Seat of the Pants Philanthropy: Riffing on Strategy

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1.  The Center for Effective Philanthropy recently published Beyond the Rhetoric: Foundation Strategy.  It should have made front page news, but it barely made a splash, even inside the world of foundations.  Here’s its primary finding:

We learned that even though most [foundation staff] interviewed believe that having and using a strategy increases a foundation’s ability to create impact, many do not use strategy in their own work. We asked respondents to describe the frameworks they use to guide their decisions. While some decisionmaking frameworks met our basic definition of strategy, a majority did not.

If I may be permitted to do a little translating: The majority of foundations do their grantmaking completely by the seat of their pants.  There’s no framework; no well articulated strategy for achieving desired ends.  The fate of some of our most vulnerable communities rests in the hands of grantmakers who do their work by feeling their way in the dark, as many of us do.

This sounds like a bad thing.  Is it?

2.  Keep in mind that for many people inside the foundation world, charity represents a kind of weak, emotional response to a social problem, while philanthropy, because it is strategic, attempts to get to the root of a problem and solve it once and for all.  Strategy is also what keeps our grantmaking from becoming a random walk through many bogus ideas about the mechanics of social change.

We use the word “strategy” frequently in our work.  But what is it really?

3.  Here’s the definition of “strategy” used by the Center for Effective Philanthropy:

A framework for decision-making that is 1) focused on the external context in which the foundation works and 2) includes a hypothesized causal connection between use of foundation resources and goal achievement.

What’s most striking about this definition is that it’s absurdly weak: Which foundation’s grantmaking doesn’t focus on the external context in which it does its work?  Which foundation CEO, when challenged, cannot articulate a connection between what his foundation funds and what his foundation sets out to accomplish?

Consider this example:  The Levittown Community Foundation aims to end gang violence in Levittown’s low-income neighborhoods.  Its strategy is to fund gang summits to achieve this end.  Foundation board and staff members believe that bringing members of different gangs together can help these gangs resolve their differences.

This has all the earmarks of a strategy, according to the Center for Effective Philanthropy definition: a framework for decision-making focused on the external context (Levittown’s low-income neighborhoods), positing a causal connection between what the foundation funds (gang summits) and its goals (the ending of gang violence).

And yet this strategy has almost no chance of succeeding.  It doesn’t address the issues that bring members of youth gangs into conflict; it does nothing to prevent young people from being drawn into gangs in the first place; it doesn’t incorporate what others have learned from failed attempts to sponsor gang summits; etcetera.

The Center for Effective Philanthropy definition is so broad that almost any kind of nonsense can count as a strategy.  And therein lies its strength:  Despite the fact that the definition is broad, it’s still the case that a majority of foundations fail to use any kind of strategy at all—good or bad—in their grantmaking.

The conclusion, lurking just behind the study’s primary finding, is that the foundation field is in disarray, having little effect, at best, and squandering enormous sums of money, at worst.

Is this a fair assessment?

4.  It might not be.  We have yet to determine empirically the correlation between explicit, well articulated foundation strategies and the production of social goods.  Foundations armed with detailed strategies and metrics might not consistently outperform grantmakers who work opportunistically without a rigid plan, who constantly adjust their tactics to a landscape that presents new opportunities and challenges.  Napoleon, for example, never developed a theory of change before going into battle.  There was no grand plan that connected the fall of Paris, say, to his winning of France.

Keep in mind also that a strategy only makes sense when the path to your goal isn’t direct, when there’s some significant uncertainty about whether your efforts will achieve your ends.  You don’t need a strategy for driving to the grocery store, but you might need a strategy for getting your school-aged child out of bed in the morning.  Likewise, a grantmaker who sets out simply to “improve the lives of children in our region” doesn’t need anything as complicated as what the word  strategy would suggest.  Just about any kindly act toward a child would achieve his desired end.

I suspect that many of the foundations studied by the Center for Effective Philanthropy had goals that were equally open-ended.  This fact, if it is a fact, would tend to inflate the numbers of the “unstrategic,” making the study’s conclusions appear much more dramatic than they are.  Why so many grantmakers would have such fuzzy goals must remain the subject of another post ...

Comments

[Bruce Trachtenberg]

I like Wikipedia's much simpler (and more to the point) definition of strategy: "A long term plan of action designed to achieve a particular goal..." It might be lacking "hypothesized causal connections," but it does suggest some thought about how you're going to get where you want to go.

[Albert Ruesga]

The Wikipedia definition maps perfectly to the CEP's definition, seems to me. "Plan" corresponds to "framework," and the causal connection is implied: you don't embark on some plan of action unless you believe there are causal connections between those actions and your desired ends. The "long-term" proviso reflects the fact that you don't need a strategy for doing something that's straightforward, like brushing your teeth.

[A Cottingham]

I'd be curious to know how being strategic or not correlates to the age of the foundation and the experience (in philanthropy) of the staff leader. New foundations rarely seem to be strategic, which may be fine, as a board and staff cast about for the best ways to use the foundation's resources -- provided they get serious at some point (in the first decade?) and make some hard choices and focus. Also, as Joel Orosz describes in his new book, some foundations seem not to believe or know that there are actually a set of proven practices for smart philanthropy. I'd hypothesize that many of the nonstrategic foundations are led by such people.

Can anyone resist imagining what the uproar would be among foundations if research showed that many grantees were not operating strategically?

[Russ Burke]

Fundamentally disturbing.

There's no correcting mechanism here... nothing that "nudges" foundations to thinking and acting more strategically.

My cynical side say want to scream that is why we received so many "refusals to fund" when the proposal was precisely positioned and presented to engage their stated mission.

It seems somehow disingenuous that foundations would insist on proposal measures and reporting that quantifies effectiveness when they likely had no true measure for their own effectiveness.

OK, I'm done whining. Structural solutions, anyone?

[Phil]

Maybe you have to go back to the founder's era and ask, "Why do you want a permanent, staffed foundation? Why not get active in your lifetime, and work with nonprofit leaders to move the needle on the causes you care about? Develop successor leadership within those organizations. Create alliances. Do what you can while alive. No permanent staff administering a pile of money will ever have your vision, energy, and commitment."

[erasmus]

One of two things can happen. Strategy can become the next flavor of the month, fueled by our desire to be the first foundation on the block to have one and by consultants on the take. Or we'll learn to avoid the subject in embarrassed silence, not quite certain that we can rise to the standard.

[Sharon Schneider]

"I’m not yet convinced that business wonks armed with strategies and metrics will consistently outperform grantmakers who work opportunistically, without a rigid plan, constantly adjusting their tactics to a landscape that presents new opportunities and challenges."

I think you're implying that strategy equals "a rigid plan." If people think strategy means having a rigid plan, no wonder they don't do it.

Strategy is having a framework that guides you to make the right decisions, the right adjustments, as new obstacles and opportunities arise. Strategy is more like sailing a ship, not launching a rocket (which I would call a "rigid plan").

I think it's being overly charitable to suggest that most grantmakers who seem to be funding something different every year are being wise and opportunistic. Mostly I think they just don't know whether anything they're funding is working, or their goals or so broadly stated "improving the lives of children" that, as you say, almost anything "works." It's the few who have a well-conceived strategy that are prepared to adjust and react wisely in order to accomplish a well-articulated goal.

That said, the CEP paper's point holds: few grantmakers employ strategy in their giving.

[John]

Some of the most wasteful foundation spending is done in the name of their "strategy." The one that occurs to me first is the Annie E. Casey Foundation, funding huge regional collaborations with multi-million dollar grants until some of the stakeholders change (like through elections, the regularity of which never seem to make it into their "strategy") and then they simply drop it, leaving the field weaker than it was before and relationships between local nonprofits sometimes irreparable damaged.

But you can bet they spent a lot of time, money, staffing, consultants, research, etc, on their "strategy."

[Albert Ruesga]

Thanks for your comment, Sharon. I sometimes sacrifice accuracy for the sake of rhetorical impact. I didn't mean to imply--although I obviously did--that adjusting to changing circumstances can't be an element of strategy. Any good strategist has to be flexible. But I would argue that in many cases, the more opportunistic we become, the more frequently we change course to take advantage of new opportunities, the less our actions appear to fit inside a single "framework" that guides decision-making. Either that or the framework becomes so broad, so general as to be silly (e.g., "Make good choices at each juncture").

You use the metaphor of sailing a ship. I think it's apt. When I sail, I don't typically devise a strategy for getting from point A to point B. I apply my skills as a sailor to changing circumstances--untoward or shifting winds, heavy boat traffic, etc.

I didn't assert that "most grantmakers who seem to be funding something different every year are being wise and opportunistic." Neither do I believe it. I do believe, however, that the case for well articulated strategies has been overstated. I should also mention that I'm persoanlly a great believer in the importance of working in accordance with some well reasoned, well articulated strategy even as I acknowledge that a lot of good grantmaking has happened outside of any strategic framework.