Philanthropy is responsible by definition, right? Well, not innately and not necessarily.

The ability to act responsibly arises from understanding how beneficial effects are created. If we are ignorant of how something works—what makes it vital and viable in its context and improves its ability to contribute and evolve—then even though we intend to “do good,” we may do harm. For example, children who receive gold stars whenever they please teachers or parents may lose the ability to recognize and to feel encouraged and inspired by their own achievements. This can happen despite the intention to give children the skills they need to become successful in society and work.

The New Mexico Association of Grantmakers (NMAG) recently embarked on an experiment to change how they fund, based on this understanding of responsibility. Through rigorous reflection, they have discovered that the effects they produce are often not what they intend. One foundation-funded initiative to create new entrepreneurial technology jobs was launched in a region where graduation rates are low and where there is no appropriate skills base. This project angered local communities, even though people living there had been surveyed and were represented on the project team.

This story is repeated far too often in philanthropy communities across the nation. A special group of NMAG members is working collaboratively across diverse arenas to improve funding. They are following five guidelines:

  1. Consider and fund with an eye to nested, whole systems rather than fixes for specific issues or problems.
  2. Find “nodes of leverage”—conditions that can be changed with little effort in order to produce big results—rather than shotgun or priority-setting approaches.
  3. Focus on developing personal agency by supporting the efforts of individuals to take accountability for their own lives, and to exercise entrepreneurship in creating businesses and in serving their communities
  4. Measure effectiveness by how well systems change, not by the efforts made in pursuit of change.
  5. Ensure foundations have integrity in all of their activities (for example, by fostering personal agency within their staffs).

These guidelines have led to a radically different way of thinking about funding in northern New Mexico. Foundations work together more often and have fewer limited partnerships; instead, they initiate projects with what is called Story of Place, a proprietary process developed by ReGenesis Group in Santa Fe, NM.

The Story of Place process starts with an “integral assessment of a bio-region” that determines unique patterns that integrate all life systems. These patterns become sources for planning and development, and foster a deep understanding of how the region’s living systems are nested within one another. This allows funders to make better decisions from the start. Funding for all development arenas arises from a shared direction—not from a “vision” that requires compromises, but from a revealed pattern that’s unique to the community and its place. It also allows funders to discover nodes of leverage more easily. The connection to place inspires new hope and alignment.

On a scale of one to five, how is your organization trending on these five guidelines?