A conversation with Tom Tierney on June 17, 2013

Participants

Note: This set of notes gives an overview of the major points made by Tom Tierney.

Summary

Good Ventures spoke with Tom Tierney about the qualities of effective philanthropists and how to choose and evaluate charitable issue areas.

The Bridgespan Group

The Bridgespan Group is a nonprofit advisor for mission-driven organizations and philanthropists. It focuses on broad social problems, aiding disadvantaged populations, and breaking the cycle of intergenerational poverty. Bridgespan's criteria for taking on a project include:

Bridgespan's core competencies include helping philanthropists narrow their focus areas from a few dozen to 3-5 and helping organizations and philanthropists develop strategies for tackling problems once they have chosen a specific cause.  They “bridge” from donors through nonprofit organizations to beneficiaries. 

Bridgespan's past projects have included creating "snapshots" of various causes for donors as part of helping donors scale their philanthropy, and it could share examples of those with Good Ventures.

Mr. Tierney recommended that Good Ventures read Bridgespan's paper "The Donor-Grantee Trap: How ineffective collaboration undermines philanthropic results for society, and what can be done about it, A guide for nonprofit leaders, their boards, and their donors." This paper is a direct derivative of the book Give Smart: Philanthropy That Gets Results, co-authored by Tom.

Characteristics of effective philanthropists

Strategic: Philanthropists committed for the long-term pay special attention to their strategy and processes, and not just what causes they wish to fund. A conscious strategy allows an organization to test the underlying assumptions of that strategy, and thus continually examine and improve it. An organization's initial strategy will almost certainly be partially wrong, so it is important to keep learning over time and to adapt the strategy accordingly. Because philanthropy does not have the same market feedback mechanisms as private business, and because clearly establishing the causality of interventions is difficult, such learning and adaptation requires work and attention.

Committed for the long haul: Having a long time horizon and the intention of working over multiple decades on an issue can increase a philanthropist's impact’.  First, many of the problems donors seek to address will take a long time to solve. Moreover, working in a field for an extended period of time can allow a funder to develop expertise, and become a leader and model for others, multiplying the impact of his/her donations.

Clear and disciplined: It's important for donors to maintain discipline over their institutions and clarity of mission, especially when aiming to work over long time horizons, as many organizations suffer when their founders' influence fades.

Flexible: Another consideration is keeping some opportunistic capital-- money available for promising opportunities that arise suddenly and surprisingly. Philanthropists who don't endow a foundation have more flexibility. This is particularly important in the early stages of a philanthropist's work. Foundations are required to pay out 5% of their assets annually. This forces a foundation to scale up quickly, hire staff and commit to strategies before they have the opportunity to learn about what works and what they want their priorities to be.

Choosing issues and causes

Key considerations

There should be a balance between picking causes based on data and picking them based on personal values and intuition. Given the energy and effort a funder needs to expend when heavily involved in philanthropy, it is important to be passionate about the selected cause.  Fundamentally, all philanthropy is deeply personal. 

When picking causes, donors should consider their own distinctive qualities that could provide particular value in in making progress toward solving the problem. Funders should also be aware of their desirable level of risk, and it may make sense to change that level over time.

It is also key to have at least a version of a philanthropic strategy before hiring program officers. Since the best potential people to hire are often the ones that already have experience in the field, it is likely that they are used to doing things a certain way. If a philanthropist doesn't already have particular strategy and set of goals in mind, the organization's strategy will be influenced heavily by the background of its employees, potentially to the detriment of the founder's aims.

Comparing different causes and making a choice

Good Ventures is unique among the philanthropists that Mr. Tierney has come in contact with in terms of the breadth of causes it is interested in considering for funding. When choosing among causes, it's worth remembering that different areas may allow for different levels of investigation – some might require two or three months to get a thorough sense of, while in narrower fields it might be possible to speak to a sufficiently broad range of experts in relatively few conversations. Bridgespan’s expertise is grounded in rigorous strategy development around major initiatives or “big philanthropic bets” that involve in-depth analysis.  Specific analysis is in part determined by issue areas.  For example, climate change is a broad cause covering a lot of different types of work and would take many months to explore, while family planning in the developing world is a cause where it might be sufficient to talk to the relatively few key funders working on it.

Different fields will require different approaches, as well. For instance, it is generally important to get objective opinions from experts rather than advocacy for the expert's side of a cause, and in some fields it can be difficult to find objectivity. One way to approach this issue might be to set up a debate between multiple experts instead of talking to them all individually. In certain fields it might be possible to pay a few of the top thinkers relatively small amounts of money (perhaps in the range of $10,000) to write a paper answering a set of specific questions, and then bring them together to present the papers and debate. For narrow, esoteric fields, this could be more informative and efficient than undertaking an issue landscape.

Similarly, it's normally a good idea to hire people with experience in the relevant field, and the right people might be harder to find in some areas than others.

Because learning over time is so important for a philanthropist, experimenting before choosing causes can be a good idea, and experimenting in a variety of fields could be helpful.

At the point where a funder has narrowed his/her potential causes down to 5 or 6, a helpful tool to winnow these down further might be spending some time talking to a group of people with broad experience in philanthropy, e.g. partners at Bridgespan, who can look at the options in a more strategic and objective light than people involved in the specific causes. Having a structured brainstorm with people who ask tough questions can be really helpful.

Finally, because some things in the world of charity can't be measured effectively with metrics, it is important to be able to infuse the decision process with plain old common sense and good judgment as well.