Five Ways Funders Must Reconstruct Philanthropy

September 22, 2015

Paul Shoemaker, founder of Social Venture Partners and the Microsoft Alumni Foundation's 2015 Integral Fellow, wrote a report this year on "Re-Constructing Philanthropy From the Outside-In." Adapted in The Chroncle of Philanthropy last month as "How to Rebuild Philanthropy's Ability to Change the World," he argues that funders need to fundamentally change the way they have traditionally worked with nonprofits, communities and each other.

"If we want to produce more of the change our resources are capable of achieving," he writes, "we need to reconstruct our underlying practices."

Citing examples ranging from the Ford Foundation to the Road Map Project, he offers five recommendations:

Make every grant unrestricted. Donors have every right to limit their giving to the groups whose goals they hope to mutually achieve. But once the money is given, let the nonprofit decide how best to achieve the end goal. Unrestricted does not mean unaccountable.

Commit to the longer term. We need to stop thinking of ourselves solely as grantmakers and more as problems solvers. There is something deeply gratifying, if less interesting in the short term, that comes from committing for the long term and making a real dent in a social challenge.

Collaborate with other grantmakers as the rule, not the exception. We talk about the need for nonprofits to work together more and consider mergers. But we almost never suggest that donors or grantmakers merge their philanthropic efforts, although two of the biggest in the world did just that, Warren Buffett and Bill Gates. At Social Venture Partners, we’ve helped build the Statewide Capacity Collaborative, made up of nine grantmakers in Washington working to help nonprofits improve their management and expand advocacy. The benefits have gone well beyond funds provided to nonprofits.

Build stronger boards. If we don’t force ourselves to adopt, and invest in, better board practices, we’ll continue to feel good inside the board room but disconnected from the reality of what we are not accomplishing outside.

Listen much more closely to nonprofits. In the long run, philanthropists can’t tell others how to fix their communities, and solutions to social problems do not stick unless all people involved are truly at the table.

Read the full version of this opinion piece at The Chronicle of Philanthropy.


Excellent piece!
How often does a Funder make a generous gift to NonProf-A, while NonProf-B on the other side of town is trying to solve the same problem? A Funder has every right to say, "Hey, NP-A and NP-B, your solutions work, but merge to scale best practices and maximize my donor investment!" It's time the M&A movement hit some of our Nonprofits, too.

Also, HUGE KUDOS, Mr. Shoemaker, to vouch for NP credibility: If they're good enough to receive your charitable gift, they're good enough to use it wisely/prudently/efficiently and demonstrate accountability. Amen and AMEN! Yes, unrestricted gifts allow NPs to go much further!