‘The networks of human interactions or the networks within organisms have universal properties: the mathematics that describes them is the same.’
Geoffrey West is a distinguished theoretical physicist whose long-term fascination with general scaling phenomena led to the development of realistic quantitative models for the structural and functional design of organisms based on underlying universal principles. He has recently become interested in extending these ideas to understand the structure and dynamics of social organizations such as cities and corporations, including the relationships between economies of scale, growth, innovation and wealth creation and their implications for long-term survivability and sustainability. What do these things have to teach philanthropy, Harald Katzmair asked him.
You refer in your work to networks as the drivers of what can be described as scaling laws, be it the laws that drive the size of a tree trunk, the life span of a whale, or the distribution of wealth in our societies. Could you explain how and why networks have an impact on how the world – specifically our social world – works?
The first thing is to recognize that in any complex adaptive system you have enormous numbers of agents that are interacting and connected. So in your body you have about 100 trillion cells, in a city you may have several million people, and so forth. If the systems are to grow and evolve, they need to have the kind of efficiency and scaleability that comes from continuous feedback, for example in organisms associated with natural selection. The fact that they are all interacting, and therefore interconnected, defines the network.
In an organism, all cells have to be sustained and fed in a roughly equal and democratic fashion. In the same way, in a city, not only do people have to interact, but they all have to be sustained in a roughly equal way. Of course there are variations and fluctuations among people, but everybody needs to be connected, otherwise they’re not part of the system. The kinds of networks that operate in both biological and social systems are often hierarchical in some way. In the body we have the circulatory system that distributes energy in the form of oxygen through the blood to our cells; in cities we have road networks and electrical lines, but we also have social networks that connect people.
People are broadly the same all over the world. We may look a bit different in different parts of the world, and we may have different cultures, but in fact the way we interact with each other, via language, and getting together in groups, is pretty universal. So the networks of human interactions or the networks within organisms have universal properties: the mathematics that describes them is the same, whether you’re in Japan or the United States, or whether you’re a mouse or an elephant. Despite superficial appearances, in biology, up to about 15 per cent accuracy, an elephant is actually a scaled-up version of a horse, which is a scaled-up version of a human being, which is a scaled-up version of a mouse, because they’re constrained by the mathematics and the generic underlying properties of the networks.
Our readers want to use their resources to support or design networks that can help them to reach their philanthropic goals. Networks require a kind of energy input in order to work, and philanthropic money is a type of energy, a food for the network, so what is the impact of the quantity of energy and the scale of time for the network to actually work?
First let me say a few words about time. In biology, the structure of these networks means that on average, as you get bigger, time slows down, things take longer, heart rates are slower and so forth – everything slows down in a systematic and calculable way. In social networks, we have the opposite behaviour. Everything speeds up in a systematic way: people walk faster, transactions are faster, disease spreads faster, the bigger the city. So if you have a pot of money, I suppose the first thing to understand is what to expect if you add that money, which you can think of as a load of energy, somewhere in the network.
Now, what I have described defines the average idealized system – city or company or animal of a given size. If it was absolutely ideal, if it conformed precisely to the rules and you told me its size, I could tell you pretty much everything about it that can be measured: in a city, how long all the roads are, how many AIDS cases there would be, how much violent crime, how many patents it produces and so on. Of course each city deviates from that a little bit, because no city or animal is absolutely ideal. In terms of this baseline defined by the scaling laws, each city either overperforms or underperforms to a limited extent, around the order of 10-15 per cent.
Going back to philanthropy, you’re putting money in to help energize some part of the system in some way to help realign it, if you like, with how it should be performing. You have the option of backing either the overperforming or the underperforming elements. In other words, you could say, ‘I would like to back winners, I’m interested in enhancing those that are already successful, because they have a track record,’ or you could take the opposite view: ‘these are underperforming, this is an important issue and we need to figure out what it is in the DNA of this system that is making it underperform.’
But at least, in theory, it should be possible to estimate the amount of money it would take to energize…
That’s correct. If you’re interested in a specific area, you first want to understand what the baseline is and what you can expect if you put x amount of dollars in. One issue is scale. If you have, say, $500,000 to put in, is that actually the right scale? It could be that for the problem you’re dealing with, $500,000 is an absolutely dithery amount of money, you actually need $50 million to have any real effect. And it could be the other way round: you give $500,000 and the problem only really needs $50,000-$75,000 to solve it.
The second issue is a more subtle one. You want to affect a particular part of the system, but since everything is interconnected via the network, if you disturb one part of it, it may have unintended consequences elsewhere. So while you think you’re solving a problem locally, it may be creating more problems globally. Take the work of the Gates Foundation, for example, which likes to choose very specific and very worthy problems in very specific places – and this is typical, of course, of many foundations.
It’s a wonderful thing to inoculate people against malaria in Africa, but you have the potential problem that if you’re saving lots of lives, you then have to feed all those people. You have to recognize that this is all part of an ecosystem. It’s connected to the local economic system, it’s connected to the sewer system of all things, it’s connected to food availability, because they’re all integral parts of this network. So there are these two issues: scale and unintended consequences, which can be recognized and understood via network effects.
Are there current initiatives that are somehow linked with the philanthropic area that you think our readers should know about? Or any initiatives that could be used as a blueprint for other change initiatives?
I’m not familiar enough to say, to be honest. On a general level, there are two things I’m disappointed about in philanthropy these days. One is the reluctance to support basic research: it’s all oriented to solving very focused specific problems in specific places, and therefore ignoring – this goes back to what we were discussing a moment ago – the bigger picture. Part of the problem is philanthropists are really now, in many ways, behaving like traditional federal government agencies, and many of them now have the same kind of structure.
I did an interview with Buzz Holling a week ago and he said exactly the same thing!
One of the weird things is that foundations, and philanthropists in general, are often seen as an alternative or a complement; they’re willing to be a bit more risky, a bit more speculative, a bit broader. But, with some notable exceptions, they’ve more and more moved into just being another source of funding for things that are very conventional, or they’re so highly focused that anything to do with the bigger picture and a more visionary future is lost.
Now there are exceptions to that: I get support from the Rockefeller Foundation, the James S McDonnell Foundation, the Templeton Foundation and some individuals who do think more broadly. But I would say the trend has been much more towards this highly focused, almost corporate way of doing philanthropy. I think that’s a huge loss. And doing it differently presents a huge opportunity, especially given the extraordinary problems that we face. If you think in network terms you realize that, because everything is connected. So let’s think of philanthropy within a context like that. We need the big picture as well as the very specific.
Geoffrey West is Distinguished Professor at the Santa Fe Institute. Email firstname.lastname@example.org
Comment – Neal Hegarty
For 86 years, the Charles Stewart Mott Foundation has funded in our home community of Flint, Michigan, a small city in the US’s industrial mid-west. Over those years, we have been witness to the city’s rapid population expansion and precipitous decline, of its transition from having one of the highest per capita standards of living in the US to having one of the lowest. While our grantmaking interests extend across the US and internationally, the foundation retains a strong commitment to the greater Flint community.
The interview with Geoffrey West is interesting to us from that place-based funding perspective. He applies his knowledge and ideas from theoretical physics to the role of philanthropy in cities and, more broadly, to cities as networks. These are ideas that will contribute to strategies to increase economic and community vitality in cities, both large and small, global North and South, and, of course, growing and declining.
West points out that cities, like cells in a body, grow and evolve from the continuous feedback that comes from an interactive, connected network. Our experience in Flint bears out the importance of connectedness and feedback, but also brings an awareness that the networks of connectivity and feedback loops are not always effective, and may not even exist. We have often supported efforts to help create (or recreate) connectivity and to seek new norms of interaction within the community.
As a long-time funder in our home community, we also observe that cities have cycles. They grow, sometimes in an orderly and planned way, but more often in chaotic and uneven ways. We see this in cities across the globe that are rapidly expanding, placing tremendous strains on service delivery systems. We also have cities experiencing decline, which creates major challenges in terms of finding ways to reimagine and revive the local economy, social networks and service delivery systems. These are not permanent conditions and, just like in the natural world, systems change over time. Philanthropy must be nimble and creative enough to fund strategies that deal with those cycles of growth and decline.
Geoffrey West talks about grant money as analogous to loads of energy, which can be injected into the social system to enhance overperformers or help underperformers. This is an apt analogy, but one can’t overstate that in philanthropy we must think carefully about the best place to ‘inject’ the money. Further, we must be prepared, as West points out, for the potential unintended consequences from making the wrong bets. Identifying the right issues and grantees, and calibrating the right amount of funding, while simultaneously balancing organizational or donor priorities and policies, is a complicated and inexact science.
Recently, the Mott Foundation has been engaged with a coalition of funders from around the world on the Sustainable Cities Network. This is a project of the Global Philanthropy Leadership Initiative, a joint project of the Council on Foundations in the US, the European Foundation Centre and WINGS (a São Paulo-based global philanthropic network). The project seeks to align funders that are focused on cities per se as opposed to those that fund specific issues that may take place in a city, bringing together funders from both South and North.
The importance of the Sustainable Cities Network, and of funders working on cities and metropolitan economies coming together, is to learn about the conditions in cities and test strategies to improve them. Growing or shrinking – or, to use West’s terms, overperforming or underperforming – there are robust funding strategies from foundations large and small addressing both ends of the spectrum.
Geoffrey West’s challenge to philanthropy to be less conventional, more big picture, and more focused on networks is valid. There has clearly been a trend in our field to be more rigid about metrics and often narrowly defined strategic outcomes. It does seem there may be a fundamental mismatch between outcome-based strategies and funding in the context of networks and broad vision.
However, it seems to me that there is plenty of room for both approaches, and that both broad, networked-based funding and narrow outcome-focused funding have important places in making the change we seek in the world. At the Mott Foundation, we blend broad support for key networks and visionary organizations with very specific outcome-oriented project grants. The field is flexible enough to do both, but we would be wise not to tip too far towards the narrow end of the spectrum. Ultimately, the challenge ahead of us all is to find practical solutions to very complex problems.
Neal Hegarty is vice president of programs at the C S Mott Foundation. Email NHegarty@mott.org