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Catalytic Philanthropy

Despite spending vast amounts of money and helping to create the world’s largest nonprofit sector, philanthropists have fallen far short of solving America’s most pressing problems. What the nation needs is “catalytic philanthropy”—a new approach that is already being practiced by some of the most innovative donors.

 

Thomas Siebel does philanthropy differently from other donors. As the founder of the software company Siebel Systems Inc., he is one of a handful of philanthropists who have the resources to devote substantial time and money to charity. His approach and the results he has achieved, however, dramatically distinguish him from most of his peers.

In 2005, while spending time on his Montana ranch, Siebel became concerned about the rampant local use of methamphetamine, or “meth.” Meth is a highly addictive and physically destructive drug, and it is a particularly acute problem in rural America. In 2005, Montana had the fifth worst level of meth abuse among all U.S. states. Half of its inmates were imprisoned for meth-related crimes. The direct cost to the state was estimated at nearly $300 million per year, and the cost in human lives and suffering was far greater.

Rather than writing a check to a local nonprofit, Siebel took the time to find out why people become addicted to meth. After learning that first-time users were typically teenagers who were unaware of meth’s risks, Siebel created the Meth Project to change teenage perceptions about the drug. He brought together experts and hired a major San Francisco advertising agency to develop a hard-hitting campaign that would reach 80 percent of Montana teens with at least three ads every week.

The ads were world-class: With production budgets of $500,000 to $1 million each, they were directed by leading Hollywood figures such as Alejandro González Iñárritu, director of the Academy Award nominated film Babel. The ad campaign has won 43 awards in national and international advertising competitions.

The ads were gut-wrenching: Tested in focus groups to capture a teenager’s attention, they were far more brutal than anything the community had seen on television before. The 30-second spots begin with an ordinary teen whom kids can relate to, and end by showing the badly scarred and disfigured ravages that come from using meth. Teens are shown attacking and robbing their own families, prostituting themselves, or dying from an overdose. In one ad, a boy describes how his mother has always been there for him, while the screen shows him stealing her purse, hitting her, and kicking her away as she screams and desperately tries to grab his leg while he runs out the door.

And the ads were pervasive: Because Montana is a small media market, Siebel’s $2 million annual advertising budget generated more than 45,000 television ads, 35,000 radio ads, and 1,000 billboards in the first two years. The Meth Project became the largest purchaser of advertising in the state. The results have been stunning. Between 2005 and 2007, meth use in Montana dropped 45 percent among teens and 72 percent among adults, while meth-related crimes fell 62 percent. The percentage of teenagers who were aware of meth’s dangers increased from 25 percent to 93 percent, and teenagers have even begun to dissuade their friends from trying meth. Montana’s ranking among U.S. states in meth abuse fell from fifth to 39th.

Siebel has continued the campaign, using teen focus groups to develop new advertising campaigns every nine to 12 months. He has convinced other funders to support the campaign and encouraged schools and community organizations to sponsor anti-meth events. Siebel has also personally lobbied Congress to combat the meth problem. Six other states have adopted the Meth Project’s program.

Siebel’s success in fighting meth abuse stands in stark contrast to the modest and often indiscernible results that most philanthropists have achieved, whether individually or collectively. Between 1980 and 2005, U.S. annual charitable giving in constant dollars grew by 255 percent and the number of nonprofits more than doubled to 1.3 million. Today, per capita giving in the United States is three times greater than any other country in the world. Yet, during this same 25-year time period, the United States dropped from second to 12th among the 30 countries that are members of the Organisation for Economic Co-Operation and Development (OECD) in basic measures of health, education, and economic opportunity.

To be sure, philanthropy cannot be blamed for the persistence of childhood poverty and failed schools that result from much larger political and economic forces. Without philanthropy, conditions would likely be even worse. Yet whatever benefits philanthropy may provide, it is not delivering the kind of social impact Siebel achieved. If philanthropy is to become an effective way of solving pressing social problems, donors must take a new approach.

Siebel is one of the exemplars of this new approach, but there are others. These exceptional donors—whether foundations, corporations, or individuals—do not write the largest checks, but they do act differently from other donors. They have expanded the toolkit of strategic philanthropy beyond even the most recent thinking of venture philanthropists and social entrepreneurs, creating a new approach to bringing about social change that I call “catalytic philanthropy.” Before turning to a discussion of the practices that distinguish this new form of philanthropy, it is important to understand why the conventional approach so rarely produces measurable impact.

Limitations of Traditional Philanthropy

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.

The overwhelming majority of the 1.3 million U.S. nonprofits are extremely small: 90 percent of their annual budgets are under $500,000 and only 1 percent have budgets greater than $10 million. Each nonprofit is capable of helping hundreds or even thousands of people in need, and many of them do so in creative and highly effective ways. Despite their often-heroic efforts, these nonprofits face severe limitations.

Each nonprofit functions alone, pursuing the strategies that it deems best, lacking the infrastructure to learn from one another’s best practices, the clout to influence government, or the scale to achieve national impact. A majority of the very largest nonprofits that might have the resources to effect national change are hospitals, universities, and cultural organizations that focus primarily on their own institutional sustainability. Collaboration throughout the sector is almost impossible, as each nonprofit competes for funding by trying to persuade donors that its approach is better than that of any other organization addressing the same issue. Very few systematically track their own impact.

However generous the donors or hardworking the nonprofit staff, there is no assurance—nor even any likelihood—that supporting the underfunded, non-collaborative, and unaccountable approaches of the countless small nonprofits struggling to tackle an issue will actually lead to workable solutions for large-scale social problems. The contributions of conventional donors and the good work of effective nonprofits may temporarily improve matters at a particular place and time, but they are unlikely to create the lasting reform that society so urgently requires.

Four Practices of Catalytic Philanthropy

What is needed is a new approach to philanthropy, one that catalyzes the kind of social change exemplified by Siebel’s Meth Project. Over the past decade, the consulting firm that I cofounded, FSG Social Impact Advisors, has studied many examples of this new approach to social change. We have distilled what makes catalytic philanthropists so effective into four distinct practices: They have the ambition to change the world and the courage to accept responsibility for achieving the results they seek; they engage others in a compelling campaign, empowering stakeholders and creating the conditions for collaboration and innovation; they use all of the tools that are available to create change, including unconventional ones from outside the nonprofit sector; and they create actionable knowledge to improve their own effectiveness and to influence the behavior of others.

Each of these practices stands in distinct contrast to the practices that most donors, foundations, and corporations follow today. To understand why these four practices are important, each will be considered in turn.

1. Take Responsibility for Achieving Results Two years ago, the Bill & Melinda Gates Foundation asked FSG to explore why some donors are more effective than others. We interviewed several dozen wealthy donors of different ages and backgrounds, all of whom had been identified by their peers as highly effective, and we found a surprisingly common theme. When these donors first began giving away money, they followed conventional philanthropic practice, responding to those who asked them for funds with little awareness of what impact they actually achieved. They gave large sums to many different organizations and were viewed as prominent philanthropists in their communities, but had not yet distinguished themselves as highly effective donors.

After some time, these donors became involved in an issue of great personal significance: A donor’s child was diagnosed with a rare disease; a wilderness preserve a donor hiked in as a child was about to be sold to a developer; or a donor went on a trip to a developing country and was exposed firsthand to a level of poverty and disease that she had never imagined. The urgency of the cause and the intensity of their commitment compelled each of these donors to take an active role in solving the problem.

These newly energized donors became deeply knowledgeable about the issue and actively recruited collaborators, sometimes even creating a new nonprofit to further the cause. The donors stopped thinking about which organizations to support, and started to think about how to solve a specific problem, using every skill, connection, and resource they possessed. The donors formulated clear and practical goals that enabled them to identify the steps needed to succeed. Above all, the donors took responsibility for finding solutions to the problem instead of waiting for the nonprofit sector to approach them with a proposal. Like Siebel’s campaign against meth abuse, the difference in impact was remarkable.

Consider the example of Bob Pattillo, an Atlanta real estate developer who had a small family foundation, the Rockdale Foundation. On a church mission to Cuba, he encountered impoverished families who had benefited from microfinance and wondered why so little microlending was taking place in the Middle East. (In 1999, there were only 40,000 Arab microfinance borrowers, compared to millions of borrowers in Asia and Latin America.) Instead of waiting for a nonprofit to approach him, or asking “Whom should we give money to?” Pattillo focused on creating a solution by asking “What infrastructure would need to be in place for microfinance to flourishing Arab regions?”

The answer to this question led Pattillo and the Rockdale Foundation to take a number of steps. The body of literature about microfinance had never been translated into Arabic, so they hired translators. There had never been an international conference on Arab microfinance, so they organized one. The lone coordinating organization in the region had a single staff member, little revenue, and no business plan, so they nurtured its growth and development. The major funders of global microfinance had overlooked the Middle East, so Pattillo commissioned research about the need and opportunity, then personally brought it to their attention. In short, Pattillo pieced together the disparate elements needed to catalyze the change he sought.

The results were dramatic: In seven years, with an average annual expenditure of only $400,000, the number of Arab microfinance borrowers grew from 40,000 to 3 million. More than 50 new microfinance institutions began serving the region, supported by 18 major foundations. The leading global microfinance investors contributed an influx of debt capital, and the coordinating organization flourished. The Rockdale Foundation more than met its goal of increasing microlending in Arab regions.

Our research suggests that if donors want to solve a problem, they must decide to do so themselves. This doesn’t mean that they need to create their own nonprofit or that they should ignore the efforts of others. It does mean that funders have a powerful role to play that goes beyond merely supporting existing nonprofits. Private donors, foundations, and corporations have the clout, connections, and capacity to make things happen in a way that most nonprofits do not. By becoming directly involved and taking personal responsibility for their results, these donors can leverage their personal and professional relationships, initiate public-private partnerships, import projects that have proved successful elsewhere, create new business models, influence government, draw public attention to an issue, coordinate the activities of different nonprofits, and attract fellow funders from around the globe. All of these powerful means for social change are left behind when donors confine themselves to simply writing checks.

Catalytic philanthropists, however, must be as cautious as they are bold. Considerable havoc has been wrought, and billions of dollars wasted, by donors whose success in business or other fields has convinced them that they can single-handedly solve a social problem that no one else has solved before. Philanthropists cannot catalyze change by acting alone or imposing a solution, convinced that they have the answer before they begin. Instead, they must listen to and work with others, enabling stakeholders to develop their own solutions.

2. Mobilize a Campaign for Change In “Leading Boldly,” an article that Ron Heifetz, John Kania, and I wrote for the winter 2004 issue of the Stanford Social Innovation Review, we suggested that many of the problems foundations tackle are adaptive in nature: The people with the problem have to become engaged in solving it for themselves. Teenagers, for example, need to dissuade other teenagers from using meth. In other cases, effective solutions may already be known but cannot be externally imposed on the existing system. It is well known, for example, that better qualified teachers produce better educated students, but the systemic changes needed to act on that simple solution are mindbogglingly complex. The obstacle isn’t that no one knows any answers, but rather that the uncoordinated actions, narrow constraints, and conflicting incentives of different stakeholders and different sectors of society perpetuate the status quo.

Catalytic philanthropy cuts through these divisions by stimulating cross-sector collaborations and mobilizing stakeholders to create shared solutions. Building alliances that create the conditions for a solution to emerge and take hold is a very different pursuit from the usual grantmaking process of trying to direct funds to the one organization that offers the most appealing approach. Systemic reform requires a relentless and unending campaign that galvanizes the attention of the many stakeholders involved and unifies their efforts around the pursuit of a common goal.

Consider the example of Strive, a nonprofit founded in late 2006 by Nancy Zimpher, then president of the University of Cincinnati. Zimpher believed that her university could not succeed in its mission unless the entering students, drawn largely from the local school systems, were adequately prepared. Recognizing that educational success was the result of a long and often fragmented process that begins with preschool and ends with career placement, Zimpher approached the KnowledgeWorks Foundation and the Greater Cincinnati Foundation to help form a community-wide initiative to reform the entire continuum. More than 300 organizations and institutions in the Greater Cincinnati area now participate in Strive, including school districts, universities, private and corporate funders, civic leaders, and nonprofits with combined budgets of $7 billion.

The organizations are grouped into 15 networks, each of which focuses on a single educational component, such as preschool education or college readiness. Each network is developing a common set of goals and progress indicators to be tracked throughout the region. They employ only evidence-based solutions that have demonstrated progress on the agreed measures. The leaders of the organizations in each network meet every two weeks for two hours to discuss their progress. Participation is voluntary and does not include any additional funding. Instead, organizations learn from each other, reach agreement on performance standards, and find ways to collaborate that increase the effectiveness of all participating organizations. Many changes are simple—letting teachers know which of their students are being tutored, and aligning classroom and after-school curricula—but these small improvements throughout the region collectively improve the effectiveness of the entire educational system. No single intervention attacks the root cause of educational failure. Instead, the entire system is gradually becoming more coordinated, informed, and effective. After only two years, Strive is already reporting positive progress on a majority of its measures of educational success.

Mobilizing and coordinating stakeholders is messier and slower than funding a compelling grant request from a single organization. Systemic change depends on a sustained campaign to increase the capacity and coordination of an entire field, together with greater public awareness and, often, stronger government policies. Catalytic philanthropists have the wherewithal to heighten awareness, raise expectations, and coordinate the many disparate efforts of other funders, nonprofits, corporations, and governments.

3. Use All Available Tools The prominence of the U.S. nonprofit sector and the tax deductibility of donations have lulled people into thinking that IRS-sanctioned philanthropy is the only way to solve social problems. Donors have the freedom, however, to complement traditional grantmaking with a wide array of other tools from outside the nonprofit sector, including many that can influence social, economic, and political forces in ways that traditional charitable giving cannot.

Siebel employed an unconventional tool by hiring world-class advertising talent and purchasing prime-time advertising for his anti-meth campaign, rather than accepting the less effective tools of donated public service announcements. Other catalytic philanthropists have used a variety of unconventional tools for social change, including corporate resources, investment capital, advocacy, litigation, and even lobbying, as demonstrated in the following examples.

Corporate Resources. General Electric Co. (GE) has helped low performing high schools located near major GE facilities, committing $150 million over five years to five urban school districts to improve math and science education. In addition to cash contributions, GE and its employees have provided intensive tutoring, mentoring, summer employment opportunities, scholarships, and management advice to school administrators, and have donated technology. Within four years, 100,000 students in these school systems improved their standardized math test scores by an average of 30 percent.

Investment Capital. The F.B. Heron Foundation has invested more than 25 percent of its endowment in investments that further the foundation’s mission. One of these investments is a subordinated loan to strengthen the balance sheet of the Minneapolis-based Community Reinvestment Fund (CRF). CRF has purchased more than 2,100 loans worth almost $1 billion from community development corporations and other community development lenders whose portfolios are not large enough to attract institutional investors directly. Since its inception, CRF has provided liquidity for loans that have generated or retained more than 35,000 jobs, financed almost 600 women or minority-owned businesses, and built more than 16,000 housing units.

Advocacy and Litigation. The William and Flora Hewlett Foundation has supported grantees that use advocacy and litigation to profoundly influence educational policy in California. The 2004 settlement of a lawsuit against the state of California brought by the ACLU and Public Advocates, funded in part by the Hewlett Foundation, led to $1 billion for school repairs, instructional materials, and extra support to low-performing schools. A separate lawsuit in 2005 brought by Public Advocates and Californians for Justice, also funded in part by the Hewlett Foundation, required that the state revoke the credentials of more than 4,000 underprepared teachers and provide them with additional training before they could be considered “highly qualified” under the No Child Left Behind Act. Other Hewlett grantees worked to raise public awareness and to educate policymakers through bipartisan legislative seminars on options for education reform, and tours that brought legislators and their staff into the schools to see conditions firsthand. These efforts helped generate a $1 billion bond set-aside for facilities improvements in overcrowded schools, created new longitudinal data systems to track student and teacher performance, and required the public disclosure of teacher salaries that unmasked major inequities within school districts, the first such transparency requirement in the nation.

Lobbying. Several years ago, the Pew Charitable Trusts converted from a private foundation to a public charity, enabling the foundation to engage in lobbying. The Pew Campaign for Fuel Efficiency, for example, was instrumental in getting Congress to pass a bill in December 2007 that raised average fuel economy standards for U.S. automobiles for the first time in 32 years. Pew coordinated the work of a diverse coalition of interest groups, gathered independent research findings, created high-quality polling data, and marshaled testimony from Fortune 100 CEOs and military leaders. In the three weeks leading up to the Senate vote, the campaign placed 85 editorials and paid advertisements in critical congressional districts. By 2020, when the full impact of this legislation is felt, it is projected to be the equivalent of taking 28 million cars off the road, saving $23 billion in consumer fuel costs and 190 million metric tons of greenhouse gas emissions each year.

4. Create Actionable Knowledge Most donors rely on their grant applicants and recipients to provide them with information about the social problems the nonprofit is tackling, focusing their inquiries narrowly on the program to be funded without researching the issue more broadly. Catalytic philanthropists, by contrast, gather knowledge about the problem they are tackling and use this knowledge to inform their own actions and motivate the actions of others. Making knowledge actionable requires more than just gathering and reporting data. The information must also carry emotional appeal to capture people’s attention and practical recommendations that can inspire them to action.

GreatSchools.net, for example, is a Web-based reporting tool that makes available public school performance data (including rankings by parents) on a consistent basis throughout the country. Funded by the Gates Foundation, the Walton Family Foundation, and the Robertson Foundation, the site receives 35 million unique visitors each year, an estimated one-third of U.S. families. Similar information, compiled by Standard & Poor’s and funded by the Gates Foundation, is available at the Web sites SchoolMatters.com and SchoolDataDirect.org. Making reliable school performance data publicly available will influence the behavior of many stakeholders and help create the conditions for solutions to arise.

Actionable knowledge can also have an impact on government spending priorities. In 2004, Pew commissioned a study showing that extending preschool to the 4 million children under age 5 living below the poverty line would produce a net benefit to the economy of more than $511 billion—a $16 return from higher earnings and fewer welfare payments for every dollar spent. This study enabled advocates to make a compelling case for increased state spending. Between 2005 and 2008 total state spending in the United States on prekindergarten programs grew by 66 percent from $2.9 billion to $4.8 billion; seven states have pledged universal preschool for all 4-year-olds, and three other states have promised preschool for all children in low-income families.

The Annie E. Casey Foundation used data in a different way. The foundation hired local residents to gather and report data about their own communities. This increased civic engagement and empowered community members to hold local nonprofit service providers and government agencies accountable for their performance. In Des Moines, Iowa, for example, the residents used the data they had collected to recover $2.5 million from four predatory lenders and to lobby successfully for passage of a statewide lending disclosure law.

Actionable knowledge is not limited to compiling and analyzing data. Jeff Skoll, first president of eBay Inc. and founder of the Skoll Foundation, created a for-profit film production company, Participant Media, in 2004 to produce major movies that could inform and engage the public on social issues. With projects such as Syriana, An Inconvenient Truth, and Good Night, and Good Luck—Participant has been a commercial and artistic success, producing enviable box office revenues and multiple Academy Award nominations. Participant partners with nonprofits to create social action campaigns for each film that it releases, such as benefit screenings and educational curricula for schools. The social action campaign for An Inconvenient Truth, one of the highest grossing documentaries of all time, led directly to more than 106,000 tons of CO2 off sets, nine countries incorporating the film into their curriculum for high school students, and four bills on climate change introduced in Congress.

Moving Forward

Social change is a messy process in which the willpower of a determined and influential person can often tip the balance. Donors who are serious about solving social problems must take a catalytic role, mounting a campaign and knitting together the pieces of a solution in ways that the fragmented nonprofit sector cannot do for itself.

This is not to suggest that catalytic philanthropy is appropriate for all donors, or that other types of philanthropic engagement are ineffective. Most individual donors have neither the time nor the resources to do more than contribute to deserving organizations. Conventional philanthropy serves an essential function in supporting major nonprofit institutions, enriching many lives, and providing assistance to countless individuals in need. Venture philanthropy and social entrepreneurship also play important roles by helping effective organizations and talented leaders expand the scale of their impact. The variety in types of philanthropy is one of the reasons for the nonprofit sector’s vitality, and society would be dramatically worse off were it not for the billions of dollars in annual charitable contributions from conventional donors.

We should not pretend, however, that conventional contributions will change the status quo. Instead, the much smaller set of donors who have the desire and opportunity to achieve change—whether professionals at foundations and corporations or individual philanthropists with the time and resources to become personally involved—must step forward to become catalytic philanthropists. If they do, they will begin to see measurable impact from their efforts and the potential to change social conditions meaningfully. Philanthropy is indeed a powerful tool for social progress, but only when donors make it so.


Mark R. Kramer is the cofounder and managing director of FSG Social Impact Advisors. He is also the cofounder and the initial board chair of the Center for Effective Philanthropy, and a senior fellow at Harvard University’s John F. Kennedy School of Government. Kramer is the coauthor of three Stanford Social Innovation Review articles: “The Power of Strategic Mission Investing” (fall 2007), “Changing the Game” (spring 2006), and “Leading Boldly” (winter 2004).

 
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COMMENTS

  • BY Dr.YKK (Yew Kam Keong)

    ON August 20, 2009 04:50 PM

    Catalytic Philanthropy - what a fantastic social innovation! This article should be circulated to all philanthropic organisations to tackle social problems at its roots rather than treating the symptoms. It is also a great lesson for government agencies dealing with social issues as well. One crucial issue in Australia and probably in many parts of the developed world is obesity. Using the catalytic approach I think will be far more cost effective and bring about the desired results rather than the traditional approaches.

  • There is nothing this author is saying that isn’t currently being done. 501c4s lobby - many 501c3s “educate.” Some nonprofits do pay for expensive advertising campaigns. Some nonprofits do engage the targeted cohorts in an effort to address a problem. Most nonprofit do practice some form of self evaluation - most foundations require some measures to show results, impacts, and accountability. And, yes, most nonprofits and many foundations do actually collaborate and talk to each other within and across fields and within a service area. Most seek out best practices and there are libraries full of materials - take a trip to a school of Social Work and talk to somebody. Sure, most non-profits would be happy to have additional capital to engage in additional activities, have more competitive salaries, etc. - thank you, when can we expect the check. The only thing novel the author seems to be suggesting - other than snappy lingo - is that in addition to the the plethora of non-profits we need thousands of rich people running around thinking they are experts, throwing their money at problems. Will Thomas Siebel run his commercials indefinitely? When they stop running, what will happen? It is ignorance and arrogance of the highest order and the author gives the impression that he hasn’t spent one day working with the nonprofit service sector.

  • Rob Lavery's avatar

    BY Rob Lavery

    ON August 21, 2009 09:52 AM

    I guess my concern with mega-philanthropists is that they have influence and resource to bulldoze through their own agendas. The article has pointed out many examples of this level of philanthropy - but I’m dreading the time when we witness someone arbitrarily making changes that we wouldn’t necessarily regard as good.  Bill Gates can basically write his own ticket - let’s hope that we all agree with his priorities.

  • I must agree with Ryan above. The arrogance and condescension in this article is disgraceful. Articles such as What is a Donor To Do? http://www.tpi.org/downloads/pdfs/research-whats_donor_to_do.pdf has a much more respectful approach to addressing the evolution of donors from checkbook philanthropy to transformational giving. Furthermore, playing a blame game with the title, as if it is ills that business and government have failed to address should be solved by philanthropy (when they weren’t solved by business or government). The last thing we need to do is blame the generous souls who go beyond their peers with their compassion by offering their resources. If anything we should point the finger at the business sector for externalizing costs at the expense of their workers, their consumers, and the communities they touch with usual flagrant disregard for the systems in which they operate. Granted personhood and yet acting all too often with little compassion, respect, or even citizenship, the business sector as a whole could take a few lessons from Mr. Kramer, if we adjust a bit of the language. But finger pointing is not going to move us into the world we want.

    I suggest a good read and then digestion of Claire Gaudiani’s book, Greater Good: How Philanthropy the American Economy and Can Save Capitalism (http://books.google.com/books?id=s2Bu-k4GvscC&dq=greater+good&printsec=frontcover&source=bll&ots=6m8IrKm6ku&sig=Hj8wm0_cU9M84pBM-pOWgeKQcgw&hl=en&ei=4dGVSrPcKNCTlAfY36mbDA&sa=X&oi=book_result&ct=result&resnum=11#v=onepage&q;=&f=false)

    I am an advocate of social entrepreneurship and a fan of blended models of business and social benefit. I believe it is more that these address gaps in our tool belt. I agree that we need to collaborate more, and innovate ever more effective ways of addressing the issues we face - individually and collectively. I have doubts that nonprofits are eager for donors to take leadership role in guiding their programs as a learning ground for trying new tactics. Wise philanthropists know how to honor the wisdom and resources of a nonprofit while leveraging the impact of their own dollars.

    Finally, I have to question the issue of audience this article addresses, for if it hopes to lure in donors and potential donors into an evolved model of philanthropy, it might be best not to insult the form of philanthropy they have been practicing. If however, it seeks an audience of non-philanthropic individuals driven by the business-approach can solve the world…well then, write on. (although business collaboration networks in competitive markets….mmm…yeah, where are those?)

    To be clear, I appreciate the success stories here…and I don’t dispute them. Nor do I dispute the need for evolving philanthropy. In fact, I am an avid supporter of evolving philanthropy. What I take issue with here is the style, tone, and framing.

  • goldbergs's avatar

    BY goldbergs

    ON August 26, 2009 08:30 PM

    I have two comments on this excellent article.  First, the author makes two exceptionally salient points with which most discussions about philanthropic effectiveness fail to come to grips:

    “However generous the donors or hardworking the nonprofit staff, there is no assurance—nor even any likelihood—that supporting the underfunded, non-collaborative, and unaccountable approaches of the countless small nonprofits struggling to tackle an issue will actually lead to workable solutions for large-scale social problems.  The contributions of conventional donors and the good work of effective nonprofits may temporarily improve matters at a particular place and time, but they are unlikely to create the lasting reform that society so urgently requires.”

    “Building alliances that create the conditions for a solution to emerge and take hold is a very different pursuit from the usual grantmaking process of trying to direct funds to the one organization that offers the most appealing approach. Systemic reform requires a relentless and unending campaign that galvanizes the attention of the many stakeholders involved and unifies their efforts around the pursuit of a common goal.”

    Mr. Kramer is quite right on both counts and no discussion about “systemic change” can be considered serious unless it addresses these two issues.

    Second, one factor Mr. Kramer might have overlooked is the choice of the “common goals” on which catalytic philanthropists have focused.  Though they can fairly be described as what “Good to Great” author Jim Collins famously called “big hairy audacious goals” or “BHAGS,” they were BHAGS that were amenable to meaningful progress.  Kramer’s examples include reducing meth abuse, bringing microfinance to Arab countries, defragmenting education reform, raising fuel efficiency standards, and extending preschool education.  In each case, by choosing a large and difficult, but substantially solvable problem, the insightful practices the author identifies resulted in moving the needle of social progress to a meaningful extent, something philanthropy rarely accomplishes.

    Steve Goldberg, author of “Billions of Drops in Millions of Buckets:  Why Philanthropy Doesn’t Advance Social Progress”

  • Michael Worth's avatar

    BY Michael Worth, The George Washington University

    ON August 28, 2009 01:38 PM

    While initiatives like Thomas Siebel’s may be important in their short-term benefits for individuals, that is, the Montana young people who did not use Meth, they do not represent lasting social change because they are not institutionalized. It is social action, but I am not sure it is “philanthropy.” To use the old story, it saves some starfish stranded on the beach (and that is a good thing), but it does not alter the tides.

    Kramer suggests that individual donors (apparently including venture philanthropists) support organizations merely because they “have neither the time nor the resources” to do otherwise. As for hospitals, universities, and cultural organizations, Kramer says that they “focus primarily on their own institutional sustainability.” So, apparently, donors who support them have no social concerns at all!

    To the contrary, philanthropists support nonprofit organizations, including hospitals, universities, and cultural institutions, because they are essential elements of social infrastructure. They create social benefits now as well as for future generations. Change that lasts. In addition, many donors believe that the professionals who manage nonprofit organizations and their programs may just have some specialized knowledge and skills related to the problems they address, including, for example, Meth addiction. They would prefer to support proven models rather than create their own.

    It is ironic that an article in the same issue of SSIR describes the achievements of Fred Krupp in his 24 years as CEO of the Environmental Defense Fund. He has had significant impact. He did it by building an organization – one that will continue to bring change long after his own tenure.

    Michael Worth
    Professor of Nonprofit Management
    The George Washington University

  • These ideas are explored in greater detail in Anheier and Leat’s (2006) book, “Creative Philanthropy.”  They, too, urge donors and foundations to take a proactive approach to innovation by, among other things, moving from “demonstration” to “implementation,” creating campaigns, mobilizing both human and financial resources for action, and creating and disseminating knowledge.  Anheier and Leat cite example of foundations (including Casey, Pew, Knight, and Wallace) that have initiated campaigns, mobilized stakeholders, engaged in advocacy, and generated and diffused knowledge.

    Is “catalytic philanthropy” a truly innovative model, or simply new jargon for a field already overburdened with insider lingo?

  • What a creative idea for social innovation - a great innovative model.

  • This is nonsense. A typical move away from Donating to those who need it, to donating to whoever needs it. On the Surface it looks innovative, and it is, but its like creative financing, it is justification to siphon much needed core funds to advertise, proselytize, and “educate”, the Philanthropist, and his audience, with terminology Like “effective” donor, “Actionable knowledge” and of course “catalytic” philathropy
    This type of financial gimmickry is what will drive us into the 22nd century, alive or dead.

  • foundationwriter's avatar

    BY foundationwriter

    ON September 16, 2009 12:08 PM

    Conventional philanthropy, strategic philanthropy, venture philanthropy, tactical philanthropy, and now—catalytic philanthropy. Can’t wait to see what’s next.

  • Center for Social Innovation's avatar

    BY Center for Social Innovation

    ON October 28, 2009 05:09 PM

    The Fall 2009 issue has two excellent feature articles that promote new perspectives, strategies and opportunities for philanthropists, both individual and institutional – “Catalytic Philanthropy” and “The Nonprofit Starvation Cycle.”  Each makes a compelling case for reform and renewal in philanthropy.  On one hand, a philanthropist can be a catalyst of systemic change by focusing diverse actors on a key problem or obstacle.  On the other hand, a philanthropist can build capacity in the non-profit sector by providing realistic financial support for organizational infrastructure.  Both are sorely needed, so I hope these will become compatible rather than competitive trends.

    However, these two articles could be interpreted to offer fundamentally inconsistent advice for philanthropists – focus on the cause not the organization vs. focus on the organization not the cause.  Taken together they lead to powerful results.  Taken separately they create conflict that prevents results.

    “Catalytic Philanthropy” has another unexamined implication.  I hesitate to make this point, because I fully support the author’s thesis, and I know too well that an author cannot communicate effectively and still cover all the possible angles.  But this angle is really too important to ignore—the wealthy and successful have disproportionate and unaccountable power to influence the course of society.  “Catalytic Philanthropy” encourages use of this power without sufficient reminder that a person of wealth and success in one sphere of society or business does not necessarily have better information or analysis of social ills and their causes.  So his or her power to champion a particular theory of change by marshalling diverse actors with relevant expertise, influence and money is not necessarily a good thing for the larger social, economic and ecological systems.  In principle and in fact, the catalytic philanthropist’s power to act on his or her own theory, especially when sheltered by unassailably good intentions, is a fundamental threat to inclusive, pluralistic, democratic society.  Why?  Because he or she is not accountable to the normal checks and balances that produce broadly acceptable compromise. 

    I am as impatient a social activist as any, but I have been humbled enough (and humiliated enough) by my own ignorance to exercise due caution.  I have to listen carefully to and even be accountable to competing theorists of change.  Wealthy and successful people often haven’t been made so painfully aware of their own ignorance.  “If I were king of the world” is an interesting thought experiment, but most of us would not want to live with the consequences of those experiments turned into real life.  Perhaps I make too much of this “remote” threat from the wealthy and successful philanthropic catalyst, but a threat unnamed is all the more dangerous.

    Christopher Dunford
    President
    Freedom from Hunger
    Davis, California

  • BY John Nash

    ON March 5, 2010 02:34 PM

    Mark, I’m a bit surprised that you lead with, and rely on, the Montana Meth Project as a shining example of what you’re coining catalytic philanthropy.

    In your piece you note:

    “Catalytic philanthropists,however, must be as cautious as they are bold. Considerable havoc has been wrought, and billions of dollars wasted, by donors whose success in business or other fields has convinced them that they can single-handedly solve a social problem that no one else has solved before. Philanthropists cannot catalyze change by acting alone or imposing a solution, convinced that they have the answer before they begin. Instead, they must listen to and work with others, enabling stakeholders to develop their own solutions.”

    In light of the documentation that has surfaced on the somewhat specious nature of the Montana Meth Project’s success claims (1) (2), and the project’s reported dismissal of calls for better transparency in their reporting, couldn’t it be argued that Mr. Siebel has himself fallen victim to the downsides of catalytic philanthropy, determining an answer up front and not listening to others who offer constructive criticism?

    I like the number of cases you present in your article. They represent a wide range of approaches and target groups. What I would have liked to see more of in your article was a discussion of the evidence that was brought to bear by these philanthropists to link their deeds to the impacts. What I fear is that much of the work in catalytic philanthropy results in implementation outputs which are used as proxies for impact. While there is great benefit to be accrued from “process use” (3), it would be wonderful if we knew the resources spent on inputs were matched with resources for program evaluators to provide formative feedback and determine generalizable, scalable impacts.

    References:

    (1) Success of Anti-Meth Ads Questioned By Study. http://www.sciencedaily.com/releases/2008/12/081211081444.htm
    (2) Montana Meth Project: Message heard, results debated. http://billingsgazette.com/news/local/article_0a1c803a-6912-11de-8b1b-001cc4c002e0.html
    (3) Patton, M. (2008). Utilization Focused Evaluation. Thousand Oaks, CA: Sage

  • BY Denis O'Reilly

    ON March 4, 2014 12:34 PM

    The notion of catalytic philanthropy is a great but the success of the Montana Meth programme is a poor peg on which to hang an idea. There is much evidence to suggest that change occurred because of other drivers. I have been passionate about building community resilience against use of meth in New Zealand and have used community action techniques to do so. The NZ approach, which seems to have reduced meth use by around 50% has operated under a broad integrated strategy call the PM’s Meth Action Plan. Meth remains a serious issue in Aotearoa. The recent work by the NZ Drug Foundation in building a broad consensus as to how to tackle problems with the use of intoxicants in general coupled with the NZ Government’s three pillar “harm minimisation” philosophy (Supply Control, Demand Reduction, Problem Limitation) and a health focus on the issue rather than a criminal justice focus looks most likely to achieve a shared goal of an Aotearoa free from drug-related harm  

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