Future of Philanthropy Pt. 1: The Donor

by Adam Sobsey

Note: This is the first installment in an ongoing series.

In a recent Worth article, Vanessa Kirsch, the founder and co-CEO of New Profit, a venture philanthropy organization that backs breakthrough social entrepreneurs who are advancing equity and opportunity in America, declared this “a pivotal moment for philanthropy.” She’s not alone in recognizing the moment’s importance. In an August 2020 Forbes article, Hugh Evans, cofounder of Global Citizen, an international advocacy organization committed to ending extreme poverty, predicted “a major shift in philanthropic giving, where billionaires shift their priorities to impact lives now, not 30 years down the road.”

The shift was catalyzed by the pandemic, but it was underway and apparent before that. A mere two months ahead of coronavirus landing in America, the esteemed philanthropy analyst David Callahan even foresaw the actual events that would catalyze the change: “My prediction is that something really bad is going to happen in the 2020s — something like a paralyzing cyber attack, a devastating hurricane that takes out a major U.S. city, a constitutional crisis that ruptures the union, or a global pandemic.” (italics added) All Callahan missed was that two of these events occurred: the first, the pandemic, triggered the second: the sociopolitical upheaval which boiled into a national fury that resulted in the mob assault on the US Capitol — in a union that was, sadly, already ruptured.

We respond to what’s in the spotlight, whether it’s a health crisis or a presidential election. In the world of philanthropy, the 2021 spotlight was on MacKenzie Scott’s high-profile showering of money on non-profits. She’s given away nearly billions of dollars in less than two years. The attention arose, ironically, partly because Scott has been at pains not to attract it. She has not established a foundation and does not accept applications for support. Instead, she and a team of advisors and consultants simply and quietly give money to handpicked grantees. 

More unusual still, and truly worthy of attention, is what she asks of them: nothing. The funds are totally unrestricted.

This pivotal moment, then, isn’t only about approach. It’s also about character — which is to say, values — and character, as the saying goes, is what you are in the dark.

New Profit’s Kirsch told Worth that Scott’s deviations from standard giving practices reflected two essential philanthropic mindsets: trust and humility. Philanthropy’s pivotal moment, then, isn’t only about approach. It’s also about character — which is to say, values — and character, as the saying goes, is what you are in the dark, when the spotlight is elsewhere.

That’s true for societies as well as for people. Look outside the spotlight, at what’s going on at a smaller scale, in smaller places. That’s where sustainable, replicable change is really happening. Not to downplay the impact of one ultra-rich person giving away billions of dollars (although MacKenzie Scott’s impact takes on a more bracing quality when it’s measured alongside her simple but trenchant observation: “It would be better if disproportionate wealth were not concentrated in a small number of hands”). But in the world of philanthropy, it’s perhaps more instructive to observe how regional foundations, operating well out of the philanthropic spotlight, have been changing. Their adaptations demonstrate a necessary reconsideration — and perhaps, their own redefinition — of that ascendant philanthropic buzzword, “proximity.”

Their adaptations demonstrate a necessary reconsideration — and perhaps, their own redefinition — of that ascendant philanthropic buzzword, "proximity."

A good example is the Peter & Elizabeth Tower Foundation. Based in Buffalo, New York, the foundation was established in 1990 to fund four key areas, all with a focus on the needs of younger people: intellectual disabilities, learning disabilities, mental health issues, and substance use disorders. In interviews with Adapt, Cynthia Doyle, daughter of the Tower Foundation’s founder; her husband Robert Doyle (who are two the foundation’s 10 trustees); and the foundation’s Executive Director, Tracy Sawicki, traced the foundation’s recent evolution. This evolution began before the pandemic and sprang from the recognition that, as Cynthia Doyle says, “there’s a difference between intention and impact.”

For years, the Tower Foundation had done Requests For Proposals (RFPs), “because this was the state of the art; this is what academia was telling us,” Robert Doyle told Adapt. The other state of the art was (and still is) so-called “evidence-based” practices. Numerous problems arose from these approaches. One was that organizations would create proposals merely to fit the RFPs’ funding priorities, even if the proposals were for projects the organizations might otherwise not have undertaken. Getting funded was often a case of the cart being put before the horse. And that resulted in a related problem: potential grantees straying from their missions, and sometimes straining their staff and operating budgets.

There’s a difference between intention and impact.

Grant-makers encountered subtle but pernicious problems of their own, both related to impact. One was that the narrow scope of the RFPs — and their inbuilt, sometimes prescriptive reporting requirements — elicited proposals that were almost sure to yield precisely the results the RFP’s implicitly demanded: “We were guaranteeing ourselves an A-plus,” Cynthia Doyle says. Another was that “we learned quickly that a lot of [academia’s] studies were in laboratories, not in the field,” Robert says. And in the field, too few of the people the foundation was created to serve were actually being reached. Some were experiencing poverty that kept them invisible to the help intended for them. Language, transportation, and other systemic barriers excluded others.

The intention to help was genuine. But the impact wasn’t entirely authentic. 

The Tower Foundation took two steps. The first was an experiment. They chose a number of grant proposals they liked, funded them   “and then we didn’t check on them,” Sawicki, the foundation’s Executive Director, says. There were no reporting requirements at all. As part of the experiment, the foundation later chose at random a few of its grantees to audit and discovered that every one of them had spent the money on exactly what they proposed. In fact, they did more than they’d promised, perhaps partly because they weren’t worried about the grantor looking over their shoulder.

The foundation was so encouraged by the results that they set up a pilot project: They gave two-year, unrestricted general operating grants to four applicant organizations. A year into the pilot, COVID-19 broke out, the foundation adjusted again: they told all of their grantees to use the support they’d received from the Tower Foundation for whatever they needed. “The programs we supported got put on hold,” Sawicki says, “but those programs were never going to keep happening unless we supported the core.”

Meanwhile, racial violence and resulting social justice activism arose in the fever of the pandemic. That set the foundation down a new intentional path. They began, Robert says, by “reeducating ourselves on American history and doing a lot of DEI work.”

"We did a scan of the organizations that we had been funding. There wasn't one who had an Executive Director who was of color. And when we looked at the population of people that were served, it nowhere matched the numbers of people suffering from those conditions. It was a real eye-opener.”

Cynthia Doyle

The work included ”doing a scan of the organizations that we had been funding,” Cynthia elaborates. “There wasn’t one who had an Executive Director who was a person of color. And when we looked at the population of people that were served, it nowhere matched the numbers of people suffering from those conditions. It was a real eye-opener.”

As the foundation began to lift restrictions on its grants, the board also introduced a new requirement: “We quickly incorporated DEI as one of the criteria we measure grants for now,” Robert says. And to ensure that this change wasn’t “a one-off, ‘DEI-and-done,’” as he puts it, the foundation moved beyond the strict priorities of its four original funding categories. They understood that these categories couldn’t be funded in a vacuum. 

“It’s been a major evolution for us,” Cynthia says, “to get more systemic.” And that has meant changing the foundation’s own systems. The Tower Foundation took the following steps:

  1. Formally redirected all of its grants to general operating expenses. This allows ongoing grantees the freedom to use the money to get at underlying systemic issues; it also potentially broadens the foundation’s focus areas, allowing for support of new grantees whose work might be systemically rather than explicitly tied to the foundation’s core funding mandates.

  2. Instituted a DEI work group that includes staff and trustees.

  3. Began efforts to diversify its Board of Trustees.

  4. Initiated a plan to give its advisory board more power. The advisory board is “a group of young people who have lived experience and expertise in our areas of interest,” Sawicki explains, “who were recommended to us by agencies that are working in the field.” The foundation will give the advisory board its own pool of money and authorize the board to grant it to any organization it sees fit, without approval from above.

The Doyles are quick to say that these are first steps and efforts. They aren’t meant to be comprehensive or all-solving, and they’ll require constant vigilance and refinement as change keeps happening. “We’re grappling with how to pivot,” Cindy says, candidly and hopefully, “noodling around with the whole range of ways of changing our grantmaking: not everything one way, but a menu of different ways of giving money.”

There’s that humility Vanessa Kirsch pointed to. It’s rare to find it among philanthropists. For the Tower Foundation, it’s accompanied by plenty of internal questioning of both their own practices and the practices of philanthropy generally. Executive Director Sawicki, who had decades of career experience in nonprofits before coming to the Tower Foundation, puts a fine point on it: “We don’t know anything in philanthropy.”

One thing she does know is this: “It really is key being proximate.” The Tower Foundation’s initiatives put its money where its mouth is, getting well beyond the heavily encoded buzzword that “proximate” has become. It was coined by the public interest lawyer Bryan Stevenson, founder of the Equal Justice Initiative and the author of Just Mercy (on which the 2019 movie is based). Stevenson’s conception of proximity is rooted in protecting and advocating for society’s most vulnerable and oppressed people. But over time, the meaning of the term has grown at once narrow and vague, with the nonprofit and philanthropic sectors’ sometimes dubious borrowings of the word often diverting or diluting its power. When we remember the intent of proximity in philanthropy — to send support as directly as possible to those in need and to the people who attend to those needs — the concept serves us well. 

Over time, the meaning of “proximity” has grown at once narrow and vague, with the nonprofit and philanthropic sectors’ sometimes dubious borrowings of the word often diverting or diluting its power. When we remember the intent of proximity in philanthropy — to send support as directly as possible to those in need and to the people who attend to those needs — the concept serves us well.

The Tower Foundation understands that and recharges proximity with authentic meaning, in multiple definitions. The first has to do with literal spatial proximity. General operating support, rather than program and project-based funding, enables grantees to take care of the physical environments where they work. As Sawicki puts it, in the old model, applicants were “constantly working on proposals that were about new projects, or expanding a project, because everybody’s into scale” — not only another buzzword, but scaling is actually an inappropriate aspiration for many nonprofits and their funders. “Meanwhile, the sidewalks outside were so bad that when a client came in, they were at risk of a trip and a fall.”

Foundations want innovation. If the core is completely starved, that’s not going to be possible. General operating support allows you to do things for your staff, which at the end of the day is what you need to do this work of innovation.

But supporting organizations at that basic level isn’t only about sidewalks. General operating and overhead support “feed the core,” Sawicki says; and the core of the core, so to speak, is a nonprofit’s staff. “Foundations want innovation. If the core is completely starved, that’s not going to be possible. General operating support allows you to do things for your staff, which at the end of the day is what you need to do this work of innovation.” 

Giving an advisory board the power to give their own grants is also a canny act of proximity. It puts money directly in the hands of people who know best where it should go, and lets them direct it there without an intermediate step. It’s also a daring act of trust.

Meanwhile, the Tower Foundation will continue to practice a form of proximity it was already engaged in before the pandemic arrived. “Our foundation is very much participatory,” Cindy says. “Our program officers come to the regions we serve, and they sit at a table in a coffee shop. People can come to the foundation with an idea, and if they don’t have a plan, they work with the foundation to develop a plan so that their great idea can be implemented and actualized.”

You hear so many philanthropists and investors say: ‘We want to see large-scale change; we want to move the needle.’ Well, move the needle on the issue in the entire community? Or move the needle and change the life of the person in front of you? Because that distinction is huge.

Finally, the relationship between proximity and impact — between the coffee shop and the final report — has to be understood differently. As Sawicki puts it: “You hear so many philanthropists and investors say, ‘We want to see large-scale change; we want to move the needle.’ Well, move the needle on the issue in the entire community? Or move the needle and change the life of the person in front of you? Because that distinction is huge.”

The distinction is mainly one of that most precious but unmeasurable resource: time. “There has to be an understanding of how long it takes to move at that higher population level,” Sawicki says. And with that understanding of time comes an enlightenment about money. “If we’re going to give $500,000 to an organization that is doing X, Y, and Z, and we have a relationship and we can talk about the things they’re doing, and they’re showing successful outcomes for actual people and families, that’s good. I’m not asking them for a blow-by-blow on how they use every dime. Sometimes it’s not going to go the way you think it’s going to go, but that’s life. If people want to fund for perfection, we all should just shut the door, because that’s not going to happen.”

Sometimes it's not going to go the way you think it's going to go, but that's life. If people want to fund for perfection, we all should just shut the door, because that's not going to happen.

Funding for something other than perfection allows for what Sawicki calls “some of the small experimentation” that leads to larger things: igniting creative thinking is one of them; perhaps another is an authentic realization of that other philanthropic impact-buzzword, “systems change.” 

“One path in philanthropy doesn’t work for everyone,” Sawicki says. And she walks that path back to both proximity and trust: “How does everything that happens nationally ultimately hit a context at home where people can talk to each other, look each other in the eyes and actually understand? Everything’s local.”

You may also like