What’s the Problem With Strategic Philanthropy?

Strategic philanthropy is a sound and valuable approach to giving, but many nonprofit leaders raise questions about the idea in private.

Because so many seem reluctant to voice their concerns about strategic philanthropy, it’s time to consider the kinds of worries one hears regularly from grantees and even from a few donors. Here are some I have collected:

Grantee: “The work I am doing is at a very early stage of innovation. Of course, I will go through the motion of repeatedly redrafting my proposal to fit various donors’ strategic-planning requirements. But honestly, the text is pure speculation, and the multiple revisions are a waste of time for both of us. The whole process makes me reluctant to try what is not spelled out in the proposal for fear of igniting a new round of strategic planning. It all has a deadening effect on how we work.”

Grantee: “The most useful money a foundation ever gave us came as general support over a three-year period. It enabled me to start some new lines of work that really put us on the map. When I got the grant, I had only the barest sense of these activities and would not have been confident about spelling them out for fear of not delivering. The foundation’s patience and trust in us empowered the organization.”

Grantee: “I am not against having a theory of change; developing one on our own a few years back was very helpful and sharpened our thinking. But I must say, in 12 years of raising money, I have never once (well, maybe once) had a program officer call after receiving a report of ours, dutifully submitted, and ask a question about what we were learning or investigate further our practice. This even after multiple rounds of proposal review and refinement and strategic planning. I assume they are just too busy.”

Grantee: “Foundations and large NGO’s [nongovernmental organizations] have become more focused on developing portfolios of projects, managing risks, and producing outcomes rather than on listening to communities, healing deep inequalities, and supporting innovation. With their new strategies and new staff, foundations today are increasingly treating organizations like ours not as innovators but as contractors who are hired to deliver donors’ visions.”

Foundation program leader: “I am trying to strengthen the field of journalism that is so important to the success of our democracy. When I report that our grantees have fostered new kinds of coverage of crucial topics and reached wide audiences, my board says: “So what? What of significance has really changed?” The board used to ask us to have ambitious visions of change. Now their demand for strategies with near-term results is steering us away from more ambitious aims.”

These are just a few comments I have collected over the last year or so. Almost all are spoken with strong feeling, laced with a fear that “the donor” or trustee will hear what they say and be displeased.

I find this outpouring of negative experience puzzling, since few grantees want to act un-strategically—to be aimless or haphazard or to pursue trivial aims. It is especially puzzling when the popular definitions of strategic philanthropy seem so appealing. These two, for example:

From the Philanthropic Initiative, a Boston group that advises donors: “effective giving, which is designed around focused research, creative planning, proven strategies, careful execution, and thorough follow-up in order to achieve the intended results.”

From Paul Brest, president of the William and Flora Hewlett Foundation: “The fundamental tenets of strategic philanthropy are that funders and their grantees should have clear goals, strategies based on sound theories of change, and robust methods for assessing progress toward their goals.”

So what explains grantees’ concerns?

The quality question: It is possible that the quality of what passes for “strategic planning” in too many places is just plain subpar. As in all fields, like art, dentistry, and economics, there is a lot of mediocre practice—not really bad but not really good, either. So a lot of time and energy are poured into planning exercises and materials that yield little actionable analysis. Grantees will not complain because participation is a route to getting a grant and, they hope, developing a long-term relationship.

The matter of metrics: Most strategic-philanthropy planning exercises involve using benchmarks to measure progress. But sometimes data miniaturizes ambition because they focus on what can be measured in the near-term, not what might be the most important long-term goals.

Andrew Natsios, who led the U.S. Agency for International Development from 2001 to 2005, has written that over many years the federal agency has suffered from this phenomenon—a malady he gives the wonderful label “obsessive measurement disorder.”

He notes that the important task of building democratic institutions involves messy and fitful processes that do not lend themselves to measurement the way immunization and other public-health campaigns do. As a result, it is often hard to get enough money to build institutions.

Steven Lawry, a senior research fellow at Harvard’s Hauser Center, make this same point in an essay with the apt title: “When Too Much Rigor Leads to Rigor Mortis.”

Mr. Lawry wisely suggests that too often donors assume that nonprofits are poorly managed and need businesslike measures to focus on results and efficiency. He reminds us that good managers use multiple sources of information to guide decision making—experience, judgment, values, and feedback from beneficiaries and partners.

Overreliance on measures and statistics can become a crutch to compensate for a lack of confidence and intuitive and experiential knowledge.

Could it be that the obsessive measurement form of strategic philanthropy has become the Swiss army knife of effective philanthropy—handy in a pinch but perhaps not always ideal?

Perhaps the reason measurement has become so pervasive is that some of the nation’s newest and biggest foundations have backed the expansion of proven strategies like immunizations or HIV-AIDS treatment.

For that kind of very valuable effort, frequent and near-term measurements are entirely appropriate—they tell whether more and more people are being reached by an approach that is clearly a good thing. But this should not be a one-size-fits-all solution.

If there is a grain of truth in the possibility that strategic philanthropy too often involves mediocre practices or wrong-headed expectations, donors and grantees need to find ways to find the right balance.

To inform this dialogue, we need formal research about how donors and grantees see the value of strategic planning and philanthropy. It will help us learn whether and how strategic philanthropy actually influences behavior of both grant makers and grant recipients.

While many foundations have backed off financing studies of how the philanthropic world works, this topic is one that deserves attention and money from those truly interested in philanthropic effectiveness. And because I hope to learn more about the question of the best use of strategic philanthropy, I hope that donors and grantees will continue to share their experiences with me, and I will do my best to report what I hear.