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| Visions & Revisions |
The Business of Philanthropy
Douglas McWhirter
09/01/2004
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Foundations and other private grant-making organizations can partner
successfully with government to bring about social change.
You can partner successfully with government to do things it does not have
the funds for or, more importantly, it does not have the entrepreneurial energy
to make happen. If government is doing things well, we ask, “What contribution
can we make?” On the other hand, if we think there are things it is not doing,
or if there are things it can do to become more efficient, we want to be a
partner in helping it get there. For example, one of the many things sorely
lacking today in education is usable information. Everyone has opinions in
education, and there is massive data on numerous topics, but parents and policy
makers do not know how to use it, or even access it. To help solve this problem,
we created a partnership with the U.S. Department of Education to create a
website to make this information available to all.
In partnering with
government agencies, the first thing we want to know is why they cannot get
public money. Our job is not to be a substitute for public money. Rather it is
to be there before public money can get into the equation, or to fill voids
where public money is just not available.
Donors must strike a balance with grantees between oversight and
partnership.
It varies. If it is something you believe in and it has a good plan, you
invest the money and oversight is enough. I would actually prefer to find the
change agent, make the investment, have oversight and measure results—that is
easy. Partnerships are more demanding of our time and energy. I would rather do
things where we did not have to stay involved, but if no one else is going to do
it, we will step up to the plate.
Philanthropy, like business, always involves risk.
Absolutely. We are risk takers. We are not sitting there like people in
government or grant officers at the grand old foundations who are worried about
making a mistake. Some of the grants you give, you are going to be very unhappy
with: People are going to dip their hand into the till or they are not going to
succeed. Do not make a cause célèbre about it. One of the reasons government
cannot seem to address many of the challenges our country faces today is because
some people working in government do not want to read about problems in the
paper, so they will not take risks. I do not worry about that because I do not
have to worry about getting fired.
In applying business principles and goals to philanthropy and to the
nonprofit sector, The Broad Foundations have succeeded where others have
failed.
There is no magic formula for success. You just set the goals, develop a
measurement system and hold people accountable. Consider it a portfolio of
venture capital. Let us say you invest in 20 companies. I will guarantee you
that any venture capitalist who says all 20 will succeed is lying to you. Some
will succeed and some will not. You keep monitoring them. You give more
resources to those that are making progress, and write off those that are not
getting anywhere. You have to do the same thing in philanthropy.
Also, you
have to actively seek out causes to support. You can sit around and wait for
requests to come in and decide once a year which to give money to. We do not do
that. Our people are out on the road visiting school districts, seeing where
change is taking place; they are trying to find leaders and change agents who
can make a difference.
“Social entrepreneurship” is a full-time career.
Well, for me it is. It is very demanding and the schedules are crazy.
Sometimes I think I am doing more than I should be doing. These are longer days
than I ever had as a CEO of a Fortune 500 company. You have to go out looking
for ideas to support and organizations and causes to back. Everyone will want
your money, but you should not just sit around waiting for people to come to
you. We fund 10 percent of the requests we get, but more often than not, we do
not have a request [for the causes] we support—we find them. We go out there
looking for something to do, and it is hard work. It is not something that a lot
of others are going to want to do, especially in retirement. Many people have
made a lot of money and say, “I want to do right, but I want to go to Hawaii and
sit on my yacht.” They do not want to spend the time or energy. Philanthropy is
an activity that, to do right, consumes a lot of both time and energy.
Photograph by Gary Moss.
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