Everyone wants their investments to be successful and your desire for your charitable donations is no different. A common question asked by donors and trustees is, "How do I know I'm making a difference?"
The best way to discover the answer to this is to answer a different question first: "What are you trying to accomplish with your family's foundation?"
If you do want to practice effective — and rewarding — philanthropy, then answering that question is your first step. Some examples?
You get the idea.There are so many worthy goals.But the simple act of choosing a goal allows you to make all your following decisions so much easier and it gives you a chance to achieve something worthwhile.
I’m going to let you in on a secret.Unless you are giving millions of dollars and pay for double blind longitudinal evaluations, you can’t truly know you’re making a difference. But don’t give up! There are many ways you can use proxy data to help guide your giving decisions to increase the odds of effectiveness. How?
Help! My brother, sister, cousin, uncle, parents, grandparents, kids drive me crazy at our foundation meetings!
I've seen it all. Brothers walking out in anger. Children feeling disenfranchised and depressed. Parents wanting to make all the decisions. Cousins wanting to quit if someone else doesn't. Why does this happen? Because family relationships are intense. They include long histories, differing generations, expectations, and responsibilities.
You can avoid at least some of these problems by agreeing as a group how decisions will be made. Then, again as a group, develop decision-making criteria.
Determine how much "homework" is needed, and who does it. Due diligence can be carried out by each member of the board, by certain members that have more time or expertise, or by someone you hire.
Make sure everyone has a chance to talk at meetings. Create a set of rules that you post each time: For example, "No interruptions" or "Listen respectfully." For those who have a bad habit of interrupting, fine them $1 (or more!) to be collected for each interruption (use the money to pay for refreshments or add to a grant), or use a talking stick, or a carefully aimed Nerf® ball. (A former colleague of mine worked with a family foundation that placed their foam ball in a chalice in the board room!)
Sometimes family dynamics become too difficult to handle and a dose of professional assistance may be needed. Foundations have split and families have developed schisms, all because people haven't agreed ahead of time what each trustee will do and how decisions will be made — and reviewed that process periodically to ensure it still works.
I will always tell you not to start a private foundation without a really good reason! Because the fact of the matter is that private foundations take a lot of work.
First of all, each structure you choose has its accompanying required paperwork. Checkbook philanthropy requires that you keep a copy of your check and receipt for your taxes. Donor advised funds have set-up, investment and grants lists paperwork — but the entity in which you've created your DAF prepares these. Private foundations have to fill out tax returns, grant agreements, minutes, declination letters, investment and conflict of interest policies, application forms — and that's just for starters. No wonder you're drowning!
First of all, identify which pieces of this work you actually enjoy (if any). Keep those. Then outsource the rest. It can be just that simple. Your attorney and investment advisors likely have policy templates. Hire a college or high school student to file papers and send out declination letters. Engage a consultant to draft guidelines, application forms, and other letters. Post a website — it can be done for free at the Foundation Center — and make sure your application information and deadlines are up to date and available to the public. Divide the tasks among your trustees or bring in the kids and grandchildren to do some of it. Hire or outsource your program officer and grant due diligence work. And most importantly, don't ask for more information from grant applicants than you actually use to make decisions!
By mid-September 2013, So You Want to Be a Philanthropist will be available on Amazon. This lively, jam-packed book will allow those thinking about setting up a family foundation to ask the questions they should — before they do. And for those with a foundation that isn't functioning as they'd hoped, this book can help get you back on the right track.
I'm excited about your reactions and look forward to hearing what you think!
I was recently perusing Admitting Failure, an interesting website dedicated to sharing stores of learning from failure in the non-profit sector, which led me to following a link to the Canadian Engineers Without Borders' website where I could delight in the stories of failure that this organization has, for five years, shared with any all through their annual Failure Reports. I so wish everyone would have at least a failure column in their annual report or on their website! And this includes foundations....
Anyone who funds internationally should read the EwB's past failure reports, since most of the stories have to do with programming in developing countries -- although a lot of the 2012 report talks about EwB's internal operational failures as well.
As it says on the Admitting Failure website:
"Fear, embarrassment, and intolerance of failure drives our learning underground. No more. Failure is strength. The most effective and innovative organizations are those that are willing to speak openly about their failures. Because the only truly "bad" failure is one that's repeated."
Don’t you find that all the new philanthropic terms are confusing? I sure do. Philanthrocapitalism, tactical philanthropy, strategic philanthropy, etc, etc. There are Blogs and magazines named with these terms, and their authors are always attempting to define their preferred phrase and why both its concept and the phrase they’ve chosen to describe it is better than another’s. An easier way to think about approaches to philanthropy was posted by Sean Stannard-Stockton on his Tactical Philanthropy Blog.
[One philanthropic approach is] focused on creating and sustaining an environment within which great nonprofit organizations can thrive, while …[another] philanthropy funder focuses on developing the initiatives, goals and approaches that they believe are most likely to succeed.
This difference was illustrated extremely well in a Stanford Social Innovation Review post by Amy Sample Ward where she used the difference between gardening and landscaping as an example:
The Gardener creates an ecosystem open to change, available to new groups, and full of fresh opportunities to emerge naturally. The approach is focused on organic collaboration and growth for the entire community. The gardener is simply there to help, cultivate, and clear the weeds if/when they poke up.
The Landscaper creates an ecosystem that matches a preconceived design or pattern. The approach is focused on executing a preconceived environment, regardless of how natural or organic it may be for the larger area. The landscaper is there to ensure that everything stays just as planned.
Do you fund organizations managed by innovative and creative leaders? Are you willing to risk your grant dollars on interesting or unusual efforts? Do you let any and all nonprofits (within your focus area) apply? Do you encourage collaboration among your grantees and others in the field(s) that interest you? Then you’re a “gardener.” (Stannard-Stockton would call you a “tactical philanthropist”.)
Have you thought deeply about “what works” in your field? Do you have your goals identified, your approaches chosen, an initiative developed around these goals and approaches, and a portfolio of grantees that fit into those molds? Then you’re a “landscaper.”
Neither of these descriptors matter much -- what does matter, though, is that you understand your approach to grantmaking and giving, whether you’re excited to see what self-seeds or prefer to place your flowerpots just so.
There has been a lot of controversy about the recent Barron’s list of the “25 Most Effective Givers”, and a column by Cindy Gibson in The Nonprofit Quarterly gave me something to ponder. I’ve used the terms ‘philanthropy’ and ‘charity’ to indicate different strategies of giving – not to disparage one over the other, since both are needed – but to clarify what I was talking about. Gibson made a simple but convincing argument that charity IS philanthropy.
One of the online comments (by Rachel F.) also made a particularly useful point about logic models and their place in helping charity become more effective:
"Logic models meet real needs in real communities every day. Consider this simple model used by soup kitchens everywhere:
We feed folks in our community who are hungry [action], when & where they are hungry [strategy], so that we meet even a part of this community's day-to-day hunger needs [goal], thus improving the lives of folks in our community as a whole [meta-goal].
Add in relevant performance indicators (Are there more people who are less hungry in our community? Are there people still going hungry day-to-day that we can reach?) and you're working toward real effectiveness."
Charity is not only of value but can be effective. I’ll attempt not to use the word in a way that infers that ‘charity’ is something less-than philanthropy in the future.
I have harped virtually all through this Blog on making mistakes. A 27-minute video made by the Communications Network showcases Susan Herr, president of PhilanthroMedia talking to Grant Olphant, president of the Pittsburgh Foundation in a conversation called 'What's the Upside of Failure?' It is worth a listen. Grant talks about specific 'mistakes' in his past and why saying "oops" is worthwhile.
Susan also mentioned a new article, Philanthropy and Mistakes:An untapped resource by Robert Giloth and Susan Gerwirtz of the Annie E. Casey Foundation.
It identified several types of common mistakes:
The article also briefly describes a few case studies about foundation failures, one that discusses the "dangers of outcome measures".
Cheers to oops!
In the arguments about nonprofits operating more like business, I sometimes find my feathers ruffled by the limitations of this seemingly black and white debate. There are differences between not and for-profit entities so not all typical business practice translates successfully into the nonprofit world, but there are business strategies that do help nonprofits be more successful. One of the proponents of nonprofits running like businesses, Dan Pallotta, wrote a piece I agree with on his “Free the Nonprofits” Blog at Harvard Business Publishing. Here he talks about “getting to scale” (another buzz phrase used a lot these days). It is not, as many seem to think, getting a nonprofit to the point of self-sustainability.
Instead, Pallotta defines scale as responding to the big problems with responses as large as what they need. “What good is it to have a bunch of nonprofits that are able to sustain themselves, if they are only large enough to address .001% of the problem?”, he asks.
A big, hairy audacious goal and organizations large enough to achieve those goals in ten, twenty years, are needed to address big, hairy problems like homelessness, hunger, racism, healthcare, poverty, and education. Getting to scale means changing the nonprofit community significantly, but changemakers are what both funders and nonprofit leaders should be.
One of my favorite philanthropy blogs is Albert Ruesga’s White Courtesy Telephone: News, Opinions and Commentary from Inside the Third Sector. My commitment to this blog may be partially due to the fact that I’ve known Albert for many years (currently he is President & CEO of the Greater New Orleans Community Foundation), but mostly it’s because I appreciate his sense of humor and his insights. An entry about social justice philanthropy (“what’s your favorite shade of pinko?”) has a short paragraph describing how social justice philanthropy can vary:
“Our work in social justice philanthropy will differ primarily along five axes: (1) our definition of social justice, (2) our goals, (3) our analysis of the problem we choose to address, (4) our choice of strategy and tactics, and (5) the values that animate our work.”
This list of five axes could apply to grantmaking about any issue or from any construct.
As a grantmaker, you should ask yourself if you have thoroughly thought out: