In a recent blog on philanthropic accountability I noted that accountability can take many forms; in philanthropy it often takes the form of accountability for achieving results (mostly successful results).
In this blog I want to focus more on the question of accountability for philanthropic learning. What happens when you don’t get the results you expected? Who decides when and how a philanthropic project is a failure? And more importantly how might one hold accountability for learning from failure?
We know it’s easier (and more appealing) to claim accountability for success than it is for failure. Both funders and fund recipients want to know that philanthropy has “succeeded” in its purpose. And they tend not to want to talk about when it doesn’t work. As I noted, accountability in the form of measuring results tends to predominate in discussions of accountability for both funders and nonprofits. This can be as straightforward as confirming that the funds were received and spent as agreed, with no reference to outcomes. Or it could include some accounting for numbers of beneficiaries reached and services provided, again without reference to outcomes. Failure might then be a failure of control but not of outcomes.
But what if philanthropy were accountable as much for learning as for controls or even for outcomes? What would that look like and how might it change the relationships (and accountabilities) between funders and fund recipients? These questions aren’t original. They come up most often in discussions about learning through evaluation. Many funders understand the value of evaluations, and even set aside some funds for it in their grants to charities But, as Caroline Fiennes, a UK-based consultant and director of Giving Evidence, has pointed out, “most charities shouldn’t evaluate their work”. She notes that charities are best at implementation not at evaluation, and that it is a waste of their time to ask them to use research skills they don’t have to produce information that may already exist elsewhere about the merits of their interventions.
So, what should funders do? Fiennes is a believer in practicing rigorous, evidence-based philanthropy. But she suggests that funders learn by seeking out sources of reliable evidence on what works from evaluators and researchers. Where reliable evidence doesn’t exist, this may be an indication of a gap that a funder can fill by supporting new research. In doing so, a funder is amplifying its own learning and acquiring reliable evidence that can help shape its funding decisions, without asking the charities themselves to supply the needed evidence. A funder can in this way take accountability for its own learning.
Today, many funders are being told to leave accountability for success or failure in the hands of the people who know the context and the beneficiaries best. This may be a fair statement to make about rebalancing power in relationships between funders and charities. But it doesn’t mean that funders should retreat from the opportunities to learn that could be offered through funding relationships. This point was well-made in a recent special feature of Alliance Magazine on Learning from Failure. Donika Dimovska of the Jacobs Foundation, guest editor of this feature, points out the advantages of systematic and proactive learning in philanthropy. She also points out “the disconnect we often find between how funders and their grantee partners set expectations and hold each other accountable not only for outcomes but also for learning.” Dimovska wonders “how often do you hear a grantee asking the funder: what did you learn, let alone what and how did you learn from a failure? ‘Failures’ are almost never the result of individual players but are rather the result of the interplay of actions, behaviours and attitudes of several actors operating in complex systems, which is why… engaging in transparent, intentional, evidence-based learning together with our grantee partners can be very powerful.”
There are many ways that funders can engage in (and demonstrate accountability for) systematic learning. They can fund the rigorous gathering of evidence, as noted earlier. They can engage in evaluations, especially developmental evaluations which can help them adjust their own strategies and thinking, using emergent learning approaches. They can be disciplined about testing their own assumptions and hypotheses about the work they want to pursue. They can structure learning among groups of their partners by giving them opportunities for sharing learnings with each other. They can use Pause and Reflect approaches and techniques to systematize their learning and do it collaboratively with grantees. They can create learning agendas. There is no shortages of examples and tools for philanthropic learning. What is needed is a learning “mindset”. Such a mindset is not common in philanthropy. As Donika Dimovska says ruefully, “learning how to learn is the ultimate frontier for many of us”. Yet there are examples of foundations in Europe, the United States and Canada who are adopting this mindset and whose leaders are highly committed to learning. Metcalf, Lawson, Hallman and Bombardier are just four of the Canadian foundations who have accelerated their learning approaches through the pandemic crisis as shown in Approaches to Learning Amid Crises: Reflections from Philanthropy. It’s even more important that these leaders and their colleagues share their learning about learning as widely as possible. When accountability for learning becomes as important as accountability for results, the conversation about the role of philanthropy can begin to shift from exercising power to deploying wisdom.
Who sets the standard for philanthropic “success”? And who is accountable to whom for that success (or lack of success)? Hard questions to answer for everyone involved in philanthropy, as givers, receivers, partners or critics. But more people are asking them now. I notice thoughtful public conversations happening about “being accountable” in the philanthropic sector. Two recent reflections on this topic really got me thinking about the differences in the understanding of “being accountable”... by whom to who and for what?
Being accountable means taking up or accepting responsibility to oneself and others. Being accountable also means being able to control or manage what you are doing. Not necessarily the same thing. Nancy Pole has a thoughtful article in The Philanthropist Journal on measuring and accounting for “success” in the nonprofit sector. She makes the point, rightly, that accountability in the minds of funders and fund recipients has been equated with control and with risk management. This is particularly true of government funders but has also been true of private philanthropic funders. The accountability goes from fund recipients back to funders. It puts the emphasis on the control of the funds awarded, not necessarily on the purposes and uses of those funds. Evaluations focus on measurement and management of performance rather than on stories of challenges, innovations and unexpected outcomes. In this situation, there are few incentives for accountability around innovation and around impacts on community or beneficiaries, beyond specific and quantifiable results. Fund recipients have every reason to prove to funders that they can get the results wanted by the funders, and little reason to show funders that they are learning and experimenting (along with or even instead of achieving targets).
Hopefully, the accountability conversation is changing. Pole notes examples from Ontario and Quebec of initiatives that feature more flexible approaches to assessing the value of philanthropic actions. These broaden the understanding of accountability to include funders in a system that holds funders accountable to their community partners. This mutual accountability can take the form of exchange: partners sharing information about their outcomes, and funders sharing grants data and aggregated outcomes, building shared knowledge about “what works”. Foundations have a trove of information, especially if they have been around for years and have made many grants. They can use this information for accountability to others…here is what we are learning… as well as for their self-accountability…how are we doing?
The more you consider philanthropic accountability, the more you see that it is not a simple act of accounting. It is a more nuanced action of “giving account”. Funders are accountable to regulators as registered public benefit entities. As organizations they are accountable to their boards and donors. As supporters they have a moral accountability to their partners. As social change agents, they should give account of their goals and strategies to the public more broadly. And as learners, they can give account to others in, as Pole puts it, “a collective undertaking of understanding, sharing and communicating our real successes and failures”.
Accountability came up again in a podcast conversation between Senator Ratna Omidvar and Liban Abokor, one of the founders of the Foundation for Black Communities. They discuss the question of how foundations as public benefit organizations can be held more accountable for their responsibility, or “duty of care” to Canadians. Abokor suggests the need for a mechanism for philanthropic accountability mandated by government. He says that such a mechanism would measure whether foundation boards “are making the right judgments and disbursements on our capital”, arguing that tax exemptions and tax incentives to donors for gifts to foundations mean that the capital of a foundation should be considered public wealth. Abokor believes that a “useful, relevant and impactful accountability mechanism has to be introduced to Canadian philanthropy…that will ensure…that we’re always thinking about who we’re giving to and how that giving is having an impact.” While Abokor did not have time in the conversation to elaborate on why he thinks a new mechanism is needed to mandate accountability, he is clearly impatient with the lack of urgency across the philanthropic sector to assume a broader accountability for creating public benefit.
Foundations that are registered charities report their revenues and disbursements, as well as the names of their directors, to the Canada Revenue Agency and the public. There are ways in which this mandated accountability to the public could be expanded. For example, a lively debate is happening in the nonprofit sector around ways to increase diversity on boards of charities, partly through mandated diversity data collection and disclosure, as a way to demonstrate accountability to a more diverse Canadian population. The federal government is considering recommendations for changes to the Canada Not-for-Profit Corporations Act, which might include similar disclosure requirements on diversity as currently apply to for-profit corporations in Canada. There have also been calls by the Advisory Committee on the Charitable Sector and others to increase the mandated collection of information on charity investments in the annual charity reporting form (T3010). But Abokor is going further and suggesting that a mechanism is needed to ensure that “we’re doing the things we’re supposed to”. He wants transformation, not incrementalism.
I don’t dispute the need for more transparency, for a greater sense of urgency, for more inclusive and equitable philanthropy. The conversation about accountability must go beyond avoiding risk and managing charitable dollars prudently (even though our legal and regulatory requirements as charities push us in that direction). I am less sure that change in philanthropy can be forced top down or mandated externally. One of the great public benefits of thoughtful philanthropy is its ability to take leaps, to fund what is risky or has unknown outcomes, to provide models and learnings for social change. Government commissions aren’t known for their promotion of risk or transformational impact. Let’s agree on a broader and more inclusive accountability that encourages philanthropy to learn, to evolve, to do better, and to do so in relation with a more diverse community.
In August 2020, a very large number of readers had their attention caught by my blog on the seven sins of nonprofit governance. It seemed that many people were interested in how governance can go wrong. Almost two years later, as Annual Meeting time approaches again, and new boards are elected, I want to revisit a question posed in my original blog: Could volunteer boards of directors be the Achilles’s heel, the fatal vulnerability, of non-profit organizations?
Unfortunately, yes. My original list of the “seven sins” of nonprofit governance showed how boards can indeed jeopardize an organization’s sustainability if they don’t do their job properly. I focused on the need for independent oversight and solid risk management. Boards can and should be assisted by external auditors and risk management experts (including cybersecurity experts). They should also be careful to spell out and to adhere to conflict-of-interest policies to ensure that personal interests of directors are not playing a role in decision-making.
Yet, as I reflect on my experience as a nonprofit director and I think more about how boards can get it wrong, I realize that measures to guarantee independent and objective oversight must be complemented by intangible aspects of culture and leadership. If those are missing, a nonprofit board won’t be effective in helping an organization achieve its purposes. Clarity, transparency and trust are fundamentally important to well-functioning boards.
Here is my updated list of seven nonprofit governance sins, taking these intangibles into account.
Boards need to find the right balance in their roles. Boards are part of the governance structure, but they are not the whole of it. They are not the only shapers or custodians of an organization’s strategy, finances or reputation nor should they assume managerial roles. Directors bring their ideas, skills, and networks to the table. They should reach out, share ideas, stay connected to the context within which their organizations work. But they share governance, they don’t monopolize it. Many boards have a written statement of their roles and areas of responsibility including the legal and fiduciary and the strategic and generative. They are clear about how decisions are made and by whom. Without this, they risk disarray.
The board needs to evaluate itself regularly. This provides important information to board members about their own effectiveness and gives them an opportunity to contribute to improve the effectiveness of the board overall. Without a regularized (at least annual) board evaluation, boards can drift off course and will lose directors.
The Chair and Vice-Chair of the board and the chairs of committees are the leadership of the Board. They need clear statements and a shared understanding of their roles. On many volunteer boards, the question of who becomes Chair or who takes on a committee lead is often a matter of who has enough time and is willing to put up their hand. But this shouldn’t be a matter of personal availability only. The responsibilities and qualities of leadership need to be spelled out for all to know. A succession process understood by all helps directors to feel included in the leadership election process. Without full board support and trust, a leader will fail, and directors may leave the table.
This has been one of the biggest questions and most glaring weaknesses of nonprofit boards. Over the last two years, there has been much more focus on the issue of diversity in all its forms. Boards need to pay attention not just to recruitment and numbers, but to how to build more inclusive cultures and to promote conversations that bring different assumptions and experiences to enrich their conversations. Without attention to this, boards will not be able to respond effectively to the changes taking place in our society, and the new risks that rapid change will pose.
Volunteer boards too often do not take the time to orient and educate their directors. Volunteers can come from many different sectors and while they care about the mission and purpose of the organization whose board they join, they may not be familiar with the culture, responsibilities, and expectations of their board. This shouldn’t be acquired simply through osmosis. Many new directors without orientation feel left out while they try to understand their roles and the context of the organization they are volunteering for. Without a solid orientation and ongoing education, organizations and their boards lose valuable time and talent.
This is a two-way street. It comes down to trust and transparency. From the board’s perspective, directors must be able to ask questions, obtain information and have debates with the organization’s leader without being perceived as intrusive or controlling. But the board must be willing to set clear strategic direction and hold a CEO accountable. If boards do not set expectations around performance and accountability, they are not supporting the CEO.
A good working relationship with the CEO, as stated above, is essential. It starts with recruitment. This is one of the most important decisions that a volunteer board makes, and as such the process of recruitment should be well structured, well supported and well managed. Boards must take the time to think through the qualities and criteria necessary to their recruitment of a new leader. Once chosen, a CEO should have the support they need from the board to take up their roles. Without this, a board is setting up its organization for failure.
For further reflection, I recommend the excellent ongoing work on Reimagining Governance by the Ontario Nonprofit Network and Ignite NPS. They have continued to develop and test their thinking on governance. One of their new resources (which could spark an interesting conversation at the board table) is Impacts on Governance Design, which describe eleven trends affecting the nonprofit sector today and how they converge to create six impacts on governance design.
One of the big debates swirling around in philanthropy today is the debate about trust. Can trust really exist between funders and the organizations they fund, given the power imbalances, the different communities that funders and grantees come from, the different operating models of grantmakers and operating charities? This matters a good deal to funders who are considering trust-based philanthropy as a strategy. There are mixed views on what constitutes trust-based philanthropy. For funders, does it mean giving funds unconditionally and standing back from organizations because funders trust them to know how best to deploy them? For organizations, does it mean simplified funding application and accountability practices that build trust in the funder with whom they are in relationship? Does trust imply standing back or getting closer?
Charles Keidan, the editor of Alliance the global philanthropy magazine, wrote a recent column on trust-based philanthropy and its critics. He evaluates the arguments for practicing trust-based philanthropy and the arguments of funders who are uneasy about this approach. One of the worries of funders in a trust-based approach is how to retain accountability for using their funds responsibly and effectively. But as Keidan and others have pointed out, the underlying question is more about power and privilege than it is about trust. Keidan makes an important suggestion: “A good question to ask of critics of trust-based philanthropy is how willing they are to invite scrutiny of their own power – how their wealth was made, who sits on the boards, how they invest their assets and yes, how well they respect, partner and trust their grantees.” How are their own practices engendering trust?
We need to think more about what trust feels like in practice. Who has to trust who? And on what is trust based? The German philanthropy think tank Maecenata Foundation has been thinking about trust for a while. Through their Philanthropy.Insight project, they have developed a framework that helps a funder with some penetrating questions about what constitutes trust. They have called it the Philanthropy.Insight Assessment Tool (PIAT). This tool is conceptually based on two elements of trust: trust in intention and trust in competence. It’s an interesting distinction. Both elements of trust matter if funders and recipients of funds are to trust each other. And both funder and recipient can demonstrate these elements.
The PIAT identifies five separate principles that must be considered together to establish or to assess “trustworthiness”. To develop trust in intention, there must be evidence of Commitment, Public Purpose and Relevance (which represent the emotional side of trust). To develop trust in commitment, there must be evidence of Performance and Accountability (the more practical side of trust). The PIAT has created a list of diagnostic questions for funders to ask themselves in each one of these five areas to assess trustworthiness. These questions are ones that funders can use to think about the levels of trust within their organizations (intra-organization), among their funder peers (inter-organization) and across sectors (inter-sectoral) in relations with grantees, governments and other players in a philanthropic system.
If we use this framework to think about trust, we realize that it is much more complicated than the notion that earning trust or giving trust is simply a matter of shifting where power lies. It is more a matter of shifting practice. The developers of the PIAT, Dr Rolf Alter, Rupert Graf Strachwitz and Timo Unger, suggest that it offers an “invitation to philanthropic funders to apply the trust lens to their current strategies and programs so that they can ultimately become better at what they are doing.” In thinking deeply about their practice and being prepared to ask questions and to change, they will begin to earn the trust of staff and board members, partners and collaborators. Whether institutional philanthropy is ready for this or not in Canada is a relevant question. There is evidence of interest and of changing practice. As an example, the Lucie et Andre Chagnon Foundation in Quebec has been working on rebuilding trust with the community sector over the last five years and has been asking itself many of the questions outlined in the Philanthropy.Insight method. Other Canadian foundations are working on different aspects of the trust pentagon described by Maecenata. But it is challenging work. In Europe, Maecenata has ruefully paused its project because it was not able to rally enough participants and supporters among funders to test its approach and create a peer exchange platform. However, it has shared publicly all its analysis and thinking about trust-based philanthropy in an effort to keep the conversation going. Perhaps this is a basis for more Canadian philanthropic peer exchange and hard thinking about what trust means in philanthropy today?
I have been thinking again in the last few weeks about the uses of language in philanthropy today. And reflecting not only about speaking language but also about listening to it. What is said and what is heard in a philanthropic conversation can be very different than what is intended, based on the interpretations by both speaker and listener. It is not simple or easy to find the language to connect and trust rather than to separate and silence. This is as true in philanthropy as in any other human sphere.
I have been thinking about this because we are hearing more voices in the conversation about philanthropy. We want to hear those voices. The challenge I see is how to bridge a gap between givers and receivers that may be created by what we say and how we hear. In a spring 2021 blog, I wrote about the implications of speaking in the language of grantmaker and grantee, beneficiary and funder, a distancing language which focuses on the transaction, not the relation, of philanthropy, and which highlights the embedded inequality between giver and receiver. In a summer 2021 blog, I commented on the listening side of philanthropic communication and the importance of “thoughtful attention”. I acknowledge that this requires skill and individual traits, foremost being humility. To listen well means to keep an open mind about what you are hearing, and a willingness to alter your thinking because of what you hear.
The last six months have underlined the need for speaking words that connect rather than divide, and for listening with attention and an open mind. In politics and in the economy, the debates seem to be getting more divisive, not less. This is for many reasons, not least the frustrations and deprivations of the pandemic. There is also the frustration and anger of people who have not had a voice or power for far too many years. It is difficult to use the language of relation rather than division in the face of the very real pain of injustice. In the context of philanthropy, words such as “privilege”, “supremacy”, “marginalizing”,“oppressive” and “control’ are being used as part of a language to articulate the anger that people feel about economic and political systems that have generated inequality and injustice as well as wealth for some. These words are meaningful and important in specific contexts. But I find them troubling when used as ways to characterize all philanthropic funding. They obscure the way in which many funders are trying to shift their behaviour away from the exercise of power, through more inclusive practices of speaking and listening.
Funders must do their part to name injustice, to be more inclusive, to seek more equity. One of the ways of doing this is through a change in the use of our own language. We can learn much about the use of inclusive language from Indigenous practices. We can talk about engaging in “right relations” rather than grantmaking, in looking for collaborators or partners rather than grantees, in making gifts or exchanges rather than grants. As funders work more closely with Indigenous partners our use of language can and will shift. This comment by Rhodri Davies (which I noted in my July 2021 blog) is relevant on the use of language: “Broadening our linguistic horizons [in philanthropy] is vital. It can help us to move away from reliance on forms of language and communication that entrench asymmetries of power, or which privilege certain forms of experience over others…it may even help us to experience our world differently (or at least understand the different ways in which others might experience it)”.
Similarly, funders can do more to listen with greater attention and openness…and to help their partners do so. This is well expressed in Using Our Power to Recenter Voice, an interesting recent blog from the Feedback Incentives Learning Group, a US group of foundations and philanthropy support organizations “dedicated to exploring ways to support nonprofits and to motivate funders to listen and act on feedback from the people they ultimately aim to help”. Their goal is to support and promote better listening, by funders of their partners, and by their partners of the people they serve. This is a way to create equity and to build relationships of trust. It requires changes in foundation practice and a willingness to fund work by nonprofits themselves to invest in their listening capacity. The Learning Group offers a Funder Action Menu to help funders promote listening and feedback across their areas of work. They urge foundations to take the first steps: “It’s on us as funders to change the way we and our colleagues wield the power we hold over resources and decisions, so that we and our grantees can be responsive to the people who are most impacted by our work and who we traditionally have consulted the least.”
There are encouraging signs of change in philanthropy as people work on their speaking and listening practices. What I hope is that this effort leads to more mutually supportive work. If we can speak and listen to each other with honesty and respect, our philanthropic work in the future is likely to be characterized by deeper, better informed and more equitable relationships.
Lucy Bernholz of Stanford is one of the thinkers I admire most in the world of philanthropy. Hers is an articulate and original voice. It helps me put into context the changes and arguments going on in the world of philanthropy, civil society and digital technology. Every year for the last thirteen, she has written what she calls a “blueprint”, an “annual industry forecast for how we use private resources for public benefit in the digital age”. In her 2022 blueprint, she has written a particularly clear-eyed commentary on what she calls a point of discontinuity that we have come to.
A year ago, Bernholz and I both picked up on an image used by the writer Arundhati Roy. She spoke of the pandemic period as a portal that we will walk through from the past to the future, and that in doing so we must decide what to bring and what to leave behind. We have not yet stepped through that portal. As I said in a January 2021 blog, much of what happened in 2020 in response to the pandemic did not go outside the boundaries of past assumptions and practice…we held the assumption that we would return to the ordinary, that there was a “normal” state that we would return to. Arguably, much the same could be said of 2021. Foundations gave more, more flexibly, more urgently. But they did not fundamentally change their roles as funders. Nor did charities and nonprofits change their roles as fundseekers and recipients.
Bernholz now talks about a discontinuity or, as she says, a point defined in physics as an interruption in the normal structure of a thing. She believes that the discontinuities accumulating in our environment, not only from the pandemic but even more importantly from the human-induced changes to the planet’s ecosystem, mean that “it’s not merely a matter of passing through a portal—we need to “leap” through the moment, making major shifts.”
How do we make this leap? It’s difficult to see beyond the moment, to avoid simply reacting to what is in front of us, to re-examine all our assumptions. The urgency of need in the pandemic makes it even more challenging to take a wider or longer view. Bernholz doesn’t have a guidebook for us. She does tell us that given the discontinuities we face, “we each need to make deep shifts in our individual lives and even bigger shifts in our political imaginations if we are to learn how to adapt to a climatically unstable planet and create new ways for humans to thrive”.
Generously, Bernholz shares links in her blueprint to examples of imaginative shifting in philanthropy. One is a report from a Design Justice workshop for the MacArthur Foundation, which explored how design justice methods can be applied to grantmaking in order to challenge rather than reproduce structural inequalities in philanthropy. The philanthropy world of 2022 as imagined and reproduced in a graphic from the workshop is a hugely different one than that of today. Among other things it imagines that a century from now there is no need for foundations. As Bernholz urges, let’s look at this closely to prompt a shift in our imaginations.
Another example is the work of Cassie Robinson, a grantmaker based in the United Kingdom who is imagining and sharing the shifts in practice that a funder could or should make to be able to leap to a future where everyone can thrive. Robinson has shared in a blog post a framework for thinking about the past or present of grantmaking practice and a possible future that might be very different, in which funders are field -builders for long-term change.. In another post, Robinson has described the skills that she believes should be important to grantmakers now, and this list is quite different to the skills we have sought in the past. Robinson names design, foresight, narrative, pattern recognition, synthesis and sense making, among other skills. Using systemic design, continuous learning through inquiry, prioritising narrative, and field building, resourcing infrastructure, making use of all the assets that a foundation might have…this is a different picture of the roles of most philanthropists today. But a shift towards these roles, and acquiring the skills to get there, is required to make the leap to a more just and sustainable future. It may take some time. I do see Canadian foundations beginning to shift their thinking and to plan for the organizational structures and people skills they need to break away from old roles and unexamined assumptions. Urgency is probably what is needed most now.
I am made more hopeful, in the dark start to what may still be a difficult year, by Bernholz’s thoughtful conclusion:
“All of us can use this time to collectively pursue visions that seemed impossible not long ago. That is what Arundhati Roy meant when she described the pandemic as a portal back in 2020. It is a threshold, a moment of choice. What we take through with us matters—whether that be a deepened commitment to the health of our neighbors, the joy we’ve found in creating mutual supports for our children and elders, the pride we can take in successful collective action, or the hope of new ideas. These are the greatest potential powers of civil society and philanthropy.”
January, as always, is a time for forecasting by philanthropy observers and “opiners”. But during this never-ending pandemic period, as I read and listen to blogs and podcasts about the year ahead, I notice that no-one is being definitive about their forecasts. Uncertainty is greater than ever. People don’t want to make predictions. They would rather express hopes or, more gloomily, voice fears.
I think that hope is a better starting point. This is shared by Phil Buchanan of the Centre for Effective Philanthropy who posted his first 2022 blog with five hopes for philanthropy and nonprofits. Phil points out that there has been more change over the last two years in how US foundation leaders approach their work than in the previous two decades combined. As he says, “for all the suffering and loss it brought — and continues to bring — the pandemic has shown that deep change, even at institutions often derided as insulated and slow to evolve, is possible when it’s necessary.” In my view, this is also true in Canada, in all sectors.
In early January 2021, I wrote about a new agenda for philanthropy and for what I called the “social good sector”. As I reread my words from twelve months ago, I realize that I was voicing my hope that funders and nonprofits would ask and answer challenging questions that might set them on a new path post-pandemic. Questions such as:
These are all questions about doing things differently…and, I hope, better. I acknowledged then that thinking about these questions is tough and answering them through action is even tougher. But I believe that at least some of them are taken seriously, demonstrated by the conversations at various nonprofit conferences and webinars that took place through 2021, and the funding practice changes that have not been rolled back or discarded. These questions are just as important as we head into a new year, with the pandemic still over our heads.
For 2022, I want to put out two hopes, two fears and one wild guess. Perhaps these could be provocations for discussion at board and management tables along with the still important questions that I suggested for 2021.
Hopes
Fears
A Wild Guess
I had the pleasure recently of participating in a panel discussion with the Toronto Arts Foundation and its Creative Champions Network, which provides guidance on good governance to Toronto’s many arts board directors. The theme of the discussion was Some Damn Good Ideas for Building Back Better. The conversation was led by Jini Stolk, the CCN coordinator and long-time champion of better nonprofit governance in the arts (see for example her excellent review in The Philanthropist of John Tusa’s On Board: The Insider’s Guide to Surviving Life in the Boardroom)
I tackled the topic by reflecting on what it takes today to cope with the enormous change and uncertainty all around us. Here are my thoughts, framed for foundation and charity board members in all sectors.
To get ideas or insights I often listen to the Ezra Klein Show podcast from the New York Times. The other day I heard an interview on the show with Phil Tetlock an American psychologist.
Tetlock quoted the ancient Greek poet Archilochus who wrote, "the fox knows many things, but the hedgehog knows one big thing." The philosopher Isaiah Berlin revived and expanded on this idea in his famous 1953 essay The Hedgehog and the Fox.
Tetlock has specialized in understanding the cognitive qualities of people who can forecast better than others, the so-called “superforecasters”. He uses the fox and hedgehog concept as a way of identifying two cognitive styles.
Foxes have different strategies for different problems. They are comfortable with nuance; they can live with contradictions. They can take the “outsider” view.
Hedgehogs, on the other hand, focus on the big picture. According to Berlin and to Tetlock, hedgehogs have one grand theory which they extend into many domains. They take the “insider” view.
Foxes are sceptical about grand theories, diffident in their forecasts and ready to adjust their ideas based on actual events. They are pragmatic and open-minded, aggregating information from a wide variety of sources. They talk in terms of probability and possibility, rather than certainty.
Both cognitive styles are valuable, but in a context of high uncertainty fox types may be better at assessing situations and forecasting strategies for coping.
What characterizes this context of high uncertainty for the nonprofit sector? Here are just a few elements:
High uncertainty suggests that you might want more people with fox-style thinking at your board table today. How might a fox thinking style be helpful right now?
Trying to see clearly as board members is enormously challenging. Fox style thinkers will bring challenging “but…although…however…on the other hand” questions to the table, as Tetlock puts it. They want to test possibilities based on data or trends not on personal convictions.
What could this challenge thinking look like? Here are ideas for you in three specific areas: revenue raising, governance and strategy
Revenue raising, especially philanthropic revenue. Fox style thinking would suggest that conventional approaches need to change. You need to meet donors and funders where they are and make the connection between your offer and their new need (to support diverse voices, to attend to previously unheard communities and perspectives, to make a gesture of reconciliation…etc). Use “but” or “however” questions to test your assumptions about what donors want. Test your thinking about who your supporters and donors are and perhaps start looking for them in unexpected place. Instead of “this donor will support us because we offer the most effective program” ask “this donor cares about effectiveness…but more donors are supporting diverse programming…should we think about that?” Today’s context opens new doors.
Governance. Fox style thinking suggests looking for new directors and members in “not the usual places”. This is in fact a good time to look for the unusual suspects. You want to avoid group think and confirmation bias more than ever. You want to hear from more foxes at the table. This is the time to say to your Nominating Committee “I know this person…. but maybe we should look at people we don’t know? OR …on the other hand maybe we should invite someone none of us know?
Strategy. Fox style thinking and agility of mind are essential right now in considering your organization’s strategic options. Plans are going to have to be fluid. It’s important to avoid preconceived ideas and to check assumptions often. This is the time to say “We have been successful in pursuing this plan…but what might Plan B look like? OR …although it would no longer be true if circumstances X and Y change.” This kind of thinking can be very generative, and generative thinking is a governance duty every bit as important as the fiduciary one. There are many ways in which fox-type thinkers could add value right now to a nonprofit organization, be it a funder or an operating charity…if only to challenge us with “but…however…on the other hand” questions.
I have been listening to some interesting conversations recently in Canada, Europe, and the United States about what philanthropy has learned over the past two years. As we near the end of 2021, people are asking whether the changes that we see in the practices of at least some in the foundation world will be permanent. At various virtual philanthropy gatherings on both sides of the Atlantic, I am hearing similar themes and questions. How can we be more urgent? How can we be more flexible? How can we be more trusting? How can we be more creative in our philanthropy? Can we be more courageous, more inclusive, more humble? Can we be all those things at one and the same time?
What I am not hearing is a questioning of the fundamental value of philanthropic foundation work. Not surprising, you might say, since these are gatherings of philanthropists. They believe, as do I, in the original and important contribution that thoughtful and courageous foundations can make to our communities. But that doesn’t mean that they don’t acknowledge the need to change. Judging from these conversations, they are willing to re-examine themselves and their assumptions and behaviours.
As I listen to the presentations, it strikes me that foundations might need to play that old game Truth Or Dare. In their case, it might be renamed Truth And Dare. Can we answer truthfully the hard questions that we are being asked? And do we dare to take the actions necessary to make our answers truthful? Here are some questions that come to mind if foundations were to play this game for real.
Taking the Pledge: Is our foundation willing to sign one of the pledges that are increasingly being offered to the foundation community? Last year it was the Give5 pledge…..giving 5% or more of endowment per year. This year it is the Canadian Philanthropy Commitment on Climate Change. In 2015, it was the Philanthropic Community’s Declaration of Action on reconciliation. And the dare? Are we willing to be held accountable for our pledge? How much will we reveal and what measures can we use to prove that we are living up to our pledge?
Transferring Capital: Is our foundation willing to consider making a transfer of capital to help build sustainable sources of funding over time for community partners? This past year for example a small number of foundations transferred capital to start building funds such as the Foundation for Black Communities and the Indigenous Peoples Resilience Fund. And the dare? Are we willing to examine new ways of using our capital, whether through making loans of our own, setting aggressive impact investing goals or even spending down our capital by transferring it directly to others?
Trusting our Partners: Is our foundation willing to let go of our control by changing practices that force our grantees and partners to conform to our own expectations about outcomes, or what constitutes a “good” grant (as suggested in the 2021 book Letting Go)? Are we willing to collaborate more and cede our views to the collective? And the dare? Are we willing to invite partners and collaborators to sit down with us and even make decisions for us that we are willing to accept in a spirit of joint accountability to each other?
Advocating for Mission: Are we willing to raise our own voices as funders in the debates about the issues that are so important to Canada right now? For example, the right to affordable housing, the design of affordable and available child care, the redesign of our cities to meet climate goals? We are seeing some examples of foundations taking a stand such as Maytree on housing, the Early Child Development Funders Working Group on child care, and Metcalf and Ivey on climate. And the dare? It’s not a high bar. Are we willing to sign an opinion piece, write a blog, explain our position in a detailed annual report, support a publication? Can we go further and act to give democratic dialogue a better chance by convening, supporting digital access, and including the marginalized voices not heard before in these debates?
If foundations are going to be both truthful and daring, they are going to be uncomfortable at times. Each truthful answer and each daring action may bring unease. Changing practice, sharing decisions with others, setting harder goals, taking a public stance, revealing more about ourselves, these are all potentially risky. Foundation boards are not often willing to take a dare. Many if not most foundation boards and donors do what they do to feel satisfaction and pleasure, not to feel anxiety or even fear. But the conversations* that I am listening to suggest that this is not a time to avoid risk or to be conservative. Post-pandemic but amid other global crises and pressures, this is a time, as Delphine Moralis of the European Foundation Centre said recently, to “reset systems, renew practices and reform philanthropy”, with courage and a sense of humility. Truth and dare, indeed.
*The conversations:
The Future of Philanthropy in Europe from Alliance Magazine (excellent summary available)
The Center for Effective Philanthropy webinar How a Time of Crisis Has Shifted Philanthropy (recording coming soon)
Philanthropic Foundations Canada 2021 conference Philanthropy and the Common Good