What Drives Philanthropic Success?

March 9, 2010

Since publishing my book Strategic Giving, I have traveled around the country and abroad talking to foundation leaders and major individual donors about what strategy looks like in the world of philanthropy. I have developed over time a compelling and polished (if I don’t say so myself) multimedia presentation that walks through all the big questions that a donor must confront when trying to formulate a philanthropic agenda that generates both a social return for the community and psychic return for the donor. While I have convinced myself that I have a fine way of exploring the central strategic challenges in philanthropy, I am increasingly troubled by a recurrent worry. It is a worry about what actually drives philanthropic success.
Let’s define two categories of philanthropic processes. The first is technocratic, rationalistic, and ordered: It includes program positioning and issue research, alignment and coordination across initiatives, logic model drafting, white paper or concept paper development, proposal reviewing, adapting and applying new information technologies, program evaluation design and implementation, and all the other day-to-day professional work that goes into modern philanthropy. Around this work a growing industry populated by smart people has sprouted up, designed to help foundations and donors do this work better and better. Call this Category One philanthropic work.
Now consider what might be called the more humanistic, interpretive, and adaptive work in philanthropy, which really comes down to judging the capacity, character, resilience, intelligence, and resourcefulness of the people who seek philanthropic funds. This is the kind of ill-defined and untheorized work that comes down to judgment and gut assessment by the donor of the person sitting across the desk from them. Call this Category Two work.
Now to my worry: What if Category One philanthropic work really only explained a small part of philanthropic effectiveness and social impact? What if Category Two work explained a vastly larger percent of outcomes? If this were a social science morel, we might ask what the r-square statistics of these two types of philanthropic work are if the dependent variable is effectiveness. The r-square statistic ranges between 0 and 1 and tells us how much variation in the dependent variable is attributable to changes in the independent variable (here, that would be Category One and Two philanthropic work). My concern is that the growing philanthropic industrial complex—made up of consultants, researchers, trainers, and advisors—believes, earnestly believes, that the r-square statistic for Category One work is high, perhaps up to .75, and this justifies the substantial amounts of money invested in building up and supporting this work. But I have come to doubt this assumption over time and now think the r-square statistic might actually be very low for Category One work. I am more and more of the belief that Category Two work has the big r-square and explains a lot more of the achieved social impact than anyone wants to admit. The problem is that Category One work has an army of salespeople out and about selling tools and frameworks, while there is virtually no infrastructure to support Category Two work.
This much said, I will be releasing a new short and practitioner-oriented book on philanthropy, titled The Essence of Strategic Giving, which represents yet another contribution to the philanthropic industrial complex. What I think the field really needs is a systematic guide to the difficult art of assessing the innate ability and capacity of grant seekers  to conceive wisely a vision and then actually carry out their plans. If donors cannot judge character and capacity correctly, all the tricks of the philanthropic trade will not help them achieve their goals. What such a guide would look like I do not know, but I doubt the current philanthropic industrial complex has the will to design and deliver it.

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