Philanthropy’s Preoccupation With Airing Failures Is a Mixed Blessing

Doug Paulin, For The Chronicle

The aftermath of a presidential election is often a time of self-accounting — at least for the losing side.

Consultants and pundits offer stinging postmortems. Dedicated partisans rehash strategic and tactical blunders and second-guess electoral strategies. Sometimes politicians even reconsider their governing ideologies. All of this reflection represents an effort to understand failure, to identify why a campaign that should have succeeded didn’t. Most recently, there has been another variant of this analysis, from those who see Donald Trump’s election as evidence of a malfunction of democratic norms and a betrayal of the nation’s deepest values.

Thinking through the roots of that failure can lessen its sting and serve as a way of absolving the politically penitent of culpability for its consequences. “Bless us, Founding Fathers, for we have sinned.”

Russian hackers, James Comey, economic anxiety, Hillary Clinton’s reluctance to campaign in Wisconsin, identity politics, fake news and the fracturing of the media universe, or some deeper civic malaise; all have been singled out for their explanatory power.

It might be true that, unlike success, failure is an orphan, but that hasn’t stopped the paternity reports from proliferating.

In this respect, and for all that the election results seemed to catch many foundation leaders flat-footed, they should feel right at home in the post-election period. Because in recent years, coming to terms with failure has become a major preoccupation in philanthropy.

Of course, philanthropists have always made mistakes; it’s just now they seem more willing to own up to them. In fact, within the past decade, the mea culpa has become an increasingly prominent part of philanthropic discourse.

“Just a few years ago, it would have been astonishing for a foundation, particularly one as traditional as Carnegie, to publicize a failure,” noted The New York Times in a 2007 article, referring to a report that the Carnegie Corporation had published that took stock of a disappointing grant to help overhaul Zimbabwe’s Constitution and government. “Today, though, many of the nation’s largest foundations regard disclosing and analyzing their failures as bordering on a moral obligation.”

Demand for Transparency

The trend has only grown stronger since then: This year has produced an especially strong crop of admissions of philanthropic error. The most recent, and most remarkable, was issued by the Ford Foundation president, Darren Walker. In his annual letter, published online in September, he apologized for the foundation’s past practice of overlooking people with disabilities in its work to address various forms of inequality.

What accounts for the willingness of foundation leaders to make public their institution’s missteps? It certainly has much to do with increased demands throughout the nonprofit world for accountability and transparency and with advances in evaluation. The rise of “strategic philanthropy” has likely also contributed. Four years ago The Chronicle of Philanthropy reported a piece detailing how foundations learn from failure, such as the evaluation procedures the Robin Hood Foundation uses:

“Before Robin Hood gives out money, it quantifies what it expects the project to do to curb poverty and then assesses how close it came. If after one year a project has fallen short of benchmarks, the foundation gives the organization a year to improve, offering management assistance, additional money, if needed, and other types of help. If by the third year the charity’s approach has still not done enough for the amount of money Robin Hood has provided, the support is cut off.”

Such frequent benchmarking makes failure more intelligible. For good or ill, benchmarks expedite definitive assessment, especially when compared with more open-ended programs with more fluid notions of success or failure.

Finally, the popularity of the term “strategic philanthropy” points to another reason discussions of failure have become more prominent. The popularity of management theory among foundation leaders and the growth of a support industry of consultants and academic research centers has combined to accelerate the production of buzzwords and adhesive labels that can be applied to trends in giving. These in turn provide coherent targets for either celebration or rebuke: They can be conveniently and coherently apologized for without having to trouble the fundamental structures of the philanthropic project itself.

‘Rite of Passage’

From all this failure talk, we’ve learned about the sorts of mistakes that foundations and donors are prone to make. We’ve also learned about the various ways that foundations and donors approach these mistakes. Some particular varieties of admitting error have emerged, each of which reflects a different approach to philanthropy.

The first is entrepreneurial. In this approach, failure is a necessary adjunct to risk-taking. It doesn’t necessarily expose some fundamental flaw in the philanthropic process: Admitting a failure is not the same as admitting a failing.

As philanthropy adviser Richard Marker wrote in 2011, donors must begin with the premise that philanthropy serves as society’s risk capital.

“By definition, risk means some possibility of failure. … Grant makers who support start-ups, early-stage organizations, new approaches to almost anything need to accept that if they are doing it right, some failure is not only inevitable but indeed desirable.”

The world of high-tech start-ups provides a powerful model here, in which heading a company that fizzled after its initial round of investment is an honorable rite of passage. In fact, Silicon Valley even hosted an annual conference highlighting failed enterprises — FailCon — which attracted hundreds of techies a year. (It was recently canceled, in part, as its organizer told The New York Times, because “failure chatter is now so pervasive in Silicon Valley that a conference almost seems superfluous.”)

Cavalier Attitude

Venture capitalism provides a related model; during the peak years of Silicon Valley growth, venture capitalists balanced the assumption that many of the companies they invested in would fail (some research suggests a ratio as high as three-quarters) with the expectation that a small handful of “unicorns” would bring in enormous returns.

Sean Parker, the co-founder of Napster and former president of Facebook, explained this approach in his influential Wall Street Journal op-ed, “Philanthropy for Hackers.” “It’s important to treat philanthropy as a series of calculated risks,” he wrote. “Not every contribution will yield success, some will end in failure, and others, when they succeed, ought to generate exponential returns. In this model, being wrong is as valuable as being right.”

There’s a certain tension running through this approach. On the one hand, it claims to regard failure as a learning opportunity. But the association of risk-taking entrepreneurship with the willingness to fail often overshadows the grant makers’ own complicity in that failure and distracts from the lessons the failure might bring with it. And even when foundation officials and philanthropists admit to being wrong, they can exhibit a cavalier attitude toward the effects of these mistakes on others.

Take Mark Zuckerberg’s philanthropic gambit to transform Newark’s schools, generally considered a disappointment (although analysts quibble about the extent of the positive impact it had on educational outcomes).

Although Mr. Zuckerberg never labeled his Newark grant a failure, he did emphasize how the experience, and the setbacks its promoters encountered, would teach him valuable lessons to guide his future giving. He rarely mentioned the disruption to the lives of countless Newark families that was the price of this education.

The second sort of admission of a philanthropic mistake is even more committed to the prospect of learning from it. Its model borrows in equal measure from the scientific method and from corporate product testing. It also regards failure as an intrinsic part of the giving process, but one whose value lies less in showing a willingness to take risks than in the additional information it can provide for an iterative process aimed at improving strategy and tactics. It is less celebratory of failure and more clinical in its analysis of mistakes.

One of the more widely remarked upon recent examples of this approach was adopted by the CEO of the Bill & Melinda Gates Foundation, the oncologist and biotech pioneer Sue Desmond-Hellmann. In her most recent annual CEO letter, Dr. Desmond-Hellmann highlighted the foundation’s approach to mistake-making: “From the beginning, Bill and Melinda wanted their foundation to be a learning organization; one that evolves and course corrects based on evidence. We want to get continually smarter.”

She specifically addressed how the foundation had handled one of its primary-school improvement grants: the promotion of the Common Core. There had been some missteps, admitted Dr. Desmond-Hellmann.

“Unfortunately, our foundation underestimated the level of resources and support required for our public education systems to be well-equipped to implement the standards. We missed an early opportunity to sufficiently engage educators — particularly teachers but also parents and communities — so that the benefits of the standards could take flight from the beginning.”

It’s not exactly sackcloth-and-ashes material. The mistake the Gates Foundation owned up to did not implicate the program but the way it was sold. But according to Dr. Desmond-Hellmann, that was a “challenging lesson,” and she promised the foundation would “take it to heart.” To the extent that the foundation has made an effort to develop closer ties to teachers unions and parent organizations recently, it seems to have done so.

The Confessional Approach

The mea culpa Darren Walker offered in his recent annual letter represents a different model, rarer, perhaps, but one very much fitting a moment in which many in the sector are grappling with philanthropy’s original sin of inequality. Its tone is not entrepreneurial or clinical but confessional.

As Mr. Walker explains, he realized the error of his foundation’s ways when he solicited feedback on Ford’s new focus on inequality. He received several vehement complaints that the foundation had neglected the disabled in the campaign. One of his correspondents even called him a hypocrite for trumpeting the foundation’s commitment to combating inequality while failing to acknowledge or take any action to promote the rights of the disabled. “I deserved it,” Mr. Walker wrote.

But the criticism did not merely spark a round of self-abasement. It also triggered introspection and prompted a central question for Mr. Walker and the foundation: “How had this happened. How could we possibly miss this?” The answer that Mr. Walker arrives at is simple: “power, privilege, and ignorance.”

Indeed, like the entrepreneurial and clinical approach to admitting mistakes, Mr. Walker’s confessional model maintains that failure is inherent to philanthropy. Yet for Mr. Walker, acknowledging as much prompts a more critical perspective on philanthropy than the other approaches do. As Mr. Walker explained it in his annual letter, “The paradox of privilege is that it shields us from fully experiencing or acknowledging inequality, even while giving us more power to do something about it.”

Mr. Walker claimed that reflecting on this privilege and acknowledging “our own fallibility and deficiencies” was the first step in the “transformation” from “unwitting ignorance to enlightened action.”

The public act of contrition formalized this process, which has led to some immediate reforms, like making sure the Ford Foundation headquarters was fully accessible to people with disabilities. Mr. Walker also explained how an appreciation of his own shortcomings led him to understand the foundation’s failings as well.

“By recognizing my individual privilege and ignorance,” he writes, “I began to more clearly perceive the Ford Foundation’s institutional privilege and ignorance.”

Yet in this confessional approach, the relationship between personal and institutional failure can be more complex. The theatrics of the confessional, the spectacle of the personal act of contrition, can also deflect attention away from structural failings.

Ambiguous Response

Michael Edwards, a former Ford Foundation official and now editor of Transformation, suggested as much in a cogent critique of Mr. Walker’s letter. Although he applauded Mr. Walker’s willingness to approach Ford’s shortcomings with “empathy and humility,” he points out that this approach had not translated into an effort to challenge the capitalist system that he maintains lies at the root of the inequality Ford has targeted.

“Walker sits squarely within the traditions of American liberalism, with its belief that promoting equality of opportunity within the current economic and political system is the best response to its failings,” he notes. But “it doesn’t matter how much empathy and humility you have if you’re not willing to tackle the structural factors that create so much privilege in the first place.”

Mr. Edwards’s criticism highlights an ambiguity at the heart of the public philanthropic confession: It can mark both the beginning of a process of change and an end. There are certainly admissions of guilt that serve as the moral equivalent of copping a plea to avoid a heavier charge. Saying sorry for some things can be a way of not saying sorry for others. But the preconditions to the confessional model adopted by Mr. Walker, an openness to the “uncomfortable feedback” of others, to use his phrase, can point an institution in unexpected directions. The grounds on which one mistake is admitted can also provide perspective toward the need to admit others.

So, for philanthropy, the frequent airing of mistakes can reflect either a commitment to dealing with some of the deepest challenges to its legitimacy or a desire to insulate itself from those challenges. Or, in the case of our current moment, some combination of both.

Benjamin Soskis is a historian of philanthropy at the Center for Nonprofit Management, Philanthropy and Policy at George Mason University and a co-editor of the HistPhil blog.