Archive for July, 2015

#FailEpic

Friday, July 24th, 2015

At three recent philanthropy gatherings*, I’ve heard open discussions of failure in grantmaking strategy and execution. The plural of “anecdote” is not “data,” but I’m heartened by this mini-trend.

Why is it still so hard to talk about failure in philanthropy?

  • There’s no incentive. Under what circumstances is one encouraged to fail? Working out, playing sports, rehearsing for a performance – these are all activities where you’re meant to try something new, see how it goes, fix what didn’t work, and try again. You get immediate signals that tell you what’s not working, and often someone is there to tell you what to do instead, or how to do better. What’s crucial in those cases is that you’re not alone, and that there is someone in the role of spotter – observing your performance with a frame of reference of how to do it better, giving you timely feedback on how to improve. And you can see the results of your improved performance. Signals about performance in philanthropy travel much more slowly, if at all, and the roles are not nearly as clear. As discussed in a prior post, most foundations are minimally staffed, so there’s not a lot of space for an HR function. And most program staff are recruited for their content expertise, not because they’re good managers. So you can’t count on there being a spotter for you within your foundation. Don’t get me wrong, people within the foundation do pay attention to what you’re doing, and you are called to account if you don’t follow the rules. But those rules aren’t necessarily set up to support performance or performance improvement. Which brings up another point…
  • There are disincentives, real and imagined. Boards are often risk-averse. (But what exactly are they worried about?) Senior leadership may be launching a new initiative that they’ve had to persuade the board or outside stakeholders is worth taking on, and they don’t want to give ammunition to their critics. (But is anyone actually paying attention?) There are internal cultures of perfectionism. (But what are the actual consequences of imperfection?) The audience with whom you’re sharing may not understand what it takes to make a good grant, and will take your failure out of context. (But what’s so bad about having to explain yourself?)
  • There’s not enough context. Foundations are not good about telling the story of their work. On the one hand, you don’t want to brag, when it’s really the nonprofits to whom you provide support that are doing the hard work. On the other hand, if no one ever has any understanding of where you’re coming from, and why you operate the way you do, then it becomes especially hard to talk about when things don’t go right. If the first time people are hearing about you is when something goes wrong, you’re going to get an unsympathetic reading, and you’ll be on the defensive from the get-go.
  • It’s not easy for anyone. Let’s not underestimate the fragility of the human ego: it stings when something doesn’t work out, especially when, like a lot of foundation folks I’ve met (and am), you’re a high achiever with a passion for this work who feels lucky and privileged to play this kind of role.
  • The stakes are comparatively high. I owe this insight to Phil Buchanan from CEP: failure in philanthropy is not the same as failure in a commercial enterprise, the kind where “fail fast” is a popular mantra. If the newest tech product launch fails, the consequences are not the same as if a social-impact bond working on recidivism among juvenile offenders fails. There’s actually an interesting discussion to be had about the loss of jobs if a business effort fails vs. the failure to receive services if a nonprofit effort fails (how well do we know the service works, etc.), but some other time.

What other reasons are there for why it’s hard to talk about failure in philanthropy? How can we overcome them?

*I note that all three discussions happened in grantmaker-only spaces. There’s value in a trusted network of peers, as my colleague Brian Walsh calls it, that provides a space in which to be more open. I look forward to the day when such conversations can happen in broader public networks.

What would it take to promote a more open discussion of failure in philanthropy? What benefits would that provide?

 

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Don’t Forget the Ark

Thursday, July 9th, 2015

Last week, I wrote about why there is a structural need for philanthropy infrastructure organizations: because the staff of grantmaking organizations are distributed across many individual organizations, and don’t have a consistent pipeline or curriculum to learn their craft.

A corollary of this structural condition is that it is very difficult to maintain institutional memory. The consequences of this were brought home for me with particular force today as I participated in a quarterly Ford Foundation staff tour of the Rockefeller Archive Center. This remarkable institution, nestled on bucolic hillsides in Hudson County, NY, houses the archives of the Ford, Rockefeller, Russell Sage, William T. Grant, and several other foundations that were established in the early part of the 20th century. They have 115 million pages of material. One hundred and fifteen MILLION pages. The mind reels.

I’m only a little embarrassed to say that I had a shiver of literal awe when we came to the room where these file cabinets are housed:

Ford Foundation grant files, Rockefeller Archive Center

These are the reels of microfilm that contain the grant files of the Ford Foundation from the mid 1950s to the mid 2000s. The data that are in here! The knowledge! The lessons learned! What a treasure.

And yet, like the final scene of Raiders of the Lost Ark, I had a vision of this treasure lost to time. That’s how we’re treating the history of philanthropy. We embark on new strategies without learning what’s been done before. That’s why as Ford is operationalizing our new strategy, we’re including deep dives into our past practice.

So let me make an invitation, particularly to new donors and those setting up foundations. Check out the website of the Rockefeller Archive Center.  Better yet, try using the search function with terms that are relevant to your work. The lovely people at the Center can help you get a hold of relevant materials that you pull up. They can even PDF things for you if you’re not able to come visit. As I learned from a stimulating afternoon of conversation, they’re also extremely informed about the contents of the archive and the history of philanthropy. They can cite, chapter and verse, reports that are relevant to your topic, or name the years in which one of the foundations in the collection went through a major strategy refresh. You’ll come away with a deeper appreciation of how far we’ve and how far we have to go – and with lots of useful reading!

And then, if there are topics around which you think it would be useful to convene scholars of philanthropy who are using the archive, let me know. I’d love to work with you and the folks at the Center to see what we might make happen.

Happy hunting in the archives!

Eternal Recurrence

Thursday, July 2nd, 2015

Why does organized philanthropy need infrastructure organizations?

For me, the simplest explanation is structural. There are upwards of 100,000 foundations in the U.S. The vast majority of these are small and unstaffed. One of the largest infrastructure organizations by membership is Exponent Philanthropy, what used to be called the Association of Small Foundations. I only bring up their former name to indicate their membership base – it has a median staff size of two. That’s likely an executive director and an admin person.

So what you have are a relatively small cluster of foundations with staffs, and then a somewhat larger cluster of foundations with minimal staffs, and then a long tail of foundations with no staffs at all.

Focusing on the first two clusters, I’m going to hazard an educated guess that there are between 12,000 and 15,000 foundation staff in the U.S. I looked into this trying to find a more solid number, and the best estimate I could track down is in the Council on Foundations’ Grantmakers Salary and Benefits Report. The 2014 version ($) includes data on 9,476 full-time foundation employees from 964 foundations whose annual giving totaled $13 billion in 2013. This amount represents roughly a quarter of all foundation giving that year, so I assume that these foundations represent a significant part of the first cluster and a decent-sized part of the second cluster. The median staff size of the sample is 5 full-time staff. If Exponent’s membership of around 2,200, which has a median staff size of 2, represents a good chunk of the second cluster, then I think it’s fair to say that somewhere between 12,000 and 15,000 foundation staff is the right number. The number of program staff, folks responsible for doing the bulk of grantmaking, is much smaller. In the CoF sample, there were 1,069 reported full-time program officers within the sample of 964 foundations (not all of whom reported having program officers or specified the number of them – and program officers aren’t the only position that make grants). So the effective number of grantmakers is almost surely less than 10,000.

Where do those people learn how to do their jobs? Philanthropy is not a profession like the law or medicine – there’s not a standard curriculum, specialized schools (apart from a small handful at this point, but they’re not designed to function like a law school does), certification processes, or industry standards (with specialized exceptions like the National Standards for Community Foundations). We have one peer-reviewed journal (The Foundation Review, which, full disclosure, I had a piece published in it earlier this year), and several professional conferences.

What we don’t have is a standard path for entering the field, or a standard procedure by which to learn how to be good at it. There are resources like Essential Skills & Strategies for New Grantmakers (in which I’ve taught in the past) and the Grantmaking School, but these are voluntary and not at scale. I’m not opining what we should or should not have at this point, just observing the structure of our field.

So, take these two realities – a not-that-large population of grantmakers spread across many different institutions without a lot of concentration in any one institution (apart from a relatively small set of exceptions); and a field that is not set up as a profession with a standardized mode of learning – and what do you get? A field of people hungry for connection who can’t get what they need inside their own institutions. That’s why there are infrastructure organizations – because where else are grantmakers going to learn from their peers, identify and learn to apply best practices, get advice and mentorship, find a career path, hone their leadership skills, collaborate for greater impact, get in touch with trends and issues, and cultivate a collective voice on issues of the day? Our field is not set up to afford most grantmakers the resources to do that within their own organizations. So they have to look outside, and that’s where infrastructure groups come in.

There’s a whole separate set of questions about the ecosystem of infrastructure organizations – number, function, balance, health, etc. But to engage that conversation, I think it’s useful to start with an understanding of why there’s a need for them in the first place. And from what I can tell, that need is, at a minimum, structural.

What do you think? I’m essentially saying that there will always need to be infrastructure organizations as long as the field is structured this way, but is that a fair assumption? Are there other ways to provide the connection, learning, and networks that infrastructure groups offer? Do we need to think differently about the highly decentralized nature of foundations? Do we need to think differently about establishing a more structured pipeline? What am I not taking into account?

Thanks, and Happy July 4th!