Precisely Describing Effective Philanthropy

I’ve now finished laying out the four core approaches to philanthropy:

Since I’ve often debated the effectiveness of Strategic Philanthropy vs. Philanthropic Investment with Paul Brest, I was pleased that Paul commented on my post describing Strategic Philanthropy and gave his general approval of my definition.

One of the reasons that I’ve been sketching out these approaches is because over the past few years I’ve become concerned that the term “strategic philanthropy” has come to be used as synonym for “effective philanthropy”. I’ve been involved with a number of field building groups seeking to advance donors’ understanding of how to engage in effective philanthropy and too often the groups start by defining “effective philanthropy” using the tenets of Strategic Philanthropy.

What I’d like to argue is that donors can be highly effective deploying any of the four core approaches above. Charitable Givers are not inferior to Strategic Philanthropists, they are executing an entirely different activity with different goals and different requirements to be effective. The same is true of Philanthropic Investors and Social Entrepreneurs. These approaches are dependent on each other for each of them to be effective themselves.

When we advance Strategic Philanthropy as the preferred approach to philanthropy, we inadvertently undermine the potential future success of Strategic Philanthropists. In order to engineer social impact, Strategic Philanthropy requires high performing, high impact nonprofits (Social Entrepreneurs) to partner with. These organizations in turn need Charitable Givers to pay for the bulk of their program execution and they need Philanthropic Investors to provide the capital they need to grow and improve their organizations.

If we can agree that these four approaches accurately describe the ecosystem of philanthropy, then we can begin to talk not just about how to engage in effective philanthropy but to more precisely discuss how each approach can be deployed effectively.

These sorts of distinctions are important as philanthropy becomes more and more of a mainstream topic and as we attempt to make our entire field more effective.

2 Comments

  1. Interesting post, Sean. The Center for Effective Philanthropy’s board of directors and staff spent a good deal of time, during our recently completed planning process, coming up with a working definition of foundation effectiveness. We do see effectiveness as requiring a strategic approach.

    This is what we came up with:

    “We believe foundation effectiveness — and impact — require all of these mutually reinforcing basic elements:

    1. Clear goals
    - Specific and achievable
    - Driven by heartfelt concern
    - Clearly communicated and well–understood at all levels of the foundation and by key external audiences, especially grantees
    - Approved and monitored by the board

    2. Coherent strategies to achieve those goals
    - Based on an analysis of the problem or issue, the social/historical context in which the problem or issue exists, the capacity of organizations working to address the problem or issue, costs and benefits of alternate strategies, and the potential pace of change
    - Informed by input from organizations and individuals closest to the problem
    - Rooted in a well-conceived theory of how the foundation’s efforts can lead to the desired change, why it is the best option, and, when possible, evidence that the strategy has worked elsewhere
    - Grounded in knowledge of what others are doing to address the problem and how the strategy relates to those other efforts
    - Aligned with foundation staff and board capabilities
    - Clearly communicated and well understood at all levels of the foundation and by key external audiences
    - Revised, as appropriate, based on what is learned through the monitoring of relevant performance indicators

    3. Disciplined implementation of those strategies
    - Driven by strong executive leadership that inspires the highest levels of performance and is committed to continuous improvement informed by data over time
    - Managed and staffed by people with capabilities matched to the chosen strategies, which requires careful attention to professional credentials/experience as well as racial and cultural backgrounds
    - Built on clear expectations, appropriate resources and support, solid processes, and constructive feedback for staff and board
    - Rooted in intentional efforts to build high-quality relationships with those the foundation chooses as its primary agents of change (often, but not exclusively, grantees)
    - Mindful of what other actors are doing and open to opportunities for collaboration

    4. Relevant performance indicators to assess progress
    - Help leadership assess progress relative to goals and strategies
    - Enable leadership to assess the organization’s overall performance — and to compare performance with that of peer funders, whenever possible
    - Help leadership learn from their implementation of strategies and improve these strategies over time based on an understanding of what works
    - Facilitate the assessment of performance of grantees and support grantees’ efforts to assess themselves
    - Help assess the performance of the board, CEO, and staff members — to motivate them and improve their performance.”

    Our full strategic plan is available online here: http://www.effectivephilanthropy.org/assets/pdfs/CEP_2011-2014_StrategicPlan.pdf

    Sean – would love to know what you think of this and hope it is helpful in provoking more conversation about effective philanthropy.

    • Thanks so much Alyse. Please see my post noting the difference between the general usage of the word “strategic” and the specific usage of “Strategic Philanthropy” that I’m using in these posts. However, I think your comment isn’t fully answered by that distinction and my next post will address your comments.

      (But not today, I have jury duty!)