In the wake of the recent Giving Pledges, we’ve been discussing what advice we’d give a major philanthropist (aside from our usual plea to conduct evaluations and share them publicly).
For the most part, our recommendations and criteria are aimed at individual donors, not major philanthropists. We stress the value of given to proven, cost-effective, scalable organizations rather than funding experiments, but we don’t feel that this advice applies to major philanthropists - taking risks with small, untested organizations and approaches makes a great deal of sense when you have the time and funds to follow their work closely, hold them accountable, and perform the evaluation that will hopefully show you (and possibly/eventually the world) how things arae going. However, we do have some thoughts on the kind of risk that’s worth taking.
One of our biggest frustrations in trying to help individual donors has been the difficulty of finding organizations, as opposed to programs or projects, we can be confident in. As we have discussed in our series on room for more funding, we feel that donors can’t take “restricted gifts” at face value, and that they must ultimately either find an organization they can be confident in as a whole or one with a clear and publicly disclosed agenda for it would do with more funding. Such organizations have proven very difficult to find.
- In the area of developing-world aid, we’ve found many organizations with activities so diverse that it’s impossible for us, or for them, to provide any kind of bird’s-eye view of their activities.
- Meanwhile, we’ve also seen very promising intervention categories that we can’t support simply because we can’t match them to strong, focused organizations. See our past discussion of community-led total sanitation; we have similar issues with salt iodization.
- In more informal investigations into other causes, we’ve found a multitude of organizations that seem to act as “umbrellas” for a cause, seemingly doing “many things related to the cause” rather than pursuing narrower, targeted agendas. For an example, see our discussion of anti-cancer organizations.
- For another example, see the organizations listed at Philanthropedia’s report on global warming, which are mostly not focused solely on specific anti-global-warming strategies, but rather extremely broad environmental organizations simultaneously carrying out all manner of global-warming-related activities (forest conservation, political advocacy, research into new energy sources and more), as well as non-global-warming-related activities such as endangered species protection.
Of course, it could make sense for an organization to have varied activities, if there are synergies between them and a clear strategy underlying them. But in all the cases discussed above, that doesn’t appear to be what’s happening. In fact, my impression from the conversations I’ve had with major funders is that most large organizations are essentially loose coalitions of separate offices and projects, some excellent, some poor. Two major funders have stated to me, off the record, that one major international nonprofit does great work in some areas but that they would never endorse a contribution to it. One has stated to me that (paraphrasing) “I don’t think about what organization to fund - it all comes down to which people are good, and people move around a lot.” From scrutinizing nearly any major funder’s list of grants, or from examining the work of the Center for High-Impact Philanthropy at University of Pennsylvania (which aims to advise larger donors), it seems clear that the typical approach of a major funder is to evaluate projects and people, not organizations.
Unfortunately, this attitude is somewhat self-fulfilling. As long as major funders treat organizations as contractors to carry out their projects of choice, organizations will remain loose coalitions; successful projects will be isolated events. We’ll see none of the gains that come with organization-level culture, knowledge and training built around core competencies. And people giving smaller amounts will have no way to know what they’re really giving to.
We’ve argued before that great organizations are born, not made. Rather than trying to wrench existing organizations into their preferred projects, we’d like to see more major funders trying to “birth” great organizations, so that there’s something left over when they move on.
My heart rose as I ready, “As long as major funders treat organizations as contractors to carry out their projects of choice, organizations will remain loose coalitions; successful projects will be isolated events. We’ll see none of the gains that come with organization-level culture, knowledge and training built around core competencies.” Yes, a million times, yes.
I’ve worked with over 300 grassroots organizations in east and southern Africa in my career. In the context of AIDS and poverty, deeper understanding of organizational development within the context of local organizations serving vulnerable children and families in Africa is key to unleashing the impact and potential of these efforts.
I believe a new set of fundamental skills is necessary for those working in philanthropy and development, especially internationally. The ability and penchant to understand and work with organizations of any size or type can and should become a core capacity of donors, governments, and all key stakeholders working on behalf of social change.
I was wondering about for-profit analogues of the problems you describe, so I did some cursory research. Turns out that corporate mergers generally decrease shareholder value, rarely achieving the synergies they hope for. This seems relevant because part of what you’re saying seems to be that many large nonprofits lack beneficial synergies across projects; too many large nonprofits take an internal “portfolio” view.
I’m wondering why this is, and I have two hypotheses but no evidence. First, most mission statements by large nonprofits are sufficiently broad that almost anything could fit within them. If you think you’re good at fulfilling your mission, and you face an expansion opportunity that falls within it, it might seem like a good idea to take advantage of it. Second, I suspect that nonprofits may share one of the failures of for-profit corporations that merge, which is a lack of clarity about core competencies. This seems to be a distinguishing feature of a number of the charities GiveWell recommends - VillageReach and TFA come to mind, for instance - which are all very clear about what they do and how they do it. But when you think of UNICEF or Oxfam, it’s much harder to distinguish specifically what they do really well.
This second hypothesis might also get at why funders seem to ignore organizations in favor of projects and people. If organizations lack a coherent and overarching core competency, it’s easy to see why the organizations are ignored in favor of their component parts.
Does this mean that there should not be large nonprofits that run diverse portfolios?
My impression of working in several offices of large INGO is that the desired organisational cohesiveness Holden looks for is frustrated one step down, with departments within separate offices themselves acting as loose coalitions.
To take Jennifer’s idea a little further, I’d like to see supporters of social change not only embrace organisations of all sizes, but hold large INGOs to account in ensuring that their interactions with small NGOs are empowering and meaningful. Too often I see the INGO/NGO relationship as tokenistic. Call it what you will: master/servant, primary-recipient/sub-grantee, technical-adviser/implementing-partner, but donors seem to easily overlook (or accept) INGO ’spin’ when it comes to the lack of community consultation and local NGO voice in programme design.
Alexander, I wouldn’t go that far. I think accountability, clarity about activities/priorities, and meaningful self-evaluation are paramount for large organizations. These things may be easier to produce when scope is narrower, but I’m open to recommending any organization that can produce them.
Hear, hear for expressing this sentiment. I would add that what also bothers me is this focus on ‘contests’ for dollars. I co-founded and run a small program in Jerusalem, Israel. Inclusion programs - informal education - for kids and teens with special needs. I think what we’re doing could be ground breaking in the long run but running the program takes up marketing energy and as for contests? I just think that dilutes the message of Shutaf - creating social change through quality programs in an atmosphere of acceptance of inclusion.
We work hard for our fundraising dollars and are proud that we continue to be supported by mostly smaller donors, who like what we’re doing and believe that it’s special. Yes, we need capacity building funds and more but I just feel that it will come when we’re ready and when we’ve done the groundwork we needed to do.