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April 2, 2014

A few days after writing about the search for breakthrough innovations in philanthropy, I caught up with the cover story in the latest Stanford Social Innovation Review (Spring 2014), by two consultants with the Monitor Institute, a part of Deloitte Consulting that specializes in nonprofit innovation.  I was struck by their opening premise: that the “strategic philanthropy movement” has caused too many funders to box their grantmaking into “carefully designed theories of change,” where they are “willing to support only safe, established programs.”  The authors nonetheless go on to describe programs at several (very strategic) institutions that have managed to break out of their safety zones and support radically new ideas, measure the results, and scale up the strongest ideas.

The message of the article seems to be that strategic philanthropy is fine, but to keep it from becoming hidebound, institutions do well to cordon off some portion — say, 10 percent — of their budget to seek out disruptive new ideas outside the boundaries of their current programs. The authors go on to suggest several unconventional ways of soliciting, choosing, funding, measuring, and scaling these new ideas. (This synopsis doesn’t do it justice — the piece is engagingly written and deserves a full reading.)

What struck me, though, was the suggestion that there is an unavoidable tension between “strategic philanthropy,” rigorously applied, and “innovation funding.” And although my first reaction was to rebel at the dichotomy, I think there’s some truth in it. Yes, as the article demonstrates, the most disciplined of strategic funders can still have wide-ranging, adventurous innovation programs. And no, a well-designed strategy should not preclude a regular, open-minded scanning of the horizon. But the two styles of grantmaking don’t easily share a single institutional love-seat. I have heard proponents of each approach casually belittle the methods of the other camp; the two schools definitely partake of different cultures and ways of assessing risk.

Managing a good innovation program — and making good use of the things it uncovers — may not come naturally to the leaders of rigorously strategic foundations. It can be fiendishly hard to keep a grantmaking program focused and accountable, even without the challenge of simultaneously chasing the next new thing.  CEOs may therefore end up avoiding the innovation route altogether, pursuing it halfheartedly, or simply stumbling along it with unsatisfying results.

Does all this suggest a shortcoming of strategic philanthropy? Has the push for discipline and strategy gone too far, spoiling philanthropy’s appetite for experimentation and exploration, and inspiring a colorless cult of logic models and five-year impact metrics? I still think the answer to that (deliberately overstated) question is No. But after reading the SSIR article, I’m less certain than I used to be.

Tony Proscio