22 September 2010 ~ 0 Comments

Time for “Catalytic” Philanthropy?

Sustainability

In the near future, foundations and large donors may be less likely to just write a check. They understand that social change is a messy process; but they believe its time to change how they fund and engage with nonprofits like us.  Here’s why:

  • They’re startled by the fact that there are more then 1.3 million nonprofits in the US, and despite the fact that annual giving grew by 255% between 1980 and 2005, the United States dropped from 2nd to 12th in basic measures of health, education, and economic opportunity.  Certainly, we are better off due to their collective efforts, but are we investing in the right objectives if our outcomes are slipping?
  • They’re curious by the fact that only 1% of nonprofits have budgets greater then $10 million while 90% of nonprofits are small with budgets less then $500,000. Are many of these nonprofits duplicating efforts and/or too small to create significant change?
  • They’re aware that most nonprofits function alone and that “collaboration throughout the sector is almost impossible, as each nonprofit competes for funding by trying to persuade donors that its approach is better then any other organization addressing the same issues. Very few systematically track their own impact.” They are right to ask if the well-intended, but disjointed efforts of countless struggling nonprofits will lead to workable solutions for large-scale social problems.

Writing for the Stanford Social Innovation Review, Mark R. Kramer framed these concerns and outlined 4 practices of catalytic philanthropy for donors who want to buck the status quo and make significant change:

  1. Take Responsibility for Achieving Results: If a donor wants to solve a problem, they must decide to do so   themselves by getting personally involved and not just investing dollars.
  2. Mobilize a Campaign for Change: Adaptive challenges require cross-sector collaborations and mobilizing stakeholders.
  3. Use All Available Tools: Tap into corporate resources, investment capital, advocacy and litigation, lobbying.
  4. Create Actionable Knowledge: Compile and analyze the data to inform refined change strategies

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