3 ways to prepare for the 'new wave of innovation in philanthropy'

REDWOOD CITY, Calif. — All too often, learnings at foundations end up in file cabinets, guiding the grant-making of these institutions, but not informing others beyond that. For the past 18 years, the Global Philanthropy Forum has worked to change that dynamic by providing opportunities for peer learning between philanthropists. “Everyone in this room and on this stage is part of a knowledge marketplace when it comes to the practice of philanthropy,” Jane Wales, founding president of the organization, said at the annual conference last week. “What would it look like to create a truly efficient and effective knowledge marketplace so the supply of knowledge truly meets the demand?” --— Jane Wales, founding president, Global Philanthropy Forum With a growing number of individual philanthropists in search of impact, including the rise of high net worth individuals in Silicon Valley and beyond, the Global Philanthropy Forum sees an urgent need to connect the supply of knowledge within foundations with the demand of individuals who want to learn while giving. Devex collected insights from Wales and other experts at the Global Philanthropy Forum on how donors can work together to make their philanthropy more effective. 1. Learn from what is and what isn’t working Phil Buchanan, president of the Center for Effective Philanthropy, said there is “room for improvement” when it comes to peer learning in the sector. Donors are least likely to share “what isn’t working,” he said. But part of the challenge is this work is complex, and it’s hard to know what isn’t working without a clear definition of what success looks like, he added. ClimateWorks Foundation, which began as a collaboration between three foundations to increase philanthropic impact on climate change, was featured at the forum in part because it is an exception to this rule. The William and Flora Hewlett Foundation and the David and Lucile Packard Foundation underwrote ClimateWorks: Lessons in Learning and Leadership to analyze their investments — and openly discussed the challenges. Charlotte Pera, who joined ClimateWorks as president and CEO in 2012, incorporated many of these lessons into her own leadership of the organization and shared her experiences coming in to redesign the model at the Global Philanthropy Forum that took place in Silicon Valley last week. Originally, the vision was large annual grants to a dozen organizations working to reduce emissions, then grantees of ClimateWorks would make grants in its regions, but the model needed to change given the large, complex, growing landscape of climate philanthropy, she said. The organization transitioned “from a formal aggregated model to a much looser kind of coordinating model that was intended to be appealing to a much wider range of donors,” Pera said. She has grown the ClimateWorks funding base, broadened its strategies, and worked to make the field of climate philanthropy more collaborative by organizing forums for donors to learn. 2. Unlock grants and investments from individuals As individual philanthropists and high net worth individuals determine the best ways to deploy their capital for impact, foundations are coming up with creative ways to engage them. The MacArthur Foundation shared a few of its learnings so far at the Global Philanthropy Forum’s knowledge marketplace session. Following its first 100&Change competition, an open call for applications for a $100 million grant, MacArthur launched a new nonprofit called Lever for Change. It resulted from the MacArthur thinking about “how to bring funders along with us on the journey,” said Cecilia Conrad, who leads 100&Change and is the CEO of Lever for Change. While MacArthur had some success with institutional donors coming in as sidecar funders of the ideas they were uncovering through the competition, the foundation was looking for ways to unlock more capital from high net worth individuals and family foundations. Lever for Change will organize “customized competitions on behalf of individual donors and family foundations,” she said. The nonprofit will also build “a pipeline of projects we will share with the world” from these competitions, she said. “It is a lot of work for everyone involved,” Conrad acknowledged. “If you’re uncovering these ideas you should just use that to help create a database that can be of service to the community writ large.” Last month, MacArthur also launched the Catalytic Capital Consortium, together with the Rockefeller Foundation and the Omidyar Network. Catalytic capital can take extra risk, be more patient, and provide more flexibility than other capital, Debra Schwartz, managing director of impact investments at MacArthur, told Devex. The effort aims to address financing gaps in impact investing, bringing investors into deals with high potential for impact that they might not otherwise support. As foundations pursue new ways to engage individual philanthropists, funders may turn into fundraisers, convincing high net worth individuals why they should put their trust and money into these institutions. “I know a lot of leaders of nonprofits who would like to go work for a foundation so they don’t have to raise funds,” Wales said. “I’m now confronted with leaders of foundations who want to become fundraisers.” 3. Collaborate for larger bets without leaving people behind By collaborating, funders can provide larger amounts over a long time period, “opening up imagination and ambition,” said Chuck Harris, who oversees the execution of Blue Meridian Partners, which has brought U.S. foundations together to collaboratively invest $1 billion in nonprofits serving economically disadvantaged youth. Blue Meridian Partners make big bet investments of $200 million for each grantee over 5-10 years, and all of it is unrestricted, a criteria that tends to be at the top of the list when organizations share what they wish funders would do differently. In addition to these new and emerging collaboratives, intermediaries such as the Global Fund for Women or the Global Greengrants Fund also offer an opportunity for individual philanthropists to leverage the giving of others and learn while they give, Wales said. Buchanan of the Center for Effective Philanthropy highlighted the value of giving circles, many of them at the local level, as smaller-scale examples of funder collaboratives that can support local solutions to global challenges. An example is Yetu, a platform that educates Kenyans about civil society organizations they might want to support. Models like these can help drive a transition from “donor funded to community funded work and provides “local resources for local solutions,’” said Matt Reeves, global lead for civil society at the Aga Khan Foundation, which supports this community philanthropy initiative together with the U.S. Agency for International Development. Wales, who said she thinks the “next new wave of innovation in philanthropy will be from the global south,” has used the Global Philanthropy Forum’s peer network to incubate efforts such as the African Philanthropy Forum platform, which is committed to what its executive director, Mosun Layode, describes as homegrown development in Africa. Wales told Devex collaboration between foundations and individual philanthropists should include not only large funds and high net worth individuals, but also grassroots funds from developing countries. “Moving away from this scattershot, and often duplicative approach, what would it look like to create a truly efficient and effective knowledge marketplace so the supply of knowledge truly meets the demand?” Wales asked.