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Using Philanthropy to Fuel Innovation

This article was written by Alex Steffen in June 2007. We're republishing it here as part of our month-long editorial retrospective.

Canada.jpgLast week, I had some great conversations, sitting in the sun on a hillside deck on Vancouver Island, talking about how we might better fund the changing of the world.

I was there to speak to the annual meeting of the Canadian Environmental Grantmakers' Network. They'd asked me to come share some thoughts about how we might better use philanthropy to fuel innovation for sustainability.

It's a subject that's been on my mind. In the last year, I've found myself speaking with more and more people who either work for large foundations or for wealthy individual philanthropists (or, even in a few cases, with those "extremely high net worth individuals" themselves). In part, to be blunt, this is because we've been trying to raise some money for Worldchanging (yes, we are a non-profit, and welcome your donations). That hasn't been an entirely successful effort, I'm afraid. But I've also been talking with a lot of people engaged in philanthropy because many program officers have great radar: they track all sorts of little-known people and projects for their jobs, and often have great tips for stories. Finally, the subject of philanthropy itself is something we cover here, and we have been trying to learn more about it so we can cover it in a more worldchanging way.

All this has lead me to hold some new views, and perhaps more importantly, some new questions, and I thought some of you might be interested in seeing some notes about my thinking. This is not a polished essay, but rather a slightly clean-up transcription of some ideas I jotted down at CEGN and, a couple weeks earlier, the Council on Foundations meeting. I hope it may offer some utility in any case.

Good philanthropy, it seems to me, funds innovation that would otherwise never emerge, and supports action where none would otherwise be taken.

Not all good works require philanthropic support. Some are the proper role of governments. Some can be provided through businesses, or social-benefit organizations run like businesses. Some can be produced through commons-based peer production. The majority require no organization or planning at all: they are simply the things good people do for other people in the course of daily life -- watching their kids, sharing food with them, listening to them when they are in distress, sharing an idea or a story with them. The vast majority of the work that keeps our societies together is not underwritten by philanthropists.

That said, there are certain key tasks which are extremely unlikely to turn a profit (so business won't support them), not amenable to peer-production, beyond the capacity of average people to do casually in daily life and are too risky or controversial for governments to effectively support. What's more, we know that as our need for innovation and innovation diffusion increases, these tasks grow more crucial. Indeed, much of the thinking, creativity and communication most needed to solve big planetary problems can only be funded through philanthropic effort, for it requires a combination of public-mindedness, vision and risk-taking found only in the work of great philanthropists (of whatever means).

But all is not well in the world of giving.

Philanthropic organizations have never had more money, sure, but there is a growing (if rarely spoken) consensus among the smart set in philanthropy that these organizations, and many major donors, don't really know how to react to either the new kinds of needs they're seeing, or the new opportunities with which they're presented.

I certainly don't have the answers, but here are the questions, as I see them:

1) Hunting the Fringes

How do you find and encourage innovation?

It is nearly a truism that innovation comes from the fringe of any field, out where strikingly new thinking is taking place -- as Thomas Kuhn put it in The Structure of Scientific Revolutions, ideas must be "sufficiently unprecedented to attract an enduring group of adherents away from competing modes" of thought, and those kinds of ideas don't emerge by tweaking slightly the established conventional wisdom.

This creates some difficulties for philanthropists who wish to support worthwhile innovation. Not least is the fact because the frontier of knowledge is advancing so quickly (in terms of sustainability and social change), most people who give away money are increasingly forced to rely upon the judgment of others when making their decisions, and those others, especially if long-established in a field, have a tendency to resist new ideas which might clash with their own and work (however unintentionally) to aid their proteges and colleagues, even to the detriment of more meritorious outsiders.

So, the first challenge is, can we find truly innovative thinkers without going through the established experts, or can we create a mechanism through which the conflicts of interest those experts have can be filtered out?

Stewart Brand, in his obscurely famous 1971 Destination-Crisis Paper for the POINT Board of Directors (you can buy it in old editions of this book) where he proposed that the answer to the question, "What is most worth doing now?" is probably only something that can be discovered by individuals who move between disciplines and across fields and among various factions and tribes -- people who we might call circuit riders.

I suspect there's something to this idea. If we want to learn what's on the fringes that might be worth bringing to the core, we need to go spend time out on the fringe -- better yet, we need colleagues who live there, who share the strange obsessions, hothouse fads and passionate convictions of those who spend all their time thinking about what's next and how to make it cooler. Most of us are not those people, but even so, there is an astonishing lack of fringe-dwellers in much of the philanthropic world.

In part, this is because innovation, though now widely seen as absolutely fundamental, is not native to the mindsets of advocacy and charity. As an oversimplification, both are much more interested in doing more than in doing better. There is a quality of certainty in the minds of both effective activists and do-gooders which motivates action by suspending debate about possibility: they want to feed the hungry or end animal testing now, not debate the future of the food system or medical research.

I won't speak poorly of people who are living out their convictions, as long as they respect the liberty of the rest of us to live out ours, but both activism and charity as currently practiced run up against a regretful reality: it is likely that no amount of doing what we're doing now will save the planet or ourselves. And, in reality, we have a quite limited ability to support good work, so the chances of planet-wide success doing what we are doing now is, well, nil.

We do not yet know how to build a sustainable society, eliminate poverty, bring democracy and human rights to all, or even how to feed everyone properly and well. We're learning, certainly, but not fast enough. Learning more quickly is an imperative, it seems to me, that outweighs almost all our other needs and causes.

That means, then, that philanthropic institutions need to ask themselves: how do we connect with the fringes? How do we find and fund ideas which are "sufficiently unprecedented?"

I don't know, but I expect it'll take some bold leaps on the part of institutions which have been better known for risk-aversion: willingness to hire people whose backgrounds are diverse, even eccentric; to gamble serious money on explorations which might return real but intangible gains in knowledge; to spend money on things which don't return a conveniently reportable deliverables, like citizen media, learning journeys, unconferences and network-building.

2) Feeding the Network

We live in an era where change is powered by networks, of course, but we don't yet live in an era where networks are funded by philanthropists.

There's a tendency on the part of funders to view networks as a sort of free good, something that just happens on its own and needs no help. That's too bad, because the best small networks I know are not financial epiphytes, growing without resources, but rather groups of people who do a lot with very few resources, or with means borrowed or stolen or subverted from other purposes. Almost all of them would benefit from more resources, more staff time, more ability to invest and pursue. It's not that they don't have roots, those roots are just hard to see, and they could always use a little more mulch.

That isn't to say that we really know how to fund networked action most effectively. Again, it would seem that we need a bunch of experimentation, a bunch of trial and error and evolutionary process to answer some complex questions, like "What is networked leadership, and how do we promote it?" "How do we support network-focused intellectual efforts?" "How do we promote member-centric models of activism?" Or even, "How do we make sure the tools groups in the network are using will work together?"

Then, too, there are the structural questions. How do we encourage existing groups to play the fringes where the audiences for specific groups and causes blur together? How do we break the zero-sum game where most NGOs assume (for some understandable reasons) than another group's feast means their famine, and thus all incentive for sharing real innovation is lost?

We are still far from good answers to most of these questions, and while some truly excellent folks are out there working on them, the sad trend has been for both foundations and large NGOs to treat networking (both in its technological and social senses) as a subset of conventional organizing and/or fundraising (rather than as a different model altogether), and thus to simply hire "professionals" in these fields who claim to be experts on the subject and pay them large amounts of money for the shallowest of thinking. Honestly, some of the stories I've heard of waste and cluelessness are mind-blowing.

For while I don't know that answer to these questions, I do know one thing: if your consultant returns with a proposal that recommends adding some geegaws -- a discussion board, an email newsletter, a Care2 page -- on to your current operations, fire them and spend the money on some 22 year-olds with some coding skills, crazy ideas, lots of friends and the caffeine shakes. Then do what they say.

3) Acknowledging The Elephant of Age

Youth in the environmental movement -- or rather the lack of it -- brings up another set of questions. Why have traditional activist NGO groups been aging so rapidly? In some cases, I've been told, the memberships of environmental NGOs are aging almost one year per year... a figure worth thinking about. Why are fewer and fewer younger people formally joining groups, giving official donations and participating in the rituals of civic life? Why do activist NGOs seem so lame to them?

Could it be because they are? We've written plenty before about the limitations of the current model of professional activism -- the tendency to reduce participation to writing checks and one-click actions, the reduction of complexity to promote attention-grabbing campaigns, the abusively low pay and bad working conditions, the lack of transparency, the ossification of their leadership, boards and donors... the list could go on and on, but it all adds up to a broken model, one which feels by today's cultural standards exploitative and opaque, not to mention boring and powerless to make real change.

And younger people are voting with their feet. Most of the people I know -- and we're talking folks with a deep, life-long commitment to social change and sustainability -- no longer send membership checks to activist groups, except (as in my case) a handful supported as much for sentimental reasons as anything else. Many of the smartest people I know are leaving the NGO world and academia to work in business, tech or socially-entrepreneurial start-ups. That's where the action seems to be.

4) Investing in Worldchanging People

Which would be fine, except, again, that certain kinds of innovation are unlikely to emerge from those fields. We need good, effective NGOs and public-benefit innovation. That means we need to think about how to bring in those incredibly bright people who have the skills and inspiration to create change but are not interested in "movement discipline," especially when that discipline seems mostly to serve the institutional aims of an organization (which only sometimes overlap with its public mission). I think funders increasingly see this, and want to figure out ways of addressing it.

I suspect that the answer is to be found in figuring out ways of supporting the work specific individuals outside of the context of standard non-profit employment, or inside skunkworks-like operations within existing non-profits, or supporting the creation of start-up incubators and epicenters. I suspect it means that funders start to see "capacity-building" as something which applies more to people than institutions. I suspect it means that funders and board members demand that NGO leaders let their younger employees have more room to run, more space to innovate.

I'll admit this is a data-free speculation, but I suspect that were the sustainability movement to pursue these kinds of approaches, we might find that our NGOs and networks become more enticing to younger people.

I think we're seeing this already on the web. Independent and entrepreneurial nonprofit and public benefit sites like Worldchanging, Grist, Real Climate, SciDevNet, Global Voices, Smart Mobs and other blogs, webmags and online communities are where the action is in the sustainability movement, in terms of energetic, youthful and engaged audiences. Yet the budgets for all of these efforts put together would be, as Denis Hayes said of our own meager finances, "a rounding error for most large nonprofits." Obviously, I'm biased, but I do think that these sorts of efforts can not only be cultivated and fed, but that similar efforts can be made in all manners of enterprise. On the web, the start-up costs are low, the model (at least now) fairly clear and the visibility high (millions of people have read Worldchanging), but with the right combination of funding and vision, I think the formula could be replicated, and I hear a lot of interest in doing just that.

5) Finding Our Allies

Ironically, one of the biggest complaints I've heard from the people I've been talking with about this stuff over the past year or so is that they don't have anywhere to go to talk about this stuff.

It seems strange to me, but a shockingly high percentage of the really smart people I've met in the funding world feel powerless to discuss innovation within their own organizations. People keep telling me that however welcome they may be to introduce new ideas within the existing frameworks, practices and expectations of their organizations, raising questions about innovating those frameworks, practices and innovations themselves is frequently unwelcome. Their bosses and board members profess a strong desire to find and support innovation, but then purse their lips when innovative methods for doing that are proposed. Not all, of course, and not universally, but enough that I have been surprised. (That, for instance, has been a very frequent response to the idea I raised of organizations reporting their philanthropic footprints: I'd love to, but my board would never go for it.)

I don't know the answer to that conundrum, either, but I expect, again, that it might take a willingness to experiment with some real money, while promoting the network and giving talented individuals more room to run. I wonder, for instance, what might happen if a group of large foundations got together, pooled a bunch of money and some energetic staff members, and consciously tried to give it away in the most innovative and challenging ways possible? Not the ways that would produce the most measurable deliverables, but simply in the ways that would let them learn the most?

Because learning, and learning quickly, should be what it's all about.

Creative Commons Photo Credit

The Future of Philanthropy: Innovation, Networks, Thought Leaders and the Fringe is part of our month long retrospective leading up to our anniversary on October 1. For the next four weeks, we'll celebrate five years of solutions-based, forward-thinking and innovative journalism by publishing the best of the Worldchanging archives.

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