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Building a Philanthropic Ecosystem

February 09, 2012

(Michael Edwards is a leading expert on global civil society and the author of Small Change: Why Business Won't Save the World. This is the final installment in a series of four posts in which he looks at different aspects of the Bellagio Initiative, an effort funded by the Rockefeller Foundation to produce a new framework for philanthropic and international development collaboration in pursuit of human well-being. Click here for the first post, here for the second, and here for the third. To read/download the Bellagio paper on which these posts are based --and from which the quotation below is taken -- click here.)

"Different approaches to philanthropy are no more in competition with each other than hammers and screwdrivers in a toolkit, though we still need to know when and how to use these tools to best effect...."

MikethirdsectorcroppedIf there is one lesson from the post-war development experience that outweighs all others it's probably this: One size does not fit all. It is, of course, an admonition to avoid seeing development as a singular process or to impose the same set of policy prescriptions across radically different contexts.

The reality is that different countries pursue different paths to development, though those paths may share some elements in common. Following this logic, one of those elements has been the belief that foreign aid works best when it supports different approaches and interventions appropriate to the circumstances. Some donors have been happy to support the problem-solving capacities of local institutions, while others have focused on achieving pre-determined outcomes in areas like public health, distributing retroviral drugs to those with HIV, for example, as well as developing national systems that can deal with different heath needs as they arise.

Some of these things pay off quite quickly, while others require a generation or more to make their presence felt. Some can be easily measured, while others are too complex to capture in a set of numbers. Some are amenable to technology and market forces, while others are embedded in politics and social struggle. All of them are valuable, however, and each requires a particular kind of financial support. It makes little sense to fund social movements with investments that demand short-term measurable returns, for example, or to finance social enterprises with revenue streams that are subject to bureaucratic decision-making instead of market mechanisms of accountability.

This may sound like an obvious conclusion, but in philanthropy a great deal of energy is expended in futile attempts to prove that one of these approaches is more effective and/or strategic than the rest. Hence, the "new" philanthropy is better than the "old"; markets are more efficient in allocating resources for social change than governments or civil society institutions; and grants are less effective than investments in promoting sustainable success. To which I say, "It depends."

No doubt some will continue the struggle to prove the supremacy of their favorite approaches. For the rest of us, there's a more constructive alternative, and that is to build an ecosystem of complementary funding styles matched to the needs and issues at hand. In such an approach, the priority is not to prove that you are the smartest person in the room, but to identify the gaps and disconnects in the system that need to be addressed. By fostering a learning community around the costs and benefits of different approaches, it should be possible to create a "social science of philanthropy" from which everyone can gain.

If we have learned anything from sixty years of development work, it is that human progress is a journey, not a destination. While we can and should help each other along the way, it is not "our" money or ideas or influence that really makes a difference. That's good news. None of us is in a position to control progress or mold it in our own image, so let's relax and enjoy the ride together. By all means we should strive to be as useful as we can to those at the sharp end of transformation. But in the hurly-burly of rapid change, we can't replace their energy or accountability for failure or success. As the experience of developing countries from Brazil to Vietnam shows, it is not the resources of outsiders that underpin success.

It would be the ultimate irony if the quest for greater effectiveness were to lead to less impact on the drivers of social change. But as philanthropy becomes more focused on its own importance as expressed through a narrow range of approaches and techniques, that possibility becomes more likely. As I hope I have shown in my posts here on PhilanTopic, there is much we can learn from the world of international development -- and plenty of things we should try to avoid. Many of the latter have been grounded in a sense of hubris and overreach by donors who think they "know best." Let's not repeat the same mistakes in philanthropy.

-- Michael Edwards

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Posted by Niki Jagpal  |   February 10, 2012 at 08:24 AM

Thank you for an insightful series of blog posts, Mike. I think you have rightly concluded that social change work in particular requires a significant degree of patience and, correspondingly, a different set of grantmaking principles and metrics. Social change work requires long term, flexible support and will often not show an immediate 'return on investment' as other types of grants might. It is much like the journey of human progress and takes patience and a willingness from both funder and grantee to take risks and stay in it for the long haul, knowing that the payoff could, in the end, be more than worth the wait.

Posted by Bradford Smith  |   February 10, 2012 at 03:51 PM

Mike's last caution is a sobering one indeed: that in their zeal to bring focus to their work, foundations could end up being criticized for the same kind of overreach that has created a negative image of the official development assistance industry. But there needs to be some middle ground between everyone trying to force the world to fit into individually-designed boxes and saying that everything is an unpredictable journey. Fortunately this middle ground is populated by good efforts like the "collective impact" work of Mark Kramer and his colleagues at FSG http://tinyurl.com/7he2f2j and those of Keystone http://www.keystoneaccountability.org/ To my mind, the most promising efforts wed the best of a previous generation of participatory processes with the more recent emphasis on metrics. There is no reason that meaningful measurements cannot be developed by processes that give stakeholders voice and try to account for even those variables that may be beyond our direct control.

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