January 27, 2000 | Read Time: 8 minutes
In the search for a way to make a more lasting difference, grant makers are looking to new concepts to guide their grant-making strategies. Three concepts more than any others — the asset model, outcome evaluation, and venture-capital investing — have advanced discussion on how foundations and non-profit organizations might better deal with persistent poverty.
Each of these concepts provides important insights that have helped to inform and refine the art and practice of grant making. Unfortunately, each has also inspired a small but vocal group of zealots — grant makers who have advocated their respective ideas to such an extreme that they often hinder, rather than encourage, candid discussion about how to alleviate poverty. What’s more, those zealots often use those popular notions as tools to avoid their responsibilities as grant makers.
Consider the “asset model,” which was first developed by John L. McKnight as a counterweight to what was perceived to be a singular focus by grant makers on the problems or deficits of disadvantaged communities. The point of the model was to encourage foundations and non-profit organizations working in poor communities to remember that both the people and places had strengths and that they could be relied upon for ideas, energy, and solutions to the problems facing their neighborhood. But some advocates of the asset model cling to its tenets so strongly that they have lost the balance that the original concept sought to provide.
The logic that is often employed by such zealots would be humorous if the consequences weren’t so tragic. It is tantamount to an emergency medical team arriving at the scene of a serious traffic accident, running up to an injured pedestrian who is barely conscious, and saying: “Ma’am, we’re going to empower you to save yourself, not that we’re saying you have a problem. We’re going to put this equipment that you have never seen before on the ground next to you and, if you choose, you may save yourself. Or, we can partner with you to work on this situation together.”
Although this may sound ludicrous, it is not unusual for some advocates of the asset model to employ similar logic in describing what they imagine to be the appropriate relationship between grant maker, grantee, and the community that they both serve. Unquestionably, when awarding a grant, grant makers should consider whether a non-profit organization is representative enough of the community to successfully carry out a project. That approach is consistent with the mounting anecdotal evidence that the most successful neighborhood projects often solicit and rely on community input and involvement. But there is the rub.
Who legitimately speaks for a neighborhood, and what constitutes a consensus? The idea that any neighborhood — which typically comprises renters, homeowners, single parents, retirees, and different racial and ethnic groups — can speak with a singular voice is inconsistent with any neighborhood with which I am familiar.
Moreover, it is questionable whether achieving such a single voice is a worthwhile objective to be pursued by a neighborhood. When differences are acknowledged, all efforts to address the community’s immediate needs are often halted while the community engages in a prolonged meeting process to work toward some elusive consensus. In addition, when consensus is reached, it is often reached at the lowest common denominator in order to keep all participants happy with the process. As a result, the outcomes are less meaningful.
For grant makers, the comfort in the consensus approach is that it removes the burden of taking any responsibility for the decisions that are made by the mythical single-minded community. It is a very difficult task for grant makers to review competing ideas, all related to their foundation’s stated areas of interest, and decide which ideas will receive support and which will not. These agonizing, gut-wrenching decisions are made infinitely easier when the grant maker imagines that he or she is doing what “the community” wants. Moreover, if the grants that are awarded ultimately fail to achieve the desired outcomes or lack vision, the grant maker bears little, if any, responsibility for the results because the grants are, after all, what the community wanted.
To finance ideas and projects contrary to the consensus view entails taking risks and facing the damning criticism of somehow unfairly wielding “power.” The reality is, however, that grant makers do wield the power of deciding how best to allocate insufficient resources to meet unlimited community needs. Certainly, there are egregious examples of grant makers’ using their authority in ways that have had disastrous consequences for communities. In such cases, the reputations of the foundations that were involved were justifiably damaged.
Like the medical profession, grant makers would benefit from a credo that says, “Do no harm.” However, after you are sure that you have done no harm, how do you know if you have made a difference? It is this question of making a difference that has led to the interest in outcome evaluation — another model to which grant makers sometimes cling too tightly.
It sounds so very simple. Find out what works best as it relates to a given problem, and finance it. If a given project doesn’t show success in a reasonable period of time, either modify the program to make it work better — or find something else to support.
However, there are several problems inherent in this approach when applied to real people and the social programs designed to assist them. Unlike business machines that can be manufactured to specifications, every person is unique. We have different temperaments, we react differently when exposed to identical social stimuli, and we are subject to numerous factors in our daily lives that can contribute to or hinder our success in a particular program.
What’s more, some programs that have had success in one neighborhood, city, region, or country cannot be duplicated in another. Conversely, and perhaps the most maddening: Just because a program is not successful in one environment does not mean that it cannot achieve positive results in another setting.
As with the asset model, the desire for “results” is sometimes used as a way for grant makers to avoid the responsibility for making difficult decisions. An over-reliance on evaluation to measure success or failure can also provide subtle encouragement for grant makers to avoid programs that are difficult to measure. Basic research, advocacy, and public policy are all less likely than direct assistance and other programs to yield measurable results. In addition, when evaluation is the driving criterion, support for important programs that involve difficult-to-evaluate changes in personal behavior is harder to justify.
The final model now in vogue among grant makers is venture-capital investing, which encourages grant makers to act more like venture capitalists in recommending grants. Specifically, proponents of this approach suggest that grant makers become more comfortable with a high risk of failure and be prepared to finance projects at greater amounts for an extended period of time. Unlike with the asset model, grant makers are encouraged to play a leadership role in the operation of the non-profit organization, even going so far as to join the organization’s governing board.
While the idea of venture-capital investing may seem appealing and is the subject of much discussion by grant makers, a close examination of how to apply its principles reveals that, despite areas of overlap, there remain distinctive differences in the mission and operation of non-profit and for-profit institutions. For example, with venture capital, the bottom line of financial return is clear. But, as we’ve seen with the failings of “outcome evaluation,” measuring success in non-profit endeavors is often far trickier. And, whereas foundations in the past could nurture innovative programs and then hand off the successful ones to government to expand, that option no longer exists in today’s era of a shrinking role for government.
As a result, foundations that have played the venture-capital role in nurturing a successful program have no one to whom to hand off the program other than another foundation. And few foundations are willing to step in to provide funds for a supposedly proven program that the sponsoring foundation is no longer willing to finance. So, as with the asset model and outcome evaluation, the venture-capital approach can become a way of avoiding responsibility for seeing that real change is carried out.
Without question, the concepts of neighborhood assets, outcome evaluation, and venture-capital investing have helped to improve the art and practice of grant making. Each grant-making strategy has a time and place where it can add value to efforts to make a tangible difference. And each, when taken to an extreme, has significant shortcomings.
It is incumbent on grant makers, then, to strike a balance between the wise use of those models and zealotry. It is also incumbent on them not to hide behind those concepts but to accept the responsibility and power to select which proposals to support, to recognize that a neighborhood’s assets must be balanced with an acknowledgment of its deficits, and to realize that outcome evaluation can guide grant makers but cannot give them the commitment and persistence to support all worthwhile projects.
Emmett C. Carson is president of the Minneapolis Foundation. This piece is adapted from a speech he made at Georgetown University in October. The complete speech is available at the foundation’s Web site at http://www.mplsfoundation.org.
