Ask almost anyone even vaguely familiar with philanthropy what a foundation does, and the answer will likely be “they give money away.” That’s true, but what if instead the go-to answer was: “They improve people’s lives,” or “They transform communities,” or even, “They make a difference you can see and our community wouldn’t be the same without them”?
In general, checkbook philanthropy is great at addressing needs, but not so effective when it comes to solving the problems that create the need. For example, supporting a homeless shelter is a great way to meet the needs of those in crisis, but what if we addressed the issues that caused them to become homeless in the first place, like job loss, mental illness, or addiction? That would be the difference between simply writing a check and changing lives.
Working Your Way Upstream
I call this transformational giving. It also has other names, like addressing root causes, funding proactively, or moving the needle. But no matter what you call it, transformational giving is always working its way upstream, identifying an issue and following the trail all the way to the source—and to other tributaries that may feed the problem along the way.
Transformational giving requires that funders think about policies and practices that exist that may exacerbate the problem or at least maintain the status quo. It means looking for institutional or even individual players who are contributing to the problem (often unwittingly) and who could be valuable parts of the solution.
In the homeless example above, a funder who practices transformational giving might research the causes of homelessness in a shelter and determine that many of those seeking shelter are low-wage workers who simply can’t afford market-rate rents. It might further learn that the city has a severe shortage of subsidized housing. Although a grant certainly can’t solve that problem, a transformational funder will recognize that it can convene housing experts, housing agencies, private developers, city planning staff, and many others to work together to create a plan to address the housing issue. This will likely involve some changes in public policies around housing, and the transformational giver can support organizations that play an advocacy role.
Transformational giving isn’t difficult, but it does require courage and creativity.
If you want to practice transformational giving, you should be prepared to:
- Decide on a specific focus. You can’t change everything, which means some things may need to be left to other supporters.
- Articulate the problem, approach, and anticipated outcomes clearly. If you can’t explain it, you can’t change it.
- Identify not only grantmaking strategies to meet those outcomes, but also other actions, such as advocacy or research, to achieve your ultimate goals.
- Not work alone. Even the largest funder in the world can’t transform an entrenched problem on its own. You’ll need to find government, private sector, and nonprofit partners who are aligned for a common purpose.
- Communicate openly and often. Good communication is the backbone of transformation. For people to be willing to change systems and practices that may feel comfortable and safe—even if they’re known to be detrimental—they need to feel informed, heard, and included in the process.
- Leverage all your assets. This doesn’t mean emptying the foundation coffers, but rather harnessing the power of your foundation’s reputation, intellect of your staff, your voices and connections (institutional and personal) to advance the work.
- Commit for the long term. The problems that currently plague society didn’t spring up overnight, and their solutions won’t either. If you truly wish to be transformational, you must be willing to commit to a targeted focus for years, if not decades, and understand that the work likely will not be accomplished during your foundation tenure. Unfortunately, this runs counter to the push for demonstrated grantmaking results within a year or two, so be clear about long-term goals and sharing regular updates on progress and adjustments along the way to reinforce the value of your philanthropic investment.
- Learn constantly. Transformations are complex undertakings. You must continually learn from your community, from other communities and funders who have undertaken similar work, from experts, and from your own experiences. Recognize the learning value in failures as well as successes along the way.
Transformational giving isn’t easy, and it’s not something any grantmaker should enter into lightly. But I believe it’s also some of the most enlightened and effective work that foundations can do to begin to make the changes we’ve all been seeking for decades.
Kris Putnam-Walkerly is a global philanthropy advisor, author of Confident Giving: Sage Advice for Funders, and a Forbes.com contributor on philanthropy. You can learn more at putnam-consulting.com or contact Kris at firstname.lastname@example.org.
Great Concept but we need all funders to work on the same direction