How the Now Generation of Leaders Can Change Philanthropy

Council on Foundations President Steve Gunderson opened the morning plenary for the second day of the 2010 EPIP National Conference with this strong statement that I agree with wholeheartedly:

EPIP needs to change their tagline from the “next generation” of grantmakers to the NOW generation of grantmakers. The future is now.

With 50 years of experience in philanthropy, Bill Somerville, author of Grassroots Philanthropy and President of the Philanthropic Ventures Foundation brought a wealth of inspiration and insight as the keynote speaker. “You are the future of philanthropy. We need reform in philanthropy, we need you to critique philanthropy, one thing I don’t want to see is young people come in and accept things as they are.”

Take the top 1,200 foundations, where 45 percent of grantmaking is made up of grants of $10,000 or less. 85 percent of community foundation grants are made up of $10,000 or less. So we can say that most grants in America are of $15,000 or less, which means we’re spending an awful lot of time on small grants. Is this effective and is the system working as it should?

Nonprofits say it takes up to 30 hours to apply for a grant. Bill gave an example of a grantmaker that required 112 questions and 19 enclosures as part of a pre-application process. His view is that this is absurd, patronizing. And because of the time spent, a $20,000 grant is really only worth $11, 800. Bill predicts that more young people will come into the field, yet he doesn’t see that young people are bringing in a correction to the field. “Some of you are just as bureacratic as your older colleagues.”

We need you. We need reform. We need to do better.

Bill doesn’t think that you can do philanthropy from behind a computer, yet that’s what seems to be happening. We’re quite reactionary, we work on the problem rather than the idea. We need to get people to think creatively and originally. Unless you have some failures, you’re not doing your job right. You’re not taking risks. And if you take risks, you’re bound to have some failures.

Less Power

In philathropy, money is a tool. Money is power. But it’s not your money. It’s not your power. We should be full equals when we’re working with people. As an example, Bill told a story of how he went down to the welfare office near his house to wait in line for an hour and a half to see what people were experiencing in this economy. You have to get out of your comfort zone and meet people you wouldn’t mormally meet.

More Trust

Why wait? Try paperless giving. It’s not reckless, you just have to trust yourselves. Bill says his foundation does their giving in 48 hours. All of you have ability to do this – it’s called discretionary giving. Grants of up to 50,000 can be done before a board meeting. Make grants when they are needed, not on a schedule. Make more impact with small grants rather than making nonprofits wait six months. Just think, how much more could be done if all $10,000 grants were made within 48 hours. What is all this paper about? I’m not sure that we trust the people we work with – we think the more paper we have people fill out, we’ve done our due diligence. But if we trust people, then let’s trust them and make the system much more modern than it is. At the Ford Foundation, the board makes no funding decisions. The staff makes the grants, the board is there for oversight.

Be Wary of “Academic Philanthropy”

You have a real responsibility to use this money in magical ways. But the field is moving toward academic philanthropy – performance metrics, outputs, outcomes, strategic philanthropy – and there’s a book on each of them. Those who are talking about it aren’t doing it. those who are doing it aren’t talking about it. Ask your grantees how THEY measure success. Get out of the office to visit your granteers. stay in touch. If there is a true partnership, you need to trust the people you give the money to.

Create a “Risk Pot”

If you can’t build risk into your daily grantmaking, you can create a “risk pot”  to institutionalize funding failures. Do we treat failures openly? No – we’re ashamed of them. There’s a world of difference betwen gambling and risk-taking.  We’re not “giving” money away, that way of thinking is patronizing. We’re investing in people who are worthy of that investment. You all are investment managers.

“The power is in the doing, not in the asking.” – Bill Somerville

Read more stories by Rosetta Thurman.