The Carnegie Corporation of New York (the foundation created by Andrew Carnegie) issues a quarterly newsletter titled Results. The recent issue includes a fascinating story by the director of their journalism initiative. It tells the story of a failed grant:
The article begins:
This is an analysis of media grantmaking to support nonprofit issues. It is also the story of a first-time grantmaker who can say, in the end, that the grantee did what it was supposed to do but the strategy was a failure.
As long time readers know, I’ve written frequently about sharing failures in philanthropy. I bring the issue back up today to follow up on my recent column in the Chronicle of Philanthropy and yesterday’s post on “superior knowledge” as the true “currency” in philanthropy.
Why did Carnegie publish this story of “failure”? Why did Susan King, the author, decide to write a six page article outlining the fact that her grant failed? Susan writes,
I must admit that any honest analysis of my first grant leads me to conclude I was naïve in making it, sensitive as a former broadcast journalist to news media needs more than issue impact, and unsuccessful in really improving the coverage of nonprofit organizations and priorities that were the twin goals of the grant.
But then continues:
I can say I learned a great deal from this $354,000 investment about how working with media can advance ideas foundations care about, and I write this edition of Carnegie Results to share some of those lessons.
It is clear that Susan, and the Carnegie Corporation, recognize that by sharing Susan’s story, that they may be able to help other grantmakers make better grants. Unlike in the for-profit world, where only the money an investor puts to work can produce a profit for the investor, Carnegie can produce impact in their focus area simply by influencing the way that other grantmakers deploy their resources in the areas that Carnegie cares about.
“Failure” in philanthropy is much more like “failure” in science. When an experiment doesn’t work, scientist do not feel ashamed. The data goes into public journals and becomes one more data point for other scientists to utilize.
So Carnegie has two resources at their disposal, financial capital and superior knowledge (as I laid out yesterday). My argument is that Carnegie’s knowledge is far more valuable than their financial capital. Carnegie gives roughly $120 million a year. But their knowledge, if effectively and broadly distributed has the potential to influence the $300 billion given to charity each year. In fact, since the government funds many programs in the areas of Carnegie’s interests, Carnegie’s knowledge can potentially influence the more than half a trillion dollars of public money spent in these areas.
If you want to play big, philanthropy is about knowledge. Everyone in philanthropy talks about “leverage”. Leverage means to take actions that have a magnified impact relative to the money deployed. The key to leverage in this field is sharing knowledge.
So play big. Carnegie is trying to. Let’s make this behavior status quo.