Not yet forty, Katherine Lorenz has been active in the social sector since her early twenties, notably as co-founder of Puente a la Salud Comunitaria, a nonprofit organization working to advance food sovereignty in rural Mexico. For most of her career, Lorenz thought of herself as a grantseeker rather than as the person who would end up heading the family foundation established by her grandfather, George Mitchell, a Texas wildcatter who amassed a fortune in the natural gas industry and pioneered the cost-effective use of hydraulic fracturing ("fracking") to extract gas from shale. However, a stint as deputy director of the Institute for Philanthropy — which later merged with the Philanthropy Workshop, where she serves as chair — convinced her that her nonprofit experience could be valuable to the Texas-based foundation. Elected president of the foundation in 2011 and named "One to Watch" by Forbes in 2012, Lorenz has become a respected speaker on topics related to environmental sustainability, NextGen philanthropy, and nonprofit leadership and has helped guide the foundation's emergence on the national stage as it waits for a final, significant infusion of funds from her grandfather's estate.
Philanthropy News Digest spoke recently with Lorenz about the difference between "good" and "responsible" donors, the foundation's strategic planning process, and its efforts to support sustainable land-use practices in Texas and the Southwest.
Philanthropy News Digest: You've carved out an interesting career in the social sector. Are you at all surprised to find yourself leading your late grandfather's foundation?
Katherine Lorenz: Yes and no. I never really envisioned that I would work on the grantmaking side. Working in the field, in rural communities in Latin America, was my first professional love. I really enjoyed the work I did with a group called Amigos de las Americas and then in founding Puente a la Salud Comunitaria and leading that organization for six years in Oaxaca, Mexico. I really believed that was my passion and that I would always stay connected to the grantseeking, implementation side. A few people asked if I saw myself going on to work in the foundation at some point; my answer was always no.
But several things happened: the primary one was that I went through the Philanthropy Workshop and had an "a-ha" moment, thinking about where can I have the most impact with my time and the work I do. It became clear while I was working on the grantseeking side how good donors who are well-informed can have a much bigger impact than people who are just writing checks. There's nothing wrong with providing funding, but I learned to recognize how great it was to work with good donors and how difficult it was to work with not-as-good donors, which helped me recognize the power of being a really smart, thoughtful, informed donor.
PND: How would you distinguish a good donor from a bad donor?
KL: I hate to use the term "bad donor" because I think all donors are really driven to have an impact, and for the most part they're not doing harm. There are some cases where, completely inadvertently, good intentions lead to significant problems. Something that might seem like a simple solution could have much larger — and negative — implications. For example, disaster relief that ends up destroying local markets. Then there are donors who are difficult to work with.
I think a lot of donors feel that, to be a "responsible" donor, they need to be strict with their grantees, making sure that only a certain amount goes to overhead. Or maybe they won't fund administrative costs or salaries and will only fund direct program costs, or require some additional type of reporting that's unique to them to make sure they're getting the impact they want to see. What I've found is that by trying to be a responsible donor, you can sometimes make it more difficult for the organization receiving the grant. I told one donor that we would rather not take their money than have to do what they were asking, because what they were asking would cost more than what they were willing to give us.
One of my pet peeves is the overhead conversation. When I was applying for and receiving grants, I felt it was very clear to me, as the organization's executive director, where we needed support and where we didn't. We did everything on a shoestring. We couldn't have a computer for all our employees, or our computers were so old they didn't work, or we couldn't pay to have the right software to run the accounting systems we needed. Even office space or an additional car — really basic things — all count as overhead. But none of it was wasteful, it was necessary. We couldn't do our work in the field without those things.
One area I felt was particularly important that no one wanted to fund was strategic planning. To achieve the most impact it can, an organization needs a strategic plan. But that's investing in the institution and overhead, which many of our donors were not interested in funding. So, when a donor would come to me and ask, "What do you want to do that no one will fund?" — which wasn't often — that was incredibly helpful. Whereas, a different donor might say, "In addition to tracking that annually, we want you to track this other thing over here every six months, and money should only go to programs." Both would think they were doing a good job, but the difference in dealing with those types of donors, in terms of pursuing our mission, was night and day.