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Jan 31, 2014

Kahane on role of foundations in fostering nonprofits

The Social Impact Exchange recently released two essays on social enterprise.  The essay that captured my attention was by Michele Kahane at the Milano School of International Affairs, Management, and Urban Policy.  Her theme was that the resources available to foundations are a drop in the bucket compared with the resources that can be provided by government and business.  She suggests, therefore, that the role that foundations can best play is to leverage the resources they have to support innovation in addressing societal problems.  She describes many initiatives across the globe but I found most useful her five lessons that have been learned about how foundations can best foster collaborative innovation to solve significant problems.

I welcome such introspection about the most effective roles for foundations and philanthropists.  In the introduction to Chapter VI in More Than Just Money I identified five questions that should be continuously posed:

  1.  Is a philanthropist a manager of community services or a writer of checks?
  2. Does the philanthropy support programs or does it support nonprofit organizations?
  3. Does a philanthropist trust that his gifts to nonprofit have value or does he need proof of that value?
  4. Is the philanthropist an investor who expects a return or does he give because it is the right thing to do?
  5. Is generosity achieved by planned giving? by endowment giving? by annual giving? by restricted giving?

The identity struggle represented by these questions creates tensions with the nonprofit
community that need to be acknowledged and openly discussed.

Here are Professor Kahane’s five lessons on how foundations can best support nonprofits (my emphasis added):

Invest in Collaboration
Collaboration requires more time and energy than acting alone, but can generate better outcomes. To do this well, funders must be willing to invest their dollars in the infrastructure and specific processes required to support effective collaboration.

Build an Organizational Culture Appropriate to the Task
To succeed, foundations are advised to break down their own institutional silos in which they typically operate, and become comfortable with risk and failure. This requires re-thinking how work is done within foundations, as well as how work is done externally with potential collaborators.

Reframe the Role of Foundation Staff
The term ‘grantmaker’ is antiquated. Foundation leaders and program officers do more than distribute grants. In fact, staff plays a crucial role as convenors, networkers, negotiators, program developers, interpreters/translators, talent scouts, designers, partnership brokers and influencers.

Find New Approaches to Measurement
Collaborative initiatives that are attacking complex problems need new approaches to measurement that are, as Irvine Foundation’s president Jim Canales suggests, “3-D rather than 1-D.” Philanthropy needs to care about impact, but it also needs to be more creative in understanding how change occurs, focusing on contribution rather than attribution.

Adopt a New Kind of Leadership Style
Collaborative innovation requires leaders who share credit and demonstrate strong listening skills, patience and humility. This type of leadership style is needed not just at the top of foundations but also among program staff.