March 20, 2011

Two Philanthropy Veterans Offer Aid to Help Donors Get Results

The Chronicle of Philanthropy's Ben Gose sat down with co-authors Thomas J. Tierney and Joel L. Fleishman to discuss the Bridgespan Group's latest book, Give Smart: Philanthropy that Gets Results.

By: Ben Gose

(This article originally appeared on The Chronicle of Philanthropy website.)

The subtitle of Give Smart, a new book by Thomas J. Tierney and Joel L. Fleishman, is “Philanthropy That Gets Results.”

Mr. Tierney and Mr. Fleishman know a thing or two about the subject. In 2000, Mr. Tierney co-founded the Bridgespan Group, a well-regarded Boston consulting firm that advises charities, foundations, and big donors. Mr. Fleishman is a professor at Duke University and author of The Foundation, which examined how philanthropy has been carried out since the early days of the 20th century.

Give Smart is a how-to guide that offers dozens of examples of philanthropy that worked—and philanthropy that didn’t. The authors freely admit that there’s no single best approach to giving, but they argue persuasively that donors who do succeed grapple with a set of rigorous questions.

Mr. Tierney and Mr. Fleishman hope that Give Smart is just a first step toward encouraging donors to become more thoughtful. The Bridge­span Group has received a grant worth more $5-million over three years from the Bill & Melinda Gates Foundation to start, a Web site that offers information about effective giving ideas and case studies of philanthropic efforts from Bridgespan and elsewhere. The authors spoke to The Chronicle about Give Smart.

Why did you decide to write a how-to book on giving?

Mr. Tierney: The foundation world is shifting toward donor-driven philanthropy. The foundations where the donors are not involved, such as Ford and Rockefeller, are losing share. People are becoming more engaged sooner, and with life expectancy and health increasing, they’re able to engage longer.

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And they are using their time and influence, as well as their money, to drive change. You see that with Jean and Steve Case, with Pete Peterson, with Herb and Marion Sandler, and with George Soros.

Ray Chambers is using his relationships to mobilize other donors around causes like Malaria No More. He’s bringing government and private constituents together to help eradicate malaria. And he’s not doing that through his checkbook, but through his reputation and leadership and relationships. That is powerful philanthropy.

In Give Smart you say that the “terrible truth” is many grant makers and donors fall into the trap of “satisfactory underperformance.” How prevalent is this problem?

Mr. Tierney: Excellence is self imposed. I compare it to exercise. Nobody makes you exercise. You have to decide you want to because you feel the benefits of exercise outweigh the costs of time and so forth. In philanthropy, you have to decide you want to achieve results.

You pursue excellence through pursuing tough questions. It’s not a natural act, but what has Joel and I so excited is that more donors are setting a high bar. They’re not declaring victory when the check is written, they’re declaring victory when the dropout rate has been reduced, or whatever else it is they’re trying to achieve. That gives us an optimistic view of the future.

But it’s not the status quo.

What’s the most common mistake committed by donors and grant makers?

Mr. Fleishman: The major problem is that too often foundations and donors chose to give money to particular people—prominent leaders that they like—and they keep giving it and giving it. Once you become a fan of an individual running an organization, there’s no accountability there.

Mr. Tierney: The most common mistake is wishful thinking. We see that all over the place. There’s the “missing middle”: you have an ambition, and an annual plan for giving money away, but you do not have a deep understanding of how the act of giving money away will achieve that mission.

There’s “build it and they will come”: the notion that once you build an initiative, it will attract all sorts of funds from other foundations and the government.

You are both big advocates of measuring impact. Why do you say that too much data can be counterproductive when starting out?

Mr. Fleishman: You are going to have a difficult time finding out through data what you care about. You start with what you care about, and you progress from there. Data is important only after you’ve decided what you want to do and to learn where your niche might be.

Mr. Tierney: When you give money away, you’re going to receive inquiries from all corners. Absent an anchor point, you get what we call “peanut-butter philanthropy.” There is always a cause that merits a check, and there is no limit to the number of causes. Not just your money, but also your time becomes dissipated over a greater and greater number of issues, and therefore your effectiveness is reduced.

You note that Jennifer and Peter Buffett faced that challenge after receiving $1-billion for their foundation from Peter’s father, Warren.

Mr. Tierney: Jennifer and Peter Buffett spent one and a half to two years wrestling with the question of what they were going to focus on, and therefore everything that they were going to exclude. That was such a big question for them that they said: We are going to invest the time and energy to figure this out.

How should an established donor or foundation use the lessons from the book?

Mr. Tierney: My shorthand is “motive matters most.”

If you want to pay out 5 percent a year, it’s not that hard. Foundations do it all the time—they meet the payout requirement and declare victory.

That is wildly different than using money to drive impact. Results are a choice. It reorients the donor, or the foundation executive, around a different target.

Once you’ve made the shift to pursuing results, a lot of other things start to fall into place.

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