Money Well Spent: A Strategic Plan for Smart Philanthropy

Paul Brest & Hal Harvey

304 pages, Bloomberg Press, 2008

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Over the last few decades, American foundations have proliferated at a striking rate, and among their creators are a good many super-wealthy donors. The media have dedicated more and more space to these philanthropists, and experts have poured out advice about the value of “strategic” giving. These advisors believe that too few donors, new and old, carefully analyze the best use of their funds, and that as a result, they accomplish less than they might through a more strategic approach to giving. Indeed, donors can now find not only books on this subject, but also multiple courses, conferences, consultants, and online guides.

Paul Brest and Hal Harvey are two seasoned and wise leaders in the field of philanthropic effectiveness—Brest is president of the William and Flora Hewlett Foundation and Harvey is a former director of its Environment Program. Their new book, Money Well Spent, is an outstanding example of the strategic giving genre. They walk the reader through the importance of donors having clear problem-solving goals, sound strategy, and clarity about risk tolerance. They urge donors to aim high: “Developing alternative solutions requires creativity or innovation akin to that of a scientist or engineer—creativity that is goal-oriented, that aims to come up with pragmatic solutions to a problem.” They advise about careful selection of grantees and accountability arrangements, distillation and communication of lessons learned, and the right types of grants and institutional arrangements. And they infuse their instructive text with non-polemic presentations of critical decisions such as choosing whether to spend out a foundation’s assets or manage them in perpetuity, as well as warnings about false dichotomies such as charity vs. change.

They also do more than offer advice on skillful grantmaking. They foster an appreciation of the many ways to engage in philanthropy, something too few authors in this space do well. Chapter 2, “Choices in Philanthropic Goals, Strategies, and Styles,” for instance, serves as a primer on the roles donors can play, ways to consider the donor’s resources in relation to needs, and the effort required to achieve change. And the book’s afterword wisely reminds donors of their responsibilities to the larger field of philanthropy and its infrastructure organizations. Brest and Harvey list organizations such as the Association of Small Foundations, the Council on Foundations, and Independent Sector, all of which can help donors live up to the important maxim “do no harm,” and even go well beyond it. New entrants to the field will surely find this section valuable, as few know about the local, regional, and national groups that assist and track philanthropy.

My guess is that this book so nicely fills its niche that it will push the next generation of authors to explore new territory—to be less donor-centric and discuss grantmaking from the perspective of grantor, grantee, and beneficiary. I will welcome that, because too many of the recent aids to donors, including this one, impart little understanding of what it is like to be on the other side of the table. Ignoring the experience of others can undercut donors’ effectiveness. Brest and Harvey do touch on donor-grantee matters in several places, including in Chapter 5’s “Grantor-Grantee Relationship” section. They list common donor mistakes: unresponsiveness, time-wasting reviews and proposal revision processes, outsized expectations, and clumsy program exits. But the book gives only limited space to the donor-recipient-beneficiary relationships and the serious problems that can emerge from inattention to them.

As Brest and Harvey certainly understand, success in the search for philanthropic solutions does not lie entirely in the logic and accountability model, or in the now-popular wholesale importation of business practices into grantmaking. If a donor wants to ensure that libraries carry particular books or that all of a neighborhood’s elderly residents get flu shots before the holidays, tight logic models and timebound grantee accountability agreements make sense and can greatly help. But if donors are funding people trying to change deep-seated attitudes or individual and institutional behavior, then they need to engage in dynamic, long-term, and open-ended consultative process with them. Such processes have been a key to success in donors’ and grantees’ struggle against apartheid and other forms of discrimination, and in building entirely new kinds of organizations empowering the poor here and around the globe. But few strategic philanthropy guides help donors learn how to be part of such relationships in a genuine partnership.

If the next generation of strategic philanthropy books does indeed focus on grantmaking from more than the grantor angle, I hope authors give attention to the following thorny issues: Does increased media scrutiny of our field lead some donors (boards especially) to feel more impatient for results and credit for those results, leading the organization to increase control over the use of its money and appear to discourage the grantee’s creativity? In other words, has the role of the quiet, patient, and responsive donor become less appealing? (I worry that this is too often the case.) What are the proper protections against donor led strategic planning that imposes wearying and unnecessary demands on applicants and grantees? (Few grantors seem to have created a feedback loop to hear from applicants who think a “reasonableness” line has been crossed.) Which business practices transfer well into effective philanthropy and which do not? (Relentless bottom-line pressure for immediate results and branding requirements work in some types of philanthropy but can undercut the effectiveness of others.)

A few leaders have already started a conversation of this sort. Sheela Patel, founder of Shack Dwellers International and the Society for the Promotion of Area Resource Centres (SPARC), an organization of Mumbai pavement dwellers, noted recently at Harvard University’s Hauser Center for Nonprofit Organizations: “Today, unfortunately, the conditions that allowed SPARC and its partners to succeed are changing. … In the last 10 years, the whole financial architecture of philanthropy has changed. Something has infected most of the foundations and large NGOs that support us. Suddenly the virus of the ‘log frame’ [logic model] has stricken us. So now we have to pretend that in a period of two years, we can implement perfect strategies and produce complete solutions. … Foundations today are increasingly treating organizations like ours as contractors in the delivery of their own visions. … They make us contractors, not innovators.”

Patel’s observations deserve donors’ attention, especially because so few grantees can risk biting the hands that fund them. This brilliant community and organizational leader believes that strategic philanthropy can be unduly intrusive and go too far, miniaturizing ambition and stifling creativity. I agree, and see too many examples of this.

Brest and Harvey’s advice to donors could have explored this set of issues further. But I believe that their excellent text has laid a sound foundation for the next generation to do so.


Susan Berresford served as president and CEO of the Ford Foundation from 1996 to 2008. She is currently a philanthropy consultant for the New York Community Trust.