 |
February 2008
A recent New York Times op-ed by Denise Caruso, “Can Foundations Take the Long View Again?,” highlighted the tension between business leaders turned philanthropists seeking greater accountability with their funding and established foundations questioning the value of this approach. But accountability, a focus on results, and the long-term perspective are not incompatible goals. On the contrary, they should go hand in hand—a maxim that also applies to public agencies, donors, socially driven for-profit ventures, and even the citizen who parts with $10 of his or her hard-earned money for a charitable purpose. I believe that it’s time to identify common ground and purpose so we can collectively address the critical challenges of our time. Aren’t we all simply wrestling with how we can make the greatest positive difference in this world—or more candidly, shouldn’t we?
Sometimes, however, I believe we make the innocent mistake of putting “the cart before the horse.” Those who know me understand I am a strong proponent of building strong, high-performing organizations, assessing performance, providing growth capital and operational funding, and more. Yet all of this is secondary to making sure what we do can have the greatest possible impact. In my terms, it begins with picking the “right starting point.”
WHERE DO WE START?
Admittedly, this is an area—in all aspects of my life—where I could have been a better performer. Give me a task and I’ll get it done. In fact, like many of my peers, I love taking on a problem or challenge, the harder the better. Although I hope a little wisdom has accrued as the years pile up, I see the times I picked the wrong one or (better said) didn’t pick what would have had the greatest impact or value relative to need and my own passion and effort invested. I now better realize the importance of taking the time to comprehensively, but reasonably, determine where efforts—the investment of money and time—will yield the greatest benefit.
After retiring from business and moving into the social sector in 1993, I was more clairvoyant—no doubt, from serendipity rather than intelligence—than I ever dreamed. My starting point then was the intersection of youth, learning, and community. Although I didn’t have the faintest understanding of the implications, I recognized the great need of educating our young people and the overwhelming importance that community—in the macro and micro sense—plays. And, I understood that that technology was making our globe a smaller, more interconnected place and that the ability to deal with change, ambiguity, continuous learning, and repetitive innovation would be key to success for some children. For others, it would be gaining the trade or skills to earn a living through “proximity-based” jobs as carpenters, technicians, healthcare specialists, mechanics, etc. A vision that all children deserve a level playing field to be able to learn how to learn was my starting point. After that, I was clueless.
Fortunately, I met and learned from many great minds and saw scores of programs and organizations working to better communities and improve society. Russell Ackoff, seen by some as the “father of system thinking in America,” said in one meeting that real, lasting change can only come when the system is changed. This view confirmed my previous experience with change theory that I hadn’t even thought relative to this new journey. No matter how noble or apparently effective, when only a piece or part of a system is changed, the change will not sustain. Think about how many truly great principals or teachers who have sparked remarkable achievements for their students. And, thank goodness, they do. But, as good as their efforts are, they change “their” school or “their” classroom—a part of a system—and when they move on, the system returns, unchanged, to its status quo.
It was the desire to affect broad system change in the lives of children that led to the conceptualization of Venture Philanthropy Partners. Certainly, its core purpose was to see the lives of thousands of children improved, to assure them a more level playing field in life. There was, however, a larger rationale which remains today. We knew our level of funding and the strategic assistance we provided, although benefiting the organizations with which we invested and having the potential for system change on a small scale in the National Capital Region, could not, at this level, lead to broader system change. But we envisioned a higher road. Demonstrating a different approach to investing in social change would ultimately—and collectively with others—influence a rethink of philanthropy, nonprofit performance, and, in turn, public funding. We strive to influence a greater allocation of financial capital—philanthropic and public--to the most pressing needs, and then to those initiatives, organizations, and, most importantly, leaders who have the greatest positive impact on these needs. Affecting sector-level change in the increase, flow, and use of capital—financial and human—can lead to system change to benefit not only the tens of thousands of children our investments directly touch, but millions nationwide.
Now fast forward to January 2008, where a friend who is the head of a prominent foundation shared how the short-term nature of politics has negated long-term thinking, and his concern that foundations are often focused too much on the short-term (and thus wrong or sub-optimal) areas. He used New Orleans as an example of distorted priorities, noting that for years it was known that a storm of Katrina’s magnitude would wipe out the levees. In his view, instead of directing dollars and attention to this infrastructure challenge, the public agencies, nonprofits, and philanthropic world focused their investments on “the same old same old.” Because Katrina destroyed the city’s infrastructure, literally billions of dollars and years and years of well-intended public, philanthropic and nonprofit work was eradicated.
Perhaps New Orleans and Katrina can be seen as an aberration, yet evidence of misplaced priorities is all around. Scan the Sunday headlines, look around your own city or ones you visit, and observe what is not happening to fix a litany of infrastructure needs. Then, take a moment to review earmark requests in pending legislation!
Many well-intended efforts appear to “major on minors,” rather than substantively affecting the most critical of our problems and needs. We need every mind and every resource in our nation working collectively toward common goals. And, when we do, we will increase our capacity and chance of success with respect to every issue facing our nation.
HOW DO WE EXPAND THE USE OF THE APPROACH?
I am far from having expertise or in-depth experience in the complex issues of driving social change and creating societal benefit. At the same time, the convergence of my private sector experience in assessing the performance and impact of technology on corporate productivity and effectiveness and my experience assessing the impact and building of nonprofits through the prism of Venture Philanthropy Partners’ philanthropic investment approach has given me an informed perspective and provided lessons learned—many the hard way—that have value to transcend the limited view of “venture philanthropy.”
After a decade of experience I firmly believe that using an “investment approach” to change must be expanded. Simply put, taking more of an investment approach to our most critical challenges—from rebuilding our national infrastructure to transitioning youth to adulthood—can have substantial long-term value. Regardless of macro focus, e.g., education, health, or investments in the private, public or nonprofit sectors, there are principles of execution that can inform our actions to realize greater social return on investment efforts.
1. Pick the right starting point
– Identify and focus on the most pressing, critical problems.
– Discover the inflexion points with the potential to disrupt the status quo and lead to system change.
– Find the critical power centers or concentration points, if there, that need to be sustained and/or built upon or around.
– Quantify, or at least qualify, access to capital via public, philanthropic or fee-based monies that exist or may emerge to sustain scaled organizations.
2. Find the right opportunities in your “investment space.”
– Discover organizations with evidence-based, workable approaches.
– Assess if they have a vision for change to significantly scale their impact or change the field or, very carefully, encourage them to articulate such a vision—so long as it is real and truly theirs, rather than a polished reaction to the promise of funding.
– Confirm that they address true core needs and root causes, and don’t settle for those that inadvertently treat a symptom or manifestation.
– Confirm that the solution or approach actually achieves (or can achieve) what it claims—in other words, is there an understood “theory of change,” is it evidenced-based, and is there demonstration that it leads to the stated changes in lives proclaimed?
– Play devil’s advocate to the approach to anticipate consequences, especially adverse and unintended ones, keeping in mind that everything functions in one or more ecosystems and when you push in one spot there will be a pop or bulge in another. Do this at both strategic and tactical levels.
– Confirm through thoughtful analysis and due diligence that the organization has the basics to move forward, the willingness to embrace transformation, and the capacity to absorb it and grow.
3. Strongly influence organizations to get the “right people on the bus.”
– Invest in people! Invest in exemplary leadership capable of rallying resources to a common horizon, navigating around the inherent impediments, and executing to deliver on the mission at hand. They will supersede any best practice, doctrine, or program specification.
– Educate, sway, even cajole these leaders to recruit the strongest leadership, board, and staff possible, using each hire to “raise all boats,” where new players bring in needed skills and experience and help further develop those already onboard.
4. Strategically facilitate without controlling.
– Leverage resources, contacts, and know-how to help at every point possible, being careful and conscious not to abuse power and influence.
– Provide leaders with the financial and human capital needed so they can grow and develop and have the chance to succeed.
– Liberate leaders to raise their views and that of the organization to “what is possible?”
– Help evolve a greater discipline in how the organization is run, with a greater, almost insistent, charge to be information-based, while never giving up one single aspect of being mission-driven.
– Develop a culture of assessment, adaptation, and improvement in which milestones are used to ensure a clear, unrelenting focus and to periodically assess progress.
– And, of course, figure out in advance how to define “success” and then continually monitor progress against this “success” criteria.
These steps may sound simple and basic. But, following this prescription is daunting in the private sector and even more formidable in public and nonprofit sector investing. Investment is always judgmental; it has to be. Although metrics play a vital role to inform and then confirm, opportunity, leadership, passion, and conviction can’t be subjected to metrics and analytics. That’s why investing is about people!
The importance of having an executive team with professional investment skills can’t be overemphasized. They must have keen judgment; be strategic in their thinking; understand the importance of execution; have the experience and contextual understanding to navigate systems; possess sensitivities and respect to deal with the inherent racial, cultural, ethnic, and social complexities; and have the interpersonal skills, integrity, and directness that can earn them the role of “trusted advisor.” If a team of this caliber and skill set (at least reasonably so) isn’t driving the investment equation, then it doesn’t matter what other assumptions you bring to the table…success won’t occur. The investment team itself must “walk the walk,” and “get the right people on their own bus!”
Finding this kind of talent for the investment team and the organizations in which investments are made is the sector’s most critical limitation. An imposing, near impossible challenge to do the above on broad scale? By today’s standards, yes, but a burgeoning labor pool from the “baby boomer” generation, the emergence of transformational leaders in the nonprofit field, the changed awareness of our young people who seek a better world, and a deeper investment to develop latent talent sitting within our communities can make the opportunity look very different in the near future.
I’m not suggesting that this investment approach can or should apply across the board. And, I’m definitely not suggesting it override or impair the charitable act (large and small) that has defined giving in America. But I am suggesting, whatever our cause, that we use an investment approach much more broadly—thinking more in terms of the cause and effect of investments, doing more to get at the source of our problems versus treating their external manifestation and symptoms.
We—as a nation, state, community, public agency, foundation, business, or nonprofit—have no option but to take the long view, but it is an even longer view that the op-ed suggests. Far too many people, without the opportunity afforded by a level playing field, have no long view for their lives and families or see that long view rapidly dissipating. We—those with the means—have the opportunity to reach far beyond our comfort zones to find common purpose; move beyond our own turf to provide for common ground; and shift our analytical perspectives to face, accept, and then navigate around the impediments that block change—cultural, racial, ethnic, class, or agendas big and small—to take on the advocacy, leadership, and firm, but fair, confrontation and intervention true change entails.
- Mario Morino
|
|
