As might be expected, Paul Brest does a masterful job in his article of arguing the case for strategic philanthropy by way of countering key objections to it. His conclusion is that, while imperfect, strategic philanthropy is better than the alternatives. Within the framework of his chosen analytical boundaries, Brest’s argument has a certain appeal. After all, who could object to more rather than less effective philanthropy? The summary description for this framework is what he calls the “expected return mindset” (ER).
But there is a fundamental problem with ER: It oversimplifies the social world and seeks to reduce philanthropic action to something akin to a business deal or a controlled scientific experiment. A powerful critique of this approach to social change appears in Beryl Radin’s compelling analysis of “the performance mindset” (her version of ER) in her book Challenging the Performance Movement: Accountability, Complexity, and Democratic Values. Radin is a career evaluator of government programs and past president of the Association for Public Policy Analysis and Management. She draws on both her academic background and governmental experience in developing her critique of an exaggerated emphasis on performance and social “return” with its detrimental effects on the assessment of social programs.
Expanding upon Radin’s and others’ insights, I want to highlight three fundamental flaws in the assumptions behind the ER mindset—the framework, as Brest defines it, that calculates the results of a philanthropic investment in terms of “potential benefits, the likelihood of success, and the costs involved.”
1) Practical challenges of drawing clear causal connections. Social causation is mind-numbingly complex. The sheer number of variables, indeterminate time horizons, effects of randomness, unintended consequences, absence of conditions for controlled experimentation, and diverse definitions of desired outcomes (unlike the single bottom-lines of business) defy attempts to squeeze social reality into a narrow box of predictable causation. Although some of these issues can be addressed by artificially constricting the definition of desired end targets, this move itself tends to distort the process of social change (as I elaborate on in points 2 and 3 below). The assumption that clarity about social change can flow from conceptualizing a “theory of change” seems to me to be based more on wishful thinking than on any real experience with successful social prediction.
2) Epistemological assumptions about the nature of social knowledge. A second factor complicating the idea of prediction and control presumed in strategic philanthropy is rooted in philosophy—how knowledge of human action and social change is understood. A long tradition of philosophical discourse (from Immanuel Kant to Jurgen Habermas) has explored the reflexive, intersubjective nature of human meaning horizons. Unlike natural scientific experimentation, intervention in human society must account for the fact that the action involves two or more meaning horizons, i.e., that human goals, rationale, and assessments of success are intersubjectively constituted. Even though one of the parties might have the power to define the nature of an intervention for all participants, that does not mean that definition is the correct one.
3) Democratic considerations. An underlying norm of civil society is democratic equality. Unlike the ownership relation of an investor to a purchased company or service, the relationship of a donor to a nonprofit is that of a supporter to an actor. When donors begin to act like owners, they change that relationship to that of top-down control.
Brest’s responses to the critics of strategic philanthropy touch, at least indirectly, on each of these points. But his responses fail to engage the fundamental nature of the criticisms. For example, he agrees with Michael Weinstein’s statement that benefit/cost ratios are inadequate and acknowledges that “there is something alluring about numbers, and they can have a strong anchoring effect even when one knows that they are estimates with large margins of error.” He also cites approvingly the William and Flora Hewlett Foundation’s statement that “ER is only one factor that the program uses to assess grantees in the decision to support, renew, or exit.” If that is the case, then it is incumbent on proponents of ER to show exactly how those other non-metric factors enter into the decisions. There seems to be a huge fudge factor here that allows subjective decision-making to intrude on the “objective” ER numbers at will. Which is precisely where non-ER driven philanthropic decision-makers end up when facing the practical complexities of social causation.
In discussing “wicked problems,” Brest begins to touch on the epistemological issues involved with ER, admitting that addressing these problems “may require relaxing, or at least postponing some of the requirements” of strategic philanthropy. What makes wicked problems “wicked,” however, is not just that they are “messy” and defy definitive formulation, but that they are reflexive and draw upon a different mode of knowledge than is used in investing or engineering. Such problems can be approached “strategically,” but only in the very general sense that one begins with some sort of an idea about what one seeks to accomplish, for example, seeking to locate a new drug-treatment facility with minimum disturbance to the community, and proceeds interactively toward that goal. To that degree, almost every grantmaker could be described as strategic. I would suggest that since most problems in philanthropy contain such an element of “wickedness” (noting here my disagreement with Paul’s assertion that “the vast majority of philanthropy focuses on supporting and scaling service delivery organizations”), and therefore require a fundamentally interactive relationship with grantees.
The democratic problem is inherent in all philanthropy—and indeed in all fields where some control resources that others desire. But strategic philanthropy exacerbates what is already a substantial power imbalance. While Brest expresses agreement with Patrizi’ and Thompson’s statement that “Grantees need to be treated as the central partners that they ultimately are,” the reality is that there is inevitable deference by grantees to grantors’ interests and priorities, and the more definitively those interests are stipulated in grantors priorities (as is especially the case in strategic philanthropy), the less democratic the relationship becomes.
One example of a social change program illustrates the three fundamental problems of the ER approach: high stakes standardized testing in schools. In the name of clarity, efficacy, and accountability, this approach has been introduced nationwide. What has happened? It has become embroiled in a huge national controversy related directly to the three fundamental problems outlined above: the practical problem of indeterminacy in relating student outcomes to the innumerable variables involved; the epistemological problem of defining what constitutes an educated person and how do we know it; and the democratic problem of state, community, and parental control of education.
When trying to evaluate strategic philanthropy perhaps the most useful question to be asked is: What is the problem strategic philanthropy is trying to solve? Is it how to generate “better” philanthropy through more efficient or effective use of philanthropic dollars? If so, there seems to be scant evidence that there is a serious problem here or even a shared understanding of what better philanthropy would be. As Brest says, “It would be difficult to design an experiment to answer the question empirically.” One thing that strategic plans and metrics-based comparisons can offer is a sense of psychological satisfaction for the donor, an assurance (even if illusory) that there is a secure basis for deciding among competing causes or organizations. I suspect that sense of security has more influence in the practice of philanthropic decision-making (and not just in strategic philanthropy) than most of us would like to admit.
Finally, I would suggest that there are other alternatives to strategic philanthropy than those that Brest lists—“giving simply based on passions, recognition, or reciprocity.” This list does not adequately describe the character of other kinds of philanthropic judgments. Rather, like many decisions in life—from assessing how one’s children are doing to Nobel Prize judging—decisions on how to allocate financial resources to worthy people and organizations are based on a shifting constellation of collective judgments about the most valuable, effective, admirable, needy, and visionary ends of human pursuits.
Read the rest of the responses.