In this article, Kramer points to a relatively new phenomenon in the philanthropic marketplace, and it has the potential to revolutionize the entire nonprofit sector. Why? Because what he’s talking about is how wealthy donors are NOT giving to existing charities but ARE taking active steps to solve problems and resolve issues in their regions or communities.
In effect, what Kramer is saying is that traditional nonprofits just aren’t cutting it. That they are not effective at bringing about social change. They’re concerned with sustainability for their own organization, perpetuation of services to target populations, but not getting at the CAUSES of our social ills.
Therefore, some donors, who have the means and the inclination to do this, are having a good deal of success in effecting the kind of social change we normally think nonprofits are designed to bring about by simply rolling up their sleeves and investing their money in strategies that are getting the job done.
So the question is, Are Nonprofits today capable of “making society better?” Or are they just putting a lot of band-aids on social problems that continue to fester; are they more concerned with their own survival than they are in maiing society better? AFter all the conservatives have shifted responsibility for doing that from government to the nonprofit sector? Are we up to the task? Are we getting the job done?
Here are key excerpts from Kramer’s article.
Kramer starts with a stunning example of Thomas Siebel who does philanthropy differently from other donors. As the founder of the software company Siebel Systems Inc., he is one of a handful of philanthropists who have the resources to devote substantial time and money to charity.
In 2005, while spending time on his Montana ranch, Siebel became concerned about the rampant local use of methamphetamine, or “meth.” Rather than writing a check to a local nonprofit, Siebel took the time to find out why people become addicted to meth. After learning that first-time users were typically teenagers who were unaware of meth’s risks, Siebel created the Meth Project to change teenage perceptions about the drug.
He brought together experts and hired a major San Francisco advertising agency to develop a hard-hitting campaign that would reach 80 percent of Montana teens with at least three ads every week. Kramer says the ads were world-class: With production budgets of $500,000 to $l million each, they were directed by leading Hollywood figures, and the ad campaign has won 43 awards in national and international advertising competitions.
Kramer reports that Siebel's ads were gut-wrenching: Tested in focus groups to capture a teenager’s attention, they were far more brutal than anything the community had seen on television before. Because Montana is a small media market, Siebel’s $2 million annual advertising budget generated more than 45,000 television ads, 35,000 radio ads, and 1,000 billboards in the first two years.
The results have been stunning. Between 2005 and 2007, meth use in Montana dropped 45 % among teens and 72% among adults, while meth-related crimes fell 62%.
Kramer reminds us that Siebel’s success in fighting meth abuse stands in stark contrast to the modest and often indiscernible results that most philanthropists have achieved. In the quarter century between 1980 and 2005, U.S. annual charitable giving in constant dollars grew by 255% and the number of nonprofits more than doubled to 1.3 million. (In 2007 and 2008 we topped $300 billion!) Per capita giving in the US is three times greater than any other country in the world.
However, Kramer says, during this same 25-year period, the U.S. dropped from 2nd to 12th among the 30 countries that are members of the Organization for Economic Co-Operation and Development (OECD) in basic measures of health, education, and economic opportunity.
Kramer admits that without philanthropy, conditions would likely be even worse. Yet whatever benefits philanthropy may provide, it is not delivering the kind of social impact Siebel achieved. If philanthropy is to become an effective way of solving pressing social problems, Kramer says, donors must take a new approach.
Here is one of the key points of the article: Kramer says that for most donors, philanthropy is about deciding which nonprofits to support and how much money to give them. These donors effectively delegate to nonprofits all responsibility for devising and implementing solutions to social problems.
Kramer goes on to say that despite the sincere dedication and best efforts of those who work in the nonprofit sector, there is little reason to assume that they have the ability to solve society’s large-scale problems.
And then he tells us something of which we are all too painfully aware: the overwhelming majority of the 1.3 million US nonprofits are extremely small: 90% of their annual budgets are under $500,000 and only 1% have budgets greater than $10 million. Despite their often-heroic efforts, Kramer says, these nonprofits face severe limitations.
And here’s another key point:
Taking a cue from Paul Light's book on capacity-building, Kramer reminds us that each nonprofit functions alone, lacking the infrastructure to learn from one another’s best practices, the clout to influence government, or the scale to achieve national impact. They focus primarily on their own institutional sustainability.
Collaboration throughout the sector is almost impossible, Kramer says, as each nonprofit competes for funding by trying to persuade donors that its approach is better than that of any other organization addressing the same issue. There is no assurance -- nor even any likelihood -- that supporting the under-funded, non-collaborative, and unaccountable approaches of the countless small nonprofits struggling to tackle an issue, will actually lead to workable solutions for large-scale social problems. These nonprofits are unlikely to create the lasting reform that society so urgently requires.
Kramer goes on, then, to make the point that, in contrast to existing nonprofits, "catalytic philanthropists" have the ambition and the resources to change the world and the courage to accept responsibility for achieving the results they seek.
- They engage others in a compelling campaign, empowering stakeholders and creating the conditions for collaboration and innovation.
- They use all of the tools that are available to create change, including unconventional ones from outside the nonprofit sector;
- And they create actionable knowledge to improve their own effectiveness and to influence the behavior of others.
Kramer’s research suggests that if donors want to solve a problem, they must decide to do so themselves. Wealthy donors, he says, have a powerful role to play that goes beyond merely supporting existing nonprofits. Private donors, foundations, and corporations have the clout, connections, and capacity to make things happen in a way that most nonprofits do not.
By becoming directly involved and taking personal responsibility for their results, these major donors can leverage their personal and professional relationships, initiate public-private partnerships, import projects that have proved successful elsewhere, create new business models, influence government, draw public attention to an issue, coordinate the activities of different nonprofits, and attract fellow funders from around the globe.
All of these powerful means for social change are left behind when donors confine themselves to simply writing checks to charity.
So, we have to ask ourselves.... Why aren't the Nonprofits in our Voluntary Sector taking the same kinds of steps to solve problems, get to the root of social ills and make systemic changes?
Kramer does say, however, that his “catalytic philanthropists” must be as cautious as they are bold. Things aren’t that simple. Philanthropists cannot catalyze change by acting alone or imposing a solution, convinced that they have the answer before they begin. Instead, Kramer advises, they must listen to and work with others, enabling stakeholders to develop their own solutions.
Kramer also advises that in these situations of significant social change the people with the problem have to become engaged in solving it for themselves. They must be engaged with the “campaigns” set up by these wealthy major donors. This was apparently the case in the Montana Meth Project. Additionally, he says, the systemic changes needed to significantly impact even relatively simple community problems are mind-bogglingly complex.
And here, in my opinion, is another very significant key in Kramer’s concept: The obstacle isn’t that no one knows any answers, but rather that the uncoordinated actions, narrow constraints, and conflicting incentives of different stakeholders and different sectors of society perpetuate the status quo. So this is going to be a block to most nonprofit organizations, as well as to these energetic, wealthy donors seeking social change.
Kramer optimistically claims, however, that “catalytic philanthropy” has the ability to cut through these divisions by stimulating cross-sector collaborations and mobilizing stakeholders to create shared solutions.
The readers of this blog will note that something of this same approach can be found in the recent book by Doug Henton et al entitled "Civic Revolutionaries," in which the authors, all protoges of the late John Gardner detail new approaches, and cite many case studies, in which systemic changes are being made in complex decision-making environments involving many strong competing interests.
Kramer suggests that using this method of “shared solutions," systemic reform requires a relentless and unending campaign that galvanizes the attention of the stakeholders involved and unifies their efforts around the pursuit of a common goal.
This is something, of course, that I personally think most existing nonprofits would find mind-boggling. Kramer says that in one of these campaigns more than 300 organizations and institutions in the Greater Cincinnati area. These groups now participate in a project called “Strive;” they include school districts, uniiversities, private and corporate funders, civic leaders, and nonprofits
But such a wide and far-reaching, in-depth campaign isn’t cheap. Kramer says the Strive campaign has a combined budget of some $7 billion.
It is clear from Kramer's account that systemic change depends on a sustained campaign to increase the capacity and coordination of an entire field. No single intervention attacks the root cause of, for example, educational failure. Instead, the entire system is gradually becoming more coordinated, informed and effective.
Organizations throughout such a campaign, Kramer says, learn from each other, reach agreement on performance standards, and find ways to collaborate that increase the effectiveness of all participating organizations. Catalytic philanthropists have used a wide array of other tools from outside the nonprofit sector to bring about social change: corporate resources, investment capital, advocacy, litigation, and even lobbying.
Now, my reflection on Kramer's account is that this method of getting together these huge multi-faceted approaches to regional problems is truly VERY different from the way most Nonprofits work!
Kramer ends his article on the note that philanthropists with the time and resources to become personally involved must step forward to become catalytic philanthropists. That’s not cheap, and it’s something that involves a lot of hands-on action by the philanthropist. Clearly, this kind of social reform is NOT for the faint of heart!
But Kramer is convinced by quite a few continuing projects of “catalytic philanthropy” that it is possible for these philanthropists to see measurable impact from their efforts, and realize the potential that exists in this multi-faceted methodology for changing social conditions meaningfully.
What I take away from Kramer's article is that philanthropy is indeed a powerful tool for social progress, but only when donors make it so by their very large donations and their personal involvement. And now, I’d like to leave you with a question: If “catalytic philanthropy” – or whatever you want to call it, where activist wealthy patrons becoming personally involved in mounting these very expensive but also very EFFECTIVE campaigns to bring about systemic change and actually solve our social ills and make society better, what is the 21st century role of the average nonprofit organization?
Will they fade into obscurity? Will we have two classes of service in the Voluntary Sector – those who really make society better through systemic change, and those who only apply band-aids? Maybe we have that already. Do we need the band-aid approaches as much as we need systemic change? Or will nonprofits eventually “get it” and move more into collaboration, mergers, and coordination, and tear down their silos in favor of making society better? After all, that’s what they’re supposed to be doing in the first place, isn’t it?
The reader here may want to refer to some of the writings of Peter L. Berger and Richard John Neuhaus who have put forward the idea that nonprofits serve as "mediating structures" of public policy. This was part of the basis on which conservatives have removed from government the responsibility for the citizenry's well-being and placed it squarely on the shoulders of the voluntary sector. This, along with Reagan's blunders in social policy, has resulted in our over-crowded, under-funded philanthropic marketplace.
So, stay tuned for more on “catalytic philanthropy” and similar new ideas in making philantyropy more effective in coming months and years. Things are getting very exciting! Maybe we're about to see a radical change in the voluntary sector in this country.
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