07/06/2011 04:35 pm ET | Updated Sep 05, 2011

Crisis Philanthropy: Partnerships & Co-Investment

United States Supreme Court Justice Oliver Wendell Holmes was fond of saying, "leverage is everything." Today, philanthropy is coming to recognize the value of this insight as essential to fulfilling sector-wide shared missions. The leaders of major foundations - Judith Rodin of Rockefeller, Luis Ubinas of Ford, Bill and Melinda Gates of Gates, and President Bill Clinton of the Clinton Global Initiative - all embrace the philosophy of leveraging, often in the language of public-private-partnerships, as driving their approach. Tough economic times demand that not only foundations but also individuals and governments embrace this leveraging approach, to systematically hone our ability to innovate on how we partner. I call this new approach to giving Crisis Philanthropy.

Why is Crisis Philanthropy so important today, and what is it all about. The philosophy behind this approach has five axioms. First, constrained budgets and ballooning social needs means that money must go further -- foundations are asked increasingly to fulfill obligations once shouldered by governments. Second, we face a crisis of opportunity in this country that can only be addressed by partnerships that leverage the capacity and ingenuity of unemployed and under-employed Americans. Third, we must view foundations as coinvestors alongside federal, state and local governments, private firms, non-profits, and individuals - all of whom must be imbibed by the public interest and also ensure that they find ways of fulfilling their respective fiduciary duties in doing so. Fourth, foundations must identify the unique leverage that they bring to the table in addressing specific challenges. Fifth, partnerships demand foundations not only to rethink metrics of success but also to find ways of constantly learning from experience and spearheading innovations,

Federal, state and local governments are systematically shifting toward a partnership approach. It is the cornerstone of the Obama Presidency. We see it in HUD-DOT-EPA's Sustainable Communities, Secretary Clinton's State Department, and First Lady Michelle Obama's Healthy Food Financing Initiative. I recently co-auhored a study explaining the economic philosophy of partnerships and detailing examples across domestic and foreign affairs with the financial support of the Ford Foundation. Importantly, these and many other partnership-driven initiatives within government have been incubated by foundations before being embraced by the administration. Foundations, at their best, are teaching the federal government how to partner.

Where then do we go from here? Importantly, we must recognize that crisis and adversity are parts of an ecosystem of innovation, central to how we understand the American Dream. It is not that crisis is an opportunity to do great things, but instead Americans do great things in the face of adversity. Crisis Philanthropy must leverage this capacity and ingenuity. This means that foundations, government, private firms and non-profits must not only learn from one another, but also from how grantees, and the intended beneficiaries of their work, conceive of leverage and innovate in the midst of crisis.