I can’t resist starting with a literary comment on the poetic reference in Paul Brest’s article to the wonderful word “discontents,” referring to William Shakespeare’s famous saying in Richard III. It is worth noting, however, that Richard’s often quoted, “Now is the winter of our discontent,” does these lines a disservice, since the “now” actually modifies “made glorious” (i.e. “The winter is now made glorious summer”). In other words, Richard couldn’t be happier with the current state of affairs. But, I have to ask, Is this the case with strategic philanthropy in Germany? Are we happy with the current state of affairs?

To answer that question one has start by acknowledging that we still know very little about philanthropy in Europe, or in Germany in particular, when compared with the theoretical and empirical research on philanthropy that has been done in the United States. It is also the case, however, that if one looks at what Brest calls “strategic philanthropy,” it can be argued that there has been a tradition of an evidence-based approach to philanthropy in Germany for many years.¹

Development of Strategic Philanthropy in Germany

In Germany there has been surprisingly little reflection on the strategy of philanthropic work. It was the Bertelsmann Foundation, under the leadership of its founder Reinhard Mohn in the early 1990s, who began doing this. The result of this strategic process at Bertelsmann has been a clear focus on policy changes. The foundation developed into Germany’s largest private think tank. It also led to the founding 15 years ago of the Center for Social Investment (CSI) at the University of Heidelberg, a research and teaching institution focusing on improving the art of strategic giving in Germany. Bertelsmann’s strategy has been heavily criticized in the philanthropic sector and was never really appreciated or consequently followed or supported by others. But Bertelsmann, for its part, did not make much of an effort to try to convince others to join them either. There has been a clear lack of leadership by Bertelsmann and thus it has had no real impact on the field in Germany.²

It wasn’t until 2008 that the question of strategic philanthropy arose again in Germany when the Mercator Foundation (with an endowment making it one of the “big five” foundations in Germany) came on the market with the explicit statement to generate “more impact through strategic philanthropy.³ Since then, the question of whether or not foundations should follow clearly defined and explicit goals, often policy goals, and develop strategies to reach these goals, has been heavily contested in Germany.⁴ The arguments about this, however, were far less differentiated than in the US. The main attack on strategic philanthropy came from those arguing that foundations have no right to follow clearly defined policy goals in highly controversial fields like migration and integration or climate change and energy policy. Instead, opponents argued, foundations should provide “neutral” platforms for the discussion and exchange of policy positions. As a result, it has been difficult for German foundations to pursue a clear strategy, such as having a goal to lower carbon emissions or to help migrant children graduate from university.

The Role of Evaluation and Science Funding

If philanthropy is society’s high risk capital it is important to evaluate and monitor the results of its investments and interventions. When the proposal came up to create a grantee perception report on German grantmaking, it generated a controversial debate among the leading foundations. The largest grantmaking foundations did adopt the proposal, creating an initial group of seven foundations together with FSG and CSI (Heidelberg) to run the study. When it became obvious that the results were in many ways critical of the foundations’ management and grantee relationships, a massive discussion about whether the results should be published arose. Criticizing foundation performance, let alone publishing those criticisms, rarely happens in Germany. Making hard choices and decisions following the negative evaluation of a program is also rare, and few executives dare to confront their boards with this challenge. The group did decide to publish the results of the grantee perception report, a milestone in the discussion of the role of foundations in German society.

The main battleground for strategic philanthropy in Germany, however, has been the role and the use of science funding by foundations. There is a strong tradition in Germany of foundations funding scientific research. Bertelsmann was the first to challenge this tradition by asking whether foundations were being responsible by only supporting excellent science without providing questions or goals or using the results of the research for policy recommendations. Foundations like Bertelsmann, who followed clear goals with a policy implication, were accused taking an instrumentalist approach to scientific evidence.

Many foundations still believe that funding pure research is at the core of their mission. This approach has a long tradition, dating back to the Rockefeller Foundation and its funding in the 1920s of modern social science, and in Germany to the Deutsche Forschungsgemeinschaft and related institutions. The strategic interest in this approach is driven by a desire to address the “root causes” of wicked social problems.⁵ This desire reflects the work of 90 percent of German grantmaking foundations. However, foundation strategies that take different avenues toward social change or problem solving need to be based on evidence too. There is no doubt among foundations working “strategically” that in an increasingly complex world plagued by wicked problems, any strategy that addresses these issues in an under-complex way is likely to create unintended consequences and potentially do more harm than good. Scientific evidence is needed in support of, and as an element of, a more complex theory of change that might include practical projects addressing problem-solving directly, advocacy support to disseminate these tested solutions, and scientific evidence to underpin the validity and therefore the legitimacy of practice-tested advocacy and coalition building.

In Germany, the aggressive criticism of strategic philanthropy in the 1990s and again in the last eight years has mostly been a defense of traditional motivations and forms of giving, which relied heavily on funding science. It’s my perception that this new way of pursuing strategic philanthropy, one based on scientific evidence, is finding more and more acceptance among large German foundations.⁶ So, Can we be happy with the current state of affairs of strategic philanthropy in Germany? It’s probably too early to tell. The next 10 years will be decisive and the perception of the US discourse on this issue will be an important factor. That is why it is valuable for there to be an exchange of ideas and practices between the two major countries where strategic philanthropy is practiced, the United States and Germany.

Note: More of Bernhard Lorentz's thoughts about strategic philanthropy appear in the German magazine Stiftung & Sponsoring.

Read the rest of the responses.