Strategic Philanthropy

A new generation of philanthropists has come of age. Self-made, focused on accountability, and determined to be as successful giving their fortunes away as they were making them, these hands-on donors are forcing not-for-profits to take a long, hard look in the mirror. In their new book (Money Well Spent: A Strategic Plan for Smart Philanthropy, ©2008, Bloomberg Press), authors Paul Brest, president of the William and Flora Hewlett Foundation, and Hal Harvey, president of ClimateWorks, explain how to create and implement a strategy that ensures meaningful results. Components of a smart strategy include: achieving great clarity about one's philanthropic goals; specifying indicators of success before beginning a project; designing and implementing a plan commensurate with available resources; having an evidence-based understanding of the world in which the plan will operate; and paying carful attention to milestones to determine if you are on the path to success or if midcourse corrections are necessary. Here the authors address the challenges facing not-for-profits.

1. What are some of the challenges of strategic philanthropy?
   One of the challenges of strategic philanthropy requires having great clarity about what the goals are and specifying indicators of success before beginning a philanthropic project. Once these goals have been determined, strategy is the tool to aid an organization in achieving its mission.

    

2. What can philanthropists bring to the table to start and strengthen organizations?
   A sense of mission, commitment and passion are essential to every aspect of the work of philanthropists and the not-for-profit organizations they support. Without the capacity to move beyond passion to effective planning and execution, the sector would be left largely with well-meaning efforts that confuse good intentions with real effects.

    

3. What are the three financial instruments available to philanthropists?
   The three financial instruments available are: grants, which are intended to achieve social impact without financial return; mission investments, which try to achieve both social impact; and financial returns and conventional investments, which are intended to achieve financial returns with no social impact.

    

4. How does strategic giving help businesses in a competitive marketplace?
   Strategic giving reinforces the message that the company makes good use of its resources and cares about impact. Furthermore, strategic giving also demonstrates how you're making a difference. Sharing those success stories with your customers or your community can be an important part of a larger communications strategy. For example, say a company engages in a campaign to support low-income youth in a community in which it is doing business. A strategic approach would look at the kinds of programs that are best suited to keep youth in school, or raise their prospects for getting a good job, or other good outcomes. Then, you might track the children who participate in the program, and measure how they are doing. You might learn something along the way worth sharing with others. You would certainly be more articulate about the value you're creating in your community than if you had supported a program but did not have a clear understanding of what constitutes success.

    

5. What is the most common mistake businesses make when choosing whom to support? Why?
   Not doing the same sort of due diligence on not-for-profit organizations that they would on a business partner or investment. It's important to really understand if the organizations you are inclined to support are a good fit for the goals you have set for yourself. It may seem intuitive, but you'd be surprised how often an organization gets support even though it may not have the leadership or the proper staffing to do the job.

    

6. How can that be avoided?
   Don't turn off the strategic business brain when you're doing philanthropy. Do your homework about the organizations you are inclined to support. Is their goal consistent with your goal? Does their approach to solving a particular problem make sense? Do they have the resources they need to be successful, including staffing? Good strategy is good strategy regardless of the goal. It's extremely important to understand what your goal is, that you have a clear plan for achieving your goal, and that you have some indicators that would let you know if you are on the right track.

    

7. What else should our readers know about strategic corporate philanthropy?
   Individuals and corporations have been engaging in organized philanthropy for well over a hundred years for a very simple reason?they want to do what they can to make things better for others. This is a core American value that we share, but I also believe that there are some key steps that a company can take to make sure it maximizes the value of its philanthropic dollar, which is both good for its image and results in greater value to society.