Philanthropic Winds of Change . . .

Two important lessons that Philanthropy seems to be taking to heart

By Isabel Guerrero and Faizal Karmali

In November, the Rockefeller Foundation announced the launch of Co-Impact, a collaborative systems change and scaling effort engaging large philanthropists around the world. Names alongside Rockefeller include Gates, Skoll, Wadhwani, Chandler and Nilekhani – and these are apparently just the beginning of a growing list. Co-Impact will invest $500 million to bring these and other philanthropists together with social change leaders, governments and nonprofits to solve broken systems and to achieve “lasting impact at a scale beyond what any one actor could achieve alone.”

Darren Walker announced a similar shift at The Ford Foundation, just over a year after taking over as its new president. The BUILD program is a five-year, $1 billion investment in the long-term capacity of up to 300 social justice organizations around the world.

In both cases, these recent commitments represent multiple years-worth of grant-making dollars that would have typically been allocated through the foundations’ traditional approaches.

These substantial new efforts, led by two of the most influential philanthropies in the world together with a powerhouse of peers, point to a sector that is clearly reflecting on lessons learned. In a recent blog post, Kathy Reich, Director of Ford’s BUILD program shared:

“Too often, nonprofits find themselves dependent on short-term, highly restricted grants, which keep them tied to rigid time frames and deliverables. This can stifle investments in areas that are critical to impact, such as strategic vision, leadership, and management systems. It can keep nonprofits on a treadmill of short-term thinking, where they become reluctant to innovate, take risks, learn, and scale their efforts.”

At IMAGO, where we focus on helping grassroots organizations scale by strengthening these very elements of strategic vision, leadership and management systems that Kathy refers to – these types of reflections and the real dollars being applied to new efforts makes us feel optimistic about the role that philanthropy could play in development going forward. We see these efforts as indicative of a sector that is acting on some key lessons we have all learned through decades of engaging in social impact efforts.

1. Going it alone won’t enable scale

Both Co-Impact and BUILD recognize that collaboration and networks are central to their success and approach. Neither organization sees themselves or any one of their grantees as silver bullet solutions. They are focused on combining resources, expertise and networks to achieve impact. While this collaborative framing has been common in speeches and press releases from the social sector for decades, the reality of collaboration has been hard to see. With BUILD and Co-Impact, these Foundations appear to be putting human and financial resources behind their collaboration declarations. A recent report entitled Scaling Solutions Towards Shifting Systems from Rockefeller Philanthropy Advisors speaks directly to the need for this shift in thinking.

2. Focused investment in the capacity of high potential organizations can activate their ability to reach impact at scale.

Through both BUILD and Co-Impact, Ford and Rockefeller speak to investing in a smaller pool of organizations and helping strengthen them in a manner that enables them to reach impact at scale. Ford plans to do this through direct investment in core capacity building of 300 specific organizations – funds that can be used to enhance strategic vision, strengthen leadership and improve management of the organizations themselves. It also plans to increase the amount of each grant allocated to overhead and general support to 20% of each grant.

Rockefeller is acting on this lesson by ensuring that organizations supported through Co-Impact also receive technical support and funds to cultivate “things such as strategic planning, program management, technology, policy and advocacy, government relations, monitoring and evaluation, and leveraging additional funding.” These are the less sexy, but very critical capacities within organizations that rarely receive support. We are hopeful that some organizations will be able to get funds and technical support for strengthening their own capacity and not merely for delivering specific outcomes asked for by their funders. This need is huge for many of the organizations IMAGO works with.

At IMAGO, we’ve seen how this focused investment in capacity building can result in step changes for an organization’s impact. Our work with Transforming Rural India (TRI), SEWA and Fundación Paraguaya to name but a few, have confirmed our own hypothesis that helping grassroots organizations with strategy, building capacity and partnerships can unlock significant impact.

While we are still in the very early days following these announcements, these new efforts are a refreshing complement to traditional philanthropy and demonstrate that even the most traditional foundations can adapt to the challenges and new development opportunities we see today. For new initiatives like Co-Impact and BUILD to succeed in shifting the way they engage with development actors, they will need to effectively tap into the amazing innovations that are already happening within grassroots organizations and social enterprises around the world, helping them achieve impact at such a scale that a whole new system can emerge to address some of the world’s longest standing obstacles to human well-being.

*Faizal Karmali is a senior social impact professional with nearly two decades of international experience investing in, and implementing social and economic development efforts in Asia, Africa and North America. He is a frequent commentator on the importance of meaningful engagement between the private, social and public sectors as a means to address the most critical development challenges of our time.

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