As they walked out of the D.C. headquarters of the National League of Cities in the summer of 2018, Walmart.org senior directors Eileen Hyde and Karrie Denniston knew they had just received invaluable feedback. But the hard truths they heard felt as heavy as the city’s heat and humidity. “I’ve coached others for years on what it takes to avoid unintended consequences,” Hyde said to Denniston. “I can’t believe I didn’t follow my own advice.”
The purpose of the meeting was to thank the league for helping the foundation meet its stratospheric goal of providing 4 billion meals as well as nutrition education for 4 million people. But during the discussion, their grantee pointed out that Walmart.org’s impressive effort had a flaw: Its numeric targets gave its grantees an incentive to focus on places where they could distribute big numbers of meals to those in need and worked to deter them from serving rural, urban, and Native neighborhoods that faced the greatest need for food and nutritional education.
Taking this feedback to heart, Hyde and Denniston worked with the league and its other grantees to redesign its grant-making program from top to bottom. As a result of their input, the foundation’s Healthier Food for All strategy now targets the geographies it had missed before and puts the priority on serving Black, Latinx, and Indigenous people. It also focuses on supporting community-led solutions, giving the nonprofits it supports much more room to innovate. “Our grantees shared insights we never could have come up with ourselves,” Denniston shared. “We’re now much better positioned to have the impact we want in the places we most want to reach.”
I’m sharing this story with you because it vividly illustrates the direction I am convinced all foundations must go over the coming decades if they want to do the most good. At the Council on Foundations, the organization I lead, we’re launching Monday a challenge to philanthropy to move forcefully in ways that will allow us to make progress on a set of key outcomes over the next 20 years — outcomes many of our peers and partners are already working toward.
This vision comes from our reckoning with this precarious moment for our society and for philanthropy specifically. Yes, we are living in a failing trust ecosystem — trust in institutions of all kinds has fallen to all-time lows. But make no mistake: Foundations and those who create and lead them are in for extra scrutiny because critiques of concentrated wealth and power are getting louder and angrier on both the left and the right.
When faced with critical feedback, Walmart.org did the right thing. Leaders there neither ignored the critiques nor resorted to PR-driven strategies. They reflected on their shortcomings. And they are inviting others with experience and expertise living and working in the neighborhoods they want to serve to shape their strategies rather than only turning to people with fancy credentials. They are recognizing that even the most ambitious work may bypass those we most want to reach if we neglect core issues related to diversity, equity, and inclusion. And they are investing in building the kind of trust-based relationships with grantees that result in truth-telling rather than sugar-coating.
Rebuilding Trust
As we spent the past two years traveling the country and interviewing dozens of thinkers and doers working to shape a vision for philanthropy over the next decades, my colleagues at the Council on Foundations and I came to realize that we must do more to build and rebuild trust — between foundations, with nonprofits, within our communities, and across society.
Over and over again, I’ve heard very smart people explain why building trusting relationships with nonprofits and communities is, at best, a secondary concern. Here are some of the rationalizations:
- “We’ve got our own strategy and theory of change, and there are plenty of nonprofits we can fund that support it.”
- “Nonprofits are only advocating for their own interests; we take a systems-level view;”
- “We don’t want them to become dependent.”
Enough. After 25 years of reading reams of reports on this subject and listening to hundreds of nonprofit and philanthropic leaders describe the power dynamic as well as their successful work together, I can summarize the reality in just four words: Higher trust, greater impact. Researchers and lay people alike know that trust is always the beating heart of positive relationships, high-performance organizations, flourishing communities, and healthy societies. Conversely, distrust is always at the root of dysfunction in relationships, organizations, communities, and societies.
At present, foundations are doing too much alone, in our own silos and according to our own idiosyncratic ways. The more we try to own or control, the less we let others in to contribute. Not only does that lead to a lack of trust in our communities, it also leads to top-down strategies that misdiagnose problems, create solutions in a silo, and waste precious resources at best or do additional harm at worst.
Philanthropy’s primary role is to fund, support, and advocate for the nonprofits and communities doing the hard work of making our communities and our society better. The more we let go in that role, the more others can lead. The more we let others in, the better our ideas and relationships become. That’s how we go from making incremental gains to quantum leaps.
How do we get there? Many foundation leaders have been painting the path forward for years, but now it is the time for philanthropy to embrace the values, behavior, and practices that a consensus of leadership organizations have long endorsed. Imagine if in 20 years:
- The basics of good grant making, including providing unrestricted grants, right-sizing reporting requirements, lifting up the voices of those with first-hand experience on the issues we tackle, and sharing decision-making are the philanthropic norm, not the exception.
- The boards and staffs of philanthropic organizations nationally reflect the rich diversity of the populations they support, which narrows the gap between donors and those they serve and improves decision making.
- Grant makers universally consider diversity, equity and inclusion core to advancing their missions because they know that they will have greater impact by doing so.
- Philanthropic organizations use their power and influence to attack challenges at the root by more regularly engaging in and funding advocacy and policy change.
- Foundation executives lead the way in holding difficult but transformative conversations and regularly collaborate with nonprofit, government, and for-profits in ways that move us forward as a society.
- More people see themselves as donors and more people regularly give because the tax code has shifted to apply incentives to give more fairly.
- Because their behavior reinforces this perspective, philanthropists and those who work at foundations are widely known to be driven by service and purpose rather than status and ego.
These are some of the long-term outcomes that will create lasting change and help philanthropy reach its potential.
To help achieve these goals, the Council on Foundations is changing how it approaches its own work to advance philanthropy. At our flagship conference in June, I shared the details of a strategy my colleagues and I have developed. As we kick off the public launch of this work, I urge you to review the commitments we are making to do what we think best for everyone — shedding work that is no longer relevant and inviting those with direct experience and expertise to shape our approaches. But more important, we hope you’ll join us in taking actions that transform how philanthropy serves society.
For all its horrors, this past year has given me hope that this new direction for our organization and a vision for a more open, trusted philanthropic sphere are absolutely feasible.
In the course of our work to develop our 20-year vision, I saw 800 organizations sign on to our call to action in the wake of the pandemic signaling their commitment “to act with fierce urgency to support our nonprofit partners as well as the people and communities hit hardest by the impacts of Covid-19.”
And dozens if not hundreds of corporations made or renewed commitments to diversity, equity. and inclusion, putting substantial resources behind those commitments. And just last month, the “Giving USA” report showed that giving from foundations increased by 15.6 percent to $88.5 billion in 2020.
Like Walmart.org, these grant makers are showing what’s possible when philanthropy opens up, follows the lead of others, and works to build lasting relationships based on trust.