In an article in Nonprofit Quarterly, “Strategic Philanthropy: Who Wins and Loses?” Prentice Zinn, using a variety of reasons, outlines the argument against funding sources alone deciding where to focus their grants as part of their version of a strategic initiative, often involving outcomes measurement and scaling up service.
In a trenchant major point, he states:
“Today, the field of philanthropy is seeing a relative explosion of conversations, debate, and reflection about how it can be more effective. Add to this rich exchange of information a dose of organizational narcissism, careerism, and peer pressure and you get a frenzy of personal profiling and experimentation like teens at a high school dance.”
Given the trendy nature of some foundation funding, he gets to the main question most of us have. Who gets left out? The small creative organization? The effective nonprofit that claims measurement is not possible in what it does? The organization that holds elements of the community from sinking into utter poverty?
What is clear is that foundations, as well as many major donors, are focusing, read narrowing, their scope of grants and donations. They want results. They want good outcomes. They want exceptional impact on the society. And, clearly, it’s their money, so they can put it to what they consider its highest and best use.
However, they often base their information on many faulty assumptions. Most result, outcome and impact data would not stand up to exacting methodological scrutiny. If we’re going to get into this strategic initiative, then let’s do it right. (See my recent article.)
A Parallel Trend
At the same time that strategic philanthropy is dominating more and more thinking, another trend is occupying a number of foundations’ strategic thinking: merger and acquisition.
The underlying assumption is that there are too many underperforming nonprofits, too many grant applications and a frustrating inability to fund all the good things in society. The sincere and honest reactions of many funding groups, including secondary funders such as United Ways, are to sponsor, fund, promote, and encourage mergers and acquisitions.
M&A is certainly one way to reduce the number of nonprofits, although, without great care and knowledge, M&A does not guarantee increases in capability, quality or inventiveness. In fact, the larger the organization, there lingers a probability for stasis, for bureaucracy, for same old, same old. Creativity needs to be nurtured, and, while M&A doesn’t rule it out, it often doesn’t include it in the priorities driving the process.
A wonderful example of the right kind of win-win merger is the recent combination of Park Nicollet and HealthPartners in the Twin Cities, which flies in the face of my worries about bureaucracy. Both organizations will contribute to a much stronger single organization, able to function much better in the world of Accountable Care Organizations.
The Missed Step
No one is against affecting change. No one is against real impacts on the society. No one is really against creative mergers that promise more. No one is against moving the needle. In fact, many of us have devoted our careers to doing so.
What we need first, however, is agreement on what needles we are trying to move, the measurements that actually demonstrate statistically whether there is real change, and the ability to share knowledge so others might benefit from the learning. Then we need the dollars.
We don’t need what Zinn is railing against. Neither do we need foundation officers alone deciding on what is important, how to measure it and those agencies to benefit from their grants, We do not need program officer career growth based on short-term results, often badly measured. We need a much larger conceptualization, involving many more interests. And clearly, we need creative foundation input.
What we need is this agreement on the needle we first want to move, what success looks like, and what measures will statistically do the job. At first, using a variety of approaches and comparing them empirically, we can reach agreement on the best way to achieve success.
The Great Race!!!
We will not get consensus on this process, and that is fine, in fact desirable. What we need is input from a select group of nonprofits, foundations, government, scholars, and others interested in the higher goal of this process: to pinpoint a societal problem, figure out what needs to be done,how to do it, choose the specific methodology to be followed and reliable statistical tools to measure it, and then fly the funding flag that whichever self-selecting groups can “salute.” The more competition among aspirants, the more original the method, the better.
This may result in some of the same things that Zinn is warning about, but the selected agencies will be those that really can achieve effective and efficient outcomes which actually benefit society and which do not leave anyone out from applying. Full information on all aspects of this ”pilot” can then be shared in the nonprofit media and literature.
All we need to do this is achieve agreement on one problem to be solved, on outcome and impact, on reliable measurement and then sufficient funds to make it happen.
It’s time to move the needle.