Posts Tagged ‘common good’

Discount Double Check

Thursday, February 6th, 2014

One of the central issues in philanthropy is time horizons. Do you exist in perpetuity? Are you spending down within the donor’s lifetime? Are you looking to bring the next generation into governance? When can you expect to see impact?

Private funders have a tremendous luxury in the ability to set their own time horizons. If they want to exist in perpertuity, the law allows them to pay out 5% of assets per year, and with sound investment policy, they can keep ahead of inflation for a long, long time, and not have to touch the principal. If they want to spend down within the founding donor’s lifetime, as Chuck Feeney of the Atlantic Philanthropies has elected to do, or within fifty years of the death of the last founding trustee, as the Gates Foundation will do, there’s nothing stopping them.

Compare their reality to that of other endeavors:

  • Publicly traded companies: Quarterly earnings reports drive the stock prize and the value of compensation. Analysts will punish you for failing to make predictions. (Almost makes you not want to publish your theory of change if you’re a foundation – why be seen as making a prediction?)
  • Elected officials: Members of the House of Representatives are elected for two-year terms. As soon as they’re elected, they have to start campaigning again. Maybe this was designed to keep you accountable to the people, but nowadays, it means you’re accountable to donors and fundraising events.
  • Pop stars: One album doesn’t sell – hmm, have they lost it? Two albums don’t sell – bye-bye record deal, enjoy the nostalgia circuit.
  • Sports coaches: The Monday after the final regular-season NFL game, the coaching carousel begins to turn. The Cleveland Browns have had three head coaches in three seasons.

It’s really only tenured college professors who have at all comparable time horizons to private funders.

So how should private funders handle this power?

There are worse places to start than gauging δ.

What’s that, you say?

I said, δ.

Is that a backwards six?

No, it’s a lowercase delta, the Greek character. You may recognize its upper-case sibling, Δ, the symbol for change.

Lower-case delta, δ, is the symbol for the discount rate, your personal algorithm or set of assumptions for how you value future payoffs relative to present ones. “This ice cream tastes good. If I have another few spoonfuls, I’ll enjoy them, but man, my stomach will hurt in 20 minutes. So I can have yummy ice cream now, or sleep better later.” If I have a low discount rate, the value of future payoffs goes up, and I get a good night’s sleep. If I have a high discount rate…well, at least I can blog at 1:15 in the morning.

So, low δ = high patience.

High δ = politicians, public-company CEOs, sports coaches, pop stars: give me success now, whatever the cost.

Now, what happens when you have high δ people running a low δ institution? This is one of the problems with governance in philanthropy. We look to experts who thrive in high δ environments and ask them to downshift to a low δ mindset, without necessarily the tools for making that shift and checking their own instincts.

The good news is that in economics at least, δ boils down to preferences. And preferences can change. The art of governance in philanthropy may be tapping into the power of low δ thinking. I’m curious how much being a family board affects this. The presence of children is a classic way to lower δ – “think of what they’ll inherit.”

How do you see δ play out in the foundations with which you work? How do they value future payoffs relative to present results, particularly with regard to funding decisions?

Phantom of the Paradise

Thursday, January 30th, 2014

Picking back up on the “Redefining Capitalism” article from the latest issue of Democracy. In a prior post, I wrote:

The role of foundations as labs for innovation…The redefining-capitalism lens suggests that this function is essential to philanthropy’s role in the capitalist system. By focusing on specific problems and promoting creative solutions to them, foundations play their part in helping capitalism function more effectively. Which depending on your point of view, may not necessarily be a good thing. But this redefining perspective certainly makes it sound more palatable.

I’ve been thinking a lot lately about phantom needs that fuel the economy. Go into any Duane Reade drugstore (that’s what Walgreens is called here in NYC), and all along the aisles and in front of every checkout counter are little products someone came up with to entice people to part with their money: USB dongles that go in a car’s cigarette lighter, another kind of candy bar, light vanilla soy milk. What if you walked into a Duane Reade, or a grocery store, and the only things on the shelves were things you actually buy or have ever bought? How bare would those shelves be? Now layer on the version of that image for each person who walks in on a given day. How empty would the shelves be? What proportion of products never get bought by more than two or three people in a given week, or month? Yeah, you’d think those products would disappear from the shelves, and I’m sure the data analytics at Duane Reade are pretty decent to enable them to do so – but maybe some items are a package deal from manufacturers: want to sell Doritos, which you know people want? You gotta stock Funyuns, which no one wants, but we’re going to try to push anyway.

Funyuns are a phantom need. If they didn’t exist…meh. Would the world be any different? Would anyone’s well-being really be diminished? (Don’t touch my Munchies mix, though, those are vital to national security and the general welfare.)

And yet we’re told that what the economy needs is more businesses, more ideas, more people making…stuff. Like USB dongles and Funyuns. Those are invented needs. Which are EVERYWHERE. They fuel our economy: stuff we don’t need, and just barely want. But you know, just seem, maybe useful, once. I’m thinking ahead to spring cleaning, and looking at how many clothes I haven’t worn even once in the past year. Closet full of phantom needs.

This may ultimately be the value of the social sector: we focus on real needs, not phantom needs. The problems we focus on are hopefully ones that are genuinely worth solving. If that’s helping capitalism function more effectively (doing the right things) as opposed to just more efficiently (doing things right), then maybe that’s not such a bad thing.

Until you stop to think about the problems that capitalism creates, especially in the pursuit of phantom needs.

There are some problems that are just problems of resource extraction – fuel pollutes. Those are real needs, however bogus the solutions (“clean coal”). Those negative externalities should be internalized, and taken into account when making planning decisions.

But problems caused by the fulfillment of phantom needs, like the giant plastic island in the Pacific from plastic shopping bags? (Which, it turns out, isn’t an island, but is still bad news.) As the guys on ESPN would say, “c’mon, man!”

So, new rule: to judge the value of a solution, you have to weigh both the problems its solves as well as the problems it creates. And if the needs the solution solves are phantom needs, well, that’s just a problem in itself.

How good are nonprofits at defining and solving real needs and not phantom needs? How good are foundations?

99 Problems

Thursday, January 23rd, 2014

…but foreign aid ain’t one?

I’m wondering whether we’re too problem-oriented in philanthropy. Are we so focused on figuring out things that need to be fixed about the world that we have a hard time seeing the way that things have improved?

Bill Gates published his annual letter about the Gates Foundation’s work this week, and it focused on countering “3 myths about foreign aid.” The crux of his argument is that within his lifetime (he was born in 1955), billions of people worldwide have been elevated from extreme poverty, and that in a bit more than 20 years (2035), he expects that there will be “almost no poor countries” in the world – meaning, almost no country will be as poor as the 35 countries classified as low-income today, after adjusting for inflation.

Put this alongside the recent news that India has all but eradicated polio, and it’s important to remember – things are actually getting better for huge numbers of people across the world. Gates also cites the rise of middle-income countries like China, India, and Brazil, which contain huge portions of the global population. Their economic development, while unequally distributed, has led to a notable decrease in human misery. There are still more than a billion people in extreme poverty, “so it’s not time to celebrate.” But it is time to recognize, Gates argues, that a lot of aid has worked.

The value and effectiveness of foreign aid is a whole other topic of discussion. But I’m struck by the notion that problem-oriented philanthropy may at least partly blind us to the progress that has been made in addressing problems. It’s like we get so focused on our particular problem, our theory of change, that we forget to look up and see that some pretty major collective problems have actually gotten better. No one needs to give up on problem solving anytime soon (though I’ll be glad when there are no longer any Indian doctors who have a memory of treating a polio case), but a virtual high-five to those who’ve made real progress, even if not in our field, is a good idea.

What sign of progress NOT in your own area of focus are you most excited about? Bonus points if it affects people nothing like you and whom you’ll never meet.

We’ve Only Just Begun

Thursday, January 16th, 2014

I’ve been writing about collective action in philanthropy. But what happens when it ends?

Health Care for American Now (HCAN) is the entity set up to manage key elements of the campaign to pass the Affordable Care Act, aka Obamacare. Atlantic Philanthropies, among others, made heavy investments of time, talent, and treasure, in helping HCAN achieve its goals. And achieve them it did – against long odds, the ACA was passed. And then a couple of years passed while bureaucrats talked about what the rollout would look like.

Then came October 1, 2013. And all of a sudden, Obamacare was a mess. The initial rollout of healthcare.gov was a complete disaster, and even now, the site is plagued by myriad problems. As I’ve written before, it’s important to remember that part of the reason so many people hate the government so much is not primarily ideology or having the wool pooled over their eyes, but the low quality of their day-to-day interaction with government services, whether the IRS or the DMV. The fiasco of healthcare.gov was this grievance on an epic scale.

In the midst of the recovery from the bungled initial rollout, HCAN has, according to its plans, shut its doors, as of December 31, 2013. “It may seem a funny time,” writes former national campaign manager Richard Kirsch, :with the current fracas over the implementation of the Affordable Care Act, but that is the point. The organization’s campaign mission was to win passage of a law, a mission extended to include ‘win and secure’ the ACA.” But wait! What about implementation?

There’s a lesson here for philanthropy: It’s not enough to get the policy passed. It has to be implemented well for the change to truly stick. Where’s the coalition for effective implementation of healthcare reform? HCAN did its work superbly well, and is to be commended. But where was the planning for the implementation phase?

We have the opportunity to learn from this experience. If comprehensive immigration reform happens this year, it won’t be enough. There have to be plans in place for effective implementation. The 11 million people who could be on a path to citizenship, like the tens of millions potentially covered under the ACA, deserve no less. Lift your sights up higher, funders, and see the true horizon.

Do the Evolution

Thursday, December 19th, 2013

Incredibly rich article on “Redefining Capitalism” in Democracy: A Journal of Ideas. I’ll be unpacking this one for a while. Let’s get started.

The authors’ entry point is coming up with a better measure for prosperity than GDP, of which there have been several attempts, but their end point is, as the title implies, far beyond that question of measurement. They redefine capitalism as an “evolutionary, problem-solving system”:

A capitalist economy is best understood as an evolutionary system, constantly creating and trying out new solutions to problems in a similar way to how evolution works in nature. [...]

[T]he entrepreneur’s principal contribution to the prosperity of a society is an idea that solves a problem. These ideas are then turned into the products and services that we consume, and the sum of those solutions ultimately represents the prosperity of that society. [...]

Capitalism’s great power in creating prosperity comes from the evolutionary way in which it encourages individuals to explore the almost infinite space of potential solutions to human problems, and then scale up and propagate ideas that work, and scale down or discard those that don’t. Understanding prosperity as solutions, and capitalism as an evolutionary problem-solving system, clarifies why it is the most effective social technology ever devised for creating rising standards of living.

The orthodox economic view holds that capitalism works because it isefficient. But viewing the economy as an evolving complex system shows that capitalism works because it is effective. In fact, capitalism’s great strength is its creativity, and interestingly, it is this creativity that by necessity makes it a hugely inefficient and wasteful evolutionary process. Near one of our houses is a site where each year, someone would open a restaurant only to see it fail a few months later. Each time, builders would come in, strip out the old furniture and decor, and put in something new. Then finally an entrepreneur discovered the right formula and the restaurant became a big hit, which it is to this day. Finding the solution to the problem of what the local residents wanted to eat wasn’t easy and took several tries. Capitalism is highly effective at finding and implementing solutions but it inevitably involves trial and error that is rarely efficient.

There’s so much here with regard to philanthropy and the nonprofit sector, I hardly know where to begin. An initial map of the terrain might be:

  • Social entrepreneurs: How does the second paragraph quoted about change if you put the word “social” in front of “entrepreneur”? Does this redefinition of capitalism mean that all entrepreneurs are social entrepreneurs? This would certainly fit with the idea that the way companies have social impact is by doing a really good job at delivering on their bottom line. Or perhaps instead, does it mean that there are certain kinds of problems that “social” entrepreneurs are particularly likely or able to take on?
  • The role of foundations as labs for innovation: One of the most frequently cited raisons d’être for foundations is that they have the ability to foster small-scale innovation, that they can be risk capital in areas the market won’t go and the public sector is too slow to find. The redefining-capitalism lens suggests that this function is essential to philanthropy’s role in the capitalist system. By focusing on specific problems and promoting creative solutions to them, foundations play their part in helping capitalism function more effectively. Which depending on your point of view, may not necessarily be a good thing. But this redefining perspective certainly makes it sound more palatable.
  • The “overhead myth”: A recent, laudable campaign seeks to disabuse funders – and especially individual donors – of the notion that overhead (the ratio of administrative and fundraising expenses to total expenses) is the single most important metric for gauging a nonprofit’s performance. The campaign makes the (valid) argument that investment in a nonprofit’s administration often helps performance, and that organizations with overhead ratios that are too low will actually do worse. This is in essence an argument about the balance of efficiency and effectiveness. The redefining-capitalism lens takes that analysis to the level of the overall economy. And the unit of analysis is not the individual organization, but the problem (or solution). High levels of surface inefficiency (it took several tries to find the right restaurant for that location) mask an ultimate focus on effectiveness – a good solution to that particular problem was ultimately found. This is the overhead myth at the level of the sector or local economy, rather than at the level of the organization. Does the analysis still hold? And what does it mean for place-based funders, who have the longer time-horizon that multiple attempts at starting a business would require?
  • The connection between small business and place-based economic development: Relatedly, the restaurant example puts me in mind of the role of foundations as investors in place-based economic development that I highlighted in a prior post. Defining a problem in a very specific geographic space and deploying a range of tools over a long period of time seems like a meaningful way for a foundation to make a difference.
  • The value of long-term general operating support: Another way in which foundations express long time horizons is by making long-term grants. The redefining-capitalism suggests that it is critical for the effectiveness of economic activity for economic actors to be allowed to try, fail, and try again until a solution is reached. Translated to the funding world, this argues for long-term general operating support to give organizations the space to experiment, innovate, and iterate.
  • Strategic “vs.” responsive approaches: The language of problems and solutions is native to “strategic philanthropy” as framed by the Hewlett Foundation and others. In a reflection on a decade of practice, former Hewlett Foundation president Paul Brest identifies “problem-solving philanthropy” as one of the two principal modes of strategic philanthropy. This would suggest a close connection with the redefining-capitalism approach. However, those authors identify as one of capitalism’s key strength its ability to foster a wide variety of potential solutions, arguing that “it is not how hard we try to solve a problem that is critical, but rather [...] it is the diversity of ideas and approaches that matters most in problem-solving effectiveness.” This suggests a link with responsive approaches to philanthropy, which are about letting a thousand flowers bloom. So perhaps the redefining-capitalism lens shows strategic vs. responsive to be a false dichotomy.
  • The concept of “social impact solutions”: The redefining-capitalism lens views prosperity as a volume and pace of solutions to social problems. This suggests that the greatest value the nonprofit sector can provide to society is to generate “social impact solutions” – products or services that address a social need not being addressed by market actors. From this lens, nonprofits should be explicitly solutions-oriented, and funders should seek opportunities to foster the iterative, long-term development of viable solutions. Stated like that, this sounds like what should be business as usual, but as we know, it’s not. Does “social impact solutions” provide an organizing principle for understanding the work of companies, foundations, nonprofits, and government?
  • Potential filters for impact investing: The authors recommend measuring prosperity in terms of access to solutions, and judging the social worth of business activity by the extent to which it creates meaningful solutions or simply generates more problems. It seems easy to imagine translating such an approach to impact investing. How does this lens relate to existing socially-responsible screens for investment portfolios?

Lots more there, but this is a first pass. What grabs you about this article or the ideas I’ve shared?

Windmills in My Mind

Thursday, December 12th, 2013

I saw a preview screening of the new Spike Jonze movie “Her” this week, and I haven’t been able to stop thinking about it. In a studiously bespoke near-future Los Angeles (all the men were comically high-waisted pants in a sly prediction of what 2020 Brooklyn will be like), Joaquin Phoenix, freshly divorced, falls in love with a uniquely intuitive operating system voiced by Scarlett Johansson. The main romance, I guess you have to call it, is compelling enough, but it’s the throwaway details of the imagined world in which the characters live that feels so uncanny – almost too real. At a certain point, everyone is walking around talking to their OS in the same way Phoenix’s character – a thumbless version of the bubbles we all float around in on the subway in New York. All these people isolated but feeling cozily connected in a perfectly individualized way – pure, comfy atomization.

What the characters enjoy most about the OS is that it knows them intimately, based on their data (emails, contacts, browsing habits, conversation). To be understood and accepted is what everyone longs for.

Ironic then, that what is so readily achieved with one’s own device is so very hard to achieve with others. We find ourselves imagined so well and so thoroughly, our desires and needs catered to, and find it increasingly difficult to understand the experiences of others, to imagine what their lives must be like, or even to think to ask that question in the first place.

The semi-fake essay “Poverty Thoughts” blew up in my social media feed, before what now seems like the inevitable backlash of puncturing the hype balloon. The author wrote searingly of the thought processes that make “bad decisions” by poor people seem perfectly reasonable, even rational, given the circumstances. People reading and sharing it resonated with the (apparent) truth-telling, particularly at a time when the GOP was slashing food stamp benefits. Here was some real talk, insight into what it’s like and why apparently mystifying behavior (buying luxury goods when you have minimal income) can be reasonable in a frame of reference where saving for the future doesn’t accomplish anything and hope is the true luxury.

I take it as a sign that we’re so hungry to know the experiences of others that so many people, myself included, fell for this semi-hoax. The world of “Her” is not yet upon us if these kinds of stories resonate, even if they turn out not to be as cut and dry as originally presented. Our credulity is a sign of our humanity, our longing for insight and connection. So I’m glad that the Times’ series on homeless youth in New York is gaining traction.

So when it comes time to do your holiday giving, ask yourself, whose experience of everyday life do I want to improve? When I think of the “beneficiaries” of my giving, how well can I imagine them? How different are they from me, really? Giving is an act of solidarity, but it’s also an act of imagination. Dive into stories like the Times’ “Invisible Child” and make a connection with a reality outside your own. The Joaquin Phoenix “Her” future of coddled solipsism doesn’t have to be the one we create.

Partisan

Thursday, December 5th, 2013

Larry Kramer, the head of the Hewlett Foundation, has written a provocative post in the SSIR opinion blog about the Foundation’s newly announced initiative to tackle political polarization in the U.S. Kramer has three pieces of advice for funders pursuing similar goals: make multiple, small bets; build bridges; and dig in for the long run.

All laudable. But I want to dig in on the implicit conception of the actors in this space. Some of Kramer’s strongest language is reserved for political parties and “myopic partisans anxious to preserve or enlarge their party’s current prospects.” Of funder strategies aimed at reducing political polarization, Kramer notes:

“Further complicating matters is the very real risk that grantmaking intended to reduce polarization will itself become polarizing. This is certainly the case when democratic reforms are a proxy for underlying substantive agendas by a particular group.”

The language is studiously neutral, but it’s hard to imagine a world where particular groups aren’t pursuing underlying – or overt – substantive agendas. What else is politics?

“Partisans” is similarly vague. It literally means supporters of a particular party, and so is appropriate in the way Kramer uses it. But what I can’t help but wondering is where social movements fit into this picture. They’re particular groups pursuing overt substantive agendas – and often through democratic reforms: the civil rights movement sought among other things to make the 14th Amendment real. Hard to be much more of a democratic reform than the Voting Rights Act.

One of the most difficult challenges social movements face is defining their relationships with political parties. In Latin America in the mid-20th century, the place and time I studied as a doctoral student in political science, the relationship used to be straightforward: citizen demands were channeled through labor unions allied with labor-based political parties. There was a structure of interest representation and intermediation. That’s basically gone now, and it’s not clear what has taken its place or how representative that structure really is.

And despite the continued strong relationship between labor unions and the Democratic Party, the situation is not all that different in the United States. It’s hard to think of the Democrats as a labor-based party: just look at what a strong hand insurers had in the most recent signature piece of legislation, the Affordable Care Act. What’s different is that social movements organizing different elements of the Democratic coalition have emerged and have complicated relationships with the party.

So I’m skeptical of conflating group-based mobilization around substantive agendas with partisanship. Social movements can and should have a degree of independence and critique with regard to political parties. But when they advance substantive agendas that include the historic securing or protection of rights through democratic reforms, this is a different world than the one Kramer paints.

I look forward to learning more about Hewlett’s agenda as it plays out, and the Foundation begins to make its “multiple, small bets” addressing political polarization. I’ll be particularly interested to see how social movements are viewed and participate in its efforts.

What do you think: How independent are social movements in the U.S. of political parties? Are movement mobilizations inherently polarizing?

 

Disclosure: the firm for which I work, TCC Group, has had the Hewlett Foundation as a client within the past few years. As with all posts on this blog, the opinions expressed are my own.

System of a Down

Thursday, November 21st, 2013

So, the Grantmakers for Effective Organizations (GEO) “Supporting Movements” conference this week was as good as advertised. Great mix of speakers, lots and lots of practical tools and applications, an appealing variety of formats and topics. Kudos all around.

Substantively, I came away with a lot of questions about the term “movement,” and how it was used to describe different forms of collective action. If I understand GEO’s take correctly, what we’re talking about under the rubric of collective action are:

  • Networks
  • Coalitions
  • Campaigns
  • Movements
  • Collective impact

These are related, but have important distinctions. Campaigns are generally time-bound and issue-based; they’re probably the least permanent of the five types. There are electoral campaigns, which have a definite end date and a very specific aim. There are issue campaigns, which can last a very long time: the campaign to reduce tobacco use has evolved over decades and taken many forms.

Networks and coalitions are especially closely related. It’s not always clear which is an instance of which. Is a network a type of coalition or vice versa? I tend to think of a coalition as a type of network, one that is specifically goal-oriented. It has a target. Therefore, an issue campaign is a strategy a coalition might undertake. A coalition to advance the passage of health-care reform might run a campaign in favor of the public option.

Collective impact, as it’s been used in recent years, tends to be place-based, which the previous forms aren’t necessarily. And it tends to be explicitly cross-sector, involving funders, nonprofits, and often business and government.

Movements I think of as the most ambitious and having the longest timeframe. They mobilize one or more constituencies that have a specific claim – rights, recognition, dignity, freedom – that requires a rearrangement of existing social norms, relations, or structures. They try to change a system. And that change usually takes generations, although dramatic gains can be made in compressed periods of time, such as advances on marriage equality in the last five years.

So what I think threw a number of people I spoke with at the conference was the way the opening plenary framed a “movement” around reducing childhood obesity. For a number of folks in attendance, myself included, movements are constituent-driven and seek the transformation of existing social systems and power relations. A coordinated effort to reduce childhood obesity has many merits, but in important respects it operates within the existing status quo. It’s a really good coalition – but a movement?

This gets at a central tension in the world of collective action: how much are we talking about changing the practices of systems, and how much are we talking about changing the behaviors of individuals? Childhood obesity is a widespread conditions that’s socially pernicious. I can see a campaign against that condition. But what is it a movement for? The civil rights movement has a positive aim, it seeks to obtain the expansion of civil rights to all. If the childhood obesity “movement” were a movement for healthy children – of which lower rates of obesity is one indicator – then maybe I could see it. But even so, it’s not the children themselves who are necessarily mobilizing. Adults are mobilizing on their behalf – a remove that seems contrary to the spirit of movements as I understand them.

So, all through the conference, I was working on this dichotomy in my head and in conversations. But my tablemate at the closing plenary gave me another bone to chew on. (Ew, not literally.) She described successful efforts to address homelessness that were explicitly not constituent-driven or funder-driven. It was funders and researchers who had the ability to generate data to show what programs actually impact homelessness that were able to galvanize collective action…(here’s that phrase again) on behalf of the homeless, who weren’t necessarily mobilizing themselves.

So maybe there are movements of (positive goal of claiming a right, constituent-driven) and movements for (goal of solving a problem, not necessarily constituent-driven) – and we need a better term for the latter.

Do you find this a tenable distinction? What’s the right term for “movements for” or “on behalf of”?

Move This

Thursday, November 14th, 2013

It’s funny, I woke up with that song in my head. I must be ready for for next week’s GEO conference on movement building.

And in fact, the conference paper’s focus on five roles for grantmakers in movement building maps pretty well to the way that I talked about non-grantmaking roles in my EPIP workshop last week. I organized them into four categories (building on the EPIP national conference panel I did a couple of years ago on the “3 I’s of Foundation Effectiveness”):

  • Influence: when a foundation uses its clout to advance an issue it cares about, by taking a public stance on an issue, envisioning and/or leading a coalition, campaign, field, or movement, or advancing difficult dialogues in its community
  • Include: when a foundation uses its convening power to bring actors around a table, such as grantees, funders, and policymakers, and practices inclusion of diverse groups in its staffing, governance, and decision-making
  • Inform: when a foundation leverages one of its key assets – the information it gathers about the grantees with which it works, the fields in which it operates, and the communities in which it works – and goes from a one-way flow of information inward to a two-way flow information both inward and outward
  • Invest: when a foundation leverages the full range of its financial and human capital, and that of its grantees, through mission-related investing, capacity building, and leadership development

The framing paper for the GEO conference, which I assume will be released next week, talks about grantmaker roles in supporting movements as investor, broker, connector, learner, and influencer. Two of the I’s are there, and you can map “learner” to “Inform,” and “broker” and “connector” are closely related to “Include.”

GEO’s talking about these roles with regard movement building, but the framework I used in my EPIP talk is about overall philanthropic effectiveness. So what this suggests is that movement building can offer a frame for understanding philanthropic effectiveness more generally. That’ll be worth talking about at the conference next week!

How do you see funders Influencing, Including, Informing, or Investing? What capacities are needed to play these roles effectively and responsibly?

A Matter of Trust

Thursday, October 24th, 2013

Brad Smith hits it out of the park again with “The Brave New World of Good,” a very useful synthesis, reflection on, and pertinent critique of major trends in philanthropy and nonprofits such as open data, transparency, innovation, and markets. One phrase in particular stood out for me:

“Collection of data by government has a business model; it’s called tax dollars.”

It’s ironic that this timely piece came out during the latest government shutdown, because I would say that the business model is actually tax dollars and legitimacy – and the latter is in short supply these days.

Sadly, foundations have had a fair amount to do with the creation of the partisan echo chamber in which we find ourselves. It’s well-documented how a number of conservative private foundations funded the intellectual infrastructure of think tanks and policy experts that over time have moved the center of political discourse ever rightward. We’re at the point that a model of healthcare reform championed by the Heritage Foundation and implemented by a Republican governor is excoriated as a progressive overreach.

A further irony is that progressive funders are practically envious of the success that conservative foundations have had in shaping the policy discourse, not least because the tactics used are ones that progressive critics of foundation practices have championed for years: long-term, general-operating support of organizations explicitly working on policy and advocacy issues.

The success of one side has prompted a kind of intellectual arms race, with mirrored (but asymmetrical) infrastructures touting conservative and progressive ideas through relatively closed systems of think tanks, policy shops, and in the case of the conservative movement, talk radio and TV news.

Can funders instead support the emergence of a vibrant, active center that draws energy and attention away from the partisan battle consuming Washington and threatening the national and global economy? As Phil Buchanan helpfully points out, the National Purpose Initiative seeks to do just that. I applaud this effort and particularly its spirit.

One friendly suggestion: take a page from the success of progressive movements like LGBTQ rights and immigrant rights and embrace cultural-change strategies. Putting a human face on a cause, and making the “other” relatable on a personal level, is more important than ever. Our intellectual infrastructures – which again, I’m not pretending are anywhere near evenly matched – move us toward ever more bloodless forms of analysis and abstraction. And the filter bubbles in which most of us are enclosed, providing only information that shares views we already hold, reinforce this exclusion from each other. As Sally Kohn helpfully described at a recent TedNYC talk, “Absent unquestioned evidence to do otherwise, I would like to start to see a country where we all assume that we want what’s best for each other.” And this starts to happen through honest, authentic engagement with those who share views unlike our own.

This can happen usefully at a local level. An overwhelming number of foundations are local entities. Here is an opportunity to leverage the strengths of the sector in service of a less polarized political discourse. Remember that business model of collection of data by government: taxes and legitimacy. Where foundations can help build up the store of legitimacy of our political system by fostering an alternative civic culture, they should consider doing so.

How have you seen foundations play this role? What are models worth sharing?