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July 28, 2010

Before I dive into some of the different “next practices” highlighted yesterday that we think may become important parts of philanthropy’s future, I wanted to first say a few words about one of the key pieces of what I think it’ll actually take for funders to start acting bigger and adapting better over the next decade.
Change in philanthropy is especially hard. As organizational theorist Edgar Schein puts it, the only time that organizations learn and change is when the normal level of “learning anxiety”—the anxiety produced by having to shift and learn something new—is trumped by “survival anxiety”—the anxiety produced upon realizing that if you don’t adapt or improve you’ll be forced out of your position or out of business entirely.

Among many endowed philanthropic institutions, there is almost never a threat that raises survival anxiety, which means, in turn, that there is nothing that forces philanthropic organizations to get over their learning anxiety in any consistent way. The result is a field in which many of the most powerful players have few (if any) incentives to prompt adaptation and behavior change.

For years, we’ve joked that this dynamic has left philanthropy with a unique set of “learning disabilities” that get in the way of change in the field. In What’s Next for Philanthropy, we look deeply at a number of these different barriers: funders’ need for independence and control, their insularity and inward focus, the cumulative effects of caution and risk aversion, the challenges of time and inertia, and the dangers of an unspoken competition for reputation and credit.

Because the field is both voluntary and independent by nature—unconstrained by the need to please political constituencies or maintain shareholder value—these challenges add up to a situation where there is no pressure that forces any one actor to respond to another, to learn, or to change course. Individual philanthropists and institutions can act without much reference to the success or failure of their efforts or to what others do.

The result is a system with no natural mechanism for coordinating effort, for learning, for sharing knowledge about what does and doesn’t work, or for adapting to shifting circumstances. And given that learning and adaptation are optional in philanthropy, it’s hard for the field to overcome the inertia of the status quo.

Which is why I’ve become obsessed over the last year or so with tools. Is it possible to facilitate change in philanthropy by building tools that make it easier for funders to do the “right” things and harder to do the “wrong” things? The status quo is typically the easiest road to follow. But what if we could create new tools that make the path to new behaviors just as easy?

The problem is that the barriers I mentioned above make adopting new tools in philanthropy extremely difficult. Top-down, centralized, sector-wide tools and infrastructure are often rejected, even if they could improve performance. And at the same time, bottom-up innovations—individual foundations creating specific solutions to their particular problems and circumstances—rarely spread or scale. One foundation’s innovation remains just that: one foundation’s innovation.

For funders to truly begin acting in new ways, we will need to begin to merge top-down and bottom-up mindsets to develop new tools and platforms that help individual funders do their own work better, while at the same time designing with interoperability in mind. That way the data and knowledge gathered by one actor can be integrated with that gathered by others, with modest investments of money and time. Since many funders face similar issues, tools and behaviors developed to solve specific problems—but with an interoperable mindset—can begin to build useful and healthy platforms, standards, and conventions that cross institutions to add up to something more powerful than just multiple individual solutions.

Over the last two years, we’ve been working with the Rockefeller Foundation to experiment with developing these types of new, interoperable tools.
The first innovation we’ve produced, the Strategy Landscape, was created as a way of helping visualize the strategies and grants both within, and across, foundations. The project aimed to solve a key internal challenge that the Rockefeller Foundation was facing: how to help people understand the connection between its different programs’ strategies and their grants. It was an important issue for Rockefeller, but also a problem faced by many other funders as well.

So we began building a tool that could help the foundation easily visualize and understand how the strategies and grants of each of its various initiatives are aligned. But we designed the tool with special attention to interoperability—how it could also be used by, and across, other funders. When seen as a collective platform, the tool actually becomes more than just an assortment of individual maps that allow us to better understand each foundation; it allows us to start mashing the maps together so we can see the entire landscape of strategies and grants across the different funders.

In the past, foundations have done their work essentially flying blind, unclear about what others with similar interests are doing, and without a clear picture of the ecosystem of funders around them. It simply took too much effort to know what everyone else was doing. You could spend all day on the phone or in meetings with other funders trying to find out what they’re funding, and still only come out of it with a vague sense of what they’re up to.

The Strategy Landscape aims to make it simple for funders to see what their peers are supporting, making it easier than ever before to see gaps and overlaps between foundations, to identify new opportunities for coordination and collaboration, and to develop strategy with an understanding of the larger system in which they operate. The goal is to make it so easy to see and understand the broader context that you would actually have to make a choice not to see the landscape of funders around you.
The first prototype of the Strategy Landscape is now being developed to map philanthropic funding flows related to climate change across more than a dozen funders, and we will be testing it with numerous other issues over the coming year.

But we also hope that the tool will help to kick off a wave of new innovation in philanthropy—the first of many new approaches that will span across all of the different areas of next practice that I’ll be discussing over the next few days.
Cross-posted at Working Wikily.

Gabriel Kasper