‘Entrepreneurial’ Philanthropy Focuses On Results
SEPTEMBER 13, 2016 • KAREN DEMASTERS
The board members of the Edwards Mother Earth Foundation based in Washington State had a vague idea that they wanted to use their money to help promote “the sustainability of life on the planet.”
That is a hefty goal and the foundation started out practicing the kind of philanthropy employed by many: It reviewed proposals and wrote checks to worthy organizations.
But that was not enough for Sonia Baker, founding director; her brother, John Edwards, and the rest of the family. They wanted to tackle a big part of that issue in a way that they could see concrete results. The foundation took on climate change as the issue and has now succeeded in changing energy policy in a number of states.
They employed a new approach to philanthropy, known as entrepreneurial philanthropy, that is more hands on and yet can achieve larger results than the typical checkbook philanthropy, according to Page Snow, chief philanthropic officer at Foundation Source, an organization that supports foundations in their creation and administration.
“Entrepreneurial philanthropy stands the conventional way of doing philanthropy on its head: It’s not about funding nonprofits; it’s about solving social problems,” says a new guide prepared by Snow entitled “Driving Change: A Guide to Entrepreneurial Philanthropy.”
“Moreover, it puts you [the donor] decisively in the driver’s seat. You pick a problem that you think is worth fixing. Then, you figure out the best ways to attack that problem, and, instead of putting out a help-wanted sign and inviting all comers to apply, you go out and find the best organization or person to carry out your agenda,” says the guide.
That is what Baker and her family did. They decided the area that was not being addressed on climate change and creating a sustainable earth was state energy efficiency. They did their research, hired an expert in the field and began lobbying five key states to develop energy efficiency policies. They worked with existing environmental organizations and made sure the organizations worked with each other to move their agenda forward.
Baker and Edwards also began engaging other generations from the family in the foundation. The foundation succeeded in prompting states and utility companies to enact energy efficiency policies where none existed before.
“It was a years-long challenge, but it has been well worth it,” says Baker. “By the end of our third year of focusing on energy efficiency policies, we had made more progress than we planned and we extended our work to five more states.”
Snow credits the Edwards Mother Earth Foundation as being a successful example of the new style of philanthropy.
“Instead of having people pitch worthy projects to the foundation, the board of a foundation can decide to do something big. They want to get a bang for their buck in an area that is important to them,” Snow says.
Snow says many entrepreneurs leave their business hats at the door when they start thinking about philanthropy. Instead, they should address philanthropy using the same skills that made them successful in business.
“Philanthropy, like the tech industry circa 1980, is ripe for innovative disruption,” Snow says in the guide. “Given the immense problems challenging the world—environmental degradation, ethnic and religious conflict, hunger, disease, and poverty—there is an urgent need for vision.”
Snow advises funders to decide on an issue that is of utmost important to them and then do the research. If it is a rare disease that the foundation wants to eradicate, find out who is funding research and what is already being done. Pick an area that is being overlooked and find out how to fill in the gap.
“Not only will you avoid wasting money on ineffective approaches or duplication of other efforts, but you might find some likely partners and allies,” the guide says. Set goals that are attainable and measurable and assess progress at all stages, not just at the end.
“With a private foundation, there are almost limitless tactics at your disposal. Therefore, to reach your goals, there’s no need to confine yourself to ‘plain vanilla’ grants. 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,” Snow advises in the guide.
“The financial advisor is the natural person to bring up the idea of creating a foundation and helping to focus its efforts, rather than waiting for the client to bring it up,” Snow says.
“This helps the advisor exceed the typical financial relationship and be connected with their clients on a more personal level. Foundations also become a way to connect with the next generation in the client’s family,” Snow says.