping into the Parts and Chapters—chunks of know-how—most relevant to you. We are also quite interested in receiving your feedback—criticisms, new frameworks and stories, specific questions and advice for others—from your own experiences as a network builder. Contact us at netgains@in4c.net. Thank you. Net Gains – Version 1.0 Page 8 of 117 THE AUTHORS Peter Plastrik and Madeleine Taylor are coauthors of two previous articles, sponsored by the Barr Foundation, about network strategies in the civil sector: “Network Power for Philanthropy and Nonprofits” and “Lawrence CommunityWorks: Using the Power of Networks to Restore a City.” Peter Plastrik is president of the nonprofit