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Compensating for Your Philanthropic Blind Spots

December 17, 2013

(Caroline Woodruff is a philanthropy advisor at Bessemer Trust, where she helps individual clients, families, and foundations develop strategies to meet their philanthropic and intergenerational legacy goals. Founded in 1907, Bessemer Trust is a privately owned wealth and investment management firm that serves ultra-high-net-worth families and their foundations and endowments.)

Vivienne_Harr_TwitterIPOFor those who may have missed one of her viral tweets, Vivienne Harr is the new face of the movement to end child slavery. Vivienne has raised more than $100,000 -- so far -- to eradicate child slavery by selling lemonade. (She's pictured here ringing the opening bell of the New York Stock Exchange to commemorate Twitter's initial public offering on November 7, 2013.)

Vivienne was a featured guest at a gathering for Bay Area philanthropists hosted several weeks ago by the Marin Community Foundation (MCF). I attended to hear MCF president and CEO Tom Peters moderate a session with my colleague Paul Connolly, director of Philanthropic Advisory Services at Bessemer Trust, in which Paul discussed the pros and cons of what he called "moneyball philanthropy" -- a data-driven and results-oriented approach to grantmaking. At the same session, members of the audience described their common struggle to balance the "head" and "heart" in their philanthropy.

Over the years, I've observed that donors typically fall somewhere on a spectrum, with a highly intuitive mode of giving propelled by passion at one end and a very technocratic approach focused more on logic, outcomes, and data at the other. Sometimes, leaning too much toward one end of the spectrum can negatively affect results. Indeed, during the session with Paul and Tom, it became clear how important it is to identify "blind spots" in one's grantmaking practice and find others to complement your particular inclinations.

Vivienne's story is an impressive example of a donor who is driven by heart. After seeing a photo of two boys in child slavery, she set an audacious goal to do something about it: sell lemonade from her neighborhood roadside stand for 365 days and raise $100,000. In less than six months, she had surpassed her target and decided to aim even higher. She wanted to create a socially conscious company to bottle her product, brand it as "Make a Stand Lemon-Aid," and leverage a portion of the gross proceeds to support her philanthropy.

Vivienne and her family realized they could have even more impact -- and better marry the "head and heart" -- by creating a related nonprofit entity. They sought the advice of the Marin Community Foundation and decided to open a “corporate-advised” fund called the Make a Stand Foundation, which would accept proceeds of Lemon-Aid sales and donations from outside parties. In turn, the foundation would make grant distributions to nonprofit partners around the world dedicated to abolishing child slavery. As the effort expands, Vivienne and her family will work closely with MCF to develop planning, evaluation, and reporting mechanisms that keep them apprised of the impact of their grantmaking.

At the session, another member of the audience explained how he applies cutting-edge business principles from the tech world to his nonprofit investments, with a focus on results and accountability. But he also wondered whether donors rely too much on outcomes data provided by nonprofits and whether there were better approaches. How do you know whether a grantee is sending you "good" data? Is it possible to get feedback directly from beneficiaries -- for example, students in an afterschool program or housebound seniors eligible for meals -- via mobile technology?

Julie Absey, MCF's vice president for research and evaluation, praised his focus on performance measurement -- and cautioned the rest of us about taking it too far. She also noted that donors could help build the assessment capacity of grantees by providing support for data management systems that enable them to track additional metrics and answer more probing questions. For instance, a donor who is passionate about afterschool pottery classes for low-income students in elementary school could reasonably want to know more than just how many kids attend a class. How many of those kids attend more than one class? Is the class being used as a way to connect the child to additional services such as food assistance or shelter? What, if any, behavioral changes are being tracked over time? Absey then reminded members of the audience that both "numbers and stories" can be used to document the success of a program.

Even family foundations struggle to find the right balance. Recently, I worked with a couple that was new to philanthropy and pretty divided on the head vs. heart question: she was objective and results-driven, while he based his giving more on experience and intuition. He was a long-time supporter of the independent primary school where he spent his formative years and felt obligated to continue giving back, while she questioned the efficacy of a large unrestricted gift to an institution that already has many wealthy supporters.

As their philanthropic advisor, I helped them identify common ground and suggested a number of things they could do to address their respective concerns. Eventually, they agreed to allocate the bulk of their funds to a joint effort between the school and a local nonprofit that teaches students how to build indoor green walls and, in the process, exposes them to sustainable urban farming techniques. Based on the success of that effort, the couple is now planning to fund similar projects at public, independent, and charter schools throughout their community.

As the above illustrates, when it comes to philanthropy, it doesn't have to be "either/or"; it can and should be "both/and." By seeking advice from people with different perspectives -- including peers, colleagues, advisors, and experts -- donors can compensate for their own biases and predispositions, allowing them to leverage the inherent tension between one's head and heart.

Do you struggle to find the proper balance between head and heart in your philanthropy? What are some of the things you've done to achieve that balance? Use the comments section below to share your thoughts and advice....

(Photo: Firstpost, November 7, 2013)

-- Caroline Woodruff

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