As foundations emerge from the market downturn with diminished assets and increased challenges all around them, it seems that purveyors of new philanthropic formulas for making a difference are everywhere. Offering anecdotes and snazzy adjectives modifying the word “philanthropy,” they extrapolate from a success story or two, promising that their approach—fill-in-the-blank philanthropy—will allow foundations and philanthropists to finally show progress in solving our toughest societal challenges.
The advice is everywhere foundation leaders turn: Experts are urging grant makers to “build the capacity” of nonprofit groups; invest in social media; finance research; find ways to influence public policy; and offer loans and other so-called program-related investments.
Many of those writing about philanthropy are insightful—and, occasionally, what is written goes beyond a few anecdotes and is rooted in some actual research. Some are making a real contribution by promoting tools and approaches that can be powerfully positive. But lost, all too often, is what may seem an obvious point: Whether those specific approaches make any sense at all for a particular foundation depends entirely on the goals and context of the foundation in question. In other words, it’s all about strategy—and strategy, by definition, is not one-size-fits-all.
As Michael Mauboussin points out in his new book, Think Twice: Harnessing the Power of Counterintuition, those who fall for anecdote-driven “new” solutions to complex problems often pay the price.
“The right answer to most questions that professionals face is, ‘It depends,’” he writes.
In his book, Mr. Mauboussin reminds us of the history of manned flight. “Early on, hopeful fliers studied animals that could fly and noticed that almost all had wings and feathers. So early aviators fashioned wings, attached feathers, climbed up high, jumped, flapped, and crashed.”
He argues that “many management theories today” look a lot like “feathers glued to wings.,” He adds: “Consultants, researchers, and practitioners often observe some successes, seek common attributes among them, and proclaim that these attributes can lead others to succeed. This simply does not work. Decisions that work in one context often fail miserably in another.”
We would be the first to agree that it’s great to see new, creative models of approaching philanthropic challenges. In the right context, they can be important elements of strategies that lead to big achievements. But which ones make sense for a particular grant maker?
It depends. Because the right set of activities—the right strategy—depends on the foundation’s goals, and the context in which it is operating.
“It depends” is admittedly not a great slogan if you are trying to sell consulting services or publish an article. But it is wise counsel, we believe, to those making decisions about how to allocate precious charitable resources.
What we at the Center for Effective Philanthropy have found, in our research on foundation strategy (based on analysis of how decision making is approached by almost 200 foundation CEO’s and program officers and described in our report “Essentials of Foundation Strategy”), is that the most strategic grant makers can explain, in detail, the logic that guides their work to achieve their goals. They also share some other traits: They are much more likely to seek external perspectives on their work than their less strategic counterparts; they communicate publicly about their strategies; they have a written strategic plan; they take initiative in their grant making; and they assess their performance to a much greater degree than those who are less strategic. They are data-driven.
Those are the essential traits that strategic foundation leaders share. But the components of their strategies—the specific things strategic foundation leaders choose to do to achieve their goals—run the gamut.
For some strategic grant makers, an aggressive communications campaign is a core component of a strategy to achieve their goals. For others, this has no relevance whatsoever. For some grant makers, an emphasis on strengthening nonprofit groups in ways that go beyond the grant is key. But others may rightly conclude that those they support don’t need this help—or that others are in a better position to offer it.
And so it goes, down the line of the various approaches that have been held up as philanthropic panaceas.
Should a grant maker embrace these ways of working? It depends.
Yet, all too often, when we read about these issues or attend conference sessions on topics like “capacity building,” to choose one example, we see a single case study—unmoored from any larger set of data—change how grant makers act. Case studies have an important place, to be sure, and we at the Center for Effective Philanthropy have published a number. But to figure out what works and what doesn’t, let’s make sure we look to large-scale sets of data and analyses that cut across many organizations.
Philanthropy has a growing body of rigorous research that can demonstrate how the common steps foundations take can be carried out in more or less successful ways. Let’s draw on those findings whenever we can.
As philanthropists and foundation leaders seek to maximize their effectiveness, we would like to see a future within which there is more decision-making that is informed by rigorous thought and research—and less reliance on anecdotes alone. We would like to see a little more self-discipline and humility before something that worked in one context (or even a few) is offered up as athe cure-all for all that ails us, philanthropically. We’d like to see a little more healthy skepticism.
Maybe then, we would see fewer foundations doing what those early aspiring aviators did: climbing high, jumping, flapping, and crashing.