Do More Than Give

The Six Practices of Donors Who Change the World

Leslie R. Crutchfield, John V. Kania, Mark R. Kramer

• Publisher: Jossey-Bass
• Year: 2011
• Print ISBN: 9780470891445
• eBook ISBN: 9781118011249
• Edition: 1
• Topic: Business
• Subtopic: Nonprofit Organizations & Charities
• Index: Business

How donors change the world through the six catalytic practices of high-impact philanthropy

Do More Than Give provides a blueprint for individuals, philanthropists, and foundation leaders to increase their impact. Based on Forces for Good, this groundbreaking book demonstrates how the six practices of high-impact nonprofits apply to donors aiming to advance social causes. Rather than focus on the mechanics of effective grantmaking, reporting, or evaluation, this book instead proposes that donors can become proactive catalysts for change by rising to meet the challenges of our increasingly interdependent world. Key principles include: going beyond check writing/traditional volunteering; advocating for change; leveraging business; forging peer networks; empowering individuals; leading adaptively; and developing learning organizations.

• Contains robust case studies depicting every type of philanthropy (corporate, community, operating, specialized, and large private and family foundations)
• Includes easy to use "Key Takeaways" tailored for donors at the "beginner" and "experienced" levels of catalytic philanthropy
• Authors are internationally-acclaimed philanthropic, nonprofit, and corporate social responsibility strategy experts who frequently speak and train on high-impact philanthropy

In good economic times or bad, this book provides guidance for givers to increase the impact of their charitable resources and go beyond check-writing to help solve problems and change the world.

Chapter One

Catalytic Philanthropy

“What business are you in?”

Peter Drucker, the renowned author and management expert, regularly posed this naive-sounding question to corporate executives whom he advised. How a donor answers this query can reveal a lot about his or her approach to philanthropy too.

Most foundation leaders and individual donors might answer that they are in the business of “giving away money.” These funders define their philanthropic purpose as making grants to worthy charities. Many do so with great thought and care. Some are exceptionally strategic in their approach, guiding their grantmaking with highly refined theories of change.

That's not what this book is about. The donors profiled here cast their role in a different light. They see themselves as active participants in the business of solving social and environmental problems—or at least, making a significant dent in an issue. They define their purpose as achieving as much impact as possible. Indeed, their aim is no less than to change the world. So even though donating money to nonprofits is one means of achieving that goal, it's often just a starting point. It's not the endgame.

As a result this book doesn't talk much about how to give away money. Instead, we focus on what donors can do to become more proactive players in solving problems and advancing the causes they care about. The donors we profile don't just write checks or make grants. Instead, they catalyze action across each sector of society. They speak out to ask government leaders to change ineffective laws or create new ones. They use their clout and influence to steer businesses to become engines of social progress. They collaborate with their foundation and nonprofit peers, rather than operating at arm's length. And they empower the very individuals that they seek to help, treating them as partners in progress rather than as recipients of charity. Their impact isn't driven by the amount of money given away but by the six key practices they use to catalyze change, as we describe later in this chapter and throughout the book. They do more than give.

This book contains stories that can be inspirational and useful to all kinds of donors; however, you may not recognize many of the individuals and foundations profiled here. Most would not make it onto a media list of the wealthiest donors, although a few do—Bill Gates, for example. The donors we write about have all given away large sums of money—hundreds of thousands, millions, even billions of dollars—yet the principles we describe can be used by donors with charitable-giving budgets of any size. In every case it is the knowledge and leadership of the funders—and their adeptness at employing the tools of catalytic philanthropy—rather than the size of their giving budgets that has earned them a place in this book.

You'll meet philanthropists like Emily Tow Jackson, executive director of her parents' foundation and a mother raising three school-age children in a small, bucolic Connecticut town. For the first seven years, The Tow Foundation did not employ any staff and funded mostly “meds and eds”—gifts to medical research to cure a disease that afflicts a family member and professorships at family members' various alma maters. After Tow Jackson became its full-time leader, The Tow Foundation grew more committed to solving social problems and soon emerged as a leading advocate for reforming the state's broken juvenile justice system. Tow Jackson had never before worked with court-involved or incarcerated youth, nor was she trained as a lawyer. But through the foundation's funding and advocacy, Tow Jackson's efforts contributed to dramatic decreases in Connecticut's rates of incarceration and to major legislative changes that moved sixteen- and seventeen-year-olds from the adult criminal justice system back to the juvenile justice system, among other reforms.

Large private foundations may also do more than give, as the Shell Foundation in the United Kingdom does. The impetus for creating this independent philanthropy, endowed with a US$250 million start-up gift in 2000 by Royal Dutch Shell plc, was largely environmentalists' and antiglobalization activists' outrage over the Anglo-Dutch company's plan in the 1990s to dump a defunct oil rig in the North Sea off Brent Spar, among other infractions.1 But instead of launching a traditional corporate foundation designed primarily to placate nonprofits with grants or provide public relations cover, Shell Foundation did something entirely different: it decided to apply its business know-how to solving global problems like poverty, and it has since been financing and assisting entrepreneurs to launch and grow small and medium-sized businesses in some of the most underdeveloped regions of the world. Of course Shell benefits from helping communities where it operates. But what's unique is that the Shell Foundation leverages the power of private enterprise to solve social problems, rather than taking the path of the more traditional corporations that sprinkle gifts across a range of local issues in towns where their employees happen to live and work.

In this book you will also meet individual donors who go beyond giving money to find ways to leverage their time, talents, and connections to advance the causes they care about, whether they give through their community foundations, donor-advised funds, or directly to nonprofits. They may advocate as shareholders at annual company meetings. They may sign petitions to change government policy. They may join coalitions to collectively push for other reforms. However they act, these donors do more than give.

We call these foundations and individuals catalytic. It's popular these days for donors, particularly those who fund start-ups or help existing nonprofits to grow, to refer to themselves as catalysts; however, we mean something more specific by the term catalytic. In chemistry the addition of a small amount of catalyst causes or accelerates a much larger chemical reaction, although the catalyst is not itself a part of that reaction. In philanthropy, donors who define the act of giving more broadly than as simply donating money to nonprofits, and who focus their time or the time of a foundation's trustees, staff, and board on highly leveraged, cross-sector activities, produce an effect that is much greater than the sum of its parts. This is what enables small donors to have more impact than some billionaires who rank above them in sheer giving. These catalytic donors punch above their weight.

Origins of Catalytic Philanthropy

The idea behind catalytic philanthropy starts with two main premises. Our first premise is this:

Donors have something valuable to contribute beyond their money. The clout, connections, business know-how, and political savvy that foundation leaders, business executives, and many individual donors possess are key resources in advancing causes—resources that nonprofits often lack.

We believe that the most valuable contribution donors can make to advance significant change in the world is to extend their practice of philanthropy beyond financial gifts and volunteered time. To achieve the highest possible level of impact with their philanthropic resources—to create real results—catalytic donors cast themselves in a different role. They shift their stance from that of passive grantmaker to that of proactive problem solver. In addition to funding nonprofits and serving on boards, they act as catalysts for change by leveraging the power of each of society's sectors—public, private, nonprofit, and individual.

Our second premise is this:

We all inhabit an increasingly complex and globally interdependent world that is changing with unprecedented speed. Although social and environmental problems have been with us throughout human history, today's challenges are of a whole new order.

Today's problems and the solutions they require are no longer confined within a community or a country or even a continent. Witness global climate change, propelled not only by gas-guzzling luxury cars in the United States and factories spewing carbon across Europe but also by the unrelenting construction of coal-fired power plants in China, deforestation in Latin America, and the dung-fueled cooking fires of impoverished families in Africa. The world is, indeed, flat. It's also complex. This applies as much to the social and environmental problems that societies face as it does to the interwoven economic systems that are financially tethering the world together. And it is with this realm of complex systems that donors must deal if they want to make a bigger difference. Whether across a continent, inside a country, or within a neighborhood, the social and environmental problems people face exist within complicated ecosystems of individual actors and institutions representing government, corporate, and nonprofit sectors. Working through one sector alone, such as by funding only nonprofit organizations, is no longer sufficient to achieve lasting change.

“We must move from seeing the world as simple, or even merely complicated. To understand social innovation, we must see the world in all its complexity,” write the authors of Getting to Maybe, a thoughtful book about how social innovation happens. They explain how traditional methods of seeing the world compare its workings to a machine—people say, “things are working like clockwork,” or everything is “shipshape.” Whereas by looking at the natural world, complexity theorists see life as it is: unpredictable, emergent, evolving, and adaptable—not the least bit mechanical.2

Emergent, evolving, and complex societal problems call for equally dynamic and adaptive responses. Today's challenges and their solutions are not so well defined that they can be wedged into a grant request. Answers are often not known in advance but require innovation and learning among many different actors before progress can be made. Even when a solution is discovered, no single entity has the authority to impose it on others. The stakeholders themselves often must create and put the solution into effect. Donors who want to solve pressing problems must take into account the systemic nature of the issues and acknowledge the complex ecosystem of actors that influence them. And so catalytic philanthropy, at the end of the day, is an act of adaptive leadership.3

Today's Golden Age

Despite these challenges we believe that more donors can—and should—aim to change the world. And perhaps now, more than ever before, they are able to.

The philanthropic funds available today, and the wealth that supplies them, are growing at a staggering rate; the number of billionaires worldwide has more than tripled in the last decade, up to 1,011 in 2010 from 306 ten years prior.4 Nearly half of the 75,000 private foundations in the United States alone were created in the previous decade, as were a majority of community foundations,5 and the rate of growth among both private and community foundations has been even faster in Europe, Asia, and Latin America. Matthew Bishop, a writer for the Economist, has called today's era of giving the “second Golden Age” of modern philanthropy (the first golden age of philanthropy in modern times having come a century ago when industrialists such as John D. Rockefeller and Andrew Carnegie were establishing their private foundations in the United States).6

This growth in giving volume is being matched by advancements in new philanthropic tools and approaches—starting with the changing role of private enterprise, which is becoming a stronger force for solving societal and environmental problems. Major corporations are taking far more active roles in addressing social and environmental issues, and new types of corporate entities are being created that blend profit making with social purpose. At the same time, foundations are pouring hundreds of millions of dollars into innovative financial investments that deliver social as well as economic impact.

The role of government has shifted as well, creating new opportunities for philanthropists to make common cause with the state. The spread of democracy and vast new private wealth in Asia, Eastern Europe, and Latin America over the last thirty years has opened to donors doors that were once bolted. Meanwhile, in Western Europe the idea of the state as the sole guarantor of social progress has started to soften, a process spurred by the recognition that philanthropy can do things government cannot and also that the needs of a growing aging population cannot be supported by tax-funded programs alone.

The implications of these changing state roles are profound. Philanthropists who want to make a difference in today's socio-politico-economic climate must proactively leverage government resources to advance the causes they believe in, rather than keeping their private philanthropic pursuits separate from public affairs.

In the context of these global trends, the dozens of specific examples throughout this book demonstrate our point: donors can make lasting and systemic change in today's complex social sector ecosystem, and they are most successful when they do more than give. When donors play this catalytic role, they leverage their philanthropic resources to the highest extent possible. We believe that if philanthropy is going to rise to the complex interdependent challenges the world faces at the beginning of the twenty-first century—if philanthropy is going to solve even a fraction of the problems in the world—then the way it is commonly practiced today must change. More donors must move from traditional giving practices to embrace catalytic philanthropy.

What's Different About the Catalytic Approach?

Donors often see their primary task as deciding which organizations to fund. This follows from the commonly held belief that donors are in the business of giving away money. Many donors subscribe to a linear process that typically begins with a funding proposal, proceeds to a grant or donation, and ends with a final report that describes what the gift accomplished. Even sophisticated funders—those who develop theories of change and map out logic models for how to accomplish results—often seem to approach issues as if their grants will set in motion a predictable series of events that leads directly to the intended result. They act as if their money might buy a ready-made solution from a nonprofit organization. And because most donors receive so many promising appeals from nonprofits year in and year out—each group making a compelling case about how the donor's gift will make all the difference—funders typically repeat this linear process time and again, scattering their gifts across dozens of issues and sometimes hundreds of grantees in response to the myriad requests.

The problem is that most nonprofit organizations today aren't equipped to provide the kind of solutions this complex world requires—no more than any other single actor, such as a business, government agency, or even a dedicated group of volunteers, is able to. “Social change is complex, and causal chains are often murky,” write Paul Brest and Hal Harvey in Money Well Spent, an authoritative guide to strategic philanthropy that encourages donors to go beyond grantmaking. “It often takes more than one tool to solve a problem.”7 Today's challenges require cross-sector solutions, and so focusing on nonprofits in isolation from society's other sectors is often not the most effective means of approach.

Catalytic donors see the world differently from the average donor. Rather than only fund nonprofits to address society's problems, these donors catalyze change by influencing the behavior of others, working across sectors, and leveraging nonfinancial resources to create systems-level change. To achieve the highest possible level of impact—to create lasting results—catalytic donors shift their stance from that of passive grant...

Table of contents

• Cover
• Title Page
• Copyright
• Dedication
• Preface
• Acknowledgments
• The Authors
• Chapter One: Catalytic Philanthropy
• Chapter Two: Commit to Your Cause
• Chapter Three: Practice 1: Advocate for Change
• Chapter Four: Practice 2: Blend Profit with Purpose
• Chapter Five: Practice 3: Forge Nonprofit Peer Networks
• Chapter Six: Practice 4: Empower the People
• Chapter Seven: Practice 5: Lead Adaptively
• Chapter Eight: Practice 6: Learn in Order to Change
• Chapter Nine: Toward a More Catalytic Future
• Appendix A: Research Methodology
• Appendix B: Peer Survey Questions
• Appendix C: Research Advisors
• Appendix D: Review of the Six Practices of High-Impact Nonprofits in Forces for Good
• Appendix E: Getting Started with Catalytic Philanthropy
• Notes
• Index