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Realizing the Promise of Spring: Foundations Should Consider Changing How They Do Business



April 16th, 2012

The author, now a consultant to foundations and nonprofits, has held several positions in philanthropy, including executive vice president of a large California health foundation.

Spring is the season for the denizens of philanthropic foundations to gather at their traditional watering holes to meet and greet and share stories with one another. Last month, Grantmakers In Health assembled in sunny Baltimore, while Grantmakers for Effective Organizations braved somewhat more dicey weather conditions to meet in Seattle. This month, the grand Council on Foundations travels to Los Angeles for its annual conclave.

It’s traditional to invite inspiring speakers to address these assembled multitudes to encourage us to magnify and expand the impact of our work in philanthropy. Whether it’s collective impact or impact investing or whatever the big idea of the moment is, considerable buzz is generated, blog posts are published, tweets are tweeted, and then we return to our respective corners of the country. What’s waiting when we arrive home is often a pile of grant applications and files awaiting action. The pressure to meet the deadline for the next board meeting too often trumps our best intentions to apply those new ideas from the conferences to the way we do business.

Meanwhile, the context in which we operate is in chronic crisis mode. The economy may be slowly recovering, but the human toll of unemployment and foreclosure and lack of health insurance and underperforming schools continues to mount. Governments are stretched to the limit in their ability to maintain even basic services. To someone observing the situation in the United States from afar, it would be clear that this is not a time for business as usual.

* What if foundations decided to do nothing alone? What if they realized that the most important problems are too big for any one funder to address meaningfully in solo fashion, so communities of practice became the norm?

* What if there were widespread use of skilled intermediaries to facilitate joint action? Some organizations (like ClimateWorks) would be created by funders specifically to pool knowledge, talent, and resources to tackle a big challenge together. . . and, in the process, achieving the otherwise elusive goal of scale. In other cases, funders would jointly invest in building the capacity of existing intermediaries to staff up and operate on a larger scale.

* What if foundations increasingly positioned themselves as key nodes in global networks of individual and institutional donors? They would announce new initiatives to those networks as “tax-deductible IPOs [initial public offerings]” and invite interested donors to join forces and maximize joint leverage. Foundations would use their brand and intellectual capital to create more order in an otherwise chaotic donor universe.

* What if there were a paradigm shift in the way that foundation assets are perceived? Instead of seeing their endowment as a restricted resource that “earns” funds for grant making, foundations would decide to deploy 100 percent of their assets directly in support of their mission. Mission-related investing would be the norm, and foundations would add staff that are skilled in vetting and creating local and regional investment “deals” that create and sustain jobs in low-income communities and fuel local economic vitality and population health.

* What if foundations increasingly opted to bypass existing nonprofits and government agencies and found ways to support the well-being of low-income families directly (for example, micro-lending, co-ops, free college-level courses on the Internet, scholarships, and so forth).

* What if foundations underwrote and sustained an open-source, online knowledge base to inform global giving? Codifying and sharing the knowledge they develop would be seen as just as important a foundation function as grant making.

* What if regional groupings of foundations created and provided quality control for online Craigslist-type marketplaces where nonprofits could post vetted requests for philanthropic capital. . . that would be open to individual and institutional donors? In this way, foundations could help current and past grantees to efficiently reach out to other sources of potential support worldwide at virtually no cost to grantees. Modest fees charged to participating donors would sustain the site.

* What if foundations gave up their fancy headquarters buildings, recognizing that contemporary philanthropy is a networked activity that requires staff to be geographically dispersed to maximize their effectiveness? Shared spaces would be created in key geographic nodes that would permit regular face-to-face gatherings and other foundation-sponsored convenings and would house other key nonprofit resources (for example, technology centers). Content-rich convenings that are ordinarily held behind closed doors would be recorded and made available free to anyone on a FORA-TV type service on the Internet.

* What if, inspired by the examples of Bill and Melinda Gates and Warren Buffett, perpetually endowed foundations were increasingly obsolete? It’s reasonable to assume that new sources of wealth that are committed to philanthropic work will be constantly emerging. The new sources would replace the assets of older foundations as they spend down. So, the focus of philanthropy would then be much more on the near term and less on endowing long-term efforts for imagined future needs.

Perhaps it’s just the good vibes engendered by springtime that encourage this kind of thinking. After all, on the North Side of Chicago, Cubs fans are once again caught up in the belief that a World Series victory is a distinct possibility this year.

But wouldn’t it be amazing to not only talk together about some of these game-changing ideas, but to actually go out and make them happen? We’re the only ones who can.

Editor’s note: Tom David is the lead author of “Responding to California’s Perinatal Access Crisis,” a peer-reviewed GrantWatch article in the Spring 1993 issue of Health Affairs.

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1 Response to “Realizing the Promise of Spring: Foundations Should Consider Changing How They Do Business”

  1. Noah Rimland Flower Says:

    Those are excellent points, Tom. I especially like your creative ideas about how foundations can take leadership with donors and re-organize themselves physically as networks. We do a great deal of consulting to foundations, and we made some similar arguments in 2010 in our report What’s Next for Philanthropy: Acting Bigger and Adapting Better in a Networked World. Here’s to a continued discussion about how philanthropy can evolve.

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