A conversation with Don Howard of the James Irvine Foundation on June 2, 2014

Participants

Note: This set of notes gives an overview of the major points made by Mr. Howard.

Summary

Good Ventures spoke with Mr. Howard about several aspects of running a major philanthropic foundation, including managing leadership transitions, strategic experimentation, and collaboration with other organizations.

Managing CEO transitions

CEO transitions can hinder an organization’s effectiveness. When a CEO leaves an organization, its direction can become unclear, responsiveness to grantees can decline, and momentum can be lost. The effects of a departing CEO are more pronounced in organizations with weak boards.

Mr. Howard agreed to serve as interim CEO of the Irvine Foundation (hereafter, Irvine) in order to ensure a successful leadership transition at Irvine when Jim Canales stepped down as CEO in early 2014. Both Irvine’s California Linked Learning District Initiative and its California Democracy program are currently hitting on all cylinders and cannot afford a loss of momentum. Its Arts Program strategy is also at a critical point of implementation.

A committee of Irvine board members is conducting the CEO search with the assistance of search firm Spencer Stuart.

Choosing focus areas

Philanthropy is ultimately values driven, especially with regard to choosing focus areas. Data, which are always at least somewhat incomplete, can only guide an organization’s choices to a certain extent. Final decisions usually must be made based on values, which in practice are often the personal values of an organization’s board, CEO, and Leadership Team.

Identifying effective strategies through experimentation

Learning about a new focus area through systematic experimentation, rather than by pursuing a pre-determined strategy, can be very effective if done in a way that provides frequent feedback and opportunities for course-correction. For example, in 2002, Irvine’s Youth program followed such a path by doing experimental grantmaking for a few years in order to learn about the area. Irvine’s Linked Learning program was ultimately developed through this process of exploration and experimentation.

Program officers, hired by foundations for their expertise in a particular area, are sometimes implicitly encouraged to overemphasize how much confidence they have in their strategies. Maintaining an attitude of experimentation and humility within a foundation can help to avoid this. The most important skills for a program officer include deal-making, partnership development, experimenting, iterating, and learning.

Building partnerships and coalitions

Most foundations do not focus on collaboration or co-investment. Good Ventures’ co-investment strategy likely will have implications for its cost structure and decision-making going forward. Collaboration between organizations often seems more effective on a shorter time scale (i.e. two to three years) with quick cycles of experimental feedback, a practical focus, and reasonable expectations.

Having some other party (such as a co-investor or customer) to whom an organization is accountable and must prove the value of its endeavors can drive an organization to do better work.

Mr. Howard suggests Good Ventures talk to Amy Dominguez-Arms, head of Irvine’s California Democracy program. Ms. Dominguez-Arms and her teammates have successfully brought together coalitions of organizations to work on causes such as redistricting, ballot initiative reform, and the Future of California Elections (FOCE) project. She is skilled at keeping organizations and interest groups involved in a coalition. It’s important for an organization that pursues policy change to have someone with the skills necessary to build and maintain large collaborative networks.

Irvine’s Pay for Success Initiative and collaborative process

At the end of 2013, Irvine launched the California Pay for Success Initiative, which Mr. Howard helped spearhead. Mr. Howard had seen Social Impact Bonds being tested (or Pay for Success Bonds) in New York, Utah and the UK. Meanwhile, California did not yet have such any such agreements in place. Irvine has committed to investing up to $4 million into the Nonprofit Finance Fund to provide re-granting and technical assistance to leaders in communities in California trying to develop Pay for Success agreements.

Reducing the prison population of California will require reducing rates of recidivism. California’s Prison Realignment policy has created new opportunities for policy change, and all 58 individual California counties are now testing various strategies to manage their prison populations. Irvine is evaluating this arena to determine the impact potential of providing support for technical assistance and data analysis to those counties whose work is most promising. In this arena, Irvine would hope to collaborate with other funders from the beginning.

California Forward, The Pew-MacArthur Results First Initiative and the Public Policy Institute of California are all working in this arena,

Short-term and long-term causes

A funding organization should strike a balance between long-term focus areas and short-term, initiative-driven focus areas.

For example, Irvine’s California Democracy program currently seeks out areas with existing momentum that Irvine can help to boost further in the near-term. Currently, ballot initiative reform has gained such momentum. In the areas of youth issues and education, on the other hand, Irvine has helped to build momentum patiently over many of funding.

Reserving part of an organization’s portfolio for more responsive, short-term opportunities may also offer employees the chance to work across new and different issue areas.

Management challenges of medium-sized organizations

Foundations tend to narrow their focus quickly. Medium-sized organizations in particular often end up divided into narrow silos of expertise. That can make it difficult for people to move from one part of the organization to another. In other words, relatively small organizations with heavy specialization can suffer from a lack of upward mobility and promotion opportunities for their employees. Irvine has only one promotion point in the program side of the organization, and employees tend to remain in their roles for the duration of their tenure.

The inability to promote creates a management challenge in medium-sized organizations, since promotions are a way of rewarding, showing gratitude, and offering new opportunities and career development to employees. Another challenge is setting up a system for recruiting, since recruiting tends to occur on an as-needed, one-off basis, rather than as a systematic filling of roles as people are promoted out of them, which is more common in larger organizations.