Alliance Online - December 2007

In search of the holy grail of impact

Marta Rey García

EVENT EFC Summer Academy on Philanthropy: Impact-driven Philanthropy
Date 3-5 September
Venue Heidelberg, Germany
Organizer European Foundation Centre

Impact is a key concern in the foundation world but the paths explored by foundations in order to define and achieve that impact are both immensely varied and difficult to replicate. And since the real impact of foundations’ work will be seen only in the long term, attribution is difficult to establish. These were among the most salient points from this year’s EFC Summer Academy on Philanthropy, held in collaboration with the Centre for Social Investment (CSI) at Heidelberg University.

The issue of impact has been the buzzword in the foundation sector for the last decade. With a combination of closer, often unfriendly, scrutiny and new wealth entering the sector, terms like strategic philanthropy and business-modelled trends such as venture philanthropy came into fashion – and, to judge by the creative philanthropy paradigm propounded by Helmut Anheier and Diana Leat in their recent book, the trend continues. But how do we define impact? How do we achieve it? Do we need to measure it or can we just ‘feel’ it? Does professional management hinder the ability to do good? These were among the questions that the ten speakers and 40 participants grappled with in Heidelberg.

Helmut Anheier and Volker Then’s research project entitled Strategies for Impact in Philanthropy provided the theoretical framework for discussion. They defined four strategic leverage mechanisms for foundations to achieve social impact: influencing public policy and advocacy; mobilization of civil society; use of market forces; development and dissemination of knowledge. These four levers act as multipliers upon foundation capital, whether economic, cultural, symbolic or social.

Helmut Anheier defined foundation management as creating value for a stated mission in weak signals-weak incentives situations for multiple stakeholders. Volker Then defined their mission as value creation for the public good. He suggested that impact comes from a blend of funding, ideas and implementation methodologies. Foundations use their resources and expertise to detect problems early, to develop innovative solutions to them, to implement pilot models of these solutions, and to replicate and disseminate them to target audiences. However, he stressed, there is no point in debating evaluation when goal formulation is unclear.

Efficiency versus creativity?

For David Emerson from the UK’s Association of Charitable Foundations, trustees have the main role in the impact challenge, because of their diversity and independence and their capacity to mediate between the private and the public spheres. Intuition, too, is crucial in making the right decisions. He also warned of the risk that the emphasis on management technique will stifle effectiveness.

On the other hand, I argued in my presentations that there is no necessary trade-off between the two: the assumption that the more managerial efficiency and planning, the less creativity and impact there is, is a false one. I believe that a holistic approach to foundation management is needed to achieve impact. The science of foundation management is much more than number-crunching and controlling. It requires managers to innovate, coach and be ready to learn from mistakes, and flexible and motivating measurement systems that feed continuous improvement. Efficiency is not an obstacle to impact but a prerequisite for it.

Holistic foundation management has a creative side, too, comprising vision, commitment, creative means, passionate ends, stakeholder orientation, and the ability to communicate and to generate trust. For me, in order to achieve impact foundations need customer-oriented creativity supported by excellent management.

Jan Martin Witte from the Global Public Policy Institute provided the grantee perspective, saying that creativity is the main precondition for impact. He encouraged foundations to overcome their characteristic aversion to risk and their tendency to predetermine outcomes and instead to help their grantees become more efficient, while at the same time benefiting from their creativity and ideas.

Illustrating strategic leverage

In the second session of the seminar, Anheier and Then’s four strategic leverage mechanisms were illustrated by case studies. Sukhvinder Stubbs from the Barrow Cadbury Trust explained their experience in advocacy and influencing public policy on migration in the UK. Their methodology consists of listening to and mobilizing grassroots voices, collaborating with government in order to change its agenda from within, and building broader coalitions for agitation and facilitation.

Drawing on the book, Reclaiming Democracy, which he recently co-wrote, Pavol Demes from the German Marshall Fund of the United States explained how the emerging civil societies of Slovakia, Serbia, Croatia, Georgia and Ukraine have removed new forms of authoritarianism arising after the fall of the Berlin wall. They have done so, he said, through coalitions, strategic planning, non-violence, youth participation and advocating legitimate, fair and free elections. He also pointed out the stress this situation has put on foreign donors.

The use of market forces was exemplified by Klara Kletzka from Dialogmuseum, who explained how its ‘Dialogue in the Dark’ initiative, which began in Frankfurt, now runs in 20 countries thanks to the application of franchising. Sighted visitors positively change their perception of visually impaired people by becoming ‘temporarily blind’ and trusting a blind guide.

Finally, Simon Sommer explained how the Jacobs Foundation develops, fosters and disseminates knowledge by supporting independent academic research through open programmatic funding; hosting scientific conferences whose results are published under high-impact, competitive, specialized university press seals; and institutional engagements such as the creation of the private Jacobs University in Bremen, Germany. Sommer argued that technocratic evaluation and excessive reporting requirements may hinder risk-taking, competitive and independent research, and advocated instead on-going evaluation geared towards learning.

Making a difference

The debate also threw up other questions, including ownership in terms of accountability to stakeholders, foundation conservatism, and the need for increased transparency. What became clear from the variety of experiences and approaches represented is that making a difference starts with two crucial and tough decisions: defining the problem to be addressed and the impact to be achieved. There are no short cuts to either, but the discussion produced a number of general points of agreement.

First, a significant percentage of philanthropic projects do not deliver the expected returns; it is therefore vital that foundations should learn from their own failures. Second, it is necessary to capitalize on available knowledge. Foundations should avoid reinventing the wheel and should learn both from each other and from public and private sector experience. Third, foundations need to become more entrepreneurial, meaning less risk-averse, and more creative and efficient at the same time. Finally, while real impact is often not achieved in the short term, a long-term approach to impact makes attribution of credit a difficult task.

Marta Rey García is Managing Director of the Fundación Pedro Barrié de la Maza and Professor at the Business and Economics Faculty of the University of A Coruña. Email mrey@fbarrie.org

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