‘Can This Crew of Aspen Institute Big Shots Show the Way on Philanthropy?’ This is the question posed by David Callahan, writing on the Inside Philanthropy blog.
‘Aspen has never had much difficulty rounding up high-level folks for its working groups,’ he reports, ‘and the 2014 roster of the Aspen Philanthropy Group, which just met last week, is a case in point. It includes the chiefs of the following foundations: Carnegie, Gates, Goldman Sachs, Heron, Hewlett, Intel, Irvine, Kaufmann, MacArthur, MasterCard, Margaret Cargill Philanthropies, New Orleans Foundation, Packard, OSF, Rockefeller, and the Rockefeller Brothers Fund.
‘A few non-foundation folks are also in the mix, representing Bridgespan, the Foundation Center, FSG, and the Philanthropy Roundtable.
‘So: Who’s missing from this group which bills itself as “a small gathering of leaders in philanthropy and civil society who are at the cutting edge of social change?”
‘I guess the answer depends on how you define “cutting edge.” But it seems that nearly any definition would encompass a range of players in philanthropy who aren’t part of the Aspen group.’
Click here to read more and find out who’s missing>
First published 01 April 2014, by Alliance magazine.
In trying to get the business community to participate in an economy which takes into account people and the environment, not just profit, Robert Rubinstein, founder of TBLI (Triple Bottom Line Investing), doesn’t put his faith in the sector’s idealism but in investors’ greed and the ability to inflict ‘excruciating pain’ on business. He explains to Caroline Hartnell how and why this works. He is optimistic about more money flowing into impact investing, as defined by TBLI, but not that hopeful that it will be in time for climate change mitigation. ‘Get your wellies out,’ he advises.
You founded TBLI in 1998. What did you hope to achieve?
I wanted to create an economy based on well-being by engaging with the business sector. I realized that to do that, the business sector has to buy into it, and they will only buy into it if they feel excruciating pain. I concluded they had three pain buttons: finance, personnel and reputation.
First, I looked at personnel. I tried teaching MBA students about sustainable finance, but most of the students were only worried about defaulting on their student loans. They didn’t follow their hearts and went to work for companies that didn’t share their values.
So then I looked at finance. I decided to focus on the financial sector. I worked out that the top hundred or so owners or managers in 1998 had direct or indirect control of 30-40 per cent of the money. So I hit on the idea of trying to convince those hundred CIOs [chief investment officers] through a conference. It sounds rather naive but it does work: if you show the financial sector over and over again the self-interest, opportunity and money flows in sustainable business, it’s not hard to change behaviour.
The hard part is access. I call it the Shawshank Redemption approach – that’s the prison movie where, after 15 years of chipping away at a wall, the guy broke through but no one knew about it. That’s what this work is, it’s chipping away over and over again, there’s no big ribbon-cutting ceremony. We’ve seen massive money flows and very large deals done at the TBLI Conference, so I know we’ve had an influence on the behaviour of the financial sector, and now I would like to scale up dramatically.
So what is the pain that you’re making them feel?
If people don’t want to invest in you or work for you because of your lack of interest in sustainability, which is what happened to Shell in Nigeria and over Brent Spar, it’s a very painful thing. Look at Dow Chemical, which is now seen as the superstar sustainable chemical company. What were its best-known products in the sixties? Napalm, Agent Orange, defoliants. How did they get from there to here – because during the Vietnam War many students didn’t want to work for them, and if you’re a big company and the best and the brightest don’t want to work for you, you have a problem. We’re focusing on the financial sector, showing them that it’s in their interest to look at what they call extra-financial issues: climate change, waste, energy, resource use, human resources management. All of these things ultimately produce better returns with a reduced risk, and if you ask anybody – even cocaine traffickers, criminals – do you want a financial return with a social and environmental added value, it’s pretty hard to find somebody who says no.
But you cannot push the moral imperative to someone who has a target if the two things are in conflict. You have to show that their self-interest aligns with the social and environmental added value. If the financial sector sees money flows going in a certain direction, they’re likely to follow.
I remember when I started, people would ask for research to show that ESG [environmental, social, governance] investing doesn’t underperform and that, at its best, it can outperform. So I stupidly sent out hundreds and hundreds of research papers before I had my ‘aha’ moment: I realized that it wasn’t about proof, it was about belief. How many investors read the research on the risk associated with sub-prime collateralized debt obligations that created the financial meltdowns? Almost nobody. How much money went into it? Everything, because people believed that this was the new way of endlessly making money.
Since the financial meltdown, are you finding finance companies more willing to listen?
Yes, but not as much as I’d like them to.
The China Charity Forum, entitled ‘Open a Philanthropy Era’, was convened in Beijing from 16 to 17 August with participants from across China and from other countries. The two-day forum consists of discussions and a field visit to Lao Niu Foundation. This is the first international forum organized by the China Charity Alliance since its formation a year ago. Below are my main takeaways from the forum.
The potential of philanthropy high in China
Private foundations have increased by more than 50 per cent from five years ago. China ranks as the second largest economy in the world, with over 200 billionaires, and with more than 67,000 people with assets of over RMB 100 million Yuan (over US$16 million). Everyone believes philanthropy in China will show a boost.
Legislation yet to be prioritized
From high-ranking officials such as the Minister of Civil Affairs and the legislator from National People’s Congress, Dr Zheng Gongcheng, to philanthropists such as Wang Jianlin and Lu Dezhi, there is consistent advocacy for prioritization of legislation to protect the legal status of philanthropy and to incentivize philanthropic activities in order to unleash the potential of philanthropy in China. According to an insider from the government, there is a wide disparity of perspectives around charity law legislation, and a consensus has yet to be formed.
Challenges of doing philanthropy highlighted
Mr Ma Weihua (former governor of China Merchants Bank and now chairman of the board of One Foundation) shared as one of the plenary speakers: ‘It is more difficult to do philanthropy than to do business in China, with little social recognition.’ This was his experience as he made the transition from a banker to a philanthropist. Although Mr Ma talked a lot about philanthropy during the National People’s Congress in March 2014, media reporters seemed more interested in banking and finance than in philanthropy. Philanthropy in China is still in an early stage of development, though the potential is great.
Private sector contribution to global development emphasized
The original aim of the forum was to discuss trends in global philanthropy. As a result, most of the discussion was focused on how Chinese philanthropists and foundations can learn from international best practices as they go global. According to Christophe Buhuet, China Country Director of UNDP China Representative Office, the private sector contribution globally is over five times larger than that of the public sector (with the OECD total contribution to global development in 2013 at US$135 billion from the public sector vs US$577 billion from the private sector, including US$59 billion from private philanthropy). Private philanthropy doesn’t just fill gaps in funding; it also contributes insights and innovations. It has yet to explore, however, how to leverage social and technology innovations and private-public partnerships to promote human development globally and locally.
Sharing of best practices on how to internationalize philanthropy in China
A dedicated breakout session focused on global collaboration in philanthropy. Despite a large economy, China is an emerging country at a learning stage in philanthropy development. Experts from the US, UK, Taiwan and Hong Kong, among others, shared best practices and innovations as Chinese philanthropy learns to go global. Currently the ecosystem of philanthropy tends to be government-driven, with much room to improve in the national strategic plan and legal framework governing philanthropy and charities, as well as in increasing self-governance, transparency and capacity of charities.
Bin Pei is a senior program officer, Bill and Melinda Gates Foundation.
This is the last in our series of responses by contributors to the March issue of Alliance to John Kania, Mark Kramer and Patty Russell’s ‘Strategic Philanthropy for a Complex World’. We published these articles throughout last week – starting with Kathleen Cravero’s on Tuesday, Avila Kilmurray’s on Wednesday, Ambika Satkunanathan’s on Thursday and Rana Kotan’s on Friday. Tomorrow we will publish an article drawing all the threads together.
I was not aware of these debates, but the issue very much resonates with the work of the community foundation in Bosnia and Herzegovina because of the complexity of the problems we face every day in our transitional, post-war, politically and economically torn society.
As Kania, Kramer and Russell say, foundations (and I add especially community foundations) are better suited than other NGOs to make progress against complex social problems, because they work on a long-term basis, isolated from political and other pressures.
We have invested a lot of efforts to become strategic in our activities and grantmaking but it seems that our strategies were always realistic about complex circumstances, insecure living conditions, multiple problems within the legal system, post-war damages, the social problems of economic development, closed factories and private businesses, etc.
In such environments, it is hard to measure outcomes if the strategies are too rigid and focus on one or two problems and agendas. I very much like Henry Mintzberg’s scheme of emergent strategy into which we fit completely, as a community foundation that is deeply rooted into local circumstances. Having in mind all the complex problems within Bosnia and Herzegovina society, we were aware from the beginning that we cannot make accurate predictions about the expected results of our interventions in the community.
We have always worked strategically – but as in Mintzerg’s scheme we had an ‘intendant’strategy that had to emerge over time and be shaped up to the changing reality (for instance, improving the quality of life in the Tuzla region by encouraging vulnerable groups such as youth and women and the unemployed in rural areas to participate in community life, convene people to press for better policies and public services, and encouraging local people to invest in their community and civil society).
There have been so many events and changes in Bosnia and Herzegovina in the last 10 years (like electoral changes, demonstrations against government at all levels, horrible floods, changes in the law unfavourable to non-profits and philanthropy development, etc) that have made us abandon or adapt parts of our strategy. This might be because of actions taken by government or other organizations or because our aims could not be realized because of political circumstances. In these circumstances we had to adapt the time-frame or completely abandon certain strategies or evolve them to meet the changed circumstances.
The debates will not change our approach because I think that we have
all elements that are needed for measuring the impact of our work (which perfectly fits with both strategic and emergent philanthropy theories): we have clear goals; we do research; we approach problems in a strategic way, involving many stakeholders in problem-solving activities; we do evaluations and learn from the results. We expect our grantees to work in the same way.
Jasna Jašarević is executive director of Tuzla Community Foundation, Bosnia and Herzegovina.
This is the fourth in our series of responses by contributors to the March issue of Alliance to John Kania, Mark Kramer and Patty Russell’s ‘Strategic Philanthropy for a Complex World’. We will be publishing these articles throughout this week – starting with Kathleen Cravero’son Tuesday, Avila Kilmurray’s on Wednesday, and Ambika Satkunanathan’s yesterday. Next week we will publish an article drawing all the threads together. On Monday we published a response from Angela Kail of NPC.
Are you aware of the debates?
Yes, I was aware of the recent article by Mark Kramer and his colleagues, but I wasn’t following the debate very closely.
Do the issues resonate with you?
Most of the ideas mentioned in the article resonate with me.Strategic philanthropy has indeed lots of shortcomings and I want to give credit to the authors for challenging the current practices and suggesting new approaches for grantmaking. Some of their suggestions are arguable, but I believe this debate will help us to take philanthropy one step further.
Mark Kramer and his colleagues suggest that foundations adopt a more collaborative, flexible and intuitive approach, as opposed to the rigid, cause and effect based approach applied by major foundations, especially in the US. I agree with that.
At the Sabanci Foundation, we do not apply strategic philanthropy in a rigid way. As I’m sure many foundations do, we collect feedback regarding our grant projects and try to make the necessary adaptations while the implementation continues. Learning and adaptation are necessary regardless of the nature of the problem. Yet, I believe this is nothing new and all grantmakers who aspire to create social change apply this flexibility in one way or the other.
During our gender trainings for high school teachers last year, the module on LGBT prompted a heated debate and created huge resistance among some of the conservative teachers. Because of this module, the entire training was a failure for some teachers. In this year’s training, therefore, we changed the name of the module to ‘discussing difficult topics’ and amended the content so that the concepts explained were easier to comprehend and accept. There is no linear causality relationship between training and change in attitude, since different factors intervene, including family, education, character and beliefs of the teachers. But by identifying and eliminating the negative attractor, as Kramer and his colleagues call it, the success rate can be improved. This can be applied even to a simple case like this one.
Have you invested time and effort in becoming more strategic? Do you see this as wasted?
At the Sabanci Foundation, we don’t apply a rigid ‘predict and prove’ model, instead we empower grantees. While doing that, we use lots of intuition and adaptation, and use different tools to catalyse social change:
Sometimes we see the need to redefine the success of our grant or modify the initial hypothesis. For example, we have been supporting the disabled women’s movement for three years. We initially predicted that training and empowering disabled women would help them get formally organized and fight for their rights in a more sophisticated way. However, we didn’t achieve this goal completely. We were able to reach women with different disabilities in different provinces. Since most of them are unemployed and stay at home, getting them out of their homes should be considered a success itself. Therefore, we needed to change our predictions along the way, in order not to miss the small successes/changes that the project creates.
While the feminist movement and the disability movement were born at least two decades ago and have achieved significant milestones, disabled women could not get their voices heard in either of these movements. Even if the desired outcome is still missing, we as Sabanci Foundation are proud to support the creation of this new movement, which will grow slowly but surely into the future.
Will the current debates in any way change your approach to how you do your work? Or how you expect your grantees to work?
We apply two different approaches in our philanthropy. One is grantmaking, the other one is a longer term programme designed in partnership with the UN. Turkey still lags behind most countries in terms of gender equality. Based on the World Economic Forum Gender Gap Report 2013, Turkey ranks 120th out of 136 countries. We are fully aware that one foundation alone cannot create progress on complex social issues such as this, so we co-created this programme to tackle it. It is a multi-year programme involving different stakeholders, including government authorities, ministries, municipalities, UN agencies, NGOs, academics, high school teachers and women living in communities.
This debate made me realize that we do apply most of the practices suggested by Kramer and his colleagues in their article. We probably apply a mixed method of the strategic and the emergent approach. One thing I have become aware of is that we may need to think about improving system fitness a little bit more. The article talks about the importance of ‘relational trust’. Going forward, we may spend more time in nurturing the relationships between different stakeholders involved in our projects.
Rana Kotan is director of programmes and international relations at Sabanci Foundation, Turkey.
This is the third in our series of responses by contributors to the March issue of Alliance to John Kania, Mark Kramer and Patty Russell’s ‘Strategic Philanthropy for a Complex World’. We will be publishing these articles throughout this week – starting with Kathleen Cravero’s on Tuesday and Avila Kilmurray’s yesterday. Next week we will publish an article drawing all the threads together. On Monday we published a response from Angela Kail of NPC.
Although until recently I was not aware of the debates on the limitations of strategic philanthropy, and the need to adopt more emergent approaches, I find the discussions are very relevant to the Neelan Tiruchelvam Trust (NTT), based in Sri Lanka. Since the article by Kania, Kramer and Russell focused only on the global North, and the resulting spirited responses did not include any voices from the global South, I hope this perspective will contribute to our common search to become better at adopting collaborative approaches.
The reality is that foundations working in post-war scenarios or in contexts that continue to be plagued by identity conflicts have no option but to adopt an emergent strategy in order to be effective, and more importantly to ensure organizational survival in a hostile and rapidly changing environment. Even formulating solutions to problems the authors categorize as ‘simple’, such as building a hospital, can become arduous, perilous tasks, depending on the location of the hospital and the population it serves. If communities are divided along ethnic or religious lines, the construction could lead to conflict over resources or allegations that the donor funding the project is conspiring to cause conflict between two different groups by favouring one over the other.
Hence, we see the ‘interplay between multiple independent factors that influence each other in ever-changing ways’ even when tackling these ‘simple’ problems. Adopting an emergent strategy is hence not a choice but compulsory. As Frumkin states, certain parts of the problem may not be immediately actionable, while some factors are entirely outside the control of the foundation.
At NTT, while being faithful to our broad aims, we have had to allow our strategy to evolve to accommodate a volatile socio-political environment. The authors’ assumption that foundations are ‘insulated from financial and political pressures’ does not apply in contexts where the state is repressive or undemocratic. In such a setting all organizations are subject to the vagaries of an unstable and unpredictable political environment. Yet, in is in these very circumstances there is a need to grapple with the root causes of a problem. Doing so requires flexibility – a flexibility that enables the foundation to take calculated risks. Speich’s comment that ‘human interaction is unpredictable’ is nowhere more applicable than in Sri Lanka, which is why ‘sensing the environment’ and ‘sensing and leveraging opportunities’ have to become second nature to organizations working here.
One of the main critiques of strategic philanthropy is that it ignores the voices of non-profits and shifts too much power to donors. This is a valid criticism. We’ve found that many programmes have been donor driven in alignment with the policy agendas of bilateral and multilateral donors, which in repressive environments might also be forced not to support certain programmes, such as those on human rights or provision of psycho-social care, due to government restrictions. In such instances the voices of non-profits, particularly community organizations that are closest to the frontlines, are drowned out. A local foundation such as NTT has learned that listening to the voices of communities enables us to have the most impact, as they are most aware of their needs.
Over the years we have also realized that research and learning play an integral role in enhancing our effectiveness. However, as a small public foundation that has to make every dollar/rupee count, we have had to be creative in making this happen. For instance, graduate students of the School of International and Public Affairs at Columbia University undertook a number of assessments and reviews for NTT as part of their coursework. We’ve also found it useful to weave learning into existing projects, such as the women’s fellowship. This enabled us to fine-tune the strategies being used to strengthen the leadership of women within their communities.
Kania, Kramer and Russell emphasize the importance of improving system fitness, pointing out that we should focus on ‘strengthening the systems and relationships that can generate solutions, rather than on constructing the solutions themselves’. Yet, in our post-war context, although strengthening nascent community groups in conflict-affected areas should be a priority and an integral part of rebuilding social networks, limited energy and resources are dedicated to this. Instead, donors often expect these nascent groups to become professional bodies immediately but without providing adequate support to help strengthen them.
When considerable resources are provided to an organization with limited experience and capacity to manage and absorb it, inevitably it leads to failure; worse, it may tear apart the existing structure and place excessive pressure on institutional and inter-personal relationships. In this regard, our strategy is in line with Katherine Fulton’s call to invest in leaders who work close to the frontlines. This becomes particularly important when systems and processes are weak, because these individuals will be able to continue to function as catalysts for social change.
Ambika Satkunanathan is chairperson of the Neelan Tiruchelvam Trust, Sri Lanka.
We will be publishing these articles throughout this week – starting with Kathleen Cravero’s yesterday. Next week we will publish an article drawing all the threads together. On Monday we published a response from Angela Kail of NPC.
After 20 years as director of the Community Foundation for Northern Ireland I have a confession to make.
Hence I come to the current debate on ‘emergent strategic philanthropy’ (a Kania, Kramer & Russell confection, 2014) as something of an outlier to the in-world of academic conceptualization of philanthropy. Emerging from the clutter of a paper-strewn desk, the more cynical me cannot help wondering if there is a growth industry of academics talking to academics and/or policy gurus employed by well-endowed foundations – perhaps this sector represents an emerging market in itself!
Notwithstanding these wayward thoughts, I am a firm believer in critical self-reflection and analysis, given that philanthropic organizations – no matter how small – have the luxury of financial resources that position them as power-holders. The pity is that all too few acknowledge this fact and what it entails in practice.
So then – how real is the ongoing debate to me, the staff that I worked with and the community based partners that we fund? Well, I can’t say that it keeps them awake at night. Managing a meagrely endowed community foundation in the contested and violently unsettled conditions of Northern Ireland is a sharp lesson in keeping the head down, the ear to the ground and a weather eye on what might be coming down the tracks. We didn’t have to be told to ‘sense the environment’ – or as we termed it ‘keep a finger on the pulse’ – we had to do it to survive. While the science of predicting project outputs, let alone outcomes, for us was more the art form of answering the ‘what if?’ query. What if the peace process disintegrated? What if a fraught marching session set one community against another? Indeed we spent many hours in futile argument with the managers of EU-funded PEACE programmes caveating the logframed target of peace and reconciliation. In the end everybody involved was forced into what I termed ‘a minuet of mutual deception’; we told the EU bureaucrats what they needed to hear; the funded projects assured us that they would meet unrealistic objectives; and we pretended to believe them. And so it went on. Yet the reality was that some exceptionally good and courageous work was supported (including work around the re-integration of political ex-prisoners; provision for victims/survivors of violence and community development with many of the most marginalized and alienated communities), while the lodestar for the foundation was a clear set of values and ethos. It was the latter, rather than any artificial clarity of short-term project objectives, that kept us honest both to ourselves and to our community partners. Yes of course we identified what we would want to see, but all too often it was a case of one step forward, two steps back, along the tortuous path of getting there.
So were we engaged in emergent strategic philanthropy? Who knows – or indeed cares? Certainly we consulted widely as to priorities and actually took the time to listen to those groups and communities that were most affected by poverty and violence. Many programmes had Policy Advisory Committees made up of activists, academics, statutory decision-makers and interested individuals. They were all involved on a volunteer basis, and given the diversity of background and experience every effort was made to avoid any unwarranted collation of exclusionary terminology. Indeed, whenever I ventured to inject a concept or theory picked up through conference attendance or reading there would be audible moans from any grantee within earshot for fear that the community foundation would lurch to embrace a new strategic approach. Change, when it was introduced, had to take account of grantee perception – they were our partners not guinea-pigs and they were never slow to voice their reservations.
So to the nuances of the current debate – I am impressed that Kania, Kramer and Russell admit their disappointment in the results of the previous strategic philanthropy approach; I am less happy, however, with a refurbished narrative which seems to beg, borrow and steal from a pot-pourri of economics, management-speak, astrophysics and ecology. Can we not just recognize that when any funder sets her/himself the task of addressing complex issues, such as social justice and conflict transformation, there needs to be provision for continuous consultation, practice, reflection and change? Is it not possible to have academic challenge and insights without the need for translation?
Although the article shares some elegant quotes (my own favourite from Einstein is ‘Imagination is more important than knowledge’), I was left pondering as to what we might call the place advocated by Kania, Kramer and Russell, where ‘rigor and flexibility meet’ – the philanthropic fitness suite? And is it overly jaundiced to view an ‘emergent strategic philanthropist’ as a newly fledged butterfly weighed down by systems maps? As we shift from strategic philanthropy to strategic philanthropy with the gloss of uncertainty, I still raise my glass to inclusive visioning, trial, error and learning drawn from a clear evidence base and, preferably, presented in everyday language.
Avila Kilmurray was director of the Community Foundation of Northern Ireland from 1994 to 2014. She has recently joined the Global Fund for Community Foundations.
In a recent article for the Stanford Social Innovation Review entitled ‘Strategic Philanthropy for a Complex World’, John Kania, Mark Kramer and Patty Russell suggest moving away from a ‘rigid and predictive model of strategy’ to ‘emergent strategic philanthropy’. While strategic philanthropy works fine for simple problems (building a hospital – is this really a simple problem?) and for complicated problems (developing a vaccine), it doesn’t work for complex problems because you can’t spot the necessary causative links leading to social change and therefore you can’t plan for them. Responses to the article have come largely from the US and from people who write regularly about philanthropy. In order to broaden the debate, Alliance went back to the contributors to the March issue of Alliance, which focused on ‘Grantmaking for Social Change’, and asked them to respond to four questions:
We will be publishing some of their responses throughout this week – starting with Kathleen Cravero’s, below. Next week we will publish an article drawing all the threads together. Yesterday we published a response from Angela Kail of NPC.
Are you aware of these debates?
Yes, I read everything I see on these issues. I find it both frustrating and entertaining.
Do the issues resonate with you?
I guess the best description for what I feel when I read this stuff is: ‘Seriously? This merits a whole debate – articles in top journals?’ Why do I say that? Here is what I get out of the SSIR article:
Okay – to me this is COMMON SENSE philanthropy. Oak Foundation did not need outside experts to tell us this.
One more thing: I am not sure that problems can so be so neatly categorized into simple, complicated and complex. The bricks and mortar of a hospital are simple – but what about the complexity of building a public hospital in a neighbourhood that doesn’t want it? That becomes a complicated – or even a complex – problem, right?
Have you invested time and effort in becoming more ‘strategic’? Do you see this as wasted?
No, because we always thought that being strategic meant being open, collaborative and aware of the big picture. We never bought into metric-driven, treat-it-like-a-business, solve-it-like-a-math-problem approaches to philanthropy.
Will the current debates in any way change your approach or how you work? Or how you expect grantees to work?
It is never a waste of time to think about what one is doing and why one is doing it. As the saying goes: ‘If you don’t know where you are going, any road will do …’ On the other hand, it is a waste of time to chase after every new term that pops up. It is usually old wine in new bottles.
Kathleen Cravero is president of the Oak Foundation.
Strategic philanthropy is too simplistic for a complex world, according to John Kania, Mark Kramer and Patty Russell, writing in the Stanford Social Innovation Review. Setting a goal and working tirelessly towards it might work for things like building a hospital, but most problems are too complex to be accurately predicted and thought out in advance. The authors instead suggest taking an emergent strategy approach, adapting and changing strategy as more information comes to light.
Emergent strategies recognize that trying to do things like improve people’s education touches on a number of other issues, including health, poverty and social mobility. The effects of these can be impossible to predict in advance; emergent strategies change tack to deal with new issues and problems as they arise. Which means, of course, that you need information about what the new issues and problems are as soon as possible.
But where do funders get their information from? For most funders the information about whether or not their programmes are succeeding will come from their grantees, so this information needs to be good enough to help funders decide if they should review their course of action. But it isn’t.
NPC’s survey of how funders use impact measurement found that while most of the funders surveyed considered impact measurement to be really important, less than 60 per cent are using the impact measurement of their grantees to inform or review their strategy. Only around a third of funders are using the information to inform other funders. And this is because, in large part, the impact information they receive simply isn’t good enough to base decisions on.
For an emergent strategy to work, funders will need to invest in improving the impact measurement standards of their grantees. NPC’s approach, articulated in our recent Four Pillars paper, is to have an impact measurement system that measures what it important and to a standard that means that people can act on the information that comes back. Too much impact measurement goes into providing evidence for funders; not enough goes into getting information that charities and funders can actually use to improve their strategies. The Four Pillars approach grounds impact measurement in what charities are trying to achieve; it asks charities to prioritize what will be useful to know, select the standard of measurement they need to answer their questions, and then select their tools. This sort of approach is badly needed if we are to secure good enough information about whether or not things are working on the ground, and to help us adapt accordingly.
If funders are not basing their strategies on information from grantees, what are they basing them on? The answer should include information from the people they are trying to help – but this is unlikely. Asking people what they think is likely to help them, or how different issues touch upon their lives, is a valuable source of information that is far too seldom exploited. But it can be incredibly valuable. A survey of funders by the Centre for Effective Philanthropy found that those that were making efforts to listen to the views of beneficiaries had a better idea of the progress they were making on their goals and the impact the foundation was having.
In a complex world results may not always be replicable. But that doesn’t mean that we can neglect finding out what works and what doesn’t. Funders will want to replicate or adapt programmes if they are successful. They should be talking to other funders and charities about what they have found to be successful and what has been a failure, so that we can collectively come up with emergent strategies, and are not doomed to repeat our failures. For this to happen, we need to be gathering evidence from as many sources as we can, evidence which can tell us whether we are going off track or not.
We need to be investing in getting that information, and sharing it as widely as we possibly can. The cost of going headstrong for a goal without checking to see if we are on course is too high.
Angela Kail is head of the Funders Team at NPC.
The UK’s first social impact bond has met initial targets for reducing reoffending among offenders released from Peterborough Prison, according to results published today by the Ministry of Justice. But the results show it has not yet delivered strong enough results to trigger a payment to investors.
The project reduced reoffending by 8.4 per cent among the first cohort of 1,000 prisoners it worked with, compared with a control group. There were 142 reconvictions per 100 offenders, compared to 155 reconvictions among a control group.
The Peterborough project was launched in 2010. It was the first example of the SIB, a type of payment-by-results contract where investors provide a not-for-profit organization with capital to carry out interventions. The government pays out if the interventions are successful. The investors make a profit if the project works, and lose money if it does not.
As widely reported, the Ministry of Justice announced earlier this year that the Peterborough SIB would be closed early because it was not compatible with Transforming Rehabilitation, a nationwide programme which will replace existing probation services for medium and low-risk prisoners, and will also include a payment-by-results element aimed at reducing reoffending.
First published 17 March 2014, by Alliance magazine.
On 5 March, Global Fund for Women and the International Museum of Women (IMOW) merged, as reported in the Alliance blog. The merged organization will be called Global Fund for Women, and will bring together grantmaking, activism and campaigning under one roof to create what the press release on the subject calls ‘better “joined up” thinking, audience engagement and action on women’s human rights. We’ll become a hybrid organization that can play in all multiple spaces, and instigate more change as a result.’
Merger or acquisition?
There is a conspicuous disparity in size between the two organizations: Global Fund for Women has 50 staff and an annual budget of around $18 million, while IMOW’s annual budget is just under $1 million. Nevertheless, there is no sense on either side that this is an acquisition rather than a merger. In fact, says Leila Hessini, Global Fund board chair, IMOW was ‘really the one that initiated the idea of the merger’. Moreover, Hessini points out, it is based on a fair amount of shared history. ‘We have been partnering with IMOW for years,’ she says. ‘Our paths have crossed many times over the years and we’ve collaborated on many projects.’ In addition, many of the organizations and individuals who have participated in IMOW initiatives are also Global Fund grantees. In short, she believes the two organizations are a natural ‘fit’. They share a vision of ‘a just, equitable and sustainable world where women and girls have the resources, voice and opportunity to realize their human rights’.
What difference will it make?
What difference will the merger make? Global Fund’s areas of work are resource mobilization, funding, advocacy and education. IMOW, by contrast, has worked on strengthening hearts and minds, says Hessini. ‘It’s an opportunity to engage and mobilize at a bigger level for both of us,’ she believes. To put some figures to this, Global Fund has an international network of over 20,000 donors, a global online community of more than 650,000, and more than 2,000 volunteers and 4,700 grantees in 175 countries. IMOW has over 700,000 annual ‘visitors’ and, in addition to its online presence, in the past three years it has held physical events and installations in 14 countries spread throughout the world. Together, the two organizations calculate they will engage more than 1 million visitors per year through social media, email and web, in effect doubling their impact as separate entities.
A disposition to give is not the same as a culture of philanthropy, argues Brazilian philanthropist Carol Civita. Brazil has always had the one but still lacks the other, she tells Caroline Hartnell. Part of the problem is that Brazilians see social problems as the government’s business, but in her view the country needs partnerships between the public sector and private philanthropy if social development is to catch up with economic development. But foundations are beginning to talk to each other, she says, a big step forward.
What role is philanthropy playing in Brazil at the moment?
Brazilians have always been noted for being charitable, but it was reflexive giving – giving to people in need without any deeper thought behind it. If you think of emergencies, if you think of natural disasters, Brazilians tend to be very charitable. But once this moment has passed, there is no sequel. What I see at this moment is that people are starting to realize that they want to focus, that they want their assets to go towards something that is organized and for the long term. So this is the basic change.
But it’s still very small and I do not consider Brazil as having a real philanthropic culture yet. I don’t like to call charity philanthropy – I think they are two very different things. Philanthropy is something that you have to be involved in; you have to understand the cause with which you are involved and you have to have a long-term plan. As for charity, it’s something very much of the moment, much more emotional than logical.
Do you think the fact that people see social problems as the government’s business is a barrier to philanthropy?
Definitely. People do not yet understand the idea of private philanthropy and the public sector working together. This is the biggest issue today I would say. Some people say, ‘there is no legislation, there are no benefits.’ But it’s more than that. I think that there is no consciousness of the importance of private philanthropy in social development. The public sector itself still does not realize how big the effect of private philanthropy could be. The ideal situation would be having private philanthropy and the public sector working together and it is starting to happen, but very slowly, for instance in education.
Carol Civita is a philanthropist, committed to strengthening the growing philanthropic sector in Brazil.
This post first appeared on the Foundation Center’s GrantCraft blog. GrantCraft, a service of the Foundation Center, taps the practical wisdom of funders to develop free resources for the philanthropy sector.
Several years ago, ACBP set out to research issues facing spend down foundations. To our surprise, there was little information available. Since then, there has been an increasing amount of publications and forums around spending down assets as compared to perpetuity. In absorbing this information, we have a few considerations to highlight.
Investment and impact are two major concerns facing every foundation. Investments are managed to produce a return. Returns are spent to have impact – with a portion held for reinvestment. The target spending rate for many foundations in the United States is five percent. This has roots in the federal government’s minimum distribution requirements. In the private foundation world, those favoring a spending plan in excess of the traditional five percent consider a third and fleeting element – time.
The issue of time is particularly relevant now. We are entering the greatest transition of wealth in human history. Foundations as prominent and diverse as the Bill and Melinda Gates Foundation, The Atlantic Philanthropies, ours, and others are in the midst of distributing all assets over a finite period. A few are also making a public record of their experiences and lessons.
There are a number of significant factors and realities that any foundation debating time should consider. Here are five that we’ve observed as important to the thought process:1) The Living Donor Effect
Employees, consultants, and paid advisors that consider perpetuity could be serving their self-interest of job security, reducing their fiduciary risk, and increasing their influence as assets appreciate. The chronological life span of a foundation is a fundamental and critical strategic decision that needs to be driven by donor intent. It is the living donor that has the capacity and independence to decide, or at least set the stage, if a foundation is to have a limited or perpetual life.2) Compound Social Impact or Investment Returns
Often, consultants of perpetual foundations conclude that foundations could do more good over the long term than in the shorter term if investments are allowed to grow. The assumption is that compounding investment returns with a distribution rate that is below the historic returns will lead to greater cumulative financial distributions. Let’s consider the cumulative social impact that would be achieved had those funds been put to use for social impact. For example, let’s look at polio and the Bill and Melinda Gates Foundation. The Gateses, who are living donors, plan to spend all of their foundation assets. They have used impact to measure the rate at which projects are funded.
In just 25 years, the number of new polio cases has decreased from 350,000 annually to less than 400 in 2013. That equates to more than 7 million people who have avoided contracting polio. We’ll never know who these people are, but nonetheless, they will not be burdens on society and they have an opportunity to be productive contributors to the GDP of their countries.
“Doing good” is a measure of impact. Impact is measured over time. The foundation didn’t limit itself to spending within the standard five percent rule. They looked at what needed to be done and worked to address the challenge with a focus on time.3) Distribution Rates Can Vary by Giving Vehicle
The fastest growing charitable vehicle used today is Donor Advised Funds (DAFs). Although these funds have no minimum distribution rate, they historically have had average distributions far in excess of the five percent minimum required for private foundations. For example, in its most recent annual report the Jewish Communal Fund, one of the nation’s largest DAF sponsors, had an average spending rate of 25.3 percent while The Fidelity Charitable, the nation’s largest DAF sponsor, had an average spending rate of 20.6 percent.
For endowments, the Uniform Prudent Management of Institutional Funds Act (UPMIFA) is used to provide guidance on investment decisions and distribution rates. Several are considered, but the result is that spending policies can be limited to a range of four percent to seven percent.
As one of the most common forms of giving, private foundations based in the United States have a minimum distribution rate of five percent. Amounts in excess of this limit can vary depending on the philanthropic plans. I’ve heard foundation professionals sometimes say, “spending down provides a quick fix.” In reality, foundations have flexibility – they can vary their spending rates based upon their plans and circumstances.
Each type of giving vehicle has proven highly effective in philanthropy. There may be legal requirements that allow or prevent flexible spending rates. With each type of fund, account, trust, or foundation, careful planning is required in both the short term and the long term.4) It’s Okay to Change Course
As circumstances change, so do spending plans. During the mid-1940’s, The Rockefeller Foundation adopted a spending plan that resulted in nearly 15 percent of assets being distributed annually. The purpose was to help countries recover from the ravages of WWII. As the quickening pace of funding lead to “substantial appropriations,” their Board undertook a change in strategy and decided to preserve assets for future needs.
Increased spending well above the investment returns over an extended period of time may lead a Board to conclude that they are approaching a period of “reckless” spending. However, reckless spending will happen regardless of time. Thoughtful spending is a function of research, debate, and planning.
Good governance is flexible in order to react and adapt as circumstances change. Clear communication with objective research will provide the necessary ingredients for a Board to respond.5) Philanthropic Assets Are Not Finite
As Jeff Solomon, ACBP President, has said a number of times, when you’ve seen one foundation, you’ve seen one foundation. According to Giving USA, Foundation Center, and the IRS, philanthropic giving is again on the rise. Giving USA recently reported that in 2012, contributions to private foundations increased an estimated 25.4 percent from 2011. And since 1980, the number of active private foundations has increased an average of 4 percent per year or more than 2.7 times – for each foundation that closes, there is at least another that is formed.
Our global GDP is rising; the middle classes in the poorest countries are growing. The world is in the midst of the greatest transition of intergenerational wealth in the history of mankind. Overall, new philanthropists and assets will continue to enter the philanthropic stream and take up worthy causes. There are people that we don’t see yet and whose assets have not been counted on a tax return that will take the mantle and continue to help those in need.
In 2013, ACBP analyzed 135 private foundations that closed between 2007 and 2012. Of these, 23 percent exhibited a gradual spending pattern, 42 percent made lump sum grants to various charities, and 35 percent made lump sum grants to other grantmakers.
The three main spend down strategies listed were defined as follows:
Examining the last ten years of each of the 135 private foundations, those that appeared to have a planned, gradual spend down did so over a period of several years, while those focused on lump sum grants did so primarily during the last three years.
What did that mean for us? We chose a path that would give the foundation flexibility and a runway long enough to 1) conduct research, 2) publish the results, 3) create trial programs, 4) partner with stakeholders, and 5) grow the program from impendence to sustainability or implement an exit strategy.
This is the ninth post in the “Making Change by Spending Down” series, produced in partnership by The Andrea and Charles Bronfman Philanthropies and GrantCraft. Please contribute your comments on each post and discuss the series on twitter using #spenddown. See related content below for more posts in this series.
John Hoover, senior vice president & chief financial officer at Andrea & Charles Bronfman Philanthropies.
Since the pro-democracy uprisings in the Middle East & North Africa (MENA) region several years ago, many donors have expressed interest in funding in this region. Deciding what, who and how to fund in this dynamic context is challenging. At the Mediterranean Women’s Fund we fund in the 21 countries around the Mediterranean shores, and specifically work in ten countries of the MENA region: Morocco, Algeria, Tunisia, Libya, Egypt, Palestine, Israel, Lebanon, Syria, Turkey. We support women’s rights groups, networks and individuals in contexts where it is difficult to organize.
Supporting women’s activism works
The decision we made to focus on strengthening women’s movements in the MENA region is supported by global evidence that this has significant impact. For example, analysis of policies on violence against women in 70 countries from 1975 to 2005 (reveals that the most important factor driving policy change is women’s activism.
The study found that the effects of autonomous women’s organizing are more important for influencing progressive policy change than the presence of women legislators, the impact of political parties or national wealth. Countries with the strongest women’s movements tend to have the most more comprehensive policies on violence against women.
Having funded in the MENA region during and after the pro-democracy uprisings, we are already seeing results.
In Egypt, we’ve supported several women’s organizations over the past four years for their work against sexual harassment. One of our grantees launched an internet campaign and conducted a study to show the magnitude of the phenomenon: they found that 97% of Egyptian women have been harassed. Another grantee led by women lawyers have provided legal assistance to victims of sexual harassment. A third grantee led by young women denounced sexual violence by taking to the streets and organizing with young men to establish open safe areas in the cities. All of these groups are part of local networks. Thanks to their work and continuous efforts, sexual harassment is now considered to be an societal issue and the Egyptian government has finally issued the country’s first law that explicitly uses the term “sexual harassment,” in June 2014. While this is a success, women’s organizations say it does not go far enough and they have to continue putting pressure on the government to ensure that it will implement good policies aimed at curbing sexual harassment in their country.
In Tunisia, there were very few autonomous human rights groups before the revolution. In 2012, we brought together fourteen women’s organizations for a two day strategic reflection meeting. Here, they decided on a campaign for an equalitarian constitution. The result of their work -with their allies – is tangible: the new Tunisian constitution is the most advanced regarding women’s status in the region. It stipulates clearly equality between women and men, parity in the election process, and that the state should protect women from violence.
In Morocco, our grantees are monitoring the implementation of the Mudawana (personal status law) with caravans going from village to village to reach women living in poor rural areas, to share with them what their rights are and to gather information about their situation. These women’s rights organizations have gone to the media to report on the very difficult conditions in which people, and especially women, are living in remote areas. This forced the government to pay attention to the “other Morocco”. As a result of their work, thousands of children have been registered and gained legal status, and hundreds of young girls could escape from early marriages that are now forbidden by law.
The power of movements
The women’s organizations described above— and the majority of women’s organizations in the region— operate on very small budgets: they exist thanks to the incredible energy and commitment of women that juggle their families, jobs and volunteer work for women’s rights. Yet their commitment is essential for the implementation and monitoring of progressive social policies. They ensure that the voices of those that are often excluded from conversations about policy are heard. They are also working tirelessly to transform social practices and public opinions about women and their rights.
Achievements like these are possible only when feminist organizations are numerous and able to form a strong movement so they can collectively strategize and organize for their rights. Our support, as funders, should thus seek to strengthen them without restrictions that could hold them back from implementing their vision for a just MENA region where women’s rights are recognized and upheld by society at large.
The Mediterranean Women’s Fund was founded in 2008 and is based in France. Its mission is to provide, or help to find the financial or technical means which are needed to fund actions decided by those groups, associations, organizations or individuals who are working towards equality between women and men in the Mediterranean region.
This article is part of a series posted by Mama Cash sharing the perspectives of the local and regional funds that are its grantee-partners.
Caroline Sakina Brac de la Perrière, Executive Director of the Mediterranean Women’s Fund