University Times

Leslie Crutchfield

In science, catalysts boost chemical reactions. In philanthropy, catalytic giving accelerates social change.

“Catalytic donors punch above their weight,” nonprofit strategist Leslie Crutchfield said in a Dec. 1 Graduate School of Public and International Affairs philanthropy forum lecture at the University Club.

“They find ways to create impact that’s much greater, that goes beyond just the checks that they write,” she said. “It’s what enables smaller donors to have as much, if not more, impact than many of the billionaires who might rank above them in sheer giving power.”

Crutchfield, co-author of “Forces for Good: The Six Practices of High-Impact Nonprofits,” shared highlights and examples from her upcoming book, “Do More Than Give,” as part of GSPIA’s Philanthropy Forum lecture series.

Catalytic giving isn’t new but it’s rare, Crutchfield said. The main difference between typical philanthropy and catalytic giving lies in the world view and outlook of the donors.

Common philanthropy — engaged in by most foundations — is linear, Crutchfield said. The donor selects a nonprofit organization, makes a grant and gets a report. “The goal is to give money away,” she said.

Catalytic donors, however, “see their role as engaging in the systems that undergird the problems that they’re trying to solve,” Crutchfield said. They seek to engage and leverage government, business, nonprofit organizations and individuals as partners in change.

“The catalytic donor says, ‘How do I get all these wheels turning together to solve the problem so that my infusion of the grant and my connections, my talent, my treasure — everything that a foundation and a donor has to offer  — comes into play to advance the cause?’” she said.

Crutchfield’s upcoming book draws on best practices from her earlier book as they apply to the donors’ side of philanthropy, outlining a half-dozen strategies for catalytic philanthropy — the secrets for success as practiced by donors who create high-impact social change.

Four of the six principles — advocate for change; blend profit with purpose; forge nonprofit peer networks, and empower the people — correspond with four sectors of society — government, business/market forces, other donors/nonprofits and individual citizens. Leading adaptively and learning to create change represent internal characteristics that enable catalytic givers to be effective at leveraging change, she said.

Last year, Crutchfield and her co-authors surveyed 2,000 donors and foundation sources, asking them to recommend donors who practice catalytic best practices.

The givers she and her co-authors studied included large private donors who fund globally, such as the Bill and Melinda Gates Foundation, as well as relatively modest family foundations most people have never heard of, such as the Connecticut-based Tow Foundation, the Jacobs Family Foundation in San Diego and the Siebel Foundation in Palo Alto, Calif. “They fund locally where they’re based, but they’ve had enormous impact,” she said.

They also studied corporate and community foundations.

Crutchfield touched on each of the six principles:

Advocate for change

This principle “really is about how donors engage in and fund advocacy, which is kind of counterintuitive because typically many philanthropists kind of shy away from this,” she said.

Blend profit with purpose

“This is all about how business leaders, foundation leaders, leverage the power of the private sector and market forces for good. For example, mission investing goes beyond the typical foundation practice of giving 5 percent of its endowment each year in grants to nonprofits, to focus on what is being done with the other 95 percent of the money. Catalytic donors make that larger part of their assets work to advance their goals, whether by screening investments or engaging in shareholder advocacy in companies where they hold stakes — “really using the power of their wealth and their investments to drive social and environmental goals rather than doing charity on the one hand, but making as much profit as possible on the other hand,” she said.

Forge nonprofit peer networks

Technology has changed the way philanthropy is practiced, making it as easy to make a microloan to a small entrepreneur in Kenya as it is to put money in a church collection plate, Crutchfield said.

“What’s interesting about social networks and new technology isn’t just the fact that we’re more interconnected, it’s the actual architecture of social networks that provides some insight into how effective social change happens.” For example, Facebook users post a page to which others link. “What you get is this network that’s really just a bunch of nodes with links that are all connected. What’s important and powerful about networks is not so much the nodes — your Facebook page — it’s all the links between it. It’s the relationship between the nodes that becomes important,” she said.

“High-impact donors have figured out that it’s not just the nonprofits that you fund but how do you change the way nonprofits collaborate and work together so they can more effectively address problems.”

For example, the Strive Partnership, which works in Cincinnati and northern Kentucky, is the result of a collaboration among nonprofit groups and school leaders that targets student success across a continuum of transition points: kindergarten, transition to middle school, high school, out of high school and graduating from college.

“They galvanized commitments among all the players to do everything they can to get students to achieve the results that are desired at these transition years,” Crutchfield said. “They didn’t introduce any new nonprofits and it wasn’t about throwing more money at the problem. All they did was get all the different players to work together in a different way toward a common goal.”

Empower the people

The civil rights movement was “probably the most successful social change movement in modern American history,” Crutchfield said. “The civil rights movement changed the entire fabric of American society” — big things, such as where a person could live or work, as well as small things, such as which water fountain a person could use.

There was no single donor who underwrote the change. “It was the composite collective effort of all of these individuals and organizations that led to this massive change,” Crutchfield said. “And if you define philanthropy as just an institution … you get one picture. But if you take a step back and broaden your frame, you can see philanthropy happening in many different shapes and sizes,” she said. “We define how we give back in many different ways, and we use different terminology, but everybody can participate in philanthropy.”

A common view of individuals might be as recipients of charity, clients of nonprofits or subjects to be studied, but catalytic donors view them as part of the solution, she said. “Catalytic donors see individuals as participants in the process of change. They are capable and responsible for their own self-help. It’s not up to us to give a handout; let’s give them a hand up to be partners in change. They are important sources of the solutions because oftentimes it’s the people in the community facing the problems who are going to have to implement it,” she said.

For example, the Jacobs Family Foundation developed a $24 million commercial enterprise zone in a blighted area of San Diego. The foundation bought the property and located its offices there, leveraging other investors’ money to build a retail development. “They didn’t just go and build buildings and give it to the community and they didn’t set up and fund typical social service programs,” Crutchfield said. Instead, they asked residents and found that the people didn’t want a drug counseling center or a welfare office. They wanted a grocery store, a bank and sit-down restaurants.

The site was developed using many local contractors and builders, then the foundation issued a community development initial public offering to transfer ownership by selling local residents shares of stock in the development. “Talk about empowering people — developing a sense of ownership that can be sustained over a lifetime,” she said.

Lead adaptively

Adaptive leaders, rather than coming up with and imposing a solution, recognize that problems are complex and engage others in coming up with answers jointly, she said.

Social problems are, by nature, complex, with no one path or a single definition of success, she said.

Technical solutions differ from adaptive solutions. “When you have a technical problem, it’s pretty well-defined, the pathway to the answer is clear and sometimes the problem can be solved by one donor,” she said.

For example, funding scholarships is a technical problem; reforming public schools is an adaptive one. Building a hospital is technical; developing affordable health care is adaptive. Developing a malaria vaccine is technical; raising vaccination rates is adaptive.

“Adaptive problems are different. They’re complex, they’re emergent. As we try to affect the problem the conditions may change. So to get to the answer, you have to work along the way. And usually no one donor or one entity has all the answers,” she said.

Learn to create change

Catalytic donors evaluate success differently. They acknowledge that they operate in a complex world in which their impact on an issue “as much as they want to have strong results, isn’t necessarily something that any one donor can claim credit for,” Crutchfield said. “This is very difficult to grapple with, especially in an age when we have so much emphasis, and I think rightly so, on outcomes, on evidence-based grants, because we want to know whether our grants have gotten results.”

But we may be asking the question wrong, she said. “It’s not, ‘Did my grant get the result?’ It’s ‘Did my contribution to this issue help move the needle?’

“Which snowflake breaks the branch? Are you the donor who wants to know that your snowflake broke it? Does it matter?

“On one level we need to know: Are our snowflakes working? Are programs that we fund effective?” she said. However, “catalytic donors have a learning mindset. They don’t worry so much about retrospective reports about whether their money was spent correctly last year.”

Such donors don’t seek year-end reports that typically sit unread on a bookshelf, but instead try to understand the progress that’s been made toward the desired outcomes, then use that information to adjust their future strategy toward the ultimate goal, she said.

In closing, she challenged her audience: “As you think about this, ask yourself: What business are you in? Are you still going to be in the business of giving money away or trying to do more than give to solve a problem?”

The entire presentation may be viewed at http://mediasite.cidde.pitt.edu/mediasite/Viewer/?peid=78f4bed2851d4d5d905d7c309cdf9fab.

—Kimberly K. Barlow