Philanthropic Strategy: Too Much of a Good Thing?

As strategy consultants to funders and nonprofits, at TCC Group we’ve increasingly seen our funder clients struggle with how directive to be in their approach to strategy, and observed a growing backlash in the philanthropic and mainstream presses about “strategic giving.” The timeliness of this issue was evident as an overflow crowd crammed into a meeting room this week during the Council’s annual conference to discuss “Philanthropic Strategy: Too Much of a Good Thing?”

Two propositions framed the discussion. Participants were asked to indicate which of the following they were more inclined to agree with:

1. “It’s my foundation’s responsibility to let grantees identify solutions to the problems they’re trying to solve; they’re the ones who know best.”

- OR -

2. “It’s my foundation’s responsibility to leverage our expertise and vantage point to identify the best solutions to the problems we’re working on; grantees have important insights but they don’t always know what’s best.”

About two-thirds of the audience voted for the first proposition, and one-third for the second. Clearly, the question of who owns the solutions to the social problems on which foundations work is a contested topic.

Three stellar panelists kicked off the discussion, which I had the privilege of moderating. Fatima Angeles, director of evaluation and learning at The California Wellness Foundation (CWF), described how her institution transformed its approach to strategy from initiative-driven to entirely responsive. As documented in its evaluation reports, both the CWF’s vision and results show that responsive grantmaking can be strategic. Denise McGregor Armbrister, senior vice president and executive director of the Wells Fargo Regional Foundation, talked about how her organization went from not having a strategy to developing an approach that makes grants to local communities to support the crafting and implementation of plans for advancing community development. And Jacob Harold, program officer in the philanthropy program at the William and Flora Hewlett Foundation, argued that all successful social change is both top-down and bottom-up, but still requires the coherence and centralization of collective shared strategy.

Several takeaways and questions for further discussion emerged from the panel:

• Part of the backlash against “strategic philanthropy” may simply be against foundations associated with that term that don’t act respectfully toward grantees. “Don’t be a jerk,” in other words. There are already a lot of affinity groups, but “Not Jerks in Philanthropy” may be a good one for all of us to belong to in our hearts.
• One audience member asked if the foundations on the panel would think differently about strategy if they were community foundations. They would, with two important caveats: the individual leader’s will to promote greater community engagement is a critical variable, and that community foundations like the Greater Kansas City Community Foundation (with its DonorEdge platform) are transforming the equation by making grantee information available online to broad groups of individual donors.
• Who develops the foundation’s strategy? This was a thread of the conversation that could be pursued further. It’s one thing to consult with stakeholders; it’s another to engage them actively in the strategy development process, like the Peery Foundation did via Twitter. What are ways you could involve your foundation’s stakeholders, particularly external ones, in strategy development?
• Central to strategy are the notions of risk and accountability. One panelist said her board expected her to take a certain amount of risk in the portfolio and pushed back when there wasn’t enough. Others argued that foundations sharing their strategy approaches publicly can help promote accountability. But the question remains: To whom should foundations be accountable when their strategies don’t work?
• Finally, audience members suggested that grantmaking strategy is distinct from social-change strategy. The latter is more comprehensive, and involves understanding the motivations and strategies of government, the private sector, and community actors to make an individual foundation’s strategy more effective. Increasingly, it appears that foundations need to think about the strategies of these other actors, and incorporate them into their own strategy development.

At TCC Group, our work helping funders plan, implement, and evaluate strategies resonates with this last point. There are multiple levels on which effective strategy operates—guiding an individual program, defining success for an organization, articulating goals around which a community can mobilize, and setting aspirations for how to move a sector forward. Funders should be aware of and intentional about how they have or contribute to all of these levels of strategy.

Ultimately, how much disagreement is there on the point of whether philanthropic strategy is too much of a good thing? As one tweet during the session pointed out, the panelists all praised strategy. But it’s one thing to be in favor of a coherent decision-making framework guided by clarity about outcomes and priorities for allocating resources. On that level, we can all agree that more strategy is good. But it’s on the questions of accountability to communities and who develops the strategy that disagreement continues in the field. What’s your take?

Chris Cardona is associate director of philanthropic services for TCC Group