March 08, 2012

Baseball's Lessons on Promoting Social Change

In an annual ritual marking the change of seasons, pitchers and catchers just reported to Florida for spring training.  Professional baseball sends a powerful lesson to those of us who work to solve social problems: Despite nearly 150 years of entrenched traditions, the sport has shown itself to be open to change.  And that change is transforming how the game is played.

How does baseball point a path forward for those of us struggling to support a just and vibrant society in our troubled times?

The answer lies in the story of Billy Beane, general manager of the Oakland Athletics, who demonstrated how radical innovation can allow anyone to achieve positive transformation even against seemingly impossible constraints.

Mr. Beane, immortalized in print and film by Moneyball, watched his baseball team lose the 2001 playoffs to the much wealthier New York Yankees. He approached the Athletics owner for more money to spend on salaries and was turned down—the money just wasn’t available. Yet Mr. Beane refused to take that as defeat. He still wanted his team to achieve greatness.

Mr. Beane’s staff members offered to work harder and put in longer hours to help the team win. However, he sensed that even an improved version of business-as-usual would lead to failure. He did not have access to the funding others had used to solve similar problems. He needed to radically reinvent how he ran the team to have any chance of success.

Billy Beane’s journey offers a powerful map for health clinics, homeless shelters, schools,  theaters, and other organizations that weave the essential fabric of our communities. If this sounds like a stretch, consider their parallel path:

Like the Oakland Athletics, these organizations are facing crushing budget constraints. And like Mr. Beane, their first response is often to try to tap traditional financing sources for more money. Operating in a small market, the Oakland Athletics could not sustainably spend more on salaries.

Similarly, given the economic pressures we will continue to face for years to come, we do not have the resources or financing that we used to have to support our social organizations. Yet the needs these organizations address must continue to be met.

So what can we do with lower budgets? I side with the romantics who refuse to accept that we must lower our standards for how just and vibrant our communities can and will be. But like Billy Beane, we are gradually realizing that just getting better at business-as-usual approaches is not going to be good enough for long-term sustainable impact. Even many of our most efficient organizations are going bankrupt.

If we accept these budget constraints and refuse to lower our ambitions, we must embrace radical innovation. Billy Beane adopted data-driven analysis to put together a winning team.

For nonprofits,, innovation will take more diverse forms. It will lead organizations previously competing over shrinking resources to collaborate. It will inspire visionary leaders to rethink their approaches to the problems they want to solve. It will mobilize “complete capital” approaches that draw on for-profit investment alongside charity and government subsidy. And it will require us to support these organizations smartly as they shift from old business models to new, more sustainable ones.

So how can we better support game-changing innovations in the social sector?

For a donor or socially minded investor, a key piece of the puzzle is to look at the organizations you support in the greater context of the social problems you wish to influence. Billy Beane didn’t just think about winning a single game; he lifted his head up to look at the bigger picture of how baseball could be played in a different way. Similarly, for example, do you want to help a single organization or be part of the greater solution to solve homelessness in your community?

Two of Boston’s most important organizations that serve the homeless, Pine Street Inn and HopeFound, asked themselves that question two years ago.  After a careful evaluation assessing how to create the most significant social change, HopeFound and Pine Street Inn recently announced a merger that will allow the combined entity to offer a more comprehensive set of homeless services than either organization could achieve alone. Through the support of the Catalyst Fund, a five-year fund to support the exploration of nonprofit collaboration and mergers in the Boston metropolitan area, homeless men and women will have better access to the services they need to get off the streets, out of shelters, and into permanent housing, bringing us one step closer to ending homelessness in Boston.

If you donate to nonprofits or sit on their boards, you can support these kinds of transformations by keeping an eye on the ultimate social impact you wish to achieve. As a board member, how might the organization you support work with other organizations in the community to achieve its mission? As a donor, what is the full scope of financial resources it takes for an organization to implement the change needed to achieve this kind of innovation? And how can you contribute to that?

The lesson for all of us is that we need to provide flexible, unrestricted funding that can allow innovative organizations to figure out new ways to meet their mission, rather than just paying for the services they have provided in the past. We also need to provide the “change capital” that will allow organizations the flexibility to build the capabilities they will need in the future. Focusing on overhead ratio as a proxy for efficiency when we consider where to donate has never made sense and is only more destructive now.

Like Billy Beane, those of us who work in the social sector must embrace his winning spirit by relentlessly asking, “What works better?” rather than, “What have we done in the past?” And we can all support the practical romantics who are figuring out how to change the game to create the type of society we all want to live in.