“Chihuly Glass,” Jonathan Gross

Author’s Note: It is no secret that the twin pandemics of COVID-19 and structural racism are forcing a thorough reconsideration of the nature of philanthropy and its role. This fall, I taught a course at Columbia University’s nonprofit management program on strategic philanthropy. My students decided it was important to draft a message to the field about how current practices need to evolve, and quickly. The five-point memo below is the outcome of our deliberations. I hope you find it of interest. If nothing else, it may give you some insight as to how incoming nonprofit professionals view the future of philanthropy.—AW

Over the past 20 years, the philanthropic sector has moved to a more business-like, data-driven approach, which has come to be called strategic philanthropy. The key elements of this approach—goal setting, strategy development, and measurement—have strengthened the field in some ways. An unintended consequence, however, has been to increase the distance between grant-seekers and grantmakers, creating a chasm between philanthropy and the communities philanthropy purports to serve, with the outcome that, more often than not, philanthropy reinforces structural racism.

The twin pandemics of COVID-19 and structural racism have accelerated moves to shorten this distance, prompting many foundations to relax grant requirements, speed up decision-making, and give recipients additional flexibility in how they use funds. Philanthropy in 2020 has done in the short term what it deemed impossible as recently as 2019.

What would it take to commit to a “new normal” and move beyond the straitjacket of strategic philanthropy by addressing inequities and upending power dynamics? These five areas of philanthropic practice have the potential to transform the field of strategic philanthropy to meet contemporary social needs.

1. Recognize Interconnected Challenges of Structural Racism

If there’s one thing this moment has shown us, it’s that the profound challenges facing our world are interconnected. While COVID-19 is top of mind for many of us, it’s merely one of the many urgent crises that must be addressed related to the economy, structural racism, and the climate. Let’s look at the segment of our population who’s been the most disproportionately impacted by these three factors: those who are Black, Indigenous, and People of Color (BIPOC).

The BIPOC community contended with “two of the most lethal preexisting conditions for coronavirus—racism and economic inequality.” The results: greater sickness and disproportionately high levels of economic, food, and housing insecurity. Additionally, BIPOC neighborhoods are particularly vulnerable to the adverse effects of climate change, given that they are often located near industrial complexes that contribute to higher chronic disease rates or are in areas prone to extreme weather.

Some philanthropies, but not all, are reimagining the systems and structures that got us here. In a recent report, the Seattle Foundation outlined how it would uplift local BIPOC communities to address this reality. Aside from pursuing a range of different funding approaches and organization types, what’s most notable is the foundation’s commitment to offering “issue experts and community members” a seat at the table as it sources ideas and makes decisions.

Recognizing the interconnected nature of societal challenges in this way forces the sector to also recognize the interconnected systems that many of our problems stem from. This requires philanthropy to advocate for reforms to reduce these long-unresolved societal injustices. Too often, philanthropy has backed away from being this voice in society, instead reinforcing white supremacist culture and colonization. Now, it must effect change by working to ameliorate the underlying systems which create, reinforce, and fail to address the many social ills in the first place.

2. Empower Community Voices

This moment has brought the issue of power into greater focus—who has it, how it is used, and who benefits—demonstrating the need for a shift to relationships built on power-sharing and community and away from the white savior complex that permeates so much of philanthropic practice.

Solutions to the world’s most complex problems can be found only through communication, collaboration, and trust—and philanthropy must move past deeply ingrained and insular practices. A recent survey of 250 foundation leaders by Dalberg Advisors, the Council on Foundations, and Philanthropy California concluded that true power-sharing will require a paradigm shift, including changes in investment and grantmaking practices and a commitment to use “all forms of philanthropic capital, including resources, voice, and networks.” While some changes, such as a move toward investing through a racial equity lens, may require more thorough planning, foundations can attain some aspects of power-sharing more easily, in how they view and communicate with their beneficiaries.

A first step is to think of grantees as equal partners whose input and feedback are sought. What stops philanthropy from viewing grantees as the “experts” in their own community and the people philanthropists should be following rather than leading? Rather than being seen primarily as the recipients of funds who must follow a grantor’s instructions, grantees are to be valued for their expertise, experience, and the critical role they play in building relationships within their communities. They are in the best position to know what is needed, and what is possible.

This approach, sometimes described as “Trust-Based Philanthropy,” is defined by core values that include humility, transparency, and collaboration. In shifting power to grantees, trust-based philanthropy also places a responsibility on funders to be more proactive in learning about their grantees’ missions and programs, who they serve, and what they are hoping to achieve. This requires more than a survey or phone call; rather, funders “should seek out trusted networks and local partners that can help them to discover culture and place, and help inform opportunities to connect more deeply with communities.” By listening, and building true collaborative relationships, funders can gain a greater understanding of what is needed, how success can be defined, and the organizations and individuals whose experience and knowledge are critical to achieving lasting impact.

3. Embrace Failure

When the for-profit sector takes on immense complexity, failure is an assumed part of the learning curve. It took Elon Musk’s SpaceX years to develop its reusable rockets, something that had never been done before, and the program continues to suffer dramatic crashes, even in a recent test that was deemed “partly successful.”

So, when the nonprofit sector tackles our most intractable and wicked problems, why does philanthropy expect a short-term win/lose proposition? Today’s problems have taken generations to develop and will not be solved quickly. Strategic philanthropy must support nonprofits that take risks in order to, over significant spans of time (decades, not months or years), move solutions forward, one step at a time.

An emergent philanthropy prioritizes three principles. First, it trusts those doing the work, such as philanthropist MacKenzie Scott’s recent $4.2 billion in no-strings philanthropy, allowing nonprofits to develop the solutions needed by their communities, not prescribed by the funder. Second, it remains flexible, allowing efforts to evolve while accommodating “pause points” for refinement, recalibration, and course correction where necessary. Third, it takes chances and is willing to fund the strategic failures along the way that will help us find the solutions. Borrowing a page from the tech startup community, lasting social impact will require numerous failed iterations (and the funding to make them possible) before meaningful solutions gain traction. The University of Oxford’s Gayle Peterson suggests we reframe these “super wicked problems” from a rigid viewpoint of win/lose to an iterative approach, which values mistakes as insight to be leveraged towards future success.

4. Reimagine Impact

Strategic Philanthropy must go beyond the use of vanity metrics or touting “numbers served” as evidence of community impact. This practice creates an absence of meaningful change at a deeper level in the lives of key stakeholders, although it does generate nice numbers that can be found in attractively designed annual reports.

During social disruption, nonprofits that are embedded in communities provide value for their constituents. When nonprofits are challenged to go beyond numbers served, they can move into the integral role they play as stewards of change in society. It is then that the effects of real impact, and not just empty lip service paid to garner philanthropic support, will be felt in the lives of others, and true change will blossom.

Strategic philanthropy should encourage a more inclusive approach to philanthropy that is grounded in SMART (specific, measurable, achievable, relevant, time-bound) metrics, measurable key performance indicators, and sound theories of change based in large part on the experiences of those inside of the community, not prescribed surface-level Band-Aids from those outside.

Impact must go beyond the feel-good anecdotes that philanthropic entities publicly share and must, at its core, express how the money is working to change the present reality of its constituents, for and advised by those constituents. These communities are more than just numbers; they are people who have problems that must be fully addressed.

5. Commit to Scalability

Global issues will require systems-level change. Recognizing that major issues such as healthcare and racial inequality are intrinsically connected is only the first step toward scale. For example, identifying partners who focus on different parts of the same system can be a vital element in creating scalable impact. While the objective is to change an entire system, it is crucial to understand how the system works and the different levels within it as well.

A truly scalable solution must take on issues of complexity while maintaining the flexibility to evolve. The objective should be the pursuit of a true 360-degree understanding of the issue, which may mean taking a hard look at the way philanthropy operates within (or even props up) the greater racial inequity of the economic and political system as well.

Funders should also be encouraged to reflect on their own role as part of a larger system, as well as their own financial and investment systems within this context. For example, a foundation might have racial economic inequality as a focus area, but if their own endowment investments and program-related investments profit at the expense of communities of color, they continue to prop up the institutional racist systems they claim to be dismantling. A real 360-degree understanding of issues includes a racial equity assessment.

Achieving true systems-change requires addressing inequality of power and engaging in a more in-depth commitment to collaboration, including actively sharing knowledge and data throughout the sector. There needs to be transparency among cross-sector partners as well.

Funders must make sure their strategies and objectives are aligned with their collaborators, as well as their own practices. They also must ease onerous and often meaningless reporting requirements and extend the duration of grants and investments to allow grantees the freedom to focus on long-term outcomes. The beneficiaries and community members should lead in the planning and execution of effective strategies. A true 360-degree understanding requires that funders are aware as consequences emerge due to their intervention, which could cause unintended negative effects on other communities. Collaboration should be inclusive of all perspectives. Scalability requires the ability to maintain a strategy that is both consistent and evolving constantly.

Conclusion

Our world is at a critical turning point. We cannot go back to business as usual. Strategic philanthropy faces this same dilemma.

By recognizing interconnected challenges, empowering community voices, committing to scalability, embracing failure, and reimaging impact, philanthropies and philanthropists will be far more able to meet the needs of our times. Let philanthropy learn from and rise to this moment, in every possible way. In 2020, many foundations have shown how they can do what they thought was impossible. Now, it is important to show that 2020 is not a blip and to make “the impossible” the new philanthropic reality.