The Future of Philanthropy

Nelson Mandela Theatre, Said Business School
Thursday 29th March 2007

• This workshop session focused on just how far “creative” philanthropy can go to support social innovation. Two of the panellists (Helmut Anheier and Lester Salamon) are the leading academics in a field that looks at the voluntary sector and civil society from the lens of social science. The other panellist, Mark Kramer, is the Managing Director of FSG Social Impact Advisors.

• Helmut Anheier, Director of the UCLA Centre for Civil Society, set out his arguments for a new approach to philanthropic engagement, which he calls Creative Philanthropy. He’s written a book of the same name, which argues that endowed foundations have a unique capability to spot innovative solutions to problems, to jump-start and help sustain the innovative process, and to help disseminate and implement the results of innovation. He believes that Foundations will become more relevant as they learn to act themselves as social entrepreneurs, as institution-builders, as risk absorbers and as mediators in different social fields.

“Foundations are neither poor imitations of government nor the chosen tools for quick fixes. They are something far more important: foundations are the potential powerhouses of creative thinking and working that society needs. We do not have a shortage or scarcity of resources in modern society. What we have is a weakness in creating innovation, and in seeing innovation through a process that leads to sustainable solutions. This is the area of creative philanthropy where foundations are needed most...” — Helmut Anheier

• Anheier remarked that one of the main characteristics of Creative Philanthropy is a change in the relationship between foundation programmes and grantees. There is not an emphasis on performance criteria and performance indicators and other elements of control. There isn’t the requirement for grantees to fill in long forms or to write long narratives on their work. There is much more of an emphasis on an ongoing dialogue and exchange between the foundation and grantee. This emphasis is on learning and evaluating their shared contribution to the common good.

During the Forum, I discovered that this approach to grant-making was very much the style of the Skoll Foundations own relationship with its own grantees. Some of the people I spoke to, who had received money from the Skoll Foundation, remarked on the difference: The Foundation people came to them, they interviewed, checked facts, and filled out all the paperwork, and when their reports were written, the Foundation sent them to the grantee and asked: Did we get that right? The end result was that the people felt they could focus a lot more on the job at hand ... and their meetings with Skoll as a funder were seen as an opportunity to discuss and explore what was being learned, rather than as some sort of accountability ritual.

• Mark Kramer of FSG Social Impact Advisers argued that we are on the cusp of a generational change in which succeeding generations will not see a separation between non-profit and for-profit sectors. He remarked that this division seems very hard for us to let go of. He also went on to suggest that we will not be looking to philanthropy or government as the primary means of solving social problems.

“ We have a phenomenal non-profit sector in America. It has a turnover of about $1 trillion and about 7% of the workforce. It has grown at a phenomenal rate over the past 50 years. But in every problem you would care to look at — whether it is environmental, educational, or in social welfare — the situation is the same or is getting worse. The problems are becoming inescapable and the ways we have been addressing them are not working. Social entrepreneurship is an interim step that has emerged as we are trying to grapple with how to find more effective ways of addressing our social problems...” — Mark Kramer

Mark Kramer has recently written a paper (co-authored with Michael Porter from the Harvard Business School) in which he argues that the social value proposition of a business will be the key competitive advantage in the near future. Businesses need to consider social issues not just because they want to be good neighbours or citizens, and not just in response to the activists, but “... because it will be the only way that they will succeed”.

Kramer argues that activists in the non-profit sector underestimate the contribution that the corporate world can make to systemic social change. He pointed to “The Equator Principles” where nine global banks have got together to set social, safety and environmental standards for major construction projects like dams and pipelines around the world. It took a year for them to negotiate the standards, but as soon as they were put in place, 75% of all major project financing in the world was under those standards. It has now become impossible to build something without meeting those standards.

Resources.
— Video stream of this session “The Future of Philanthropy” featuring Helmut Anheimer, Mark Kramer, Lester Salamon and Alex Nicholls (Real PLayer required) 1 hour 59 mins
— Creative Philanthropy by Helmut Anheier and Diana Leat (book pub 2006 Routledge)
— From Charity to Creativity - philanthropic foundations in the 21st century by Helmut Anheier and Diana Leat 2002 report for the Joseph Rowntree Reform Trust
— “Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility” by Michael E. Porter and Mark R. Kramer in the Harvard Business Review (December 2006)
— The Equator Principles website

“The Future of Philanthropy” workshop (Real Player required) 1 hour 59 mins