(This blog post originally appeared on the Stanford Social Innovation Review website.)

The philanthropic sector seems to be changing its tune about failure. While some, like former Hewlett Foundation President Paul Brest, have been encouraging philanthropists to talk about their failures (of grants, initiatives, or entire strategies) for years, only more recently has the sector more widely adopted the view that failure can be something positive, an indicator of a willingness to take risks, experiment, and adapt. A number of recent initiatives demonstrate this new outlook: the Case Foundation’s Be Fearless campaign, the Institute of Brilliant Failures Award for Best Learning Moment in international development, the Admitting Failure online community, and the FailFaire conferences. All of these have launched in just the last three years.

While failure can be an incredibly valuable learning tool, research from the private sector suggests that most organizations don’t take a systematic approach to experimentation, and therefore don’t reap the benefits of failure. In 2011, Bridgespan began a series of blogs based on a decade of close client work with philanthropists called “Does Your Philanthropy Have an Adaptive Strategy?” These blogs chronicled an emerging redefinition of strategy from a static towards a more flexible view of what constitutes success, and a greater willingness to prototype ideas, learn from mistakes, and adapt in light of new information and opportunities. A video series of candid conversations with more than 60 philanthropists, recently released by Bridgespan, echoes this approach and provides five insights into how to diagnose, learn from, and improve after failures.

1. Start with clear definition of success. In the videos, Paul Brest notes: “You can’t know whether you’re succeeding or failing unless you’re pretty clear about what outcomes you’re achieving.” Philanthropists can be especially challenged in being clear about outcomes, since they must typically consider outcomes at multiple levels: what their grantees are achieving for the people they serve, how the capacity of the grantee organizations themselves may be increasing, and whether the philanthropist and grantees are collectively achieving a broader set of outcomes for populations or systems.
    
2. Measure along the way to learn and adapt. Since even the best strategies are based on an imperfect understanding of future conditions, plans and initiatives need to be regularly evaluated against new information. When the Robert Wood Johnson Foundation (RWJF) first got involved in end-of-life care, it funded a study to test whether an intervention it planned to support would result in the outcomes it desired. According to RWJF President Risa Lavizzo-Mourey, the study revealed that, “What we thought was going to happen absolutely didn’t happen,” and this allowed RWJF to change course and help advance the movement that changed the way physicians deal with death and dying. Performance measurement systems that behave more like instant feedback mechanisms than long-term evaluation studies alert philanthropies when a strategy is not working as planned, and provide the input to reflect and adapt when necessary.
    
3. Resist seeing results as black or white. With increasing efforts to publicize failures, there is a growing pressure to label initiatives and grants as either a success or a failure. However, as President of the Silicon Valley Community Foundation Emmett Carson explains, “The reality is, very few evaluations, under the best of circumstances, are unambiguous ... There’s always some failure and there’s always some success.” Rather than simply plowing ahead with an initiative, or abandoning it, identifying which parts were successes and which were failures can help philanthropists move forward more effectively.
    
4. Create space for good failures. Just as initiatives can combine success and failure, failures can be either good, bad, or somewhere in between. Many “bad failures” happen because of avoidable errors. Good failures are often the result of taking risks that could lead to transformative change. Inevitably such risks increase the chances of failure, but potentially also the chances of breakthrough success. Pierre Omidyar creates space for these types of failure by empowering each of his teams at the Omidyar Network to spend 5-10 percent of their budgets on “things that aren’t very clear that they’ll have impact.”
    
5. Talk about failure. When Paul Brest introduced The Worst Grant Contest at the Hewlett Foundation, in which staff nominate and discuss their worst grant of the year, he initially met with great resistance from some of the program staff. But over time, the contest has taken root. The program responsible for the “winning failure” gets a dinner. But the real motivator for staff, says Brest, is “the intrinsic motivation of being able to learn something and help the rest of the foundation learn something.” After a while, Brest and his colleagues realized that there was too much focus on grantee organizations that had failed, rather than on potentially broader strategy failures by the foundation. The emphasis has now shifted to how the foundation itself has failed and what it can learn from this failure. Encouraging open and purposeful conversation about failure is one of the best ways that a philanthropic—or any other—organization can get better at what it does and achieve more impact in the world.
    

Matthew Plummer is a Senior Associate Consultant in Bridgespan’s Boston Office, playing an integral role in assembling Bridgespan’s video collection “Conversations with Remarkable Givers." Prior to joining Bridgespan, Matthew worked as an operations manager at McMaster-Carr Supply Company.