It is my pleasure to welcome you to Chicago. It is a great city and I hope you have a chance to look around. The Chicago Architecture Foundation offers a good overview of the City’s rich history, “Stories from the Silk Road” at the Art Institute is worth a look, as is “Gregor Mendel: Planting the Seeds of Genetics” and “The Ancient Americas” (opens March 9) at the Field Museum – all within easy reach of the Renaissance Chicago Hotel. And, of course, you are most welcome to drop by the MacArthur Foundation at 140 South Dearborn to visit our staff.
I appreciate Phil’s invitation to speak with you today. I greatly admire his work and am pleased at how the Center has developed into a source of quality research, collegial conversation, and practical wisdom we can use. MacArthur had an excellent experience with the grantee perception survey and will soon undertake a second round. The Center’s staff presented the findings, including critical observations, in a way that opened minds and galvanized commitment to change. In a field afflicted with endless flattery, earnest self-justification and a fair quotient of gossip, the Center’s determination to bring objective evidence and an analytical framework is already raising the quality of philanthropy. Honest conversation about constructive criticism is at the heart of those gains.
Phil is a man on a mission, but also a man true to his convictions. My presence is testimony to that. As a member of CEP’s Advisory Committee, I have offered more than my fair share of dissenting comments about CEP’s approach. So Phil knows that, while I come as an admiring friend, I will speak my mind.
Let me begin by disclosing some of my own views. I came to the foundation world with a healthy dose of skepticism about the field; not all of my experiences on the other side of the table were happy ones. They gave me good reason to applaud the Center’s effort to find objective measures of performance. And I too very much believe in articulating strategies so the unexplained refrain of “out-of-program” is replaced with respectful reasons for a turndown.
But I have some cautions. I believe one great asset of philanthropy – like higher education – is pluralism. We should celebrate our differences and not seek a single model of effectiveness that erodes them. I believe in metrics, but only as a tool for making informed decisions. They are no substitute for experienced judgment or good instincts. I believe in measurable goals, but not everything can be measured. We should guard against creating incentives for easy short-term wins at the expense of speculative risks on longer term, complex issues. And while I believe in accountability, I also think philanthropy should be fun. Foundations -- along with the entire independent sector -- have been through a period of intense, skeptical scrutiny from the public, the press, and the politicians, all taken to heart. I think it is time to lighten up, and I have cautioned the Center’s Board not to take undue advantage of the current climate to push its agenda too aggressively.
With that said, I am enthusiastic about the topic of this conference – the importance of a clear strategy for enhancing a foundation’s effectiveness. I thought the survey was well done and the categories useful. It is of course natural to ask, “Where does MacArthur fit?” As I tell you a bit about how MacArthur works, I will be interested in where you place us.
We have gone through the process of developing a strategy for each field in which we work. And we have thought through what we call “craft papers” on topics like creating, changing, and closing fields or on judging the value added of our programs.
As we think about the choices we make, among the most important is whether to enter or exit a field, what niche to occupy (with or without partners), what strategy to pursue, and what grants to make. When I arrived at MacArthur, I thought good choices had been made in major fields – from conservation to community development -- and that the quality of grants was uniformly high. Not so clear, however, was that middle ground: how individual grants in a field were meant to add up to an impact you could measure -- or at least describe. That gap became painfully obvious when an outside reviewer looking at our environment program asked about the goals he was supposed to evaluate. We could respond only with generalities like “to preserve biodiversity by protecting large landscapes.” It seemed to me that we had good schematic designs, to borrow an architect’s term, but no working drawings. So, three years ago, we set out to create detailed work plans – in effect strategies— for each “element” of our programs. That compelled us to dig below our general categories such as “human rights,” “population,” “housing,” or “education” to identify where the real action was happening. Our exploration found 60 such elements across the Foundation, now reduced to 34.
In our conservation program, we singled out eight biodiversity hotspots to preserve. In housing, we selected three elements: public housing transformation in Chicago, a national initiative to preserve affordable rental housing and research on why housing matters.
That exercise reminded us of the importance of specifics. One can have a lofty mission for conservation at a global level – preserve large landscapes, build institutional capacity, promote sensible policies, and so on— but those terms are almost meaningless until one grapples with the actual situation on the ground. The challenges in Fiji are quite different from those in Bhutan or Bolivia.
Consulting with grantees and experts in the field, our staff created strategies for each program element that specified:
• the problem;
• the economic, political, cultural, and policy context;
• the factors that could promote, or impede, change;
• the principal market, government and philanthropic actors;
• our goals, quantifiable when possible, and how to assess them;
• and the mix of grantees required to achieve the outcomes we seek.
We took care to identify research needs, policy changes, institutional capacity building, public awareness campaigns, and coalitions in each plan.
Now we can tell you what we are trying to do in each element of work: show you on a map how many areas of land or seascape we seek to preserve in Madagascar (3.8 million acres) or Ecuador and Colombia (10 million acres); specify reductions in maternal mortality in Mexico (35% in Chiapas by 2012), or cuts in pre-trial detentions in Nigeria (40% by 2009); we can also show you on a map of the U.S. precisely where we aim to preserve affordable rental housing or reduce racial disparities in the juvenile justice system.
Not all initiatives lend themselves to such precise measures. Our Peace and Security program seeks to reduce the dangers from weapons of mass destruction. There is little a foundation can do directly on that challenge, but we can support rigorous policy research, Track II initiatives, good data collection like the periodic world reports on the location and security of fissile material. And occasionally good ideas migrate from universities to policy like the Nunn-Lugar program that has led to the elimination of over 7,300 war-heads in the former Soviet Union. We can trace its origins to a collaboration in the early 1990’s between university scholars (at Harvard and Stanford) and Senate leaders. To encourage this kind of co-operation, the Foundation launched its Science, Technology, and Security Policy Initiative in 2003. The Initiative is building a network of researchers to advise policymakers on critical matters of international security.
But we do not have precise goals for this line of work, and make do with proxy measures like the number of distinguished scientists stimulated to take an interest in arms control policy in MacArthur supported university centers.
With work plans in place – and continuously refreshed – we are in a position to look at our progress every year element by element. Starting this year, each program head submits a short report comparing cumulative and annual progress to the goals articulated in the work plans. We rate every element of work – juvenile justice reform in Louisiana, conservation in the Caribbean, maternal mortality reduction in India – on a three-point scale: exceeding, meeting, or falling below expectations. For those falling below, we discuss what we can do to get back on course. These conversations take place just before the annual budget cycle so we can consider investing more to remedy a short fall or accelerate a high achieving area that has a window of opportunity to do more.
Our objective is to be transparent about the goals, strategies, and the progress of each element of work. So the next step will be to include a bottom-line assessment element by element on our website. And starting next month, we will post summaries of external evaluations, including our failures and the lessons we have learned from them.
Having an articulated strategy also makes it possible to ask the “value-added” question. Periodically we look at each element of work and ask, not whether it is doing good work, but rather, whether the value added is accelerating or eroding. We see this as a continuous process that will help the Trustees make judgments about leaving fields and replacing them with new ones where we have the prospect of making a bigger difference. We ask questions like: Is MacArthur on the leading edge of a field? Are grantees breaking new conceptual ground? Is the issue well recognized or appreciated? Is the time ripe for change? Can our leadership catalyze others into action? Has a tipping point been reached?
We all know it is painful to give up an area of work and so one of two things usually happens: Foundations can stay in a field too long and get stale, passing up better opportunities; or they exit abruptly, usually when the CEO changes, often causing turmoil in a field. A rational, regular look at the value added of programs is a better way to go.
The arguments for having a clear strategy go beyond aiding our ability to judge impact and value added. Let me suggest five others, in no particular order of priority.
a) A clear strategy builds internal understanding of a program’s goals between Board and staff and between Foundation leadership and Program Officers. It enables Program Officers to give grant applicants an early and reliable signal about whether a grant proposal within strategy is likely to be approved.
b) A clear strategy will make the grant process more transparent to the public and can increase the fact and the perception that the process is fair, based on merit and not on personal connections.
c) A clear statement of goals can build consensus among grantees who can now locate their work in a context, perhaps find new partners. They will see connections we do not as they begin to think of themselves as a field.
d) Having measurable goals is good for the institution and individual psychological health of a foundation and staff. It is hard to work in a world of high expectations and never objectively know how well you are doing.
e) The strategy can get better as it is critiqued, and it can stimulate partnerships with other donors. It encourages analytical reviews and mid-course corrections.
As I sing the praises of having a strategy, I can hear the skeptics urging caution. “Don’t strategies constrain the instincts and imagination of Program Officers?” “What about good ideas – or important causes – that do not fit within strategy?” “What if your theory of action is wrong, or the context changes – might not a sharply defined strategy make a foundation slow to adapt?” “Don’t strategies reinforce the silo effect and cut off cross program initiatives?” All fair questions. I know there are more.
The best response, I think, is to honor those reservations with counter-cyclical measures. Rather than stretching credibility – and chewing up time – showing something you want to do fits in a strategy, why not say this doesn’t fit in a strategy but here are the strong arguments for it?
We give Vice Presidents and Area Directors discretionary authority outside of approved strategies. We also have a General Program explicitly for proposals that do not fit anywhere else. And the Trustees have a committee actively searching for new ideas, patterns, trends, and problems over the horizon, perhaps those only dimly perceived. We have set aside a good portion of our growth to respond to such ideas like a new initiative linking neuroscience and the law or a research network on the aging society. So too, I have a fund that encourages linkages across program areas, essential to taking full advantage of the breadth of a foundation like MacArthur. Connecting our human rights work in Nigeria with juvenile justice reform in the U.S. is one example of out-of-program work.
So, with the necessary countervailing safeguards, I would argue that having clear strategies increases MacArthur’s rigor and also sharpens its creative edge, its penchant for risk taking and innovation.
Articulating strategies also makes it easier for the public to know what a foundation is trying to accomplish and judge how it is doing. That builds credibility and trust.
I do not offer MacArthur’s approach as the holy grail of strategies. We may be on the high end of the “total strategist” category. But, I have no doubt that the quality of our grantmaking, the internal consensus about objectives, the character of our interaction with grantees, the impact of our work, and the public appreciation of that work have all improved as we crafted clear and transparent strategies.
Other approaches work too, even deciding not to have a strategy. That is the virtue of pluralism. But, I do think all foundations will benefit from considering the Center’s study, and coming to a reasoned decision about where they want to stand on the strategy scale.
Our choices should be informed, rational, and easily explained to the public.
The Center has challenged us to be more analytical in our choices, given us benchmarks and models to work from, and a safe venue to share our experiences. Philanthropy will do better – and be better understood – for its efforts.