Augusts in New Hampshire

These remarks were given by William Schambra at the Grantmakers for Effective Organizations 2008 National Conference held at the Palace Hotel in San Francisco on March 10, 2008.  The session, entitled "Back to the Future: The 'New' New Philanthropy," also featured Paul Brest of the William and Flora Hewlett Foundation and Edward Skloot, of Duke University's Center for Strategic Philanthropy and Civil Society.

AS WE consider the topic "the new, new philanthropy," I'd like to put it into the context of the "old, old philanthropy." Because I think many new, new grantmakers today enter the field with a certain naïve assumption: that they are the first to bring rigorous expectations about effectiveness and impact to the field of philanthropy. Nothing could be farther from the truth.

In fact, the central commitment of modern philanthropy, founded over a century ago, was precisely to be effective in a scientific, measurable way, a way that had never been known before. The prior approach – disdainfully called "charity" – had all too often relied on emotion, personal whims, or parochial allegiances to guide giving.

But modern philanthropy was going to be different because it was vitally interconnected with the new sciences of society like sociology, anthropology, psychology, and political science. These sciences promised to analyze human behavior and institutions in such a way that we could, for the first time, truly understand, calibrate, and control them.

If human affairs could be transferred into the hands of professional elites trained in the new sciences, we could make genuine, effective progress against human ills in a rational, systematic, measurable fashion.

It's no accident, then, that modern philanthropy directed much of its beneficence at the beginning of the 20th century to the disciplines and institutions where the new progressive sciences were being developed, and where professionals were being trained. Law, medicine, public health, and social work were all reorganized around the new sciences. Research universities and think tanks were established to apply the sciences to human affairs and train new elites – all thanks to new benefactors like Rockefeller, Carnegie and Sage.

If ever there were a moment when grantmakers were truly likely to be effective, this period – the first two decades of the 20th century – was it. This was the Camelot of strategic grantmaking. A handful of wealthy, powerful foundations dominated the landscape of philanthropy, and collaborated closely among themselves. Indeed, they dominated the landscape of national public policy itself, because federal and state social programs were only beginning to develop.

Through the new sciences of society, philanthropists were united behind a common understanding of how to approach social problems, and a common metric for determining effectiveness and outcomes. That vision was widely shared by the professional and governing elites of the nation, who were deeply indebted to the foundations for their universities and research centers.

This Camelot moment for strategic philanthropy sprang to life each August in the late 1920s and 1930, when the nation's leading foundation directors and social scientists gathered en masse at a summer resort in Hanover, New Hampshire. They would play tennis and swim all day. But in the evenings, they would plot and plan the next phases of research and policy for human progress, with all the major American philanthropists in the same room prepared to write handsome checks, and all in agreement about the means and ends of effective social action, and how it should be measured.

We are, of course, very far from that Camelot moment today. Instead of a handful of large foundations calling the shots for American philanthropy, we have tens of thousands of foundations, which would create a scheduling nightmare for the tennis courts of a New England summer resort. Notwithstanding incessant calls for collaboration, consortiums, and coordination, these countless foundations evidence a bewildering diversity of means, ends, and notions of how to connect them.

Where once the nation's leading universities and research institutions were critically dependent on foundations for funding and so for guidance, today some of them possess endowments that dwarf those of most foundations, and pursue academic programs without heed to philanthropy's concerns.

Where once philanthropy was the leading player in national social policy, today government at all levels has grown enormously and dominates the landscape of virtually every public policy issue. The policy scene consequently is awash with vast, entrenched, bureaucratic institutions, as well as vigilant unions defending the employment prerogatives of those who staff them.

Government in turn provides substantial support for the social service nonprofits and cultural and arts institutions that once depended on foundations for support. Non-governmental funding comes not from foundations, but from fees for service or individual contributors. Finally, and perhaps most important, few today have faith in a unified, coherent, rational, scientific approach to public policy, capable of producing universally measurable and comparable outcomes.

In short, and in contrast to the early decades of the 20th century, foundations tend to be bit players on the American policy scene, drastically diminished in influence, disorganized, dispirited, and lacking a common vision or intellectual framework for their undertakings.

In spite of their reduced status, though, foundations today tend to plot out their strategic giving as if the outcomes still depended almost entirely upon their funding. Even the most sophisticated efforts to account for unpredictable outside influences – such as Paul Brest's insightful notion of "expected return" – imply the ultimate possibility of rational control through a precise calculation and comparison of alternative outcomes.

It's still possible for foundations to operate as if they were summering at Hanover because they are, as often noted, almost impervious to larger social forces. Because they still have cash to dispense, few outsiders are brave enough to call them on their philanthropocentric view of the world – a view as outdated as Ptolemy's geocentric view of the universe. And so grantees silently but resentfully go about trying to construct a coherent program by positioning themselves at the point where the idiosyncratic strategic plans of their supporters happen to intersect.

Philanthropy's obliviousness is only compounded when each new generation of the wealthy enters the field and, seeing only futility from previous foundation programming, pronounces itself appalled that philanthropy has never tried to be rigorous about impacts or outcomes – a state of affairs that of course it will remedy. Such a naïve, ahistorical view simply puts us back into the closed loop of inflated, utopian expectations followed by bitter disillusionment.

In light of this, I think we have to understand strategic philanthropy in a radically different way. Of course foundations need to specify missions and goals for themselves. But I think it's a serious error to be too specific or detailed in advance about the strategies needed to reach them. It is wildly unrealistic to postulate a theory of change and expect anything like its typically complex, fragile chains of cause and effect to play out in real life.

As the experts say, there are simply too many "exogenous variables." The social landscape today is just too complicated, too cluttered with other actors which have far more impact on the outcomes than do foundations.

Foundations, of course, often bravely proclaim that they realize this, and so they pledge to use their limited funds to "leverage" the resources of these other actors toward the desired end.

But the fact is that those other actors – massive government bureaucracies, global corporations, powerful public sector unions, and other mega-institutions – have proven to be utterly impervious to direction even by those explicitly, legally charged with the task. They've eaten presidents and Congresses for breakfast. They are unlikely to be swayed by a fistful of dollars dangled before them by foundations.

What foundations can do, I would suggest, is to be serious, quiet, attentive students of their surroundings, watching carefully for opportunities to enhance slightly the trends that they applaud, and diminish slightly the trends that they deplore.

That modest, humble goal is the best that foundations can aim for today. The premise must be that the primary drivers of social action will always be others, who are open to influence only in the rarest and most fleeting of circumstances, and only by those not otherwise mesmerized by their own internal plans and processes. Even then, the impact of foundations will be slight, and probably not at all clearly attributable to philanthropic intervention.

Let me give you an example, drawn from conservative philanthropy where I've spent some time. The conservative foundations – Bradley, Olin, Scaife, and several others – are often held up as examples of strategic philanthropy, successfully and single-handedly creating a political movement that managed to capture – or steal – the national policy agenda. In other words, the conservative foundations surely give the lie to my argument for philanthropic modesty and humility.

That's absurd, of course. Operationally, the conservative foundations did nothing other than to replicate on the right the various policy institutions that had been established on the left by the progressive foundations a century earlier. The new conservative institutions, in turn, did not create political change, but merely capitalized on the political turmoil that American liberalism brought upon itself during the 1960s and 1970s, as LBJ's Great Society provoked fierce resistance from both the New Left, on the one hand, and George Wallace's blue collar, white ethnic voters, on the other.

To be sure, here and there and at particularly critical moments, the conservative intellectual apparatus contributed a key study or funded an important legal case or held a useful conference. But the foundations mostly stood back and watched for opportunities presented by events driven by others, rather than trying to force circumstances by detailed strategic planning.

This approach – watching for opportunities to make small differences – applies not just at the grand policy level, but at the grassroots level as well. Here, I heartily recommend a new book by another California philanthropist, namely, Grassroots Philanthropy, by Bill Somerville, founder of Philanthropic Venture Initiatives in San Francisco.

Rather than having the experts at foundation headquarters draw up a grand strategy for transforming a neighborhood, he suggests, it would be far wiser for the philanthropist to get out of that comfortable chair in the foundation office and spend most of her time quietly and discretely poking around the neighborhood.

The point is to find the unsung community leaders who have particular, concrete ideas about how the neighborhood can be improved, and who can do a great deal with a small grant at a particularly critical place and time.

These small, quiet interventions certainly don't add up to a coherent, unified strategy. But they do modestly enhance favorable trends and diminish unfavorable trends in the manner appropriate to the status of foundations as relatively minor players among other, more important players.

The additional virtue of this approach is that it opens itself to the civic engagement of citizens who have otherwise often been marginalized by the larger social policy actors, and thus helps meet the pressing national need for democratic renewal.

In this more humble conception of effective philanthropy, foundations accept the evanescence of their Camelot, and embrace a much more modest role as one, severely diminished public actor among many.

Of course, philanthropocentrism would predict that foundations will instead deal with the frustrations of strategic planning and measurement by redoubling efforts to strategically plan and measure. My humble expectations for philanthropy lead me to suspect that it's not ready for humility.