To cope with and address increasingly complex and rapidly changing social and global forces and problems, philanthropy needs to build on its work over the last 10 years of improving organizational effectiveness and efficiency and now also focus on coordination and adaptation, a new report says.
Philanthropy will need better coordination “because given the scale and social complexity of the challenges they face, funders will increasingly look to other actors, both in philanthropy and across sectors, to activate sufficient resources to make sustainable progress on issues of shared concern,” says the report by the Monitor Institute.
And philanthropy will need to adapt “because given the pace of change today, funders will need to get smarter more quickly, incorporating the best available data and knowledge about what is working and regularly adjusting what they do to add value amidst the dynamic circumstances we face,” says What’s Next for Philanthropy: Acting Bigger and Adapting Better in a Networked World.
The most successful funders in the future “will do more than operate as effective, independent institutions,” says the report, which was funded by the W.K. Kellogg Foundation and the Robert Wood Johnson Foundation and written by Katherine Fulton, Gabriel Kasper and Barbara Kibbe.
“The next decade will call on them to develop ‘next practices’ – effective approaches that are well suited to the emerging landscape of public problem-solving – that allow them to act bigger and adapt better.”
While funders acknowledge the importance of working together, “collaboration remains more the exception than the rule,” the report says. “That’s because too often, working collaboratively means giving up individual control, being patient with group processes that feel slow and drawn out, and dealing with sometimes difficult interpersonal tensions, even as the benefits of doing so are often hard to see and measure in the short run.”
The ability to adapt better will be critical, the report says, because it often no longer makes sense in public problem-solving “to develop strategy using purely linear approaches: identifying a problem, formulating a theory, deciding on a solution, and executing a clear plan.”
Today, the report says, strategies “must evolve on the basis of judgment that is actively and continuously cultivate, using multiple inputs and sources.”
So funders will success “if they continuously improve their ability to learn, shift and adapt in real time – or they risk becoming irrelevant at best or, at worst, actually hurting the cause.”
Key tools for change consist of new technologies that “allow us to share information and gather input in real time, more easily and cheaply than before,” the report says.
“The question for the coming decade,” it says, “will be whether funders can learn to use these new tools to figure out what works, share what they know and do, and get feedback quickly, and then be ready to act on what they learn in ways that add up to meaningful impact on public problems.”
Retooling philanthropy will require changing behavior, which in turn will require new data and tools, new incentives and new leadership, the report says.
While new technologies that already have shaken the media and music industries, for example, now are “sweeping into and through the social change world,” the report says, “it’s still hard for philanthropy as a field to adopt and use new tools.”
Top-down, centralized, sector-wide tools and infrastructure often are rejected, even if they could improve performance, the report says, while bottom-up innovations rarely spread or are taken to scale.
The report predicts “a merger of top-down and bottom-up mindsets driven by new tools and platforms that help funders do their own work and their collective work better.”
And while technology may facilitate change in philanthropy, the report says, “nothing will change until people change.”
Funders, for example, “want to encourage risk-taking and systems change but then demand immediate results and don’t tolerate failure,” the report says. “They want to promote learning and knowledge sharing but then provide no benefits for doing so. They talk about collaboration but then resist sharing or ceding power to others.”
Quoting organizational theorist Edgar Schein, the report says “the only time organizations learn and change is when the normal level of ‘learning anxiety’ (the anxiety produced by having to shift and learn something new) is trumped by ‘survival anxiety’ (the anxiety produced upon realizing that if something doesn’t change, they will not survive).”
Leadership is key, the report says.
Leaders today “have to be comfortable bridging boundaries of all kinds – especially across sectors,” the report says. “They have to be comfortable with technology and speed. They have to be skilled at listening, sharing control and empowering others. They have to be comfortable with ambiguity. In other words, old models of hierarchical leadership that worked well in an organizational context don’t fit today’s more networked environment as well.”
More “emergent and adaptive” approaches, or “design thinking,” are needed, the report says, quoting Roger Martin, dean of the Rotman School of Business at the University of Toronto.
“It’s not simply a matter of coming up with the right answer,” the report says. “It’s about recognizing and engaging the people who will have to act, working together to test a range of possible solutions, creating feedback loops to facilitate learning, accepting and learning from failures, and practicing continuous adaptation.”