Nonprofits Need Strategic Philanthropy.

Nonprofits need strategic philanthropy.  Make no mistake about it, the need is urgent but should not be confused with “big bet” or “audacious philanthropy.”  Instead of reinforcing the mythology of the “bigness of philanthropy” and its power to be the source of change, nonprofits need philanthropists who bring equal partnership, strategic investments, and humility.

This is the third article in a series about what nonprofits need from philanthropy at this moment in time (see Part 1 and Part 2) and it follows a series of articles about nonprofit courage (see here). It is my contention that philanthropy must match nonprofit courage by providing strategic philanthropic investments.  In my last article, argued the concept of Audacious Philanthropy that appeared in a recent Harvard Business Review (HBR) article is over simplistic at best and self-deceiving at its worst. The premise is that philanthropy has played a major role in breakthrough social change movements over the last three decades.   For example, the HBR article highlighted progress made in decreasing tobacco use and associated the philanthropy of the Robert Wood Johnson Foundation and American Cancer Society as pivotal investments leading to the tobacco control movement. Really?

According to the 100-page, Surgeon General’s report, The Health Consequences of Smoking—50 Years of Progress, published in 2014, the Robert Wood Johnson Foundation (RWJF) is mentioned only three times. Each reference attributed RWJF as the funding source for specific initiatives. If RWJF was a significant catalyst in the Tobacco Control movement, one might expect a robust discussion of the Foundation’s role and influence. The reality is that the RWJF did not even come into existence until 1972, a decade after tobacco was deemed as having a causal relationship with lung cancer and two years after Richard Nixon signed legislation officially banning cigarette ads on television and radio.  The tobacco control movement was well underway without “catalytic” philanthropy.

Sticking with tobacco control as the illustration, I would like to talk about social change movements and the role of philanthropy from a different perspective.  I believe that to understand philanthropy’s role in social change requires understanding four principles.

1. In social movements, people drive change. The advances made in dramatically reducing tobacco consumption in this country was the result of people. Advances were made by scientists who doggedly moved the understanding of tobacco’s harmful effects from the laboratory to population studies, and from association to causality. Advances were driven by lawyers who litigated against the tobacco industry across many fronts. Investigative journalists played their part in exposing the tobacco industry. I could go on. However, one of the most impressive victories was in 1988, when 5,607,387 California voters approved the Tobacco Tax and Health Protection Act ballot initiative.  This one ballot initiative has been described as “the quarter that changed the world.”

The Tobacco Tax and Health Protection Act needs one more footnote.  The ballot initiative in California was driven, in a large part through a tri-agency coalition of the American Heart Association, American Cancer Society, and the American Lung Association.  These three disease charities had statewide networks of individuals who were negatively impacted by tobacco. These people volunteered for, received support from, and donated to the three disease charities. The people within these networks were the “boots on the ground” and were essential to building support for the tobacco tax initiative. Through people, signatures were gathered, funds were raised, and votes were cast. 

2. In social movements, the government is the backbone. The success of a social movement is ultimately measured by how deeply the change becomes part of the social contract between the government and the people. Most social movements are accelerated and sustained by the government action and involvement. The movement of tobacco control arguably dates back as far as 1929 when Surgeon General Hugh S. Cumming warned about the hazards of tobacco. The ongoing government investment in the science that explored the negative health impacts of tobacco was instrumental in building the science base required to elevate tobacco use to the level of a serious public health risk. Over time, the regulatory authority of the government, the ability of the government to raise tobacco tax revenues, and government investments in building the infrastructure required to support the social change, were essential to preserving the social changes related to tobacco control.

Again, it is instructive to return to the California tobacco control movement funded by the tobacco tax initiative. The initial year of the tobacco tax generated $93.5 million and established a comprehensive tobacco control infrastructure for the entire state. The infrastructure included: 1) comprehensive programs and local leadership delivered through sixty-one local health departments, 2) state, regional and locally funded competitive grants, 3) statewide training and technical assistance, 4) evaluations of program effectiveness and 5) funding for aggressive anti-tobacco media campaigns.  Over the next two decades, the tax revenues resulted in nearly $1.3 billion dollars invested in preventing and reducing tobacco use through programs, public policy, and changing community norms.

3. In social movements, all philanthropy is not equal. In the Audacious Philanthropy article, the authors commingled in the same sentence the philanthropy of the endowed foundation like RWJF with the philanthropy of the American Cancer Society (ACS). You can’t. RWJF is accountable to no one other than a 15-member, hand-picked board of trustees. ACS is a disease foundation that blends research grants and direct service programs that are delivered through a national network of state and local affiliates. In addition to being accountable to a board of trustees, the ACS is accountable to its affiliates and everyone who volunteers and donates to the organization. Unlike the RWJF that skims off 3 or 4% the interest of accumulate wealth, in perpetuity, the ACS aggregates donations from corporations, large individual gifts, and an army of small gift supporters, each with a story to tell of how cancer has touched their lives personally. Heck, in the story of tobacco control we must recognize that even the tobacco industry deployed philanthropic resources in an attempt to slow or blunt the progress of the tobacco control movement.

The point is that not all philanthropy is created equal. Endowed and private foundations, while at times provide large financial capital, have also been criticized as being antithetical to democracy.  I first encountered this thinking back in the early 1990’s when Noreena Hertz wrote the book Silent Takeover.  More recently, this idea is at the heart of David Callahan’s book The Givers and is also critiqued in a more nuanced working paper (see here) presented by academic Rob Reich of Stanford University.  Conversely, philanthropy, that is federated, networked, or participatory in other ways, represents both financial and social capital. When it comes to successful social movements, there is a need for the democratization of philanthropic capital rather than reliance on the annual margin of endowed philanthropy.

4. In social movements, philanthropy is a strategic tool. Too often philanthropy likes to flatter itself by believing that it is the tail wagging the dog. In reality? Philanthropy is most often just the tail. Over the course of two decades, the Robert Wood Johnson Foundation invested $700 million in tobacco-related research and program innovations (chronicled here). However, as impressive as this is, over the course of that same time, the state of California invested twice that amount of money in maintaining a single statewide program infrastructure. Remember too, that the litigated Master Settlement Agreement between 46 state Attorneys General (and five Territories) and the tobacco companies, extracted from the tobacco industry marketing concessions, the establishment of anti-tobacco programs, and payments to states of $206 billion over the first 25 years of the agreement.

The point is not to criticize the impressive investment and contributions of Robert Wood Johnson Foundation but to reframe the role of philanthropy in social movements.  Philanthropy contributes, augments, leverages, but does not lead social change.  As the tobacco control movement typifies, private philanthropy can play a strategic role rather a (buzzword worthy) catalytic or transformative role.  

The point?  If we understand the principles at the core of social movements then we can admit that audacious philanthropy is not about transformative grantmaking. Instead, audacious philanthropy is about partnerships, strategic investments, and humility.

In this article series, I am arguing that, at this moment in time, nonprofits desperately need philanthropy as strategic partners rather than transformative leaders. Even before this latest round of natural and man-made disasters, nonprofits were facing storm clouds blowing in a perfect storm that threatens the historical progress made in building many social movements.  We are watching the erosion of progress made on economic equity, healthcare, safety and justice, social equity, education, equal rights, and environmental conservation (to name but a few).  The nonprofit sector needs philanthropy more than ever but we need philanthropists as servant leaders, not knights in shining armor who think they know best because they are sitting on a mountain of cash in their endowment or personal stock portfolios. Audacious philanthropy?  It is about joining the fight to save and rebuild the deteriorating social contract and nonprofits need all the help we can get. 

As always, your thoughts are welcome.


Photo Credit Qimono

Mark Fulop
Mark founded Facilitation & Process in 2009 to help organizations and communities bridge the gap between where they are today and where they want to be tomorrow. He’s led dozens of Portland nonprofits, government agencies and philanthropic organizations through complex change initiatives including strategic planning, revenue planning, board development, collaboration, and facilitation.