Strategic Philanthropy

This is a post about strategic philanthropy, expanding on Hal Harvey's and my recent book, Money Well Spent: A Strategic Plan for Smart Philanthropy (Bloomberg 2008). The idea of strategic philanthropy may seem so obvious that there's nothing to write about.

There is also no shortage of excellent blogs that explore philanthropy in general, and which periodically engage in terrific conversations about strategy. Tactical Philanthropy, Philanthropy 2173 and the philanthropy section of White Courtesy Telephone come to mind. But I hope to use this forum to focus specifically on strategy and perhaps add to the conversation.

I've just participated in a vigorous debate about at a meeting of the Philanthropy Roundtable. My critic was William Schambra, a distinguished thought leader in philanthropy, who directs the Bradley Center on Philanthropy and Civic Renewal at the Hudson Institute, a conservative think tank in Washington, D.C.

At its heart, strategic philanthropy is result-oriented. It is intended to help you use your money most effectively to achieve whatever your philanthropic goals may be. Essentially, it involves (1) setting clear, measurable goals, (2) developing sound, evidence-based strategies for achieving them, (3) measuring progress along the way to achieving them, and (4) determining whether you were actually successful in reaching the goals.

Strategic philanthropy doesn't favor any particular goals. You may want to fight hunger and disease in Africa or in your home town, or improve the arts, or combat climate change. Strategic philanthropy doesn't have a liberal or conservative point of view. It is equally useful for philanthropists who support opposing programs, for example supporting or opposing gay marriage.

So what were Bill Schambra's objections? Fundamentally, he had two. The first harkened back to the early 20th century idea of "scientific philanthropy" that motivated some large foundations such as Rockefeller and Ford. Giddy with the hope that the newly emerging social sciences could solve complex social problems, these foundations undertook some ambitious reform agendas. Whether or not, to quote the title of a book published by the Bradley Center, these foundations committed "great philanthropic mistakes," many did not achieve their aspirations. The social sciences have turned out to provide much less certainty than had been hoped for. Mr. Schambra is concerned that strategic philanthropy too gives excessive power to unaccountable actors pursing grandiose theories.

But strategic philanthropy has learned from the experiences of the "scientific philanthropists" and is based on evidence rather than on abstract social theory. For example, philanthropists who want to improve the education of disadvantaged children can increasingly look to randomized controlled studies to learn which approaches worked best.

Mr. Schambra's second objection is that a strategic philanthropist requires an applicant to describe his or her own goals and strategies before funding the organization -- a process he sees as inconsistent with what might be called the "wisdom of communities" (my term, not his). In his view, community organizations are close to the ground and know how to meet the needs of their constituents better than any philanthropist does. He regards a funder's requirement that an applicant describe goals, strategies, and the like as meddlesome.

Sure, most applicants would prefer to take the money with no questions asked. But among organizations doing the same kinds of work, some are more effective than others. Achieving social change requires philanthropists to direct money to the organizations that use it most effectively. Whether an organization is housing and feeding the poor or improving educational outcomes or advocating for or against gay marriage, a philanthropist has every reason to ask whether it has a sound strategy and a good track record as well as good leadership. The alternative is to sow hundreds of seeds without ever finding out which take root and flourish.

Comments

[jmorariu]

Hi Paul,

Just had the pleasure of attending your panel at the Hudson Institute. Your book is the type of work the philanthropic sector is in dire need of, even if they do not know it. I believe the argument that strategic philanthropy lessens the importance of the "heart" connection to philanthropy is dangerous. In fact, those who practice strategic philanthropy, I would argue, do so because they have an incredibly strong "heart" connection to their work; they care so deeply about the work they seek to eliminate any wastefulness or missed opportunity through careful planning and strategizing.

One question I had for you but ran out of time to ask is this: In regard to the conversation about spending one dollar today or one dollar tomorrow considering the diminution of foundation endowments and foundation desire to exist in perpetuity, what is your perspective on spending today to keep nonprofit organizations (foundations' partners in philanthropic work) strong and in existence so that the infrastructure remains to do the "good work" when foundation endowments eventually bounce back?

I look forward to your feedback. Thanks again,
Johanna (jmorariu [at] innonet [dot] org)

[kevindjones]

I am finding the work of Sabina Alkire at the oxford poverty and human development initiative, productizing amartya sen's capacity approach to development intriguing in making sure we are including the voices of the poor and women and children as we measure social impact. her work is being adopted widely by development agencies and i am exploring how it could be applied in fair trade.

[DavidBonbright]

Like Hamiltonian and Jeffersonian traditions in American political thought, the contrasting perspectives of the outside social investor interested in results (strategic philanthropy) and those inside a problem trying to get their acts together to solve it (wisdom of communities) will endure, with changing manifestations according to the issues of the day. But there is also an exciting synthesis emerging in the field that uses indicators of progress as a way to re-frame relationships among all constituents to social change processes -- from donors to those meant to benefit. Leading edge practitioners are doing this by ensuring that community feedback -- as expressed through sound empirical methods -- is incorporated into public reporting.

The Feedback Principle of Public Reporting says, "Report not only what you say you are achieving, but also what your primary constituents say about what you say you are achieving."

To learn more see www.keystoneaccountability.org.

[Bongo2000]

"Mr. Schambra is concerned that strategic philanthropy too gives excessive power to unaccountable actors pursing grandiose theories." This concern seems not to be limited to strategic philanthropy, but to all private philanthropy. Don't see the relevance.

[DurhamCares]

I was at the debate in Florida and profited from hearing both views. It's hard to argue with having a strategic approach to philanthropy....though Bill gave it a good shot. I am a firm believer in what I think applied strategic philanthropy requires: strong measurement of the outcome......ROI in other words.

I am also a believer though, that it's often the smaller, indigenous groups without a well formulated strategy and access to grant writers, that are most effective at reaching target populations. I think of the DurhamEagles a youth football program in Durham that reaches 220 kids, 90% of whom live under the poverty line, but who with the help of the Eagles have 2x the graduation rate. They do all of this with just $25,000 in operating budget. That's $113 per kid! They get to that level because they are small, nimble and staffed by caring/motivated volunteers without staffers or overhead. They need to be better at planning, no doubt (and that's what we at durhamcares.org aim to do). But they also need someone who will (as in Bill's words) "write the darn check"

So for me, the answer is somewhere in the middle of both views, though admittedly closer to Paul's. The challenge we have though is to shepherd smaller, effective organizations along a path towards strategic planning in a way that doesn't compromise their effectiveness or their return.

[TacticalPhilanthropy]

Hi Paul,
Welcome to blogging! I like the phrase "wisdom of communities". I agree with you that funding the most effective nonprofit in a certain area is key. But Schambra is also correct that there is knowledge within communities, knowledge that might be difficult or impossible for an outside funder to truly understand or use. So how can strategic philanthropists leverage the "wisdom of communities" while at the same time making grants strategically?