Last year, Mark Kramer of FSG Social Impact Advisors defined the term “catalytic philanthropy” in a Stanford Social Innovation Review article. Mark wrote:
“For most donors, philanthropy is about deciding which nonprofits to support and how much money to give them. These donors effectively delegate to nonprofits all responsibility for devising and implementing solutions to social problems. Despite the sincere dedication and best efforts of those who work in the nonprofit sector, there is little reason to assume that they have the ability to solve society’s large-scale problems.”
Mark then went on to describe four practices of what he termed “catalytic philanthropy”:
Take Responsibility for Achieving Results
Mobilize a Campaign for Change
Use All Available Tools
Create Actionable Knowledge
In other words, Mark argued that donors or funders should take responsibility for being agents of change themselves rather than focusing on supporting nonprofits who are agents of change.
To a large extent, Catalytic Philanthropy is in direct opposition with Tactical Philanthropy. Catalytic Philanthropy is in many ways a special category of Strategic Philanthropy. In a Chronicle of Philanthropy column in which I described Tactical Philanthropy I wrote:
“While strategic philanthropists seek to solve social problems, tactical philanthropists are social investors.
Investors, in both the for-profit and the nonprofit contexts, provide capital to organizations that solve problems. Good investors take great interest in the solutions deployed by the organizations they finance, but they themselves are not problem solvers.”
Yet I have great interest in Mark’s concept and think that Catalytic Philanthropy is an important approach for large donors and funders to consider. In some ways, Catalytic Philanthropy is an attempt to leverage the “soft power” potential of philanthropy, a concept I wrote about yesterday.
The core case study that Mark uses is Tom Siebel’s work on the Montana Meth project. When I wrote last year about Investing in Nonprofits, I used Siebel’s project as a counter example of effective ways that donors could approach philanthropy.
But while I agree that Catalytic Philanthropy, in which funders are positioned as the core agent of change, can be an effective approach, I disagree with Mark’s premise that most philanthropy does not already attempt to act this way.
“For most donors, philanthropy is about deciding which nonprofits to support and how much money to give them.”
But this is clearly not how most large foundations work. Most foundations talk about their own programs and view grantees simply as the way in which they express the foundation designed program. Only a small handful of large foundations truly see their role as an investor in nonprofits and talk not about the foundation designed program but about their portfolio of grantees as their agent of change.
Even individual donors, who might say that “philanthropy is about deciding which nonprofits to support and how much money to give them,” in practice generally don’t invest in nonprofits, but instead restrict their donations to certain programs and in effect attempt to use the nonprofit to execute the ideas that the donor themselves believe will do the most good.
When I first read Mark’s article, I was reminded of the Powell Doctrine. When Colin Powell was chairman of the joint chiefs of staff for the US military during the first Gulf War, he advanced the idea that war should be avoided at all costs. But when it became necessary, overwhelming force needed to be deployed.
To me, this is how I view Catalytic Philanthropy. Donors should avoid the temptation to design social impact programs themselves in the majority of situations. But when a donor decides that they have the answer to a problem, they must bring overwhelming force to the situation.
Mark himself told me that when he was writing his article, he considered using the term “shock and awe” to describe Catalytic Philanthropy.
When Tom Siebel decided no nonprofits were effectively combating the meth problem in Montana, he didn’t just launch a media campaign to educate non-users about the devastation caused by the drug. He saturated the media market with extremely hard hitting ads designed by advertising firms who usually work with Nike and other major corporate advertisers. And he supplemented the ad campaign with support for a variety of other elements of the system.
Siebel didn’t just design a strategy. He brought overwhelming force and execute a “shock and awe” campaign that resulted in a massive decline in methamphetamine related social problems.
So here’s the lesson. If you are a donor or a foundation, your best bet in my opinion is to focus your energy on building portfolios of outstanding nonprofit organizations. Invest in these organizations, help them grow and provide them the resources they need to achieve impact.
But remember that there are a lot more tools available in philanthropy. These tools can be powerful. But it is not enough to simply sit in an office and design a strategy that you think might work. Don’t forget that nonprofits on the ground have been hard at work on the very problems you think you can solve. But you have a unique role as a funder. There may be opportunities for you to become an agent of change yourself.
But if you take this route, bring your A-Game. Bring overwhelming force. Be prepared to execute a campaign of shock and awe that has a shot of truly acting as a catalyst that sets in motion a new chain of events.
Sean – great article. The big concern from the nonprofit side of a donor directing the problem solving is that the donor probably does not have the expertise to know the best solution. But clearly there are exceptions. “Shock and awe” is a great litmus test to separate the armchair philanthropists from those who do have the knowledge (and resources/access).
Thanks for this analysis.
Thanks Brigid. We all like to think we know what’s best, but maybe donors role is to know which nonprofit is best, not which social program is best.
Another excellent and provocative post, Sean. As I read it, particularly “invest in these organizations, help them grow and provide them the resources they need to achieve impact,” I am reminded of the approach and attitude the Quixote Foundation is bringing to its “spendup”.
This quote from Co-Executive Director June Wilson in my recent post on Quixote (http://www.sloperesources.com/2010/04/quixote-we-hardly-even-knew-ya/) seems very consistent with what you’ve described: “We plan to talk really frankly with collaborators about using this concentrated resource to get in front of policies and issues now, so problems are avoided long term. One reason we’re making our decision public early is to work with grantees on building the capacities they see as most important. ” Founder Stuart Hanisch used the same words as you to describe the importance of recognizing and achieving through nonprofits’ presence “on the ground”.
Thanks again for the excellent post.