I have had the pleasure of knowing Tom David for many years and have always valued his insightful analysis of philanthropy from his nearly 30 years working in and around our field. He has become an important thought partner in Grantmakers for Effective Organizations' work on the role of culture in enabling grantmakers to operate in a way that helps grantees succeed. You can find another post I've written about values and culture here. Below are some insights from his recent paper on philanthropy's cultural source code that will be published shortly by GEO.
Kathleen Enright: What spurred your thinking about the role of culture in philanthropy?
Tom David: In my various roles in foundations and as a consultant, I have observed that while we may devote a lot of energy to discussing and refining strategy, we too often fail to examine the underlying culture of the organization. It has a subtle but profound influence on foundation behavior. In my experience it frequently differentiates the organizations that, by and large, make good decisions in the interest of the communities they serve from those that seem to stumble. For example, foundations that emphasize accountability and rigorous due diligence might accidentally send the signal that they don't trust their grantees which makes grantees less likely to be candid when problems arise.
In any organization, culture can help align values with actions. It can provide a shared sense of coherence. It helps establish and maintain appropriate standards of behavior and productivity across the organization and may simplify the task of integrating new staff into their jobs. But, at the same time, it can stall efforts to change in productive ways and lead to institutionalizing behaviors that are unproductive.
Enright: Time and time again, we've heard of the positive impact that intentional conversations around culture have had for both funders and their grantees. Why are these conversations so hard for organizations to initiate and pursue?
David: It's difficult for a number of reasons. First of all, leaders need to be willing to do the hard work of attending to culture. For some, cultivating a healthy culture seems to remain forever on the periphery. Even when there's the will to do so, it's difficult to be objective about culture. After all, it's the air you breathe. Cultural forces are powerful precisely because they can operate outside our awareness.
Established cultures can also be notoriously difficult to transform. If foundations intend to contribute to progress on complex issues, they need to take a fresh look at whether their longstanding internal cultures are equipping them for success or whether they represent a fundamental mismatch with their larger strategic goals and aspirations. For instance, can your foundation make decisions quickly when the work demands it? Are you willing to give up some control to be part of a larger change effort?
Enright: Do you think that philanthropy is able to change rapidly enough to stay relevant?
David: I'm convinced that, in many cases, our self-imposed institutional constraints are blinding us to historic opportunities or making us too slow to act. I believe our shared conception of good philanthropic stewardship should include attention to culture, especially given emergent complex challenges like climate change.
Enright: Are there a set of cultural elements that many foundations seem to share?
David: In my work with foundations, I have noticed three primary sources that have shaped organizational culture field-wide. I have been talking about these as making up the cultural "source code" of our organizations. Included in that source code are the cultural legacies of banks, universities and for-profit corporations.
The core cultures of these kinds of institutions bring remarkable strength, but foundations tend to hold on to some of the less helpful aspects of those cultures as well.
Enright: How so?
David: Well, foundations may model the fiduciary integrity of financial institutions, but there's a downside to that focus. Boards often become overly fixated on perpetuity and measure performance by how much staff has been able to grow the assets rather than by how generous or successful they have been in distributing them for their core charitable intent.
Foundations also model the core values of analytical thinking and high intellectual standards from universities, but one the of the shadow sides of university culture is a tendency toward elitism, including a preoccupation with credentials, status and prestige.
And as they model an emphasis on leadership, innovation and data-informed decision making from business, the overriding goal can become to grow the assets of the foundation.
Foundations have also enjoyed significant independence from demands for more transparency or public accountability. For foundations to prepare to act in this more open way will require a new consciousness about the influence of organizational culture.
Enright: What advice, if any, do you have for those foundation leaders who recognize the need to be deliberate and proactive about shaping the culture they want?
David: Our first task is to recognize the strands that comprise the cultures of our organizations and ask ourselves the critical question: in what ways is our culture an asset and when is it a liability in pursuing the fulfillment of our missions? We seem to have assumed that foundations should look and act a certain way, when there are lots of other potential designs for our organizations that could much more appropriately encourage adaptive thinking and creative approaches to the challenges we confront.
I'm typically not an advocate for encouraging nonprofits to operate "more like a business," but I think we could benefit from a sideways glance at organizations like Google, IDEO, and Zappos that have put culture at the center of their business models, with demonstrable positive results for themselves and their customers. It's too important a dimension of organizational functioning to ignore.