Farmers or Merchants?

Once upon a time, there was a farmer with a goose that laid golden eggs. When he first got the goose, he was delighted. What could be better? Without doing anything, each morning he woke to discover a new golden egg. He was rich! Soon he was richer than his neighbors and got infinite pleasure in buying new, expensive toys for himself and his family. After awhile, the farmer was spending so much money on frivolous things that he stopped farming. He bought cheap corn for the goose —which resulted in smaller golden eggs. He stopped feeding the other geese and as her friends and family began to die, the farmer’s special goose became unhappy and stopped laying eggs altogether. Soon the thin, sad goose laid down and refused to get up. The next day she died.

As the farmer sat despondently at his kitchen table, he glanced across the road at his neighbor’s farm. How had he not noticed that his neighbor had become successful? The farmer wandered over in the hope of discovering his neighbor’s secret.  When he walked into the gate he saw miles of fields planted with healthy crops, trees lush with fruit, and then he saw the most surprising thing of all: a large, clean coop full of happily clucking geese laying lots of golden eggs. The farmer was astonished. He found his neighbor and asked him where he’d bought all those geese because he wanted to go buy more. His neighbor looked at him and laughed. “I didn’t buy all these geese, I grew them. I started out with one. With careful cultivation, I found out what foods helped her grow, which foods helped her lay golden eggs. Soon she was raising a family and heading up a community of geese all laying golden eggs.” He looked at his friend’s ramshackle farm across the way and said, “Surely you haven’t forgotten. We are farmers not merchants. Our job isn’t to buy things to sell, it is to prepare the soil for things to grow.”

This adaptation of the well-known parable came to me as I was thinking about the ongoing debate of whether capitalism can or should be a driving engine for social change. I wholeheartedly believe it can. Capitalism can develop “mission along with margin” but the success of the venture in creating lasting social change is, I believe, dependent upon understanding who you are: a farmer or a merchant.

In this oversimplified parable, farmers are concerned with creating the conditions for growth, because an organic increase in soil fertility creates a farm that is a better ecosystem of productivity. Merchants are primarily concerned with creating products that, when sold, give some immediate benefit. Both are good. Both are necessary. But they are necessary in different situations. In microfinance, for example, farmers may be needed, but in the development of solar panels, we may need merchants. As a grantmaker, one will likely set different financial and programmatic objectives based on whether a grant is funding a merchant or a farmer.

Here in Asia, the contrast between creating conditions for long-term growth or products for immediate benefit is being played out in daily news reports on the rapid rise, and equally rapid decline, of SKS Finance, the microcredit company with backers such as by billionaire Vinod Khosla and George Soros. SKS raised $358M in its closely-watched IPO. But the rockstar rise of SKS has been matched by the rapid tumble its stock has taken. Reports of a rash of suicides allegedly caused by high interest rates, clients who were overextended on credit, and tough repayment requirements are said to have affected the crash.

In a matter of one month, a company that had been the exemplar of microfinance-going-to-scale stands on the brink of major changes that may dramatically reshape the players and the way microcredit operates.

SKS has been contrasted with other players in microfinance such as Grameen or ACCION. To be clear, these two organizations charge high interest rates. And they also engage in the practice of collecting repayment on a weekly basis. But some evidence suggests that the differences between them and SKS are as important as the similarities. Microcredit organizations that fall into the “farmer” category focus on social support as a key element of success and repayment. They develop long-term relationships with clients. They recognize that microcredit may be an ideal central organizing tool, but it is only one tool that poor women need to get closer to self-sufficiency. These microfinance organizations use their profits to create farm insurance products that help the poor avoid losing everything due to bad weather. They create savings programs and educational loans to build skills that take people beyond subsistence. In other words, they use revenue to cultivate the soil, not prematurely take profits.

Don’t misunderstand me: profit-making and profit-taking are not bad. However, the idea of calling a purely capitalistic business that “also happens to do good” a social enterprise seems to be a bit of a fantasy. There are always trade-offs. The social enterprise makes profits while asking what more it can do to re-invest those profits into the communities, people and relationships it is helping to build.

The story of SKS is not over. Some say this incident is but a stumbling block on the path to even greater microfinance expansion. But the question I would ask is, are those changes technical or fundamental? “Merchants” may look at Grameen or ACCION and say, “We can sell that product too,” but they are missing the point. “Farmers” focus on all the inputs needed for long-term growth in the community, not just the products that generate short-term profits. It remains to be seen whether SKS and others are nurturing or killing the golden goose.

This piece is co-posted at the Center for Effective Philanthropy blog.

Whose Volunteer Experience Is This Anyway?

2010 ushered in do-goodism 2.0. The opportunities to check-in, check-out, or slack-out “for good” have never been greater. Voluntourism is on the rise, as people want to see and feel more of their vacation destination than a five-star resort may offer. But there are downsides, as I recently discovered at a cocktail party fundraiser.

The otherwise delightful woman to whom I was speaking was explaining how she and her husband had recently traveled to Cambodia with their kids in order to give the teenagers an understanding of poverty and their responsibility to help others less fortunate than themselves. I was interested.

When planning the trip, she explained, her kids had immediately dismissed Habitat for Humanity and other “traditional” groups because they wanted an authentic, personal experience. Prior to the trip, they’d gone online and researched places they could go and things they could do.  They’d found a small village that was building a library and some houses and that needed materials and books. “Perfect,” she thought. Emails were exchanged, arrangements were made.

But, she then went on to explain, the trip had all but been ruined by the fact that when they arrived the locals took the books and materials they’d brought and proceeded to build the structures themselves. Her kids, who had planned what they wanted to do and how they would direct the building process, were sidelined by locals who took over and did all the work themselves. Her kids were invited to participate, but they weren’t allowed to lead “their” projects. The goal of the trip, she complained, had been for her kids to feel how they could make a difference and this experience hadn’t provided that at all. “Overall, it left a bad taste in their mouths for future volunteer work,” she concluded.

It was then that I yelled, “It’s not about you!”

In my head.

Aloud, I asked her politely, “Whose volunteer experience is this anyway?”

Nick Kristoff’s recent New York Times piece on Do It Yourself Aid raised similar feelings. While it is great to get out and feel like “I’ve made a difference,” shouldn’t the emphasis in that sentence be on “made a difference” and not “I?” When the primary purpose of volunteerism or aid work becomes our own experience of self-fulfillment, we’ve crossed a line. And unfortunately, sometimes the term social entrepreneur with its emphasis on one person, is synonymous with a “me” orientation that is antithetical to strategies that have been effective in creating lasting social change. Similarly, some social enterprises may be praised for taking a bold approach that makes perfect sense to donors, but which might not be highly prioritized by those receiving. Recent criticisms of TOMS Shoes and other “buy one, give one” programs raise important issues. If TOMS Shoes are being sourced and made locally, then that is sustainable change. If they are shipped in, then it’s mostly plain vanilla charity with excellent marketing. Almost by definition, these donor- or giver-centered approaches can leave out indigenous/local groups that are working to help themselves, but keep getting left out of others “solutions.”

So that begs the question, how much should one’s own need for achievement, media, or notoriety influence decisions about giving? Volunteering? When, as funders, do our demands for metrics and causality shift from necessary rigor and become instead attempts to assign egotistical ownership? When is our desire to develop a strategy that is “unlike other foundations” truly innovative, and when is it merely chest thumping?

For foundations, I think strategic philanthropy, as outlined by many of CEPs studies and reports, gives a great framework for allowing impact — not ego —  to drive action. And personally? Well I love feeling that I’m making a difference, whether it is buying green products or volunteering or contributing to organizations I love. By doing these things I create a sense of community, connection, and empathy that benefits me as well as those on the other end of that support. The act of giving is mutually beneficial. But at the end of the day, it’s not only about me. Giving, volunteering, and the work done to support nonprofits becomes transformative when the goal is something much larger than just one person’s pride or fame or even self-actualization.

Do you have strategies for keeping your ego in check?

This piece was originally posted on the Center for Effective Philanthropy’s blog which can be found at http://www.effectivephilanthropy.org. I am a member of CEPs board of directors.

Giving As Good As We Get

This piece was originally posted  on the Center for Effective Philanthropy’s website where I have been a guest blogger. The Center for Effective Philanthropy (www.effectivephilanthropy.org) provides foundations with comparative data to enable higher performance.

A recent Harris Interactive poll suggests that Americans intend to give less in 2010 than in 2009. A combination of high unemployment and economic uncertainty have caused generous people to feel slightly less so. Despite this fact, it is also clear that Americans are giving more in new ways this year than ever before. Five years ago, we didn’t have the option to Tweet for Change, or, through Foursquare, Check-in for Change.*

One young woman who was interviewed about “check-in giving” through the CauseWorld app said, “CauseWorld makes me feel like I’m doing some good in the world every day. I don’t have much money to give to charity these days, like most people, so having a chance to direct money to some really important causes means a lot to me.” Declines in charitable giving have occurred in the past, but never before has that decline been coupled with the rise of so many other quick-hit ways to express generosity.

If the desire to be generous can be assuaged by directing someone else’s money, will we still feel compelled to give? Will we be willing to sacrifice our own money to support the causes we care about? For example, Starbuck’s has tested making charitable contributions as a benefit of checking-in. While this may be an appealing experiment to Starbucks regulars, it should be noted that these $4-latte-lovers are not offering to drop their Starbucks habit in order to direct those funds to charity.

Questions such as these were raised by Malcolm Gladwell’s New Yorker piece as well. Will casual support displace deep commitment? The jury is still out, but I think the potential difference in how nonprofits receive funding from individuals could, over time, be quite important. In aggregate, annual giving—usually defined as contributions from individuals—represents a core, stable funding base for many nonprofits. In fact, annual giving is often the counterweight to time-limited or non-renewable funding from corporations and foundations.

If, over time, nonprofits receive more and more funding from these embedded giving/contribution consolidators, will that negatively affect nonprofits’ cash flow? One recent study by Network for Good suggests the answer is yes. When offered a gift, the question nonprofit leaders often ask is not just “how much?” but “how often?” They all know that a consistent gift of X is almost always more valuable than a one-time gift of X+. So that leads to another question, how can nonprofits convert those casual givers to become regular givers?

In order to help nonprofits do this, foundations need to support the development of fundraising practices that help nonprofits engage with these new giving vehicles. Nonprofits shouldn’t simply be passive recipients of grants from social media philanthropic aggregators, they should be active participants. But as Beth Kanter regularly points out in her blog posts, an effective nonprofit social media fundraising strategy requires thought and time (and funders, that means money).

Nonprofits will need to learn how the ease of transaction (“Press # now on your cell phone to give a dollar to Haiti relief efforts”) can be maintained without nonprofits having to cede the entire relationship to a charity portal. In his recent Harvard Business Reviewpost, Dan Pallota also points out the importance of foundations placing strategic emphasis on their grantees’ fundraising capacity. While I am a strong advocate of general operating support, I think that foundations should go further to engage with grantees about fund development and adapting to the changing technological landscape.

Those of us who fund nonprofits can often be heard criticizing the lack of strategy and financial planning among nonprofits. But if embedded giving allows people to express support for many groups, will that lessen people’s allegiance to specific groups? Maybe funders should be putting more thought, research, and money into helping nonprofits creatively respond to these new fundraising challenges and amazing opportunities.

* Geo-location sites like Foursquare and Gowalla are game-like mobile phone applications that invite people to “check-in” when they have arrived somewhere and give a quick status update, similar to Facebook. On most sites, people gain points or credits the more often they check-in. Companies are beginning to offer coupons or time limited deals when people check-in. Causeworld is a similar site which gives people points they can use like frequent flyer miles to make donations to charities.

Before Strategy was Strategy

This piece is my first post for the Center for Effective Philanthropy as a guest blogger. The Center for Effective Philanthropy (www.effectivephilanthropy.org) provides foundations with comparative data to enable higher performance. Over the years, CEPs surveys of grantees has changed the way the foundations I have worked at have operated. And CEP provides benchmarking that helped us compare ourselves to similar foundations and to our own performance over time. Despite my move to Singapore, I continue to sit on CEPs board. These blogs will be a few of my thoughts on philanthropy, NGOs, aid, Asia and effectiveness.

When I was fresh-faced and just starting to work in philanthropy at a woman-focused community foundation, I made lists. I would write down the problem or issue I wanted to tackle, then make a list of reasonable solutions. For example:

Domestic Violence

  1. Make it a crime
  2. Lock up the criminals
  3. Get women legal services for safety & to pay for the divorce
  4. Provide counseling for the kids
  5. Get mom a job

Then I would look at the money I had available (never enough) and divide it equally among each of the reasonable solutions. Confident I was doing all I could to address the problem of family violence, I talked earnestly with the board of directors about the importance of our “multi-faceted” approach.  (now, that word looks quaint, but trust me you used it a lot in the 80s too).

Next, I would turn to the giant map of Los Angeles we’d hung on the wall and divided into what we called neighborhoods, but which were really more economic descriptors than geographic locations—South Central LA (Compton but not Ladera), Westside (Venice, but not Santa Monica), Hollywood (but not West Hollywood).

We would push pins into the places where we made grants—red for violence prevention, blue for economic development, green for arts, etc.—and we aimed to distribute those pins fairly and evenly from the San Bernardino mountains to the shining sea.

I did due diligence – financial assessments and site visits – on every organization that received a grant. We gave project but not general operating support. And we considered ourselves partners with the groups we funded.

And that’s how we did it.

This was what we called our strategy if someone had asked us that question, which really no one ever did. Far more frequently, what people wanted to know was “why should I give to a women’s foundation?”

Why I could talk about passionately:

– Because the status of women is a barometer of equality in any society

–Because if women flex our giving muscles to demand that solutions have a gender lens we will develop better solutions

– Because women are the backbone of financial decisions in most families and communities

– Because well-educated women give a lot more of their joint wealth to their husbands’ alma maters than they do their own

– Because sisters are doin’ it for ourselves.

The list went on and on.

At the core of the answers to “why?” was a belief that women didn’t want to be saved. Women wanted tools to make good decisions for themselves and their families. Women wanted the opportunity for hard work to result in something more than 63 cents on the dollar.

And that belief saved us from ourselves. It put us in partnership with the (mostly) women’s organizations we funded. Over the years, those partner nonprofits joined our grantmaking committee and our board of directors. They challenged our approach—why not general operating support? They challenged our funding partners—can Virginia Slims buy a table at an event? Uh, no. Their staff members wrote checks contributing their hard-earned dollars to the Women’s Foundation* because they felt like we were all part of the movement. And they helped us to understand how to prioritize “solutions” by telling us which ones mattered most in which communities, which ones were dead wrong in others, and how to add ones we’d never thought of ourselves.

We practiced an early form, I think, of what Peggy Saika recently called “democratic philanthropy.” Now not every foundation is willing or able to be as fully participatory, but it makes a huge difference if you can be. I learned, in those early years, that folks did not take kindly to the notion that their communities or their lives were problems to be solved. By starting from a place where we stated our “why” values and listened to theirs, we found we were in alignment. And that alignment allowed us to be on the same side of the table in determining “how.” And even working through massive disagreements on “how.” But that’s what partnerships are about.

In short, we found that good strategy starts with listening. And not just sporadic listening, but listening that is built into the processes of our grantmaking. If we understand how our grantees see the world, it makes us smarter, better partners.

* I am pleased to say that the Women’s Foundation of California has come a long way since my early days of strategy development at the Los Angeles Women’s Foundation 24 years ago. The Women’s Foundation of California is one of the most thoughtful, grassroots and policy oriented foundations I know and I owe them so much for helping me learn what I know about philanthropy and social change.

Sandwich To Go

Two photos taken on the same day in August:

Here a picture of my beautiful boys, Roman and Avery, dressed smartly in uniforms for their first day of the 2010-2011 school year. Below a photo of my dapper, Guayabera wearing Daddy. He’s 82 years old this November.

I took the picture of my Dad on Monday at an Applebee’s in Florida, just a few hours after Chris, my husband, took the picture of our boys in Singapore.

Because try as I might, I have yet to perfect the art of being in two places at once. So I missed Avery’s first day of first grade and Roman’s first day of 2nd grade, in order to spend some much-needed time with my Dad. As I agonized over the choice of where I most needed to be, the term “sandwich” generation kept coming to mind. That phrase, the origins of which are unclear to me, but which seem somehow linked in my mind to a Time Magazine cover, seemed both appropriate and ridiculous. Appropriate because I certainly felt mushed between conflicting demands on both ends of the generational spectrum, but ridiculous because I’m not sure there has ever been a generation that wasn’t a “sandwich” generation.

Both of my parents lived in households with their grandparents. I doubt my father’s mother would have called herself a “sandwich” generation member when she was caring for my dad and his siblings as well as her mother. But daily she decided, “Robert needs shoes” or “Momma needs new shoes.” Or medicine, or schoolbooks or a cane. And while one likes to think that no family member ever causes another’s suffering, the reality is that few of us have infinite financial resources and none of us has infinite time resources. So families, like societies, make tradeoffs — and these tradeoffs are across and between generations.

It’s a particularly 20th century notion that seniors, like teenagers, achieve independence. Pensions, Social Security, Medicare, the ability to live in separate homes hundreds, if not thousands of miles apart, allow us to forget that one family member gives, so that another member of the family gets. As it is in families, so it is in societies.

While it was hard on me to be away from my boys on their first day of school, I talked to them about why I was gone. They missed me but I have to believe they also gained something. Living across the world, it’s easy for my kids to view their grandparents as others. Related, but separate nonetheless. By seeing me make a difficult choice, they have a clearer sense of their grandfather as part of our family. One who needs and deserves family time and resources every bit as much as they do. Maybe I needed that reminder too.

Expo yourself

Quintessential Shanghai. Looking down never looked so good. View from the posh bar on the 92 floor.

Shanghainese are like New Yorkers–almost anything super-popular is too uncool to be considered. So it wasn’t surprising that our first few days in Shanghai we didn’t meet a single Shanghainese who had attended World Expo 2010. They all but sneered at the idea, but gave a smug”you go ahead” nod when we told them we were planning to attend. The travel sites I rely upon for planning tips were also full of people shrieking about 5 hour long lines, dropping-like-flies heat, and the sheer massiveness of the Expo site. So it was with a huge amount of trepidation that we drove across the rainbow bridge to the edge of nowhere, plunked down 480 RMB (about $70US) and were immediately abandoned by our English-speaking guide who would rather sit in the car and wait for 7 hours rather than brave the crowds with us. Who’s with me?Ten minutes into it, despite the heat, the crowds and the strong sense of being overwhelmed, we were all giggling with delight and knew we’d hit the jackpot of fun and interesting stuff. I mean think about it–giant pavilions built by people and countries from all over the world to tell what’s special and cool about their particular piece of the planet. Walk along and “ooh, look there’s Germany, there’s Nigeria, ooh check out Brazil.” The architectural representation of each country was fantastical. Like walking across the continents in a giant kids’ 3-D map of the world. An estimated 70 million people will visit the Expo by the time it ends its six month run. Of those, less than 3 million are expected to be foreigners. So here is the exciting thing about the Expo: tens of millions of Chinese are getting introduced to the world they have so quickly become a major part of. And the world they see at Expo, however sanitized and best-foot-forward, is mostly in the words of the other countries themselves. This is a big deal in China where media is so carefully groomed.We got lots of stares. My last trip to mainland China was in 1987, where I was a true rarity since most Chinese had never seen foreigners, much less an African-American woman. While not that much of it goes on in Shanghai, it was fairly common at the Expo because people there were from all over China. And many of them probably don’t see all that many foreigners regularly. My kids, normally shy, were great sports about having their pictures taken with people who spoke no English but were quickly able to demonstrate their desire to have a picture taken with (cute) foreigners. My kids quickly embraced their embassador roles.

The theme of the Expo is Better City, Better Life. While some were opposed to Shanghai hosting the 2010 Expo, it would be hard to find a more appropriate setting for this theme. There are 20 million people living in Shanghai and while beautiful, vibrant and exciting, it is hard not catch constant whiffs of  the grey/dark futuristic crowded gloom that Blade Runner predicted.

As Professor Joel E. Cohen of the Rockefeller Center on Populations puts it in his work projecting populations trends, “From here on out it is an urban world.” For the first time in history, more of us will live in cities than in rural areas. So building better cities really matters.

Having worked in public health for a considerable portion of my career, I am both inspired and a little terrified by what Shanghai and the Expo 2010 showed me about what can happen in a few decades. This go round, there were precious few bikes in Shanghai, a shocking change from 20 years ago. A huge loss that impacts not only air and noise pollution, but also speaks to a wholesale adoption of a very narrow definition of success and affluence. At Expo, clean fuel vehicles were very much in evidence but I still would have liked to have seen more bikes.

Haibao, which means Treasure of the Sea, was everywhere. And a big hit with my kids.

Sanitation, which 20 years ago consisted primarily of stinky pits in the ground, was MUCH improved. Let me assure you, this type of progress is not a given of economic development. With 300-400,000 people visiting  Expo daily, (Disney World is estimated to have about 40,000 visitors a day) I gotta tell you the bathrooms at Expo were clean, plentiful and urged water and paper conservation. I don’t pretend to know the reality behind the slogans, but I do know that health education matters and requires memorable messages and messengers, even if provided by kitschy characters. Before you join those making fun of the big blue mascot Haibao, perhaps remember Smokey Bear. My guess is that this Haibao character has a public education career far beyond the life of the Expo.

Overall, I’d give the Expo a big thumbs up. It opened my mind. It gave me hope. It made my kids excited to be part of a larger world. It raised the important point that yes, we will need Better Cities in order to have Better Life. But where it came up short is that in the end, only a few of the pavilions  (and the US pavilion did an admirable job on this front) captured the necessity of building a collective vision of BETTER which means equitable, just, sustainable and desireable.

After all, we can’t get there alone, but we’ve got to want to get there together.

P.S. If you decide to go, one tip that saved our bacon: go around 3pm and stay till 10pm (closing). Not sure if crowds were smaller, but not as hot and the pavilions look amazing when lit up at night. I could have skipped the “It’s a small world” rip-off parade, but my 6 and 7 year old kids were enthralled.

5 Things We Know, But Keep Forgetting

This is the full text of a speech I delivered on 24 April 2010 and the annual Council on Foundations meeting where I was selected as the James A. Joseph Lecturer by the Association of Black Foundation Executives.

I want to thank the Association of Black Foundation Executives for this honor and this opportunity. When Susan called and told me that ABFE had selected me for to be the 2010 James A. Joseph Lecturer and complimented me on my accomplishments she then said they were particularly interested in awarding it to me at this time, she paused, “at this time when I had left the field.” I was a little taken aback. Like I had stepped out of this world, into some other, a crossing over that folks felt the need to wave handkerchiefs and shed a tear as I drifted away. I thought, “ Susan, I’m not GONE, I’m just taking a little sabbatical.”

It is a fact. In December I left my position as president of the Blue Shield of California Foundation and moved with my family to Singapore. But it is interesting the way that the line between those “in” philanthropy and those of us “out” of philanthropy is so thickly drawn.

So thank you to ABFE for giving me the privilege of thinking about that line. About crossing lines. About being inside and being outside. And the opportunity to reflect from both spaces.

I have entitled this talk, The 5 Things We Know, but Keep Forgetting because it captures the knowing/forgetting/remembering cycle that characterized so many of the high and low moments of my career in philanthropy. Maybe I’m just hard-headed, but some lessons seem to keep coming back for me.

In an effort to remember and hold them a little tighter, I’d like to share those thoughts with you. So here they are. Five Things We Know, But Keep Forgetting.

Number 1: We should take more risk.

I don’t mean the kind of risk that is a narrow calculation of whether this grantee has a 48 or 63% chance of achieving these four goals. When we define risk in philanthropy we place it outside of our own walls and begin to assess the grantees’ risk of success or failure. But I am talking about us taking more risk. And I mean heart-stopping, “omigosh what have we just done?” “is that even legal?” kind of risk. The kind of risk that makes the safety players chuckle uncomfortably and snidely remark, “Gee I hope that works out for them.”

Nehru once said, “The policy of being too cautious is the greatest risk of all.” But that is not how it feels when making grantmaking decisions.

When I think about risk, I think about the people I know who have taken big risks. My dad for one. He was raised in a Southern Black upper class, lower-income family. You know. We have those in our community. Black folks who had risen in “class” because of their education if not because of the size of their wallets.

My dad was the son of those kind of Black folks. And he risked stepping off that precarious rung on the upwardly mobile ladder, to be a civil rights activist. To be in solidarity not with his ability to get ‘up and out’, but in solidarity with his community. And he risked his parents’ disapproval. Something we don’t often talk about is that everyone in our community supports civil rights leaders NOW, but everyone didn’t support them then. Many, like my father, heard constant admonitions to stop “worrying about all that marchin’ foolishness” which was clearly preventing him from grabbing the brass ring that, as a trained dentist, was so within his reach.

So how has that shaped how I think about risk in philanthropy? It reminds me that risk needs to feel personal. It needs to feel dangerous.  I haven’t felt that as often as I would like, but I have felt it. Like when I worked at the California Wellness Foundation almost 20 years ago and we launched a $30 million youth violence prevention initiative. We were a brand new foundation and I remember meeting with some established foundations. You’d have thought we had hillbilly painted on our foreheads. They questioned our science, poked holes in our theory, and seemed to say, “who do you think you are anyway, talking about $30 million?” And then we went into communities where parents of kids who’d been shot in drive-by’s asked us how dare we think some little bit of our money was going to change anything. I remember being mortified, and then I remember thinking about my dad and thinking, “Well we may not be right, but we better go ahead and find out.” There was too much at stake not to try.

I want to take the kind of risk guaranteed to piss someone off.

And not just the detractors. We have to be willing to piss off our friends and allies as well. To avoid the group think. There are examples: the education funders who want to strengthen public education but who supported charter schools, the funders who support and criticize the Gate’s Foundation’s approach to public health. When I took over the Blue Shield of California Foundation, many of my friends thought I had gone over to the dark side because our foundation was staunchly supporting the notion that every American not only has a right to health insurance, but also has a responsibility to have it. The idea of the individual mandate, a part of the recent historic health reform legislation, made us pariahs among the health advocates in California. And this was just 5 years ago. In order for risk to have real consequences, think of it less in terms of will this project succeed or fail, but will this funding have the opportunity to dramatically push progress forward and will it outweigh a real and tangible alternative use of the funds.

To quote the great American philosopher Chris Rock (who is in fact quoting his mother), “She would always say, If they don’t pay your bills and they can’t beat your ass, what do you care what they think of you?”

In order to take risks, we need thicker skins. Number one: Take more risk.

Number 2: The time is now.

We all feel it. That sense that everything–the good and the bad – is accelerating. We feel the urge to both slam on the breaks and floor the gas pedal as if our lives depended on it.

Every major part of our ecosystem is sending out distress signals.

“This planet came with a set of instructions, but we seem to have misplaced them.” Paul Hawkins founder of WiserEarth

There are an estimated 27 million people on this planet living in slavery. Not poverty. Slavery.

And here in this country we send high performing black students to college at the same rate we send low performing white students to college.

These are big, complex problems. It is easy to get lulled by the successive iterations of 3-5 year strategic plans into believing that time stretches out before us like a freshly paved road. It does not. Our destiny is rushing toward us.

We need to re-envision our relationships, our communities. Destabilize many of the beliefs we hold most true. Radically re-think how things get done.

It means all hands on deck. Nonprofits, governments and for-profits too.

Now many of us have grown up in the nonprofit world (that’s what we used to call it before it became the social sector). And you and I are going to have to give up a bit of our thirst for purity in order to quench our desire for impact. The current groundswell of interest in social venture investing is not a fad; it is the wave of the future. Some of the work for the greater good will be done by people wearing suits and making money. Maryland has just passed a law allowing the creation of B-Corporations or businesses that are permitted, even required to consider their employees, the community, and the environment in the development of their business models, products and profits. We may be seeing an end to the single-minded definition of ‘shareholder’ value which enforced a rigid process of externalizing all long-term costs to society and to future generations.

And some work will be done by those between the non-and for-profit sectors. Think for a moment how radically different it would be if, for example, foundations placed more of their assets against the problems we face by dramatically expanding mission related investing.

The problems we face are big and the time to solve them is now.

Number 3: Design matters.

There are many definitions of design, but one that I’ve seen that I like is,

“Design is the human power to conceive, plan, and realize products that serve human beings in the accomplishment of any individual or collective purpose.”

Holding exception to the word ‘products’, this sounds a lot like what we in philanthropy and nonprofit sector do, yes? So why is it so hard to design good programs and build strong organizations? Because when it comes to institutions, we have too few design models to play with and when it comes to products and services, we undervalue and underfund the design process.

While on a study trip with the Global Fund for Women, I met Jane Chen the founder of Embrace, a newly created nonprofit that builds and distributes a $20 baby warmer. Now this may not seem like such a big deal until you stop to consider the fact that 20 million low birth weight or premature babies are born worldwide each year. 4 million, or 450 every hour, die. A large reason is that their small bodies are unable to regulate their own temperature, a problem that is solved either by having access to a $20,000 incubator in a hospital or through home remedies such as putting the infant near an oven or fire in villages where incubators are not available. You can imagine that this latter route is what most resort to. It is largely ineffective and downright dangerous. As part of a design class at Stanford Jane and her multidisciplinary team of engineers, MBAs, industrial designers and med students set out to address the problem using integrated design and new materials technologies. And they have created a solution that goes from $20,000 to $20.

Design matters because some of history’s most effective social change actions utilized a structure perfectly designed to achieve the outcome. Large scale nonviolent social protests were an organizational innovation perfectly designed to engage those most impacted using the resource they had most available—large numbers of people who were fed up and ready to stand up. This structure was a hugely important innovation. Which one of us here is helping to nurture the new structures or products that will reshape our world?

Design matters because the way in which we give money is dramatically changing. The line between the helping and the helped, the do-gooders and the doing-wells are disappearing. Bono, Ashton Kutcher and Wyclef Jean are among the most recognized international philanthropists on earth right now. And that has less to do with their own personal giving but everything to do with their ability to inspire and mobilize other people’s giving.

The new giving characterized by contests and games, where the wisdom of the crowd directs the dollars, this is just getting started. But rather than seeing that as a process that would replace traditional philanthropy, perhaps we should consider ways that we could utilize these approaches.

And what if the crowd-sourced philanthropy isn’t a one-stop deal, but becomes an iterative process—which as we all know is the very definition of good design.

What if the crowd provides financial resources, and then goes on to provide creative, organizational, cultural and intellectual resources that help groups get things they could never otherwise have accessed. And what if there isn’t a board and an executive director because the work is distributed across regions and time? Some new sites like Kickstarter, fund ideas. Not organizations but ideas.

Of course, if organized philanthropy steps up, it can help make the crowd-sourcing better. It can structure “in-gaged” or integrated philanthropy to make sure that minorities and orphan causes don’t get forgotten. It can help to prevent the tyranny of the majority or the lowest common denominator. But that requires that we not ignore this new philanthropy, but utilize it. It means we have to think about supporting and investing in those who think about design and the ‘how’ as much as they think about outcomes. And we’ve got to try lots of things to see what sticks.

Design—of organizations and products—matters.

Number 4: Technology is just a tool. But it’s a power tool.

Technology isn’t the savior. It isn’t the devil. But it is up to us to figure out how to use it toward the best service of the communities we care about.

Years ago when I was running the MediCal Policy Institute, brilliant colleagues of mine came to me with the crazy idea of putting the Medicaid application on-line so that people could enroll through a computer at home, or their public library or a community clinic. We were initially dismissed. Ridiculed as peers reminded us, “We are talking about poor people. They don’t have or use computers.”

But how quickly that changed. It didn’t take long before community clinics saw the possibilities, then other funders. Suffice it to say that 10 years later, the organization now called Social Interest Solutions, produces technology that has screened more than 6 million people for applications to programs such as Medicaid, food stamps and the earned income tax credit.

We could spend a lot more time helping our grantees harness the power of cell phones, Twitter and fourSquare for the benefit of low-income communities? Maybe we should be creating ProPublicas in each barrio and housing project? NGO’s have transformed the way in which rural farmers in Africa and Asia find out the market price of their crops via voice messages and texting so they can make better decisions on when and where to sell to get the best prices. The nonprofit open source software group Ushahidi, which means “testimony” in Swahili, used text messaging to gather real-time data on violence following the elections in Kenya and more recently relief work following the earthquake in Haiti. We often say our communities are in crisis. Well how could these technologies help now?

The power of technology is not new. The civil rights movement in the US would not have been nearly as successful had it not been for the proliferation of a relatively new technology at that time: the television. Were it not for the images of proud and determined Black people being beamed into homes across the country, many historians have argued, we never would have gotten to the Civil Rights Act in such a relatively short period of time.

Data is simply the information we use to make sense of our solutions. Data can be statistics, but increasingly data is stories, texts, photos and videos. We do not have to fear that data paints a single dimension of complex problems so long as we help communities control their own data. Technology is simply the tool we use to gather and tell our stories.

The greatest technological innovation of the last thirty years may not really be a personal computer, but a cell phone. Almost everyone has a cell phone, almost everyone texts, and the cost of broadcasting tailored messages – and receiving valuable information back from large numbers of people – is plummeting. I just saw a service that allows you to do real-time surveys of an audience using text messaging and the results of each question would be displayed in your PowerPoint. Goodbye keypads. Couldn’t we use that in clinic waiting rooms to do fun health quizzes for prizes? Or to get feedback on services? Or to stay in touch with clients? And ultimately to measure changes, over time, in clients’ health seeking behaviors.

Technology is the power tool that can help us capture our stories so we can see ourselves: where we are hurt, where we need help, but also in all our beauty and glory.

Number 5: We need new leadership.

In thinking about Ambassador James Joseph and his legacy as I was preparing for this talk, I read an interview where he talked about the importance of leaders using soft power. As he defined it, hard power is the ability to make others do what you want. Soft power is the ability to convince and inspire people to want things you want, based on shared public values. It’s about working with people, not working on them.

I believe we are seeing a dramatic shift in effective leadership skills with Gen Y. They refuse to see the stark delineations we have created between getting and giving, working and living. If we get out of the way, they are going to lead us to rethinking organizations and communities. And they don’t have time to wait until we retire. We have got to be more comfortable letting them push us from behind, elbow us from beside and lead us from in front.

And I have to admit these shifting definitions of leadership remind me more of my mother, than my father. They led in very different ways. My mom taught school for more than 30 years. She taught middle school, 7th graders for most of that time. Now I don’t know about you, but I was pretty unbearable between the age of 11 and 13. Yet somehow this age group was one that my mom loved working with. Because this is an age when teachers have to practice a delicate dance of accompaniment. You can’t really push tweens and you can’t really pull them. One has to just be there with them, guiding imperceptibly. And that’s what my mom did. It was weird how many times when we were in a grocery or department store, a boisterous high schooler would break away from their pack or newly minted adults in their early twenties would come up to us in the grocery store to say, “Hi Mrs. Hayling, do you remember me?” And she always did.

I strive to be that kind of leader. But have most certainly fallen short more than I’d like. It occurs to me that maybe memory is a good natural limit to how many grants we should make. If it’s too many for me to remember all the people’s names and organizations, maybe it’s too many. Because maybe that is where the sense of seeing them, knowing/valuing their work and walking beside them as a partner begins to break down for me and for them. I’m not sure. I’m still grappling with this one.

But I do know that the willingness to see people who are usually invisible, to believe in the power of neighbors when a neighborhood is crumbling, and the willingness to value and accompany others on their journey, these are leadership skills that are the heart of philanthropy.

“We are spiritual beings, here to have a human experience.” I love this quote. Because as much as I believe in the kind of risk-taking, urgent, technology and creative design inspired social change that I have been talking about, I must also admit that we have to find a way to bring more love into this work as well. The purpose of strategic, responsive philanthropy cannot be just to win this or that policy battle. It is to build a more perfect union. It is to open a space of love and hope where new possibilities can flourish.

The Xhosa proverb states, “People are people through other people.”

Each day there is a choice. Only one choice really. Love or fear.

Sometimes, in philanthropy, we see the fruits the titans of fear have reaped and we are jealous. We think we can follow the same steps and pour equal amounts of money into “our side” and then we’ll win. We will not win that way. Because as some point the careful task of crafting a new enemy to hate only builds a world with more hate. Politics are ugly and sometimes you’ve got to get in there swinging, but you also have to get yourself back out.

Adaptive leadership gurus call this sitting on the balcony. This is a privileged position we can hold and can offer to our grantees as well. And what I see from the balcony is that all this work is about using the power of love, and respect, and inclusion to build better links and connections between people.  The tech people call it networks. The community development people call it neighborhoods. Whatever you call it, it is looking for those things that bind us, those people who inspire us and those organizations that make us want to join, not divide.

Because in the end, the most important thing we know and keep forgetting is that in this struggle for a better world our hearts have to change before our minds will. And then, only then, will we be the change we want to see.

 

 

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Five Things We Know But Keep Forgetting by Crystal Hayling is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.