Without question, foundations are the primary source of start-up support of a whole spectrum of civic-sector organizations on the left, right, and center… foundations often continue to support for many years organizations they helped to start. Moreover, foundations provide civic-sector organizations with the wherewithal to launch the widest possible variety of major new initiatives.
Joel Fleishman: The Foundation — A Great American Secret: How Private Wealth is Changing the World
Yesterday, I spoke at the Leadership Academy for the Indiana Grantmakers Alliance. (I asked if Peyton Manning would be there, but he couldn’t make it. Something about getting ready for some big game on Sunday against the Patriots…).
The other speaker for this Leadership Academy was Mark Sedway, director of the Philanthropy Awareness Initiative. He spoke about, among other things, the power of stories — that telling stories well is a powerful way to make a difference. I agree. One of his current projects is this: helping Foundations tell their stories in ways that get heard.
So, I have a question for you: do you know what Foundations have brought to this world? I could tell you many stories, but here’s one worth telling and re-telling.
Here’s a quick summary of the Borlaug “miracle” in a moving scene from Season 2 of The West Wing (“In This White House” — script here). (And, I’m sad to say, I had not heard much about Borlaug until this West Wing episode, and then I started reading…)
It was called dwarf wheat, which produces heavy yields without its stalk falling over from the weight of the grain.
Was it a hybrid?
What am I, Farmer Bob? It was wheat, and there was more than there used to be.
You ever read Paul Erlich’s book?
“The Population Bomb”?
Yeah. He wrote it in 1968. Erlich said it was a fantasy that India would ever feed itself.
Then Norman Borlaug comes along. See the problem was wheat is top-heavy. It was falling over on itself and it took up too much space. The dwarf wheat… guys, it was an agricultural revolution that was credited with saving one billion lives.
Foundations are not perfect, and the stories are not always as successful as the Borlaug story. But – one billion lives saved. It’s enough to justify a lot of false starts and half-successes.
There are many other Foundation success stories (ever heard of Sesame Street?). But I think it may be tough to top the Norman Borlaug story. And this story is equally the story of one foundation: the Rockefeller Foundation, and its determination to do something that mattered. People lived that would have died because of the decision to hire Norman Borlaug and give him the resources he needed to pull off his “miracle.”
We could all benefit if we learned a few more of the great stories of what Foundations accomplish. (And you might start by reading Fleishman’s book, The Foundation).
I present a minimum of two new synopses each month. One, of course, is a business book for the First Friday Book Synopsis. The other is a book related to the nonprofit/poverty/social justice arena for the Urban Engagement Book Club sponsored by Central Dallas Ministries. (Companies and other groups then bring us in for longer versions of these synopses for their groups).
These two worlds occasionally overlap, and I suspect will do so more frequently as more and more people seem to be seeking deeper meaning in their work life, and thus opt for nonprofit careers.
Recently, I was asked to prepare a synopsis of the book Uncharitable: How Restraints on Nonprofits Undermine their Potential by Dan Pallotta. I presented this at the annual gathering for the Conference of Southwest Foundations. This group consists primarily of people who work for foundations, and the people/family members who set up the foundations themselves. It is a wonderful group!
Uncharitable is quite a provocative book. The author is arguing for a whole new way to approach the nonprofit questions. I mean, a really whole new way. He writes:
We give money to charity because we do want progress… Why do things seem to stay pretty much the same? Why have our cancer charities not found a cure for cancer? Why have our homeless shelters not solved the problem of homelessness? Why do children still go hungry on the streets of America? Why have the pictures of the starving children in Africa not changed in five decades?
Our system of charity doesn’t produce the results we are after because there is a flawed ideology at work.
He states that what we are now doing is simply not reaching the ultimate goal: actually eliminating problems.
There are some great success stories out there. Norman Borlaug, father of the Green Revolution, is credited with saving the lives of 1 billion people with his great discoveries/innovations in crop yields, significantly funded by the Rockefeller Foundation. And vaccines developed by Jonas Salk in 1952 and Albert Sabin in 1962 led to the virtual elimination of polio, a truly crippling disease.
So – success has been achieved in some major areas, and there is much to celebrate. But there is much more to accomplish.
Dan Pallotta believes that we can do better, and his innovative approach, in his view, would lead to far more actual victories in the battles for better lives for people all across the globe. Here is his summary of his view in table form (taken directly from his book):
For-Profit Rule Book
Nonprofit Rule Book
|Compensate according to value.
No limits on financial incentive.
Effect: attracts top talent for life
|Don’t compensate according to value
Strictly limit the use of financial incentives.
Effect: discourages top talent.
|Buy advertising until the incremental effect is zero.
Effect: Saturate the market with your offer,
build maximum demand.
|Don’t advertise unless the advertising is donated.
Dollars spent on advertising could have gone to the needy.
Effect: Minimal ability to build demand.
|Manage and reward risk.
Effect: Discover new opportunities for growth.
|Don’t take risks. Donated dollars are earmarked for programs.
Effect: Discover few opportunities for growth.
|Invest in the long-term.
Effect: Builds long-term value.
|Don’t invest in the long-term – must meet short-term “efficiency “ standards.
Effect: Institutionalizes problems.
|Unlimited permission to pay return on investment to attract capital.
Effect: Trillions of dollars of capital.
|No permission to pay return on investment to attract capital.
Effect: no surplus capital.
(table from page 42)
If you work for a nonprofit, if you contribute to nonprofits, if you follow philanthropy, this book might be one to put on your reading list. It is not without controversy, but it certainly does stretch the envelope for the way to approach some of the biggest problems facing us.