Yesterday, the Chronicle of Philanthropy published an article about the ending of our Nonprofit Marketplace Initiative, which we discussed in a recent blog post and video. The article suggested that, by this, the Hewlett Foundation is somehow abandoning its commitment to pursuing what has come to be known as "effective philanthropy."
Needless to say, we're doing no such thing. Our president, Larry Kramer, wrote the following response to the story, which the Chronicle has printed in its entirety.
To the Editor:
It’s necessary to correct the record on several points in Doug Donovan’s article, “Hewlett Ends Effort to Get Donors to Make Dispassionate Choices on Giving” (April 3), which describes the Hewlett foundation’s decision to wind down its Nonprofit Marketplace Initiative (NMI). As the article notes, we launched NMI in 2006 with the objective of influencing 10% of individual donors to be more evidence-based in their giving, a goal we sought to achieve by making high-quality information available about nonprofit performance. Based on independent research and evaluation, we concluded we were not going to meet that goal. And because we are committed to being transparent about our work—both successes and failures—we openly shared our reasons for ending the initiative in a video and blog post on our web site.
We made the decision to end NMI because of our commitment to effective philanthropy. We certainly were not abandoning the idea, much less repudiating it; nor do we believe the movement will or should “lose some luster” as a result. Of course, it helps to begin with an understanding of what we mean by “effective philanthropy,” which scarcely resembles the caricature depicted by some commentators. Effective philanthropy means philanthropy done for a purpose. It calls upon donors to choose goals and direct their gifts and grants to organizations that achieve them. It is agnostic about what the goals should be, and (contrary to the suggestion in Mr. Donovan’s article) indifferent as between short- and long-term goals. What effective philanthropy does require, however, is that if goals are not being achieved, resources should be directed elsewhere.
The Nonprofit Marketplace strategy was untested and risky when we began, worth the effort but inherently uncertain. When some of the risks turned out to be true—meaning we were not achieving the results we had hoped for and sought—we made the difficult but sensible decision not to continue. Thus, Jeff Raikes has it exactly right in observing that we were simply doing what we ask of grantees and other donors: “pull[ing] the plug on efforts with no evidence of results.”
Yet saying we failed to achieve the results we sought is emphatically not the same as saying that our grantees failed. We ended the initiative because our strategy wasn’t reaching its target goals, not because any of the organizations we supported were underperforming on theirs. It’s an important distinction. Mr. Donovan mentions Charity Navigator, GiveWell, and GuideStar, for example. All three organizations do many things and do them well. We can envision potentially supporting them (or other organizations from NMI) down the road in a future strategy. That certain global results we sought from our strategy were unrealized reflects nothing more than the failure of hopes we had about what individual donors might do under certain conditions.
Other funders continue to support other strategies aimed at making data about nonprofit performance a more significant driver of individual giving than it is today. These include such things as giving circles and donor forums, for example. We applaud such efforts and hope those pursuing them can and will benefit from our experience. That’s a big part of why it’s valuable to be open and transparent about results—and an important way in which openness can and should increase the effectiveness of philanthropy.
Even if being open does, sometimes, come at the cost of being misrepresented or misunderstood.
President, William and Flora Hewlett Foundation
We believe this is an interesting and productive debate, and we welcome your thoughts on it.
Since Paul Brest first joined the Hewlett Foundation as President in 2000, the Foundation has made over $65 million in grants to build a stronger philanthropic sector. With these grants, we aim to support more effective philanthropic practice so that all foundations are better equipped to make social and environmental change. We call this our Philanthropy Grantmaking Program, and today it sits within the Foundation’s Effective Philanthropy Group.
Transition points can provide natural windows to reflect on progress to-date, and several such transitions occurred in late 2012 and early 2013: Larry Kramer joined the Foundation as President, Fay Twersky became the first Director of our newly formed Effective Philanthropy Group, and Lindsay Louie joined the Foundation as the Program Officer for the Philanthropy Grantmaking Program. The reflection process we undertook has included third-party evaluations; consultations with grantees, field experts and fellow funders; and thoughtful analysis by both our staff and consultants.
To share our work with the field, we created the 14-minute video included in this post. The video is a shortened version of one that we first produced to share our reflections with the Hewlett Foundation’s Board of Directors last November. The video highlights our strategies, key research and grantees, and the external evaluation findings. It features former Hewlett Foundation President Paul Brest, Stanford Social Innovation Review Managing Editor Regina Ridley, Center for Effective Philanthropy CEO Phil Buchanan, Lead Evaluators Paul Harder and Lucy Bernholz, and others.
As the video shows, we have pursued two strategies to date—one that we will continue, and one that we will not. We believe it is important to share openly about this strategy that didn’t bear out as we expected. In doing so we also want to be clear that our experience and decision are not a reflection on the work of individual grantees we funded. We also want to be clear that we are being open about this work so that our experiences might be helpful to others. We welcome thoughts, reflections and feedback.
For those who’d prefer a written summary of our reflections and links to the two evaluations, they are below.
I grew up in a deeply religious community. While the behavior of community members may have looked similar to an outsider, I found that there were, generally speaking, two kinds of people around me. I will call them the “certaintists” and the “meaning seekers.” The certaintists, as their name implies, had a great deal of certainty about their practice and beliefs, and often behaved as though they had a corner on the truth. They followed and enforced the rules of religious practice with little question, found comfort in routine and community, and were good, well-intentioned people. But their routines, I noticed, could occasionally inflict harm. Meanwhile, the meaning seekers followed the rules and established practices, but more as vehicles for finding spiritual meaning and leading a consciously just and purposeful life.
What does this have to do with strategic philanthropy? Why am I impolitely introducing the usually taboo topic of religion into the secular world of philanthropy? Don’t we usually prefer to compare philanthropy to business?
It is because during the last two decades of tremendous growth in philanthropy and the evolution of strategic philanthropy, I have noticed a trend that reminds me of the community of my childhood.
Proponents of strategic philanthropy set out to help foundations have a greater impact on the problems we care about, and positive results of strategic philanthropy are many: The Robert Wood Johnson Foundation, for instance, has helped put obesity squarely on the map of problems facing the United States in a way that is spurring national attention for solutions. The Hewlett Foundation has made great strides in supporting the conservation of natural ecosystems of the West. The Edna McConnell Clark Foundation has led transformative efforts to help vulnerable youth by scaling proven programs. The Gill Foundation has been a major force behind the movement for marriage equality. The Gates Foundation has helped reduce incidence of malaria throughout Africa. And the list goes on.
On the systems side, we have created and reinforced tools that make philanthropy more disciplined and focused on results. These include theories of change, which force us to articulate how we think change will happen and why. We can increasingly draw on evidence in those theories; and where evidence doesn’t exist, we can better describe our assumptions. Logic models, when we do them well, are tools that can unlock the black box of magical thinking and translate those theories of change into practical plans that address critical questions: Who do we think we will reach, through what means, in what timeframe, and with what results? We have also come a long way in the last couple of decades in our efforts to rigorously evaluate philanthropic and nonprofit initiatives. And finally, it is terrific to see an increased philanthropic focus on helping nonprofits develop into healthy, high-performing organizations. Smaller strategic foundations—such as the Haas, Jr. Fund, which has successfully developed nonprofit leadership—have advanced these capacity-building efforts.
Yet along the way, strategic philanthropy seems to have evolved to a point where we have many certaintists and not enough meaning seekers.