Why strategic philanthropy makes a difference

Lexi Nolen, VP for Impact, wrote the following article for EHF’s V1SION Blog and the national Grant Managers Network journal GMNsight.

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The Episcopal Health Foundation embraces an emerging thread of philanthropy that utilizes strategic planning, evaluation, and learning systems. We want to be accountable for the resources we steward, and we believe communities deserve that kind of accountability. But how does strategic philanthropy differ from non-strategic philanthropy?  What is the role of collaboration? There are a number of possible responses, but let me illustrate with one example.

Some communities despair at the level of social and health problems they face, despite myriad social services agencies serving the local community. What is often not recognized, though, is that it is as critical to know how agencies work together as a system as it is to know who exists and what they do, if we are interested in impact. The system dynamics map below illustrates the role of strategic philanthropy in converting a particular (but common) vicious cycle into a virtuous cycle for advancing community health.

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                                                           Box 1

Box 1 is our starting point: a community with multiple social service providers. Upon receiving general requests for funding, responsive (non-strategic) philanthropies might provide short-term grants to a number of local agencies working on similar issues. Such grant-making can dissipate investments and create territorialism among agencies, leading to lack of cooperation, low capacity, and duplicative investments. The result is failure to meet goals, often with little incentive for improvement. New social services providers emerge to address the local problems that have not been solved. But do we question why the challenges are not being met, and what the implications are for how we do things differently, or do we just chalk it up to “need”? Are the right partners addressing the right issues in the right ways? And do they have the capacity to achieve the goal? Or have we, as funders, actually undermined that potential through our own approaches?

A collaborative model of strategic philanthropy explicitly asks these questions, and recognizes the importance of local knowledge and collaboration in solving complex problems.

Let’s take the same starting point below—Box 1’s multiple social service providers—and consider how a strategic philanthropy approach might transform a vicious cycle into a virtuous cycle for community health. Instead of the purely responsive grant-making described above, let’s say the philanthropy discovers that there are many local social service agencies with a similar focus, being funded by multiple donors, creating little incentive to work together.

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The philanthropy approaches other local donors to open a conversation with the community about key challenges, alignment of goals among agencies, strengths and assets of agencies, and refinement of their roles and leveraging opportunities in implementation. This leads to a set of grant applications (ideally reviewed jointly by funders) that take a holistic look at the problem, and advances interdependent relationships, accountability for success, and an explicit learning process for improvement. The result is increased cooperation among local agencies and the community, increased accountability and incentive for focusing on multi-sector solutions to complex problems, and increased capacity and integration among the local players.

Goals are better achieved (or if not, lessons learned for improvement), new structures and relationships might be developed, and agencies may be consolidated with an eye toward increased capacity and integration — now we are on to something. In this scenario, we, as a community, fundamentally changed the dynamic and the systems structure to better respond to local problems because we took an approach that was both strategic and community informed. Of course, some social service providers have been trying to create such virtuous cycles for quite some time, but have not had the resources, leverage, or partners to effectively do so.

Philanthropy can be one of those partners for transforming a vicious into a virtuous cycle, and for strengthening systems, effectiveness, and sustainability for community development.

What do you think of strategic philanthropy approaches? Does this level of philanthropic engagement with communities make sense to you? Do you think that systems approaches can help us make a difference together in advancing community health transformation?


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