Philanthropic foundations can become prisoners of their best ideas.
In the realm in which modern philanthropy must operate to develop and advance new concepts, some notions never make it past the idea stage. Others cast a bright light for a time before fading or sparking other ideas, and some just never glow with the promise initially envisioned.
But what about the ideas that grow to meet or even exceed expectations? In the foundation world, it actually may be easier to cut our losses than manage our wins.
High-performing operating programs can expand to consume more than their share of resources. They gobble up time and money, and staff can struggle to take on the day-to-day weight of administering these programs.
Faced with the challenge of finding a place where great programs can scale, we established Kauffman Support Services, Inc., in 2010 as an affiliate of the Ewing Marion Kauffman Foundation.
We created Kauffman Support Services to maximize operational strength and efficiency by centralizing key back-office functions and making them available across multiple Kauffman operating programs. As the sole or primary funder for these operating programs, Kauffman has a vested interest in moving them in the form of affiliate entities to successful self-sustaining organizations.
Kauffman Support Services provides operating support to these Kauffman operating programs:
- Ewing Marion Kauffman School
- Kauffman FastTrac
- Kauffman Labs for Enterprise Creation
- Kauffman Scholars, Inc.
- Urban Entrepreneur Partnership
Key considerations that led to the formation of Kauffman Support Services
- Operating programs, while small organizations to start, still have sophisticated finance, accounting, human resources, legal, information technology, and communications needs.
- Qualified personnel with substantial operational experience are needed to lead and advise affiliate operating programs.
- In the early stages of an affiliate's formation, there is generally a mismatch between available resources and funding required to staff administration appropriately.
- For a small organization, obtaining a reasonably priced health care plan is a challenge.
- Kauffman, as sole or primary funder, has a vested interest in the success of these organizations, including moving them to be self-sustaining—thus the need for oversight, transparency, and quality support.
- A model or process for startup affiliate administration will help avoid inefficiencies caused by "recreating the wheel."
These operating programs, as early stage, independent organizations, often do not have the resources to justify full-time employees in administrative areas where expertise is critical to success. And while many of these services can be contracted, the cost can be high and the attention less focused. Combining resources of the Kauffman operating programs affords improved quality, a higher level of expertise, and greater cost efficiency.
Specifically, Kauffman Support Services provides operational and management advisory services, business development, financial management, human resources and payroll services, corporate governance and legal services, communications and marketing services, and information technology services. To structure the work, we have hired functional expertise, shared the cost of expertise across the multiple organizations, dedicated staff with incentives aimed at responsiveness, and established best practices. This structure affords additional oversight, transparency, and the assurance of quality support for each of the affiliate operating programs, which is critical given our vested interest in their success.
Kauffman Support Services bills the individual affiliate operating programs based on appropriate cost drivers such as headcount, annual expenses, annual revenue, etc. This allows affiliates to consider the value of services received while also appropriately reflecting the costs associated with them in their financial results.
The creation of Kauffman Support Services places us in uncharted territory. The process can never be perfect, but within our framework, we are prepared to make adjustments as we move ahead.
In our view, we owe it to these successful initiatives and proven programs to create a home where they can grow to their fullest potential. We believe that through Kauffman Support Services, these organizations will be better poised to achieve even greater things, ultimately helping even more individuals to participate successfully in our economy and society.