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Event: 'Disrupting Philanthropy: Changing the Rules'

May 17, 2010

(Emily Robbins is the managing editor of Philanthropy News Digest. This is her first post for PhilanTopic.)

Chess_pieces Nothing, not even rain and rush-hour crowds, could dampen the enthusiasm of the capacity crowd that turned out Thursday evening for the "Disrupting Philanthropy" panel discussion hosted by the Council of the Americas and the Stanford Alumni Association at the council's Park Avenue headquarters.

It hardly seemed possible that a year had passed since I'd been in the same room to hear Hewlett Foundation president Paul Brest, Rockefeller Philanthropy Advisors CEO Melissa Berman, and Stanford professors Debra Myerson and Rob Reich discuss the potential and pitfalls of strategic philanthropy. That night, with the U.S. economy in freefall, it was impossible to ignore the tension and anxiety in the room.

This year's event, in contrast, was marked by a palpable sense of excitement and possibilities, on both sides of the funder/grantee divide. Indeed, at times it felt as if we had all arrived at a transformative movement together. The panelists -- Council on Foundations president Steve Gunderson, Independent Sector president/CEO Diana Aviv, consultant Lucy Bernholz, and Stanford's Reich -- seemed to agree that the philanthropic sector had reached an inflection point, and that while the forces shaping its future were still diffuse, they were beginning to come into focus. The spirit of the evening was captured best when Gunderson asked: "Are we really disrupting philanthropy, or are we just modernizing it? Is the main role of philanthropy to provide funds? What if, instead, we provided leadership for social change? What if we acted more as partners and provocateurs?" Scary? A little. But also inspiring.

Reich likened the changes roiling society to nothing less than a rewriting of the social contract, with the traditional roles of the public, private, and nonprofit sectors suddenly open to reinterpretation. He noted that philanthropy is changing much more quickly than the public-sector regulations to which it is subject and argued that as business discipline and techniques increasingly are applied to social benefit work, nonprofit practitioners need to make sure the sector doesn't sacrifice its soul in the pursuit of greater impact and efficiency. He also urged those in attendance to remember that the vibrancy of the sector is dependent on its freedom to innovate and that foundations and nonprofits should not be afraid to embrace the "permission" they are given to do that as a result of rapid and disruptive changes in society.

Bernholz, the founder of consulting firm Blueprint Research & Design and the brains behind the influential Philanthropy 2173 blog, was fired up by the idea that the traditional role of 501(c)(3) nonprofits was being challenged by the emergence of entities with a "triple bottom line" -- e.g., low-profit limited liability companies, otherwise known as LC3s, and so-called beneficial corporations, aka "B corps," which recently were recognized as legal entities by the state of Maryland. She noted that Americans need to develop a better understanding of the laws, here and abroad, that shape and determine global philanthropic giving. And she suggested that while nonprofits' use of social media is advancing by leaps and bounds, as evidenced most recently by the success of various mobile text campaigns for Haiti earthquake relief, we are still in the early stages of understanding the multiple possibilities for these tools in terms of how they can help us better organize and finance our social change efforts.

Aviv pointed out that the evening's conversation was not one you were likely to hear in the hallways of large grantmaking organizations even though it was "exactly the kind of cutting-edge discussion we need to have." She asked those in attendance to imagine the good foundations could do if they looked beyond the 5 percent they are legally mandated to pay out and found ways to harness the other 95 percent in the service of social change. And she noted that the new paradigm of interconnected global markets -- for capital, labor, information -- means that, now more than ever, the philanthropic sector needs leaders who favor change over the status quo and are committed to innovation and taking risks.

As to what kinds of organizations will thrive in this new environment, Aviv answered by paraphrasing Einstein: "We cannot solve our problems with the same thinking we used to create them." Between the opportunities created by the sector's adoption of social media and the possibility of new policy decisions with the potential to affect the availability of resources on which the sector has long relied, philanthropy finds itself at a critical crossroads. "A good chess player thinks a couple of moves ahead," Aviv reminded the crowd. "The great ones think ten, twenty moves ahead."

The overarching message was clear: If philanthropy is indeed like chess, you might want to pull up a seat. The next few years are likely to be characterized by lots of unexpected moves.

-- Emily Robbins

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