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Doing Good

Sometimes it seems impossible to tell the difference between good grants and bad ones. If we feed the hungry and house the homeless, it feels good but the lasting result is to encourage dependency. If we fund groundbreaking research on how to address poverty, the connection between our grant and the end result is usually hard to see.

Accepting accolades and congratulations from a grantee for our generosity, wisdom or hard work should make us skeptical. Are we really so selfless and smart? Or do these grantees need our money so much that they will say anything to get it? And if that is the case, have we done anything to help our grantees become more independent or is our grant just another link in a chain of endless handouts?

One of my favorite stories about philanthropy is a much criticized grant for medical research that was made in the early 20th century by John Rockefeller. Pure medical research was unheard of at the time and one incredulous observer asked, “Why would you do this?” to which the reply was: “Because we have the faith of fools.” It was not until years later that the grant proved its worth and medical research became a new standard in the world.

Effective grant making often involves risk of failure and, worse yet, risk of looking stupid. None of us enjoys being on the receiving end of a critic’s hindsight, “what were you thinking!” In the short run at least, it is much more enjoyable to be the object of a grantee’s gratitude and affection. But for really great grant programs, the ones that we are proud of in years to come, we were usually faced with the prospect of failure and, at some point or other, found ourselves asking ourselves if this program was worth doing.

Scholarships, education and even transition involve relatively less risk and reward. The Johnson Scholarship Foundation’s grants are less likely to be a waste of money (or to revolutionize the world). Our choices usually involve the question of how best we can utilize our limited resources and talent.

On the one hand, we may be overreaching with such programs. We might ask: Is this program too complex and expensive for a Foundation of our size? Can we really be a catalyst for the community support required to sustain this program in the long run? Time will tell and proper evaluation tools and data collection will help understand the impact.

Accolades should always make good grantmakers nervous. But striving for honest relationships and insightful data can ease the nerves and take the spotlight off of the funders and onto what really matters: doing good.

Malcolm Macleod is the president and CEO of the Johnson Scholarship Foundation (JSF). Since joining the Foundation as president in 2001, he has spent the past 18 years working with the Board, staff and grantees to ensure that JSF is a Foundation that makes quality grants serving as catalysts for effective change. Prior to his work with the Foundation, he had a 26-year career in law and is currently a member of the Bar.


Philanthropy & Social Media

As a private foundation with 25 years of experience, the Johnson Scholarship Foundation has recently made the decision to prioritize communication. Toward that end we have hired consultants, taken to social media and revised our website. But who are we trying to reach? Why are we trying to reach them? What do we want to tell them?

The answer to the first question is that we are trying to reach potential, existing and former grantee/ partners, other grantmakers and anyone else who might be curious about what we do.

The need to reach potential grantee/partners is easily understood. We need them to know about us so that they can inquire about a grant. But why do we want to talk to existing and former grantee partners?

A channel of communication with existing grantee/partners will help us to manage our grant agreements. Further, it will give us a means of showcasing results. The Foundation makes investments (grants) but the actual work is done by its grantee/partners. Grantee /partnersgroup of social media company logos will have a forum to publicize successes and milestones and this will inform, encourage and in
spire others. There is an element of advocacy in this. Part of the Foundation’s pursuit of its mission and its support for the work of grantee/partners is to draw attention and resources to them. Increased communication will expose other grantmakers to the work of our grantee/partners.

We also feel the obligation to share what we learn. During the course of investigating and making grants and evaluating their results the Foundation acquires knowledge, which ought to be disseminated. Social media is an excellent tool for this and will help us to maximize our impact.

Like most private foundations, we are not well known or understood. We need to be transparent and more visible in order to do a better job. It is our task to build a larger community of people interested in the Foundation and its mission. Not only will this increase the pool of potential grantee/partners and result in more and higher quality grant inquiries, but it will bring people together to learn, compare and discuss their work.

Communication can no longer be viewed as a marginally relevant byproduct of our work. Rather, it is a core responsibility of the Foundation – and philanthropy in general – to generate interest in its mission and activities.

Faith & Money

The Johnson Scholars Program offers college scholarships to disadvantaged students and helps to prepare them for post-secondary success. Since 2008 it has reached nearly 500 students and awarded 240 students scholarships in value over $3 million.

The criteria for selection of Johnson Scholars is not based upon academic achievement. Ideal candidates are those who have the ability to graduate and attend college but are not headed in that direction. Johnson Scholars are selected in grade 9 and are given 4 years of preparation in a peer cohort system supported by teachers and outside mentors.

Preparation of Johnson Scholars encourages academic remediation and progress, but this is not an end in itself. Rather it is part of the process that leads Johnson Scholars to believe that a college degree and success in life is within their reach. Children of affluent or college educated parents grow up with this belief. Johnson Scholars must acquire it.

The promise of a scholarship is a show of faith in a student. It says that a prestigious Foundation is willing to invest its money in them because they have what it takes to succeed. Teachers and mentors build on this faith. Students do their part by applying themselves. They see that their effort is rewarded by academic success and come to believe in their ability to succeed.

Take Stock in Children is a scholarship program also designed for disadvantaged students. As the name suggests, it is also based on the premise of investing in young people. Like the Johnson Scholarship Foundation, Take Stock in Children invests money and much more. The program begins early in high school (or before) and has a large mentoring component.

Take Stock in Children in Palm Beach County and the Johnson Scholarship Foundation have worked closely for years and this year have decided to merge their programs. In addition to the scholarships, the merged program will serve 600 in the high school system this year. This is just a start. Take Stock and the Foundation will work together to raise money in the community in order to increase that number.

In this week’s blog there are photographs of Take Stock and Johnson Scholars. Take a good look at these excellent young men and women. All of them will get scholarships to go to college and most of them will succeed. The secret to their success will be faith in themselves, not money.

On the Art of Exiting Well

“As much as we love our students, we want them to leave after they’ve been successful.” The room filled with chuckles as university coordinators resonated with Lynda’s statement.

The mark of a successful student is their ability to be launched from their post-secondary foundation into employment or graduate opportunities. As much as an institution may have loved the student or bonded over the progress made in the past few years, a healthy trajectory involves leaving.

But leaving is difficult. It necessitates adaptation to big changes, perseverance, new support systems and a different way of relying on the old ones. Sometimes it’s uncertain and other times it’s not.Exit sign

But for the most part, leaving for the sake of launching into something new offers exciting opportunities for growth and expansion.

Philanthropy and nonprofits must view exit strategies through this lens. A responsible discontinuation of funding is a healthy step forward, offering opportunities for both organizations to revel in their impact and launch into something new for the sake of growth and expansion.

Exit strategies are an art form; a delicate balance of support and release. We must see them as such and attend to them with the appropriate amount of attention and care. We must apply the Hippocratic Oath to our philanthropy and “do no harm” in our exit or our stay.

A good exit requires wisdom on behalf of both the grant maker and grantee. If the goal is to do no harm, then there can be no one-size-fits-all strategy. Open conversations are to be had to land on an agreement that leaves neither party high and dry. Whether it’s a gradual decline in funding, an increased proportion of matching funds, endowment building or a cold turkey goodbye, the exit must be beneficial to both parties.

What are good exit strategies you and your organization have come across? We’d love to hear from you!

Hands-On Investing

Grantmaking can be likened to investing. The role of strategic grantmakers can therefore be likened to that of a money manager. Instead of a financial return, foundations seek a social change, which is much harder to measure. But the concept is similar. Philanthropy invests in ideas, people and organizations. Good foundations diligently check the people and the organization and debate the ideas and missions behind them. Some investments are relatively safe – matching scholarship programs with universities for example – and others are more risky.

The Johnson Scholarship Foundation’s investment managers use different operating styles and the style is often dictated by the type of investment. At one extreme are index funds which mechanically folopen hands forming a circlelow the market index for whatever assets they are buying. Managers of these funds do not research or make qualitative judgments. Venture capital or specialized hedge funds can be at the other end of the spectrum. In addition to initial research they can take a seat on the company’s Board and an active role in management and operations. Their specialized knowledge and expertise is just as important as the money that they invest.

Most of the Foundation’s investment managers fall somewhere between these extremes. An equity manager might m
eet with management of a publicly traded company and monitor the company’s progress towards stated objectives. But they don’t take an active role. The Foundation’s grantmaking process also falls within this middle ground. We generally don’t get involved with telling our grantee partners what to do. In fact, we usually defer to them on the basis that they understand their business better than we do.

Should the Foundation become a more involved investor?

This question has been raised by a number of our grantee/partners. Some tell us that our advice on strategy and governance, which we continue to give, has been even more valuable than the money we invested. Our experience and assistance, in addition to our money, has been vital in helping grantees develop fundraising and scholarship programs. We continue to work hand in glove with other organizations on strategy and operational issues. One grantee has asked us to sit on an Advisory Committee its national program. Our consultants have taken leadership roles in developing proposals and have written drafts for particular projects. And still other grantees have invited us to attend Board meetings and to participate in discussions regarding programing.

For smaller, edgier projects the argument in favor of our involvement becomes more cogent. We can give badly needed advice on basic governance and strategy issues. Our presence also helps us to monitor our investment. More direct involvement in certain types of investments takes our social investment model to its next logical step.

Hands-on investing surely has its strengths and pitfalls. There is a delicate balance when it comes to supporting grantees and dictating the operations of their program. Philanthropists must defer to their better judgment, offering advice when asked and relying on the expertise of our partners when not.

A Lesson in Humility

When FSDB made the request to use JSF funds for a playground I remember thinking that a new playground would certainly be a nice thing for FSDB, but it didn’t seem very high on the priority scale for educating deaf and blind children. It was a close call, but we ultimately deferred to our grantee’s good judgment. And when Tanya suggested during our site visit that we see the playground I almost told her that it really wasn’t necessary. We only had a few hours and it was cold, but I didn’t say anything.

The playgroublind child climbing a playground rocknd was quite the site. Imagine an interesting, safe place for blind children to experience the physical world. Imagine a place where children can learn the consequences of a misstep or a failure to properly interpret a physical cue. This is a place where a child can stumble or fall and not suffer serious hurt or injury. It is ingenious. We watched the children play. They were in a small tactile laboratory. It was completely different from what we expected.

James, orientation and mobility instructor, hosted our tour and explained the playground. He is a former classroom teacher and is obviously a very bright penny. In order to explain the importance of the playground for the education of blind students he told us about something that happened years ago when he was teaching grade 10.

James is a baseball fan and he had a blind student that year who was absolutely nuts about the game. This kid knew every team, every player and where he came from, batting averages, on base percentages, win-loss records of every pitcher and on and on. This student made James look like a baseball novice.

One day James was sitting at his desk when the student came into the classroom to see him. James was busy and, while he waited, the student indulged his curiosity by feeling around the top of James’ desk. There was a baseball glove and a ball. After extensively and carefully feeling each of the objects the student asked James, “What are these?”

At first James could not believe that the student didn’t recognize a baseball and glove and he urged him to identify them. When he finally understood that the student really didn’t know, James was stunned. He explained the items in detail and the next day he took his student to a baseball diamond, around all of the bases, let him feel each one and took him to the infield and outfield. He is still amazed (and touched) that his grade 10 student, who seemingly knew everything about baseball, could not recognize the basic tools of the photo of parents and children at a playground

This is a poignant story and instructive for us. How much do we really understand of our grantees experience? Are we like James, surprised that a blind student can’t recognize a baseball and glove? Are we like the blind student, knowing everything about baseball but not comprehending the basics of what it is to play the game?

The Intersection of Ideas and Pragmatism

Albert Whitaker’s review of the philanthropic tome, Strategic Giving: The Art and Science of Philanthropy, identifies the conundrum of professional grant making. He describes the book as a “powerful attack on professionalism, written in the most professional terms and style.”

Professionalism is attacked because it robs philanthropy of its passion and innovation: “While grant making professionals may have the best of intentions… something is still lost when the delicate balance of public purposes and private values is tipped in the direction of the former to the detriment of the latter.” According to the author, what is lost is “idiosyncratic” and “provocative” giving. The process becomes so dry and bureaucratic that it loses its passion (and its real value).

Dr. Susan Raymond, a senior managing director of Changing Our World, Inc. makes a similar point when she lamentsillustration of a light bulb the unintended side effects of greater transparency and accountability in our industry and decision making that is increasingly process oriented. She compares many modern philanthropists to mortgage brokers, who make grants solely on the basis of probability of success. This leads them away from the most pressing and difficult issues of the day, which they are uniquely suited to address. Foundations should look up from the safety and comfort of their usual work and “come back to the world of ideas, even though there will be no immediate proof of impact.”

But transparency and accountability are necessary. Anyone who has had even a fleeting glimpse of sloth and self-indulgence in our industry knows that we need to be more than “idiosyncratic” and “provocative” in our grant making. We must have “the faith of fools” without being foolish. We must be disciplined without being conventional. We must strive to accomplish big things and not worry too much about immediate results. This is the essential art of philanthropy and it is more easily described than practiced.

Like our peers, the Johnson Scholarship Foundation must grope for it as we develop new programs and evaluate old ones. One of our Core Values is the power of entrepreneurship. This has been an inspiration for us in the past and we should continue to be guided by it. Entrepreneurship is similar to good philanthropy. It values creativity and risk taking and requires realism and hard work. The entrepreneur must find the intersection between ideas and pragmatism or perish in the market place. If we are to remain relevant, philanthropists and nonprofits must also do so.

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