Anointing Philanthropists as Social Change Leaders: Pro or Con?

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December 5, 2013; Greater Good (Arabella Advisors)

The Greater Good blog of Arabella Advisors is frequently a useful read for provocative ideas from experienced and new philanthropists. The latest post is from Steve McCormick, president of the Gordon and Betty Moore Foundation. McCormick was formerly president of the Nature Conservancy; his tenure spanned the time when the Conservancy was excoriated by members of Congress for a variety of questionable practices, including problematic stewardship of land and self-dealing transactions. Now he heads one of the largest private foundations in the nation dedicated to environmental conservation. His experience, both at the foundation and prior to taking the helm six years ago, gives McCormick the knowledge and the platform to suggest strategies for his grantmaking philanthropic peers.

Unfortunately, embedded in his framework are a couple of foundation practices that do not necessarily warrant automatic endorsement. While McCormick encourages philanthropy to “make big bets on bold ideas,” an idea that most of the nonprofit sector has been futilely waiting for from foundations, he couches that recommendation with the idea that philanthropists should “take the lead in seizing the important opportunities and addressing the biggest and most complex issues we face across the globe.”

He might consider this semantics, but no, foundations shouldn’t take the lead. Nonprofits, particularly community-based nonprofits, should be doing that, and foundations should be backing them, rather than moving in front of activists, due to foundations’ “unique mix of capabilities and…[ability to work] in a way that other actors cannot or have not.”

Foundations are increasingly attracted to the lure of doing things themselves and allowing nonprofits to participate only so long as they follow the roles they’ve been allocated in the foundations’ scripts. As Governor Cuomo’s nonprofit coordinator, Fran Barrett, mentioned during a presentation at the Urban Institute, foundations typically “make up initiatives and then want people to fit into them.” It is a process of substituting the experience and values of foundation grantmakers for those of the nonprofit activists on the ground. Perhaps it doesn’t apply to the Gordon and Betty Moore Foundation, whose board includes a number of recognized scientists and environmentalists, but even there, relying on the groups on the front lines seems to be a better and more democratic prescription than foundations’ taking the lead.

A second troubling item in McCormick’s prescription is his notion of having foundations “work in complementarity toward collective impact.” The example he cites is a broad array of foundations, including Moore, “increasingly coalescing around market-based solutions for conservation.” Foundations themselves are strongly market-based, heavily invested in stock market equities and typically governed by people from business. The frequent gravitation to market-based solutions is to be expected from foundations, given their origins in private wealth earned in free enterprise. It doesn’t mean that market-based solutions necessarily work, that they even fit the problems, or that they don’t create new problems in their wake.

McCormick includes market-based solutions within the rubric of foundations “pursuing and supporting new or unorthodox ideas.” It seems to us that the market-based solutions touted by foundations are frequently promoted by foundations far in excess of what they have or might deliver in terms of positive social change. (Social impact bonds come to mind.) However, they are based in a belief that the market, with whatever tweaks and innovations that it needs to work better, is the ultimate solution. The Nature Conservancy experience was one in which market-based solutions, such as negotiating conservation easement when the beneficiaries might have been primarily the wealthy landowners or real estate developers or aligning the organization with big corporations of somewhat disreputable environmental practices (in the TNC case, its close relationship with BP), didn’t always work quite as well as they might have.

Notwithstanding McCormick’s advice to philanthropists, ours is to be very careful about finding yourself operating ahead of the nonprofit activists doing the hard work on the ground and to be modest in your belief that the market, with an updated, entrepreneurial twists, leads to better, long term solutions than more collectivized, community-based solutions.

NPQ would love to hear your thoughts on the matter.—Rick Cohen

  • Rick Cohen

    Discussions changing the table already: President Obama has signaled that the inclusion of extended jobless benefits need not be in the budget deal for him to sign it. See

  • Eve

    It is so refreshing to have a voice dare to go beyond the common refrains in our sector. I am not holding my breath, however, for the powerful to abandon their power. A book that relates is called “The Revolution Will Not Be Funded: Beyond the Nonprofit Industrial Complex”. I recommend it to anyone in the nonprofit sector, especially the opening chapters. This problem is not limited to environment, but inhibits social progress in many areas, the way I see it.

  • Donna

    But there is certainly stagnation that exists from group think when non-profits and their government funders are the sole leaders (and I use that term loosely here) of social change. Because often, leadership in non-profits and government are not interested in change but in position preservation. Foundations can serve a wake up call to the stagnation that prevents systems change and applying innovative practices to chronic problems.

  • chad jones

    As the Fran Barrett quote succinctly describes, this is a wealthy, privileged few deciding that their ideas are what deserve funds; oftentimes, the most funds. The nonprofit development industry has never been a level playing field, and foundations don’t give and have never given the “best ideas” a fair chance. Instead, grants have been made based on personal relationships, shared social circles and the privileged access that comes with being in the some economic, class and academic strata as the foundation boards and leaders who decide how much to give and to whom. The manipulation of K-12 education in school districts throughout the country (such as your reporting about private foundations and school funding in Philadelphia) is as narrow minded and short-term as the Moore Foundation endowment sanctioning the ideas and access of people near Steve McCormick. This is another instance of plutocracy rather than meritocracy.

  • David Beebe

    Thanks for posing the question and providing a tantalizing glimpse at the intricacies of the “nonprofit” foundations of multi-billionaires such as Gordon and Betty Moore. There is little in the way of “Pros” to consider in the realm of social change leadership and plenty of Con’s” as these representatives of the top 0.0001 percentile of society are used to calling the shots, while openly taking pride in redefining charity as “investments.”

    Investments indeed. GBMF’s “recognized scientists and environmentalists” notwithstanding, fuller scrutiny of their trustees and staff (alumni of predatory institutions) is in order — as is noting the inherent conflict between fiduciary obligations to grow and protect the corpus with environmentally destructive investments.

    I would also caution any use of the term “market based solutions” without also pointing out its patently oxymoronic wordstock.

    Given the most urgent societal problems requiring “charity” are overwhelmingly “market based” in the first place, the highly questionable claim of “solutions” to environmental problems created by the neoliberal free marketeers of philanthropy must be thoroughly vetted and scrutinized. Otherwise, unqualified repetition of their oxymorons serving greenwashing PR ends only reinforces the acceptability of fraudulent claims.

    Any sober assessment of purported solutions to environmental problems MUST address causation of those problems. Treating effects of the problem instead of the causes of the problem only assures the maintenance of business as usual — which is precisely what is occurring. That’s why their “win-win” rhetoric is invariably based upon “incentivizing” recidivist corporate environmental criminals to make money off of half-measures treating the effects of the problems, instead of causes.