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Transformative Philathropy PDF Print E-mail

This is one in a series of "think pieces" on which we invite comment and discussion. Each of these short pieces raises an issue that any nonprofit might want to consider when the Board begins to develop policies that should undergird the institution's move toward "self-sufficiency." This piece was written by E. Maynard Moore, Ph.D., one of the partners of CommunityNexus Consulting LLC.

Venturing Our Resources for Social Capital

Within the next decade, philanthropy in the United States will need to reinvent itself. Let me explain.

Institutions that comprise the field of American philanthropy have a long tradition of grant making, and can point to many successes. But these philanthropic institutions (as well as any other social institution, including those in the nonprofit service sector) are means to an end, not ends in themselves.

It is easy to blur this distinction, a distinction between structure and mission. It becomes easy to conclude that what we are doing in our chosen realm is so important that it should somehow be supported (or continued) for its own sake. But institutions are just instruments and cannot be better than the purposes they serve.

Those purposes can be separated between ultimate social ends and institutional goals. Ultimate social ends are an expression of a society's shared beliefs. In American society, freedom of expression, freedom of religion, equality of opportunity, enjoyment of natural beauty and economic well-being are widely valued as proper social objectives.

In pursuit of these ultimate aims, Americans have become accustomed to working within a particular set of institutions, which have been established or have evolved over time through the interaction of social, economic and legal forces. Among these cherished social institutions are many in the field of philanthropy, which we call "foundations" in the private sector, as well as a host of non-profit agencies committed to addressing many specific social ends.

Institutions themselves are ultimately important, however, only to the extent that they reflect the broader ends valued by society.

Because these nonprofit organizations are merely means to help pursue ultimate aims (represented in their mission statements), there is little reason to value any given organization for its own sake. Now, through the complex skein of history, our society finds itself with a certain set of philanthropic institutions and a division of tactics among them.

Consider, for perspective, the charitable entities that sprouted forth in the 1880s and 1890s: these institutions marked a new professional approach to social problem-solving. Many of these were incorporated to meet specific needs following the Civil War, but after four or five decades, we see a myriad of organizational types and a veritable plethora of approaches being tried in what we now call the non-profit, voluntary sector.

In various learned circles, discussions arose about the effectiveness of these "charitable organizations," bringing forth some initiatives to coordinate the activities of various benevolent groups, with limited success. Soon the discussions led (in the 1920s) to something called "scientific philanthropy," heralding a search for methods to address social and economic problems that would be grounded in science and rationality rather than "merely" altruistic sentiment.

Beyond the focus on efficiency, such foundations as Sage, Rockefeller, Carnegie and Harkness aspired to use scientific methods to comprehend and to remedy certain social and health scourges that otherwise seemed intractable. Donors began to take an interest in some of the great scientific advances, especially in biology (such as blood circulation) and medicine (such as radiation), and sought a means by which their applications might work effectively on behalf of humankind. Science, for these foundations, seemed to reflect an almost unbounded optimism for the future, and they adhered to an almost religious faith in scientifically guided progress.

But the larger issue, which not many in the foundation or nonprofit world recognized overtly, was the struggle to institutionalize the public spirit, and that is a struggle that has not abated. It is a question not easily answered in the United States, for our society is so diverse (in ethnicity, in cultural background, in religious faith, in economic wellbeing) that few so-called social values now can claim universal acceptance.

From time to time, scholars and pundits come up with a list of such values, but apart from an occasional best seller (one thinks of William Bennett's The Book of Virtues, for instance), such attempts do not move the debate very far along. That may be appropriate, because we have come to value diversity itself as a public (i.e. social) goal.

So what is a self-respecting philanthropic institution / nonprofit service organization to do?

Institutions are central to our individual and corporate wellbeing as Americans, but as Robert Bellah and his associates have pointed out (The Good Society, p. 288), "If the central value system is flawed, then it is much more likely that many of its institutional specifications will be problematic as well. Institutional change must then involve changing the value system" that comprises American life. No small order.

But we can commence working at this, and we begin by recognizing that the social contract between the nonprofit sector and the rest of society is simply an expression of the institutional division of labor that has evolved as the typical "American way" of addressing social problems.

The social contract is a good one if it effectively secures the society's ultimate goals. But in the context of rapidly changing social values, these goals can be ephemeral, and thus "throwing money" at a problem seldom works.

The alternative would seem to be an approach that builds "social capital," and does so in such a way that we get beyond the convenient institutional arrangements that we have inherited (and the distinctions we speak about as "grant making" and "grant seeking" institutions). In the decade ahead (and this is becoming quite apparent following September 11, 2001) the old structures might well fritter away resources that have been amassed for the "public welfare." Some of the most respected of the traditional structures are being questioned at every turn. It soon will spread across the board as new demands of the 21st century become evident.

The imperative is present for the nonprofit sector to address the problem as an opportunity. Whatever their chosen field of focus, health, education, environment -- it doesn't matter -- the nonprofit organization and grant making foundation each has before it the opportunity to bring its creative genius to the task of redefining the landscape.

The seeds of such a response are present in the notion of transformative philanthropy, an approach that a few forward-thinking donors have already begun to implement with "venture" philanthropic investments. This does not mean indiscriminate funding of wildly adventurous ideas, though some worthy ideas might have such an unconventional characteristic, but rather, defining initiatives carefully and providing a framework for incubation.

An example that comes to mind is Venture Philanthropy Partners in the metropolitan Washington DC area, which pools the resources of some 30 donors and foundations to focus on the long term agenda concerning young people, their education and development, in the national capital area. Other encouraging signs come from the work of the Fetzer Institute in Michigan, ASHOKA in Northern Virginia and the venture philanthropy network in the greater Boston area.

In fulfilling its well-established mission, I believe that any American foundation with a substantial corpus and any nonprofit organization, whose mission intends broad social impact, should begin to consider such a creative partnership. It requires a process of building constructive interactions between entities in the "independent sector."  It surely means redefining relationships within the grant making and grant seeking community. Some cherished institutions might disappear. But if opportunities are met creatively, that will be an insignificant consequence.

United States foundations now have the resources, so the burden of leadership rests with them. Any foundation would do well to reappraise the current landscape. That foundation's programs will then reflect rigorous, well-strategized, high-impact, approaches in order to address "opportunities" (not problems) with the rigor needed for generating transformational advances in the cultures of institutions, including their own.