12/14/2008 05:12 am ET | Updated May 25, 2011

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.