Emerging from the swimming pool: authors’ reflections on the ‘Strategic Philanthropy for a Complex World’ blog series

John Kania

John Kania

We would like to thank Alliance magazine for selecting the SSIR article ‘Strategic Philanthropy for a Complex World’ as a topic for reflection among its readership and elevating the debate ‘out of the swimming pool’. We also appreciate the thoughtful comments of the blog contributors, who took the time to share some personal insights into the relevance of these concepts within their individual, often non-North American, contexts.

In Alliance’s final instalment in the series, Caroline Hartnell, Jenny Hodgson and Barry Knight provided their summary of key themes emerging from the blogs and individual emails they received. Below, we’d like to provide reflections on their three high-level comments and our own takeaways from the rich discussion.

Mark Kramer

Mark Kramer

1 ‘There is no such thing as a simple problem when you take context into account.’

We absolutely agree. The discussion about what constitutes a simple vs complex problem in different settings was fascinating and informative to our thinking. By way of background, we were fortunate several months ago to have Brenda Zimmerman, a leading thinker in complexity science and co-author of a fantastic book called ‘Getting to Maybe‘ (that we would recommend to anyone practising emergent strategy), come and speak with us at FSG about what it means to work in complexity. We came away from that discussion seeing this framework less about undergoing an academic ‘labelling’ exercise, but more as a tool to help understand the nature of a problem and how to make investment decisions with finite resources. Any complex problem has simple and complicated problems nested within, and any seemingly simple solution can become complex once you try to get uptake for a solution in different settings.

Patty Russell

Patty Russell

Blog contributors made the very important observation that the context for these social problems can influence the level of complexity – for instance, where the problem is less clearly defined or where the environment is more unpredictable (such as in a post-conflict context or where communities are not welcoming of a new healthcare facility). Our perspective is that by discussing the nature of problems themselves, funders might think differently about relative levels of investment in their solutions (eg to what extent do we need to invest in system fitness? When is co-creation with the beneficiaries and other key stakeholders the right approach?). As always, it was very helpful for us to read how others were interpreting these ideas, and gave us good food for thought for how we might be clearer moving forward in describing complexity with a particular emphasis on context.

2 ‘This debate will be less relevant in some contexts than others, but reflection on how philanthropy is practised is always valuable.’

We were pleased to see that the concept of emergence struck a chord with most of the respondents, and the shared perspective that continued debates on these topics are beneficial to the field. We appreciated that some of the contributors challenged our ideas given the context of their individual cities and countries. For instance, Ambika Satkunanathan rightly asserted that our assumption that foundations are insulated from financial and political pressures isn’t always accurate, particularly in repressive or undemocratic states. Upon reflection, it would seem in these conditions, the idea of working the positive attractors and being mindful of negative attractors would become even more critical, as foundations have to get creative about leveraging positive trends and energy (political or otherwise) to achieve their goals.

We would disagree, however, with the authors’ conclusion that the debate is less relevant in some contexts than in others. As our world gets even more complex, with even greater pressing social and environmental issues, finding effective approaches (new or otherwise) to address them transcends geography – the variation comes in the approach to execution. As stated above, and rightly observed by readers, context is key, and the assumptions in the SSIR article should be tested and approaches adapted to different circumstances.

3 The article told them little that was new because they were already practising what it describes as ‘emergent philanthropy’ – though they see it more as a common sense response to the complexity in which they work.

We suspect readers won’t be shocked to hear that this is not the first time we have heard the criticism that we are discussing ‘old wine in new bottles’ as the president of the Oak Foundation put it, or that this discussion is irrelevant because ‘we are already doing it’.

Since we agree that this is ‘common sense’, and that the concepts of emergence and complexity are not in and of themselves new, it begs the question: why are we still talking about it? Our response is that like so many things in life, there is often a disconnect between knowledge and action. If one takes emergent philanthropy merely to mean that foundations adapt their grantmaking to changing circumstances over time, that is of course common sense and widely practised. But we are suggesting something different, as noted by Michele Fugiel Gartner and Daniel Overall from the Trico Charitable Foundation in their recent Alliance blog post:

‘Emergent philanthropy could easily have struck us as “yup, doing that”because we were always open to change. But change is not emergence. [And that this work…] ‘requires different processes, communication and cultures.’

The unpredictable nature of social change means that foundations cannot know the answers to the problems they try to solve; that successful interventions cannot reliably be replicated; that randomized control trials will not provide the key to social progress; and that no funder or organization acting on its own can produce lasting large-scale change.

We are suggesting that working within complexity requires the grantmaking approach of many foundations to fundamentally change. Foundations cannot simply do their research and devise strategies in their boardrooms. Instead, they must undertake the messy and open process of collectively developing interdependent strategies together with civil society organizations, governments and corporations. And if foundation staff must balance accountability with improvisation, then their reporting relationship to the board must also evolve. Many foundations we know have not yet mastered – or even attempted – these challenges.

Other reflections

As we stated in our ‘Last Word‘ response in SSIR, our objective in the article was to use stories of impact to create a sense of urgency and to suggest practices that could complement existing approaches to strategic philanthropy – all in the hopes that it would increase the odds of improved outcomes. Several blog contributors have joined Alliance in urging the field to elevate the debate and share perspectives on the ‘how to’ aspects of the article – the organizational structures, board and staff dynamics, and sensing and evaluation functions necessary to successfully navigate complexity. Like many in the sector, FSG is eager to learn from you, and would be happy to serve as another platform for you to share your story with the field.

Since our article was published, foundations have reached out asking difficult questions about how to change their practices. Some of the questions we’ve posed to them for consideration are:

  • Co-creation Beyond one-off conversations and grantee meetings, how can you intentionally engage the community in strategy development?
  • System fitness Who are the major stakeholders in the system you hope to influence? If you were to draw a picture of the system, how strong are the connections among actors? How and to what extent would making investments to actively strengthen the system enhance the effectiveness of your individual grants?
  • Amplifying the attractors How do you keep your finger on the pulse of what is happening in your community beyond interactions with grantees? How do you leverage positive or dampen negative trends the field (eg policy changes, political dynamics, funding flows) to accelerate potential for impact? How do you engage your board in discussing these opportunities?
  • Organizational dynamics How do you discuss and learn from failure at your organization? Are conversations in the board room focused on accountability to implementation or accountability for learning? On what is working? On what isn’t?

As a final thought, Christine Letts commented in her ‘Up for Debate’ response that ‘Perhaps the most important beacon that we all should be seeking is the impact that we all talk about so much.’ In our mind, that means ongoing reflection and willingness to adapt behaviour. Our earlier thinking on strategic philanthropy still holds; we are not saying ‘no, but’ but rather ‘yes, and’ when it comes to concepts such as clear goals, data-driven strategies and the use of evaluation for ongoing learning. These are still the bedrock of planning for impact. But we’ve learned over the years that greater intentionality towards investments in co-creation, system fitness and leveraging positive energy will help accelerate achieving that impact.

Thank you for your continued engagement on this important topic and to Alliance for bringing a much more global perspective to the debate. We look forward to hearing your stories and to encouraging more dialogue around what it means to be a funder in a world of complexity.

John Kania is a managing director at FSG, where he oversees the firm’s consulting practice. Mark Kramer is a co-founder and managing director of FSG, and a senior fellow at Harvard’s Kennedy School of Government. Patty Russell is a managing director at FSG, where she leads the catalytic philanthropy practice.

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Five Cost Effective Tactics for Driving Engagement in the Nonprofit Sector

Otar Makharashvili

Otar Makharashvili

Employee engagement is used to describe employees’ attitudes and dispositions towards the employer, mission statement and their job responsibilities. Leadership’s ability to inspire, engage and motivate staff is fundamental to the continued success of any nonprofit organization.

Current engagement studies suggest that an engaged workforce could make a difference between organizational failure and success and can influence outcomes as important as productivity, efficiency, creative problem solving, staff satisfaction, low employee stress levels and most importantly, organization’s social impact. Some of the problems associated with lack of engagement are far too familiar to those who work or have worked in the nonprofit sector. Based on research and experiences, some tactical, cost-effective and scalable actions that nonprofits can take to drive employee engagement are outlined below:

        I.            Mission Driven Engagement

The most important quality of an impactful nonprofit organization is clarity around its mission. A recent research report from Opportunity Knocks confirmed that organization’s mission was one of the most important factors in employees choosing their jobs with 87% ranking mission from important to very important. The analysis also showed that employees most attached to the mission of the organization were more engaged than those who weren’t. These findings demonstrate clear evidence of the importance of properly articulated mission statement that is reinforced on a daily basis and woven into internal communication strategies.

Additionally, nonprofit leaders should practice hiring more mission-driven candidates and strike a perfect balance between screening candidates based on transferable functional skills and their enthusiasm for organization’s mission. From an accounting assistant to the COO, nonprofit leaders must stay focused on recruiting candidates committed to the mission and social impact of the organization.

     II.            Employee Development Driven Engagement

Making investment in career and leadership development for employees is a key driver of engagement, satisfaction and sense of efficacy. However, due to budget constraints, nonprofit organizations often struggle with providing enough opportunities for career advancement, discovery and learning for their employee base. There are few cost effective approaches that leaders can consider to drive staff development:

  • On the Job Learning Opportunities such as job rotations, cross functional team experiences and special projects,
  • Lunch & Learn programs;
  • Individual Coaching & Mentoring;
  • Time donation for employees to pursue development opportunities at their own expense.

Additionally, communicating organization’s financial standing and being transparent as to what is possible in terms of staff development will instill trust, sense of loyalty and understanding. Employees aren’t enemies and they’re as interested in meeting financial goals as the leadership.

   III.            Shared Decision Control Driven Engagement

There are several crucial benefits of involving employees in the decision making process and this is especially true for nonprofit organizations. The very structure, organizational tree, and project priorities are constantly changing to respond to sector and funder demands. Additionally, nonprofit organizations are constantly looking for ways to scale the scope of their programs and impact. They do this through coming up with new models for social innovation, building project around it and fundraising from various sources. This means big changes! Key findings from multiple employee satisfaction surveys speak for four important benefits of involving employees in the decision-making and project building process:

  • Employees feel valued when they get a chance to contribute
  • Better sense of overall direction of the organization and hence more informed day-to-day project decisions;
  • A strong sense of responsibility as their decisions have consequences and thus are committed to making ‘best’ decisions;
  • Employees won’t blame their managers and superiors when and if things go wrong.

   IV.            Work-Life Balance Driven Engagement

Majority of nonprofit employees care about issues they’re trying to tackle! And sometimes they care too much! So much that they’ve lost a sense of difference between their personal and work lives and somehow the two have become one. Innovations in technology have contributed to increased staff burnout. It is increasingly easy to be available 24/7 via e-mail to respond to issues right away.

Additionally, it’s not a secret that majority of nonprofit organizations are cash strapped and or too small where most of the funding is project specific and leaves very small to no room for flexibility. Hence the sector has some major issues with stress and staff burnout. Some nonprofit organizations, mostly large, have embraced work-life balance as central and critical part of operations, realizing that stressed out employees are not productive. But much like staff development, establishing a work life balance doesn’t have to cost a fortune. There are simple steps that each nonprofit can take to minimize staff burnout and increase engagement as a result:

  • Encourage time off when possible. Working long hours and inefficiencies that come with it have become the norm in the nonprofit sector where it’s normal for employees to be judged for leaving on time and taking vacation. This tendency is an added stressor that sucks the productivity out of nonprofit workforce and discourages engagement;
  • Implement the system of prioritization. Not everything needs to be treated with the same level of urgency. Proofreading a proposal for typos and errors? – Perhaps that’s something an intern should tackle;
  • Utilizing Volunteers. Nonprofit organizations have one of the biggest and most cost effect benefit as compared to their for profit counterparts: volunteers that are committed to the mission and will go out of their ways to make a difference. Investing time and effort in recruiting mission driven pro bono talent (volunteers, interns) can help alleviate some workflow, leaving room for staff to focus on personal lives and work tasks that really matter.
  • Talk to your Biggest Donors. They are committed to your organization’s continued success and will step in should that be in jeopardy due to staff burnout. If not your own donors, there are many foundations that realize the problem of job burnout and may be willing to offer funding for employee wellness programs.

     V.            Reward and Recognition Driven Engagement

Nonprofit employees go out of their ways to save the world. And part of effective staff engagement effort is to recognize and reward performance and it doesn’t always have to be monetary. Nothing is more empowering that a simple ‘thank you’ from your employer but in order to drive even higher engagement through recognition and reward nonprofit leaders should:

  • Make recognition tangible and directly related to staff position;
  • Go beyond a simple thank you and recognize why performance made a difference;
  • Recognize multiple staff members and make it consistent;
  • Recognize publicly during staff, board meetings and via internal communication (newsletters, boards, etc.);
  • And encourage staff to recognize their coworkers.

The five tactics outlined above are cost effective ways to inspire and motivate employees and drive high engagement without compromising the budget.

Otar Makharashvili is program manager at Bolder Giving.

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Focusing on the ‘how to’: emergent philanthropy debate must evolve

Daniel Overall

Daniel Overall

As a small and relatively new private foundation, we were intrigued by Kania, Kramer & Russells discussion of an emergent philanthropy framework. While our initial debates focused on the ‘newness’ and the key elements highlighted in their article were theoretically interesting, we were more attracted to the ‘how to’ elements outlined in the ‘How to move to an emergent model’ section.

For us, the authors’ move away from their views on strategic philanthropy does not mean that emergent philanthropy loses its own requirement to be strategic. Rather, it honours the notion that the shift from predictive to emergent models requires different processes, communication and cultures to ensure that we can describe the impact of what we are doing.

Michele Fugiel Gartner

Michele Fugiel Gartner

To this end, the ultimate potential of the article lies in its attempt to explain how emergent philanthropy can be done. Sadly, this does not seem to be the focus of much of the discussion that has occurred. This strikes us as a squandered opportunity. Imagine the incredible value of all the organizations that participated in this debate talking about ‘co-creating strategy’, ‘working the attractors’ and ‘improving system fitness’ – do they embrace these elements, what has worked, what hasn’t, what have they learned? We are sharing our story in the hopes that it inspires more experienced foundations to join a discussion of the ‘how to’ aspects of the article.

Emergent philanthropy could easily have struck us as ‘yup, doing that’ because we were always open to change. But change is not emergence. We found ourselves wanting to make sure that change was not for change’s sake; that it actually led to an evolutionary advance in our impact. Our mission is to provoke innovation and build capacity in social entrepreneurship. To make sure that our individual activities added up to a coherent whole we developed a framework (lovingly referred to as ‘the pie’) that articulates eight key areas needed to build a vibrant social entrepreneurship ecosystem.

Then something strange happened. We saw the power of the pie was not just as a framework to evaluate the sum total of our activities; it inspired us to ensure that each grant, programme and partnership we design advances multiple elements of the pie. For example, an educational programme would not just seek to build capacity for grantees. Rather, we’d see that same programme as a way to harness data to advance policy, or see if it could yield insights to provide new financing tools, and we’d hook the programme into influential networks to share best practices on programme development.

The strategy shows potential in allowing us say ‘yes’ to things, guide their design, and inform an evaluation focused on the social impact of the system, so that, over time, we hope to see the pie as a whole expand, not just each of the pie pieces. Admittedly, we did not co-create the pie (although it draws on the work of many), but it will be a crucial tool in our co-creation work with grantees and partners. We are also beginning to test it out with local leaders who are similarly dedicated to advancing the social entrepreneurship ecosystem.

Where we have struggled is being accountable to our board for our greater focus on learning, an issue the article alludes to under the category ‘organizational structures and systems’. You can’t predict a quantifiable amount of learning; you can’t even really guarantee it will happen. That type of open-ended accountability seems like a blank cheque that would make any board nervous. We see this approach as promising, but it’s still a pilot. Ensuring clear articulation of an emergent strategy requires constant communication, the setting aside of ego, and a shared belief that if we can get that pie moving (fly wheel) we can indeed make social entrepreneurship mainstream.

We share these examples not out of certainty, but from a gut feeling that this work requires a different approach to strategic planning. For us, emergent philanthropy creates the opportunity to share exactly where our own journey is experiencing bumps and opens up the opportunity to learn from others using similar processes to achieve impact. We see value in the specific articulation of the concept, whether it is new or not. We hope others will join us and explain their journey.

Michele Fugiel Gartneris Director, Strategic Investments & Operations, at the Trico Charitable Foundation and Daniel Overall is Director, Collaboration & Innovation.

Click here to read a series of Latest from Alliance blogs commenting on the Kania, Kramer & Russell article>

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Sustainability in transition (2): Wilde Ganzen’s match funding model

Brian Pratt

Brian Pratt

As discussed in yesterday’s blog, there is a lack of experience in building a sustainable basis for resource mobilization in transitional countries that are leaving aid behind and moving into middle-income status. A recent review of a Dutch programme from Wilde Ganzen brings together experiences from newly ‘graduated’ middle-income countries such as India, Kenya, South Africa and Brazil.

Since the 1950s, Wilde Ganzen has raised funds from the Dutch public, mainly via a Sunday television/radio slot, in order to match funds raised in the Netherlands by small private groups wishing to support development and welfare projects they identify themselves in the developing world. Using a similar co-funding model, Wilde Ganzen started a new programme in 2007, first in Brazil followed by India and South Africa and a few years later in Kenya (not yet a middle-income country).

The model stressed two elements of co-funding. The first part of the programme supports small poverty reduction programmes at community level where funds would be released by Wilde Ganzen (through a national partner) once the community had raised their matching component (normally 50 per cent of the total budget). The second element was to help an existing national body that would manage this process, as well as engage with donors in their countries to provide matching funds for their own institutional costs and eventually for community projects as well – in so doing replacing the present funds from Wilde Ganzen. In other words the whole programme was an attempt to help groups transition from foreign to local funds, using the co-funding as an incentive for organizations previously dependent on foreign funds.

Despite trying slightly different approaches, all of the participating agencies found that communities were initially almost always more successful in raising their contribution to the co-funding scheme than the intermediary agencies. Although it had been hoped that the need to raise funds locally would lead to poor communities making contacts with local middle classes, either as individuals or through local businesses, this was not always what happened. Often poor communities engaged in events and fundraising campaigns and raised the funds from themselves – although in other cases local businesses and people did support these community initiatives.

One thing that came out of our review was that many local private donors are copying some of the big global players by setting up their own projects rather than fund existing groups. This trend of course undermines the sustainability of almost any programme in the longer term so any gains of short-term efficiency are at the cost of longer-term inefficiency. Programmes will inevitably come to an end and close, whereas investment in local organizations has at least a chance of longer-term impact and survival.

The culture change required from groups that had lived for more than a generation with one dominant model only to find it no longer working should not be underestimated. The first problem is denial, disbelief that the system is coming to an end. This denial runs through the whole system. Hence when interviewed, developing country NGOs would often say that they had no warning, and that the donor’s ‘desk officer’ didn’t believe funding would be withdrawn any more than they did. In some ways it was easier for newer organizations to adapt than those with more baggage from the past.

In Kenya the case we studied (KCDF, Kenya Community Development Fund) has had success in attracting both corporate and individual donors for its programmes, some of which are to award grants to community groups. The importance of this example is that they were able, before the country attained middle-income status, to develop local resource mobilization based on an indigenous culture of giving.

All the countries we reviewed have some tradition of giving, sometimes through faith membership or individual alms giving ( to beggars, outcasts) or through local communities to friends, neighbours or relatives. Different resource mobilization strategies need to be employed depending on the history of giving. One of the challenges is whether such often random giving can be better channelled for greater public good, for example through improved education and health facilities. More challenging still is raising funds for more controversial social issues around rights, alternative resource allocation or anti-corruption programmes, where there may be a clash with local power elites. It is easy for people in a middle-class suburb to identify with the needs of the national cancer hospital, harder to see why they should fund a training programme for locally elected councillors in a poor district, or a programme of child protection for under-aged prostitutes. It is a major challenge for local philanthropists and middle-class donors to back human rights and other issues through appropriate civil society groups. Wilde Ganzen hope that by encouraging a change in the culture of giving at all levels of society, eventually even these more challenging areas will begin to gain support from within their own societies.

Brian Pratt is a freelance consultant, editor in chief of Development in Practice and an INTRAC associate.

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Sustainability in transition (1): the continuing reliance on external funding

Brian Pratt

Brian Pratt

The roles and types of donors dominate too much of the current discussion on philanthropy in international development. There are, for example, many debates around the increasing role of private philanthropy or corporate giving versus a decline in funding from official agencies or European NGOs. The issue of civil society sustainability seems to be tied to this debate when in reality the future of civil society is a far more serious challenge.

Behind most of these discussions there is still an assumption that external funding is the key to development in a range of social sectors and countries. Whereas in fact the most important challenge for civil society in any previously developing country is the development of a local funding base and local constituency.

In recent workshops I attended in India on this subject, the discussion merely reflected similar concerns to those in the developed world, for example as to whether corporate social responsibility (CSR) money would replace traditional sources of funds from international NGOs and developed country embassies. Although we did find that some local NGOs were planning to, or had already, closed in the absence of external funds, others were transforming themselves by default into not-for-profit companies, selling services previously offered for free (e.g. seeds, fertilizer agricultural advice). The workshops I attended were just before the new CSR law came into play, which does indeed specify that a percentage of profits should be designated to CSR, but it is too early to tell whether companies will just give to traditional causes such as temples and orphanages or whether to a new form of giving for social causes.

What is clear is that regardless of the nature of external funds, many civil society groups are being forced to take into account the basic fact that dependency on foreign funds will never provide long-term sustainability. Foreign funds from a variety of sources have played an important role in assisting a massive range of activities and groups over the past 40 or more years. However, as the transition of an increasing number of countries to middle-income status is showing, this was probably a short-term historical process linked to a post-colonial movement of solidarity and humanitarian responses in the post-war developed world. Some groups will inevitably continue to raise funds and transfer them to their favourite cause or group, but this does not make for a sustainable strategy unless it is clearly linked to a programme of genuine capacity building and developing a local constituency that can fund or resource the group in the future. Rick James, and indeed many others, casts doubt on the nature of capacity building from most western donors, in that the focus has been to meet donor requirements rather than to develop a locally sustainable strategy.[1]

It is understandable that groups that have been well funded from foreign sources for a generation will find it difficult to realize and act on such a major change as the withdrawal of aid funding. There is always the hope that another donor will come along and bail them out. Indeed the discussion in some of the Indian workshops was exactly along these lines: who will be the new external donor? Will it be a different embassy, church, international NGO, or maybe a private foundation?

What I see missing in this debate is a concern that we have created civil society organizations throughout the developing world that are heavily if not totally dependent on external funding. For many years donors and recipients alike have acted as though this was part of the natural order. It was assumed by most in development that flows of funds from rich to poor countries and organizations would continue for ever. Despite some concerns about the overbearing nature of donors, and the top-down nature of much development, these debates were all held under the overarching view of a resource transfer model in which rich people and countries would pay for development work and social welfare programmes in poor countries. Insufficient time and energy has been spent looking at genuinely sustainable ways of ensuring local civil society can cope with a world without foreign aid.

Tomorrow’s blog will look at one experimental model.

Brian Pratt is a freelance consultant, editor in chief of Development in Practice and an INTRAC associate.

[1] See recent blogs by Rick James WWW.intrac.org

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