Creative Innovation is Next

I was recently thinking about how funders invest to make their communities better. Often, foundations’ decisions are dictated by what is presented before them in terms of responsive grantmaking or by selective strategies that proactively affect an issue. Both of these methods have value and, in most instances, benefit the community. 
 
But as we look to the future in philanthropy, we must really begin to ask ourselves the question about what is next? Or what should we be looking to accomplish beyond the normal systems in which we operate?
 
I recently watched a program where Jeff Bezos, president and chief executive officer of Amazon, was interviewed about the Kindle which is the latest version of a device that serves as a method to read books. You can download books in no time, it has a 30 hour battery, you can easily read a book using the device and it is relatively small, and all this for only $139. 
 
In the interview, Bezos was asked about philanthropy. I thought his philosophy was interesting.  He believes that in some cases, for profit models can improve the world more effectively than philanthropic models.  They should want to invest in places where there are clear market failures. The example he used was vaccines. “Well, vaccines need to be refrigerated. In poor places, there is no refrigeration and there is no electricity for refrigeration. Shouldn’t philanthropy be looking, through research and development, for ways to develop vaccines that don’t need refrigeration or battery powered refrigerators?”
 
This is an interesting take. I guess there is no incentive for big pharmaceutical companies to develop these types of vaccines because the money flows through developed countries that have electricity. But the whole discussion peaked my interest. I think the whole field of philanthropy should be much more creative and much more forward thinking. We have to find and invest in new and innovative ways of helping the poor and disadvantaged. The old model does some good, but it is not enough good. 
 
Foundations must do a better job of thinking and problem solving at a different level. We cannot wait for government or private industry to be the innovators, particularly when it comes to the underserved. As times continue to be difficult and individuals and families struggle now more than ever, we must become our very own think tank.  If we don’t take the time and give the energy to developing new ideas and methods for our work then it is simply not going to happen.
So, to me, the next phase of philanthropy should be about creative innovation and, yes, we need to be willing to help pay for it too.

Tom Keith is the president of the Sisters of Charity Foundation of South Carolina

What Are We Thinking?

I was reminded recently of the “fine line” that we walk in philanthropy as it pertains to expectations of grantees. Also, we sometimes send mixed messages to those seeking funds. Let me explain. Two questions that most funders ask potential grantees are “what is your sustainability plan?” and “how do you intend to fund this project/program beyond this grant?” In isolation, these questions are relevant and fair. Foundation’s don’t want to fund something that is going to have a short life span and they don’t want to be “on the hook” for a long-term financial commitment to organizations they fund, thus the significance of these questions.

But what are the results in the relationship between grantee and funder if the grantee does or does not reach sustainability as the funder expects? Good question. Does the funder let the program die because they are unwilling to put up additional funding to get a program to sustainability even if it takes longer than expected? Another good question: do they walk away from a grantee that is a high achiever, reaches success with the grant funds and is sustained, but needs additional funding to take the program further?
Here is what I think? Funders, in large part, are fundamentally unrealistic about their expectations around sustainability. That is not to say that the questions should not be asked, but the reality is that nine times out of ten an organization is not going to be able to answer that question with certainty that they will or will not be able to sustain themselves following the grant award period. There are just too many variables that make the answers to the questions unachievable unless there is a funding stream that is ongoing, which is not the case for most nonprofits. Individual and corporate donors come and go, grant funding has a short life, special events take time and energy and wills and bequests happen infrequently.

Yes, foundations must be good stewards of their resources and they must operate within certain guidelines to be fair and accountable. But arbitrary time limits for grant funding and high expectations for sustainability is not helping, but rather hurting the very nonprofits that funders intend to help. So, if funders truly want to get the biggest bang for their buck then they need to consider some flexibility in decision-making and more realistic expectations around results, particularly as it applies to sustainability. During this economy, more nonprofits are fighting to survive than ever before. We, in the foundation business are investors; investors during good times and bad times. If we want a realistic return on that investment then we need to employ some alternative investment strategies. These include: a longer commitment for funding, more flexibility for those who can’t promise sustainability and let’s not punish those who have sustained themselves either.

The goal for nonprofits is to succeed with their mission and survive this difficult economy. We, in philanthropy, should not be obstacles toward achieving those goals but a catalyst for reaching those goals. This starts with a little self reflection about our processes and procedures, expectations and, yes, the questions we ask. If we can do that, then more realistic outcomes can be attained and our relationship with grantees will be stronger because they will know that we understand them better.


Tom Keith is the president of the Sisters of Charity Foundation of South Carolina