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Making the Most of Philanthropy: Authors of 'Give Smart' and 'Do More Than Give' Share Insights

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In an ongoing interview series on the most effective philanthropic practices, I spoke with Tom Tierney, co-author of "Give Smart: Philanthropy That Gets Results," and Leslie R. Crutchfield, co-author of "Do More Than Give: The 6 Practices of Donors Who Change the World," on the motivations behind their books, key findings of their research, and the culture of philanthropy today. Excerpts of their interviews are below, and links to the full discussion are at the end of each Q & A.

"Give Smart"

Rahim Kanani: In the book, you encourage donors and grant makers to pursue a process of inquiry around six questions. How did you arrive to this list, and why are these particular questions so critical when contemplating philanthropic efforts?

Tom Tierney: Einstein once said the "questions are more important than answers." If you aren't wrestling with the right questions, you certainly won't discover the most useful answers. Nearly every book and article we found on philanthropy tends to assume that there are universal answers, that the author truly understands those insights, and that the answers fit precisely with issues relevant to the reader. Learning is far more robust when people are asked pertinent questions that they subsequently have to work out for themselves. We believe that philanthropic decision-making will improve if people undertake this messy process of thinking hard.

The six questions in "Give Smart" emerged from our two years of research and writing, Joel's decades of experience, and hundreds of Bridgespan projects. We also got feedback from dozens of external readers. In the end, these six questions seemed to best reflect reality.

We have seen philanthropists struggle with each of these questions across a variety of settings. "What are my values and beliefs?" is a precursor to all other philanthropic decisions. Unless you are personally anchored in some general philanthropic direction, it is impossible to proceed effectively. Similarly, Bridgespan has deep experience in helping donors develop and implement strategies, as reflected in "What is 'success' and how can it be achieved?" and its companion, "What am I accountable for?" The majority of Bridgespan's work is with nonprofit organizations -- which directly raises questions of capacity ("What will it take to get the job done?") and donor/grantee relationships ("How do I work with grantees?"). Measurement is a pervasive theme throughout the social sector; we expand this topic to embrace learning and continuous improvement by asking, "Am I getting better?" The interesting aspect of all these questions is that philanthropists constantly wrestle with the related problems without always being clear about the exact question. Once we identified the patterns, we could move the questions from implicit to explicit, from background to foreground.

Moreover these questions are interdependent; the answer to one influences the answer to another. Consequently, the questions can be addressed from many starting points. Confronting the right questions is essential to combat the scourge of philanthropy, satisfactory underperformance. The absence of market forces and the deluge of positive feedback that accompanies the act of giving money away make it easy to fall into the trap of thinking you are doing better than you really are. In philanthropy, excellence must be self-imposed. And no one achieves excellence without pushing themselves on the fundamental dimensions of strategy, execution and continuous improvement that underpin the best philanthropy.

Tim Tierney is co-founder and chairman of The Bridgespan Group, a non-profit consulting firm serving the non-profit sector and its funders. He co-authored "Give Smart" with Joel Fleishman, faculty chair of the Duke University Center for Strategic Philanthropy and Civil Society. Read the full interview with Tim Tierney here.

"Do More Than Give"

Rahim Kanani: How would you describe the culture of philanthropy in the context of learning from our failures?

Leslie Crutchfield: Funders frequently talk about the idea of "learning from failures," but we unfortunately rarely see donors acting on the idea. There are a few notable exceptions. Hewlett Foundation President Paul Brest commissioned an evaluation of the Foundation's Neighborhood Improvement Initiative and published the results in a candid, detailed report, "Hard Lessons about Philanthropy & Community Change." The initiative attempted to transform three vulnerable San Francisco Bay communities. One project self-destructed; the other two yielded some improvements in education and public safety among other areas. But each program "fell far short" of the hoped-for improvements, Brest surmises in the 2007 report and later in "Money Well Spent."

Foundations like Hewlett are the exception. Most funders -- especially short-staffed family and community foundations that often lack the vast resources of large private giving institutions -- barely have time to read the year-end grantee reports they receive, let alone act on any hard lessons contained in them. And grantees are complicit in the process. Intent on winning another round of funding, nonprofits have little incentive to risk sharing failures with donors.

The catalytic donors that we studied are different. Like Hewlett, they are committed to learning from their failures, as well as their successes and marginally productive activities. They do this because their goal is not only to give out grants but to solve problems. In the process, they build what Peter Senge calls "learning organizations." They engage in a continuous learning cycle of planning, acting, evaluating and then modifying their approach accordingly (see also the Deming Cycle). Catalytic funders marshal the data that they receive from grantees and evaluators to inform their activities going forward, rather than relying on retrospective evaluations or year-end reports -- which by the time the funder receives them, it's usually too late to make any substantive changes. And they establish systems to receive and discuss information from their grantees in real time, using that data to inform their grant-making and program efforts going forward.

Paula Ellis, VP of Strategic Initiatives for Knight Foundation, is so deeply committed to building a learning culture at Knight that she believes the very term "failure" has no applicability for donors that seek to solve complex social and environmental problems. "Failure" implies actual winners and losers, and that some end-state can actually be achieved, whereas complex problems are constantly shifting, emergent phenomenon. Funders that seek to address them must constantly evaluate and tweak their approach going forward as they learn what works and what doesn't. She suggests instead that donors be fully committed to making "course corrections," constantly looking for evidence of progress or delay, and adapting strategies accordingly.

Leslie Crutchfield is an author, speaker and leading authority on scaling social innovation and high-impact philanthropy. She coauthored "Forces for Good: The Six Practices of High-Impact Nonprofits" (Wiley 2008), recognized by The Economist on its Best Books of the Year list. Leslie serves as a senior advisor with FSG Social Impact Advisors, a non-profit strategy firm cofounded in 1999 by managing director Mark Kramer and Harvard Business School Professor Michael Porter. Read the full interview with Leslie Crutchfield here.

Follow me on Twitter and become a fan on Facebook to learn of updates on this series.

The next interview will feature Laura Arrillaga-Andreessen about her upcoming book "Giving 2.0: Transform Your Giving and Our World." Laura is founder and chairman emeritus of SV2 (Silicon Valley Social Venture Fund), president of the Marc and Laura Andreessen Foundation, and director of the Arrillaga Foundation. She is founder and chairman of Stanford PACS (Center on Philanthropy and Civil Society), and she created and teaches Stanford Graduate School of Business' first courses on strategic philanthropy and social innovation.