Introduction

In business, breakthroughs come from revolution, not evolution. Mark Zuckerberg, Bill Gates, and Steve Jobs are hailed as geniuses not because they came up through the corporate ranks, tweaking existing products, but because they came out of nowhere with ideas and products that broke new ground. When these entrepreneurs started out, they didn’t have the resources of giants like IBM, but they shared a key differential: vision.

Philanthropy, like the tech industry circa 1980, is ripe for “disruption.” Given the immense problems facing the world–environmental degradation, ethnic conflict, hunger, disease, and poverty—there is urgent need for vision. We need revolutionary ideas that would never come out of the IBMs of philanthropy.

Nonetheless, entrepreneurial individuals often don’t apply the principles to their philanthropy that made them successful in business. Instead, they take a traditional grantmaking approach: Solicit applications from multiple nonprofits, and fund whomever writes the best proposal. If you happen to fund a nonprofit that runs a successful project, then you are a successful funder. If not, cross your fingers and try again.

Entrepreneurial philanthropy stands this conventional model on its head, putting you in the driver’s seat: It’s not about funding nonprofits; it’s about solving social problems. You pick a problem that you want to fix. Then, you figure out the best ways to attack it, and, instead of inviting all comers to apply, you go find the best organization or person to carry out your agenda.

This “funder knows best” model has detractors as well as proponents. Critics contend that it gives too much power to donors and disenfranchises nonprofits, treating them like mere contractors. Of course, the road less traveled is rarely the smoothest.

Check Your Oil and Tires

Before you begin your journey, you need to inventory the advantages that could make you a successful social innovator. Are there certain issues where you are uniquely qualified to make a difference? What attributes and skills do you bring to the table? After all, when it comes to achieving social impact, dollars aren’t necessarily the only—or even the most important—asset. We’ve seen countless examples where smaller funders, by virtue of their business know-how and connections, were able to accomplish goals that would even elude professional staff at billion-dollar foundations.

Take stock of the resources that you, your family, and your network of contacts might have: What unique expertise and special talents do we have? What issues do we completely understand? What important contacts and connections do we have that can help us? What’s our name recognition/credibility/reputation? How much time and energy do we have to devote to our cause? What level of assets can we afford to commit?

Find Your Ignition Switch

The next step is to choose an issue that allows you to exploit your strengths. Although your initial instinct might be to select big problems like poverty or hunger, you’ll be more effective if you pick an issue that has personal resonance, such as fast-tracking research for a rare disease that ravaged a family member, saving a school district’s music education program from budget cuts, or cleaning up a polluted lake in your hometown.

By championing an issue of personal significance, you not only expand the menu of pressing needs that receive attention, but may possibly address “orphaned” issues that have been overlooked or are too controversial to be tackled by others. In thinking through where you can make a difference, ask yourself: What makes me mad? (“Every child in this country should be able to go to school without fear of being shot.”) What gets me fired up? (“When I see a veteran reduced to homelessness, it just drives me crazy!”) What do I think is really insane? (“Why do we keep buying bottled water?”)

Update Your GPS Software

Once you’ve determined your issue, you’re ready to take the next step. For the same reasons you wouldn’t embark on a road trip with outdated GPS software, don’t start your philanthropic journey without mapping the road ahead.

To understand the contours of your chosen issue, go on a listening tour. Undertake a literature review. Make effective use of consultants. Talk to other funders. You’ll want to know who else has been working on your problem, what’s already been done, and what impact that work has had. Not only will you avoid wasting money on ineffective approaches or duplication of other efforts, but you might find some partners and allies.

Caution: Don’t delegate the lion’s share of your due diligence to potential grantees. Although it’s great to solicit input from those on the front lines, it’s hard to get a candid assessment from people who may want your money. To get a more accurate picture, you’ll need a broader spectrum of perspectives, particularly from those directly impacted by your issue.

Check Road Conditions

Just like success in business, success in philanthropy is dependent on situational factors such as timing and market conditions. To what degree is the environment receptive to and ready for change? Some issues are ripe for action because people are aware of the problem, and they’re concerned about it. Other issues aren’t even on their radar. If you choose to work on the latter type, you may have a long and bumpy road ahead of you. You’ll have to put effort and money into educating relevant audiences that there is a problem before you can put money and effort into solving it. To determine if an issue is ripe for action, you’ll want to assess:

  • Social urgency: Is this problem compelling enough to mobilize others around your cause? Is this problem a high priority for influential players?
  • Feasibility: Is this a problem that can be solved by philanthropic dollars? (After all, not all problems can be solved with money.) Does the problem need significant groundwork or research before moving ahead can even be contemplated?
  • Stage: How ripe is the problem for a solution? Are people aware of this issue, or do we have to work to put it on the public agenda? Is the issue at a “tipping point” where just a few dollars will result in dramatic change? How long would it take for the problem to be resolved?

Set Your Destinations and Mileposts

Because vague goals lead to uncertain results, it’s important to define your desired outcome, your programmatic endpoint, and all of the intermediate goals along the way. Even if your chosen problem has a 20-year solution horizon—or might not be solved in your lifetime—it’s important to track progress in the here and now. Before you begin your work, define your ultimate goal in specific detail, and set mileposts to mark your progress. Setting a 3–5 year goal will focus your attention and efforts on what you can accomplish in the near future. Ask yourself: What change do we ultimately want to bring about? What progress do we want to see in 3–5 years? What is our five-year goal? When should we see measurable progress (short- and long-term)? When will we declare success? How much progress is enough? What will success look like? When are we willing to abandon efforts that are not producing results?

Find Your “On Ramp”

Every problem can be attacked from multiple angles. If you’re planning to eradicate a disease, you could concentrate on prevention (e.g., a vaccine), treatments, or finding a cure. Similarly, if your goal is to eradicate road rage, you could prevent the problem by educating new drivers, treat it with better police enforcement, or “cure” it by researching triggers of vehicular violence. So, how do you choose the right approach?

First, review everything you’ve learned about your issue, and examine the impact and cost of previous interventions. Next, decide which of your options to pursue based on its merits. For example, if your research reveals that most road rage incidents involve newly licensed drivers, incorporating a reckless driving module into existing driver’s education classes might be the best way to intervene. However, if you discover that drivers who commit incidents of road rage are also more likely to have racked up multiple traffic violations, you might favor enforcement.

Using All Your Gears

Now that you’ve determined what you want to do, it’s time to focus on how you’re going to do it. With a private foundation, there are almost limitless tactics at your disposal so there’s no need to confine yourself to “plain vanilla” grants to reach your goals. Instead, consider a whole range of options: advocacy, media campaigns, awards and scholarships, program-related investments, research or polling, litigation, demonstration projects, coalition building, documentary film, and much more.

However, just because you can do all of these creative things with a private foundation doesn’t necessarily mean you should. Some funders fall into the trap of chasing innovation (e.g. the grantmaking fad du jour) instead of pursuing efficacy. Remember that your goal isn’t to find the “trendiest” philanthropic approach as much as the “right” philanthropic approach. You want to choose the tactics that best match your problem, its stage, and the conditions on the ground.

Passenger Van or Motorcycle?

Depending on the scope of your issue and the number of viable strategies necessary to resolve it, you might find it advantageous to collaborate with other funders, allowing each partner to work on a different part of the problem, thereby reinforcing each other’s efforts. For example, while you focus on raising awareness by waging a dynamic media campaign, a different funder might work on legislative changes.

Ask yourself: What parts of the solution can we implement alone? What parts require the efforts of others? And remember that for all its potential advantages, successful collaboration requires exquisite coordination. All funders will need to work in concert to develop a coherent strategy that fills gaps, overcomes barriers, and exploits opportunities. Getting everyone to agree on that strategy and then execute it isn’t always simple—especially if you’re trying to bring consensus to a group of other visionary, strong-willed, entrepreneurial philanthropists.

Finalize Your Trip Plan

Now that you have developed the outline of your strategy and decided on the specific tactics to make traction on your issue, it’s time to commit your plan to writing.

Think of this as a business plan that describes the current situation, your proposed solution, and the final result. What are the roots of the problem? What obstacles will need to be overcome? What is your theory of how the issue can be fixed through your chosen intervention? What time and resources will be needed? What foreseeable events (positive or negative) could affect your ability to make traction? What different circumstances might unfold?

Once you’ve formulated your action plan, hand it over for objective feedback from those with different perspectives, especially potential naysayers and skeptics. Being told that your plan has shortcomings, gaps in logic, or relies on leaps of faith is discouraging, but if you can revise your plan to address these criticisms and resolve any inconsistencies, you’ll be better poised for success.

Invite the Perfect Traveling Companions

Now it’s time to find organizations and people to carry out your strategy. It’s likely that you will be working with nonprofit partners, but don’t limit yourself. We’ve noticed that entrepreneurial philanthropists don’t necessarily make a distinction between the nonprofit and for-profit sectors in effecting change. If they think they can do the most good by supporting a for-profit company rather than a public charity, they do it. The key is to pick the best partners to get the job done.

Whether you’re recruiting an independent consultant, hiring a public relations firm, giving a grant to a for-profit business, or funding a nonprofit partner, it pays to remember that the “who” can be every bit as important as the “how.” The best organizations have the best leaders, so you’ll want to fully investigate your potential partners to make sure you are entrusting your vision and funds to someone you know can deliver.

Was It Worth the Gas?

You can’t determine whether your intervention was successful without evaluation. But don’t wait until you’re wrapping up to begin your assessment. Establish mechanisms for real-time monitoring that commence at the inception of your effort and are sustained throughout. You don’t want to ask, “How did we do?” Rather, you want to continually inquire, “How are we doing? What changes do we need to make?

In monitoring your impact, beware of “metric madness”—collecting reams of data in the mistaken belief that “more is more.” In actuality, collecting too many variables can obscure your most important ones. Instead of chasing yet more data points, aim to collect “good enough” information that enables you to easily gauge your progress.

Finally, it’s imperative to react to results, not just collect them. When you’re not getting the outcomes you anticipated, or if you uncover emerging and unanticipated opportunities, having the flexibility to change course is a strength, not a weakness.

Conclusion

To effect real and significant change, it takes more than just good intentions—it takes vision and talent. If you let the same qualities that made you successful in your professional life inform your philanthropy, you can accelerate progress where it’s been stalled for decades.

Whether you want to prevent drug addiction in your community or find a cure for a rare disease that’s affected a family member, taking an entrepreneurial approach can really move the needle. And you don’t have to have Bill Gates resources to do it.

If you’ve followed all of these steps, you’ll have a clear idea of the scope of your chosen problem and its dimensions. You’ll know what’s been tried, what’s known, and what’s unknown. You’ll have taken inventory of your resources and considered the pros and cons of all the conceivable approaches to solving your dilemma. You’ll have invited critics to punch holes in your strategy, come up with a road-tested plan, and found the best people to carry out your agenda. In sum, you’re ready to act like an entrepreneur and leverage your strengths to drive change. —By Page Snow with Catherine Censor

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