Philanthropy and Complex Problems: Being Real, Stepping Into Leadership (4 Years Later)

More than four years ago, our Andy Carroll penned two blog posts on the role of funders in addressing complex problems. Struck by their relevance still today, we re-run them here for those who have joined our community since then. Read other posts in our series on philanthropic leadership >>

Original post
by Andy Carroll, Exponent Philanthropy, November 16, 2012

In the wake of the recent election campaign, I’ve been thinking about our country being divided, and things being “stuck.” We know that by collaborating we could accomplish big things, but we still don’t come together. Conflict, disagreement, and gridlock are common in our national discourse, at a community level, and also within organizations, friendships, and families.

Sometimes it seems like humanity, in the words of one popular songwriter, is a “bunch of whining, fighting shmoes.”

The important work of many small funders—to build opportunity, promote health, reduce hunger and suffering, and protect the environment—is often undercut or compromised by disagreements between competing factions. And divisiveness is only one among a set of complex problems that ensnarl their philanthropy and the nonprofits they support. Another complex problem is culture that is embedded and resistant to change.

I don’t think complex problems are acknowledged openly enough. Many funders who keep asking how they can have more impact eventually come up against challenges that are too big for them to solve alone.

For example, when funders talk about the following issues, they are talking about complex problems:

  • “We’re funding this very effective training program for people with prior drug problems and people who have been incarcerated. The program faces major government funding cuts, which will only increase recidivism and burden our society with even greater costs.”
  • “We’re funding the training of elementary teachers in this creative, highly effective teaching technique. But we realized the teachers’ class sizes are huge. They’re too overwhelmed to consider the new approach.”
  • “The insurance companies in our state won’t pay for a certain intervention, which we know is proven and effective. We can’t get traction.”

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Trust Is Essential to Changemaking; Funders Must Take the First Step

By Andy Carroll, Exponent Philanthropy, and Colleen O’Keefe, Sauer Family Foundation

In any group or in any relationship, trust is the feeling that allows people to work toward common purpose. Trust comes from a sense of common values and beliefs. But more than that, trust allows us to be ourselves, to be creative, use our talents and skills, and take risks. Where there is trust, we feel empowered to try new things, and take advantage of opportunities.

Where there is trust, we feel safe enough to be vulnerable. This is really powerful. It means we can share challenges and problems, offer new ideas, and provide honest feedback. By being able to be honest and open, we make it more possible for problems to be addressed, and good ideas to be considered and put into action.

For all its power, trust is often elusive, difficult to build or keep.

What Creates Trust?

The foundations of trust have to do with a feeling of safety. And at organizations, a feeling of safety comes from the leaders, the people who have formal authority and power. The management expert and thought leader Simon Sinek explains (TED Radio Hour on NPR, originally broadcast May 15, 2015):

The sense of feeling safe comes first. So when we feel safe, trust will emerge. This is what the foundations of leadership really are. The reason we call someone leader, is because they choose to go first. They choose to extend trust first, even before maybe any signs have been offered that they should.

It is the willingness to express empathy before anyone else. When we assess that someone would do that, and we see that they have that integrity, and they would willingly sacrifice their interests for our lives, we cannot help ourselves. The natural human response is trust.

As human beings, if those especially in leadership positions express empathy for our well being, we reward them with our trust, and our loyalty, our love, to see that their vision and the company is advanced.

We forget that these very human things require us to sacrifice. And it can come in any form, you know, time or energy. But I think the foundation of trust really is the willingness to sacrifice for another.

Opening Up Authentic Conversations With Grantees

The lack of trust between funder and grantee remains one of the biggest barriers to impact in philanthropy. Without open, honest conversations, funders can’t learn what nonprofits really need to deliver outcomes desired by funders, grantees, and most of all—people and communities in need.

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Curiosity as Catalyst for Personal Renewal, Community Transformation

By Andy Carroll, Exponent Philanthropy

At some point in our life and work, we ask ourselves,

Is there more to know?
Is there more to experience?
Is there more impact or change we can make?

It’s not that we’re ungrateful for what we have. It’s that we get restless, frustrated, fatigued. We heard somewhere that philanthropy was about taking risks, empowering people who have great ideas, catalyzing change.

Instead, our days and weeks are filled with an endless cycle of elaborate funding processes. Our well-intended efforts to steward resources responsibly and minimize risk accumulate over the years. Applications, reports, and evaluations bury us. Preparing for foundation board meetings devours weeks. Gradually the paper and process takes over, crowding out people, relationships, and time to learn, reflect, and evolve. We lose track of philanthropy’s purpose and soul.

Fatigue also comes from not seeing or feeling impact. Problems and issues persist over years and decades, and sometimes only get worse, in spite of continual funding and attention.

We wonder, Is there more to philanthropy than this? Is there another way?

The next time you ask, hold onto that question and don’t let it slip away. Take it seriously, embrace it, hold it close. Then—act on it. 

Here is one path.

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[The Pulse] Philanthropy Leaders Call on American Public to Step Up to Nation’s Challenges

By Andy Carroll, Exponent Philanthropy

The Pulse
In our regular “Pulse” blog series, I explore trends influencing philanthropy by spotlighting articles, reports, and essays in the media. I cast a wide net, venturing beyond philanthropy and traditional topics to consider a variety of ideas, innovations, debates, and critiques. Read previous posts in the series   

It takes courage to attempt the near-impossible, to take on monumental challenges with only modest resources. This is the task the nonprofit sector has set for itself the past 40-plus years. Nonprofits, their funders, and the associations that serve them have struggled against poverty, hardship, and environmental degradation; achieved successes; and continually developed the rigor of their fight.

Yet it takes another kind of courage to assess, with a sober eye and honest heart, the progress made, and recognize publicly that the nonprofit sector alone cannot meet the deepening challenges. It takes courage to admit that philanthropy needs partners, a more collective effort, and a greater shared responsibility for the most vulnerable in our country.

Nell Edgington, Tom Watson, Darren Walker, and Jake Hayman are among the growing number of courageous writers and thought leaders who are questioning out loud whether philanthropy alone can solve our deepening problems. I highlighted their voices in my June 7 blog, “Hardship, Inequality, and Racial Divides Create a Reckoning for Philanthropy.”

Let’s take a deeper look at why philanthropy can’t do it alone.

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[The Pulse] Hardship, Inequality, and Racial Divides Create a Reckoning for Philanthropy

By Andy Carroll, Exponent Philanthropy

The PulseIn our regular “Pulse” blog series, I explore trends influencing philanthropy by spotlighting articles, reports, and essays in the media. I cast a wide net, venturing beyond philanthropy and traditional topics to consider a variety of ideas, innovations, debates, and critiques. Read previous posts in the series  

The model that private foundations and donors have relied on for decades to make positive impact on the world is being questioned. Economic hardship, inequality, racial discrimination, lack of social mobility, and environmental degradation are only increasing in depth and scope. And there is growing recognition that human and environmental needs that go unmet today will incur greater costs in the future. 

The scope and urgency of the challenges is causing frustration, re-assessment, and soul-searching. More foundations and donors are asking themselves not only how they can alleviate problems, but how to solve them once and for all. Can funders reduce the need for philanthropy in the first place?

Many of the nation’s 1.5 million nonprofit organizations struggle constantly, lack internal capacity, and cannot sustain their critical work. Even if foundations and donors provided more funding for general operations and capacity building, can private philanthropy solve nonprofits’ financial struggles when national and state legislators continue to cut government funding—a much larger share of nonprofits’ income? Should funders be more concerned about the decline of public funding over the past decades, since the cuts undermine the effectiveness of their grantees? 

(Among current stress points are budget battles in Pennsylvania, Illinois, and other states, which delay funding to nonprofits that provide critical services. In Pennsylvania recently, more than 17,000 people received no or reduced services due to the budget impasse.)

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Are You Using Your Power, or Leaving It on the Table?

By Andy Carroll, Exponent Philanthropy

Acknowledging and talking about power is taboo. We’re uncomfortable with the fact that some wield greater strength and influence, and feel no shame about using it to hold sway over others. In spite of our laws and regulations, our checks and balances, our moral and social norms nurturing restraint and respect, people use power to bend rules, exclude and disenfranchise, distort facts and disseminate misinformation, manufacture fear, and secure preferential treatment.

Disillusioned, some of us retreat into silence, and lose sight of our own agency and power. But what if more funders intentionally use their power for good?

In my work helping small-staffed foundations and donors step into leadership roles, I have learned that the most dynamic, effective funders use their power judiciously—but boldly. In a paradoxical way, the source of their power is passion, curiosity, and humility. First and foremost, these funders are great listeners. They don’t begin by thinking they know the answers; they venture out to ask questions. They realize that as funders they have unique perspective, unique access to experts, and unique abilities to soak up knowledge. They venture deeper into their issues, until they figure out things no one else has really understood, and discern how to make change.

The journey takes them far beyond making grants, to convene, mobilize, commission research, raise public awareness, advocate, and put pressure on stakeholders to stay on course. They become activists, brokers, and catalysts.

What does power look like in action?

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Peer Coaching: The Gift of Deep Listening

By Andy Carroll, Exponent Philanthropy

“With capable coaches at their side, nonprofit leaders can learn more about themselves, about their organizations, and about how to manage people and conflicts, how to delegate responsibility for day-to-day tasks, and more. No other intervention can teach these things better than effective coaching, and we hope that grantmakers, both individually and as a field, will work hard to advance the application and practice of coaching in the years ahead.” —Coaching and Philanthropy: An Action Guide for Grantmakers

Peer coaching is the practice of listening and asking good questions to help an individual uncover, discover, or develop something important to their learning or growth. Unlike professional coaching, peer coaching is done by colleagues in the same organization or field who take turns coaching each other, usually in pairs or groups of three or four.

“Peer coaching is giving someone the gift of your presence,” says Robin Gallant, executive director of Gallant Family Foundation, “which allows someone to give presence to themselves. Once they achieve quiet within themselves, a whole world of solutions can emerge.”

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[The Pulse] Social Change Drivers & Difficulties

The PulseBy Andy Carroll, Exponent Philanthropy

In our regular “Pulse” blog series, I explore trends influencing philanthropy by spotlighting articles, reports, and essays in the media. I cast a wide net, venturing beyond philanthropy and traditional topics to consider a variety of ideas, innovations, debates, and critiques. Read previous posts in the series   

It’s Not Foundation Money but Culture and Talent That Can Change the World 

In a study exploring why some social-change efforts achieve transformational results while others do not, Community Wealth Partners found that a strong internal culture plays an essential role in the ability of nonprofit organizations and foundations to achieve change on important issues. A strong organizational culture is one where rules for acceptable and unacceptable behavior are clear and regularly communicated, expectations for how people are managed and treated are well defined, and where individuals’ learning, growth, participation, and dignity are valued.

For decades, academics and leaders in the business world have understood that an organization’s strong culture contributes to its productivity, ability to attract and retain talent, and its bottom line. Now, culture is seen as linked to social change outcomes:

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[The Pulse] Surprising Facts About the Nonprofit Sector, Preview of 2016 Policy Issues

By Andy Carroll, Exponent Philanthropy

The PulseI regularly explore trends influencing philanthropy by spotlighting articles, reports, and essays in the media. I cast a wide net, venturing beyond philanthropy and traditional topics to consider a variety of ideas, innovations, debates, and critiques. Read previous posts in the series  

Surprising Facts About the Nonprofit Sector

Urban Institute conducts research each year on public charities, giving, and volunteering. The following highlights from Bloomerang are from the 2015 issue of Urban Institute’s “Nonprofit Sector in Brief” series.

  • Only 35% of registered nonprofits file Forms 990, 990-EZ or Form 990-PF with the IRS. This leaves a vast number of nonprofits and their contributions to our society unnoticed. Although they are the smallest of the registered nonprofits, their impact can be felt, and they are the future high-growth nonprofits of the future.
  • Only 5.3% of public charities are $10 million or more in size. 
  • Nearly 50% of charities’ total revenue comes via fees for services and goods; charitable giving accounts for 13%. These fees include ticket sales, tuition, hospital fees, membership fees, and product sales. The second largest group is government funding (35%). 

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Nurturing a Culture of Curiosity, Inquiry, and Innovation

By Andy Carroll, Exponent Philanthropy

As funders seek to leverage their resources for impact and change, many ignore a powerful asset right under their gaze. This hidden asset is the donor, board member, family member, or staff person who possesses curiosity—the drive to venture out into the community or field to listen, talk with people, and learn.

From interviews with over a hundred small-staffed funders around the country, I have learned that these inquisitive people are the ones who discover insights that take their foundation or philanthropy in a new direction, to a new level of impact. They are the ones who, by talking with people from diverse walks of life, convening grantees and community agencies, attending public meetings, or going to conferences, find out something that changes the game for their philanthropy. 

These individuals take the initiative to reach out and talk with board and staff of nonprofit organizations, other foundations in their region or field, beneficiaries of social services, university researchers, business leaders, government officials, social workers, journalists, teachers, parents, students, volunteers.

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