- What are my values and beliefs?
- What is "success" and how can it be achieved?
- What am I accountable for?
- What will it take to get the job done?
- How do I work with grantees?
- Am I getting better?
- gain strategic clarity and articulate your personal definition of success;
- uncover the complex and unique issues that are likely to affect your philanthropic endeavors;
- develop feedback loops that you can use to continually improve; and
- think about which nonprofits you want to fund and how you can best partner with them for success.
Philanthropy question 1: What are my values and beliefs?All philanthropy is personal. Philanthropists can, and do, support almost everything, which can be a great strength. But if you are committed to making a real change in the world, you will want to start by clarifying your aspirations. With all the worthy causes in need of support, it can help to first spend some time clarifying your values and beliefs. This process will help provide clarity around which choices deserve your consideration. Here’s how:
- Think about your motives for giving.
Understanding why you want to give will help define how you want to give, including how personally engaged you want to be in your philanthropy.
- Decide which values and beliefs will anchor your philanthropy.
Consider the people, places, problems, pathways or philosophies that you care about most.
- Determine who else will be involved your philanthropy, and in what ways.
Family members, advisors, staff, and everyone else with whom you’ll work will bring their own aspirations to the table. Getting clear about your own aspirations and communicating them with others will make it easier to work together.
Philanthropy question 2: What is "success" and how can it be achieved?Just as every philanthropist has unique aspirations, every philanthropist will have a different definition of success. Knowing what you are trying to achieve is essential to getting results, and it’s a deceptively difficult process. The complexity of the problems means there are many paths to choose from. To help you develop your personal definition of success, it can be helpful to go through the following process:
- Think about the outcomes you hope to achieve.
Defining success involves translating your aspirations into specific outcomes. Give thought to who you want to help, which geographic areas you will focus on, and how long are you willing to wait for results. As yourself what you are trying to achieve, and articulate those goals in the most concrete terms possible.
- Thoroughly research the issue you hope to influence and the factors that affect it.
To get the most out of your investment, do your homework. Find out which philanthropists, nonprofits, and government agencies are already working on this issue or similar issues. Ask yourself what seems to be working and what isn't.
- Think about whether success is feasible.
What will it take—really—to reach your goal? Look into how much other funders have spent on similar initiatives, and what kind of results have they gotten.
You might also like: Jeff Walker and NPower: Building on Existing Success and Real Success: How Laura Arnold’s Ambitions Have Changed Over Time (video).
Monday Morning ChecklistsHow can you tell whether you’ve wrestled with a philanthropic question sufficiently to move on? If you can check many of these markers off your Monday morning to-do list, then you’re probably well on your way to giving smart! These lists include
- What Are My Values and Beliefs?
- What Is Success, and How Can It Be Achieved?
- What Am I Accountable For?
- What Will It Take to Get the Job Done?
- How Do I Work with Grantees?
- Am I Getting Better?
Even the wealthiest philanthropists need help in solving society's toughest problems. It's easy to overestimate what you can actually contribute—so you will want to be ruthlessly realistic about the resources you are willing and able to invest. To identify how you can best use your resources to achieve impact, and what non-financial resources you might bring to bear, it can be helpful to take these steps:
Philanthropy question 3: What am I accountable for?
- Consider how you can best use your financial resources to achieve philanthropic impact.
Besides making direct grants, you can fund crucial supporting activities (such as publicity), invest creatively by putting your balance sheet to work (through debt or equity), or support for-profit activities that create social good.
- Brainstorm whether there are non-financial resources you can use in service of your philanthropy.
Your time, expertise, and unique personal networks can be extremely valuable in the right circumstances.
- Define the boundaries around what you are willing to give in service of your philanthropic goals.
Give careful consideration to your own expectations, tolerance for risk, and where each initiative fits in your philanthropic portfolio. This will enable you to identify a commitment level—both financial and otherwise—that is commensurate with the task at hand. Armed with these answers, you can define a role for your philanthropy that both contributes to the outcomes you want to see and matches your personal circumstances and preferences.
See also: Does Your Philanthropy Have an Adaptive Strategy? and Barbara and Pitt Hyde Use Sweat Equity and Perseverance to Reform Education in Memphis.
Philanthropy question 4: What will it take to get the job done?Ultimately, execution trumps strategy, and successful execution requires capabilities, resources, and discipline. To learn how to ensure your philanthropy is structured for success, it can be helpful to reflect on the following:
- Consider whether you are structured for success.
As a philanthropist, you have choices about how to build your own capacity for impact. For example, you will need to decide whether to outsource capabilities or hire staff to support your work. For institutions, there are further questions about boards, governance, and organization design that support impact without undue cost.
- Think about what the nonprofits you fund require in order to be successful.
Nonprofits need more than just checks. To execute with excellence, grantees need the right people and the right organizations in place. This requires attention to recruiting, retention, development, and leadership, which philanthropists can help facilitate.
- Find out what investments in capacity (or “overhead costs”) your grantees need to thrive.
Focusing on outcomes, not nonprofit overhead, is key to philanthropic success. Unfortunately, a phobia of nonprofit overhead is all too common in the philanthropic arena. Consider choosing a different path and instead work with your grantees to understand the people, systems, and processes that are critical to getting results, and to understand how you can support building that capacity.
You might also like: Risk, Failure, and Nonprofit Overhead: Paul Brest on Strategic Philanthropy and Creating Win-Win Philanthropy with Limited Time: Three Keys to Josh Bekenstein's Giving.
Philanthropy question 5: How do I work with grantees?Since the nonprofits you decide to fund are on the ground doing most (if not all) of the heaviest lifting, it’s really not much of a stretch to say that your single most important job is choosing your grantees wisely, then doing everything you can to help them deliver the best possible results. To this point, it can be helpful to break the necessary activities down into what we call the “six Ss of grantmaking”—sourcing, screening, structuring, selecting, supporting, and sustaining. Here’s how:
- Identify a process for sourcing potential nonprofits to fund.
Typically, there are four major ways to find nonprofits that you’d be interested in funding and then whittling those options into a short list. You can seek recommendations from your established relationships, you can do your own research or evaluate existing research, you can seek out respected opinions, and you can solicit requests for proposals from interested organizations.
- Do the appropriate screening of potential grantees.
The process of conducting the research into a nonprofit you’re considering funding, what some call nonprofit due diligence, in an extremely crucial part of the philanthropic process. As you learn about your potential grantees, a few questions are paramount: Does the organization’s mission align with your personal philanthropic goals? Is the organization well positioned to carry out the proposed project? Can you work well together? The answers to these questions (and others) indicate whether you can successfully partner with a particular nonprofit.
- Identify the appropriate structure for the grants you make.
Once you have identified an organization you might want to support, think about how you would structure that support. What type of grant would you offer? What size grant will you offer? What would the requirements be? You’ll need to create details answers for each of these questions.
- Select, or make the choice to fund a specific nonprofit.
Making the final decision to fund a specific grantee is clearly a crucial part of the philanthropic process. In situations where there is one decision maker (an independent philanthropist, for example), this process is fairly straightforward. A more complicated decision-making environment, such as a family foundation, needs a formal decision-making process. Such a process will clarify who has the final authority to make the decision, how input will be considered, and what each stakeholder's role will be.
- Decide on how you will support your grantees.
As mentioned above, the nonprofits you support are crucial to the results of your philanthropy. If they aren’t successful, it’s nearly impossible for you to achieve philanthropic success. That’s why learning how to truly partner with your grantees, including supporting them in a way that creates the best conditions for success, is so important. One key aspect of doing this is to fund nonprofit overhead in an appropriate way.
- Identify how you will sustain your support, that is, decide on continued grantee funding or responsibly exit from funding a nonprofit.
Once you have supported a grantee for the agreed-upon term, you will need to make decisions around sustaining, that is, deciding whether to renew your grant, to exit but provide some sort of transitional support, or to exit without providing support. Each option has specific ramifications you will want to consider with great care.
You might also like: The Art of Being a Philanthropist: Eli Broad's Three-Question Investing Test and Why Philanthropists Should Focus on Nonprofit Outcomes, Not Overhead.
Philanthropy question 6: Am I getting better?A success-driven philanthropist wants to understand what results his or her philanthropy has effected. Yet due to the complex nature of the problems philanthropy tackles, results are rarely black and white. So instead of focusing energy on perfect metrics, focus on improving over time by considering the following:
- Give thought to how you will know whether your philanthropy is heading in the right direction.
Reflect on both your grantees' performance and your own strategy to understand the connections between your activities and the outcomes you expect. This can help you identify where learning matters most—and how to learn best with and through your grantees.
- Think about where measurement can help you.
The key is to focus on what data will directly inform your decision-making, and to be realistic about what numbers can tell you and what they can’t.
- Brainstorm ways to learn from your experience.
The endless need for philanthropic dollars as well as the lack of competition means that you must impose standards of excellence upon yourself. This means acknowledging "failures," learning from others, and investing in experiments.
You might also like: Continuous Improvement in Your Philanthropy and Getting Better: Risa Lavizzo-Mourey Adapts RWJF’s Strategies (video).
We recognize that not every question will be equally relevant for every philanthropist, and that their relative importance is likely to change over time, as your circumstances and the arc of your philanthropy evolve. So whether they merit several hours of consideration—or several days, months, or even years—will depend on the specifics of your circumstances as well as on the sum of money involved, the difficulty of the issue (or issues) you’re choosing to focus on, and the extent of your ambitions.
You Might Also Be Interested In
- Carrie Avery and the Durfee Foundation—Honoring Family Values, while Forging New Paths
- The Importance of Nonprofit Leadership: Tom Steyer on the Key to Philanthropic Success (video)
- Five Principles Geoff Boisi Uses to Guide His Philanthropy
- Using All Your Resources: How Pierre Omidyar Is Most Successful at Having Impact (video)
- Why Some Donors Go Public With Their Philanthropy
- Donors Discuss Why They Give, Personal Decisions, and More
- Defining “Success”: Debi Brooks and Michael J. Fox Measure Progress in Fighting Parkinson’s (video)
- Prioritize Your Strategic Initiatives and Seek Advice
- Three Strategies for Creating Effective Philanthropy Alongside an Active Career
- The Hilton Foundation Sees a Need—and Finds a Partner