The Poster Child for Failure in Philanthropy

A lot of people pretend that philanthropy is easy—that every grant meets its objectives, and that foundations, despite taking risks, knock the ball out of the park every time.

Wrong. Innovation and constant success are mutually exclusive. It is impossible to do anything noteworthy while consistently avoiding failure. If you never fall and skin your knee, then you’re hanging out in the kiddie section of the playground.

Jim Canales, the CEO of The James Irvine Foundation, has some badly scarred knees. And he’s proud of it; he believes that “failure” is the mark of someone who takes risks and pursues difficult tasks. Last year at the 2007 Council on Foundations conference, Canales was a panelist at the Demonstrating Impact session along with Joel Fleishman, author of The Foundation: A Great American Secret, and James Knickman of the New York State Health Foundation. While the session was nominally about the extent of philanthropy’s impact, at its core it argued that by being transparent and honest about what works and does not work in philanthropy, we will truly demonstrate impact.

Canales was back at this year’s conference, but this time he was accompanied by the brilliant Phil Buchanan of the Center for Effective Philanthropy. In his session, “The Advantage of Sharing Failures,” Buchanan pointed out that while the Council on Foundations conference has long booked sessions about innovations, session about failure have been nonexistent.

Jim went through a list of the pros and cons of sharing failure:

Pros

• You share knowledge. Knowledge and capital are all that foundations have, so we must effectively share both.
• You help others avoid common mistakes.
• You improve your own work by valuing self-reflection and learning.
• You reinforce your commitment to impact and effectiveness.

Cons

• You potentially harm your grantees.
• You might damage your reputation.
• You might discourage others from taking on high-risk ventures by highlighting the difficulties you’ve encountered.
• You provide fodder for people who are against foundations.

The pros are correct; the only legitimate con, however, is the potential to harm your grantees.

There is a risk to reputational damage if all of your colleagues refuse to recognize mistakes and foundations pretend to be infallible forces for good. Canales and Paul Brest (from the Hewlett Foundation) both published reports on their mistakes last year. As far as reputational risk, what they got for their trouble was coverage in The New York Times, an op-ed in The Chronicle of Philanthropy, and an enhancement of their already stellar reputations. Their colleagues hung them out to dry, but the lack of other foundations taking similar steps makes Canales, in his own words, “the poster child for failure in philanthropy.” Still, he hasn’t suffered any reputational damage. Instead he is asked to lead sessions at philanthropy conferences.

Confessing difficulties and then having nothing bad happen to you for doing so (as is the case with Brest and Canales, and will likely be the case in 99 percent of future cases), encourages people to take risks. The people who are not joining Canales in sharing failures discourage other people from taking risks.

Does talking about failure provide fodder for people who are anti-foundations? Last year at the Demonstrating Impact session, a member of the audience who identified herself as a professor of marketing stood up to say that people who admit their mistakes publicly are viewed as more trustworthy afterwards. Enough said.

At the Demonstrating Impact session, panelist James Knickman summed it up well:

“We need to frame our release of ‘failures’ as an attempt to learn. No one tells scientists they are a failure when one of their experiments [doesn’t] work!”

And my comment at the time, which I still stand by, was:

“That’s it right there. What philanthropy is engaged in is an experiment; an experiment in how we can all make the world a better place. We don’t know what the right answer is. In fact, the ‘answer’ is probably evolving as quickly as we can design experiments. But by being transparent, by sharing successful ideas and failed ideas, by judging ourselves not on the outcomes of each grant, but on the body of knowledge that we contribute to the field, we will truly transform philanthropy.”

I know this stuff is hard. But during the “Failure” session, moderator Toni Freeman of the Duke Endowment told a wonderful story that highlighted the difficulty. She described her decision to take a firefighter training class as leadership training. She was told, “You are going to climb up to the seventh floor and jump out the window.” She thought, that sounds good! But standing on the ledge, every fiber of her body was telling her not to jump. Yet she did. And then she climbed back up and jumped out of the window two more times.

And each time it was easier.

Sean Stannard-Stockton is a principal and director of Tactical Philanthropy at Ensemble Capital Management. Ensemble Capital provides families both traditional investment management and philanthropic planning. He is the author of the blog Tactical Philanthropy and writes the column On Philanthropy for the Financial Times.

Read more stories by Sean Stannard-Stockton.