Over the last forty years, it has become an article of faith in the philanthropic community that foundations play an important role in creating and promoting social change. Moreover, as Helmut Anheier and Diana Leat write in Creative Philanthropy (Routledge, 2006), foundations perform that role, at least in theory, in a variety of ways: by fostering recognition and exploration of new needs, ideas, and cultural forms; by changing the way people think about social issues and their solutions; by increasing the empowerment of those traditionally excluded from policy considerations and practice; and by demonstrating the feasibility of new ways of working.
But that view, as Anheier and Leat note, has always had its critics. No one was more articulate in this regard, Anheier and Leat suggest, than former Carnegie Corporation president Alan Pifer, who, writing in the 1980s, argued that the "great myth" about foundations "is that they are firmly ensconced on the leading edge of social change, managed by far-sighted trustees and staff who make brilliantly daring decisions about the disposition of funds over which they have stewardship. In this myth," Pifer added, "the funds are known as seed corn and venture capital, thereby associating the foundation vicariously with two of the noblest traditions in American life, the agrarian and the entrepreneurial. But foundations in fact have a highly restricted capacity to influence social change...."
Earlier this summer, Philanthropy News Digest spoke with Emmett Carson, president and CEO of the Minneapolis Foundation, one of the oldest and largest community foundations in the nation, about foundations and social change, the barriers that keep foundations from devoting more of their resources to a social change agenda, and the future of the community foundation field.
Carson is well known as a writer and speaker on persistent and emerging social issues and as an advocate for progressive social change. During his tenure at the Minneapolis Foundation, the foundation has received national recognition for its grantmaking and communications efforts, while more than tripling its assets from $186 million to $650 million. Prior to joining the foundation, he was the first manager of the Ford Foundation's worldwide grantmaking program on philanthropy and the nonprofit sector and also worked for the Joint Center for Political and Economic Studies and the Congressional Research Service.
In addition to serving on a number of nonprofit boards, he also has been named on several occasions to The Non-Profit Times' annual list of the fifty most influential nonprofit leaders in the United States.
Earlier this month, Carson, who received his Ph.D. and M.P.A. degrees in public and international affairs from Princeton and his bachelor's degree in economics from Morehouse College, was named president and CEO of the Silicon Valley Community Foundation, which was created by the merger of two of the Bay Area's largest foundations, the Peninsula Community Foundation and the Community Foundation Silicon Valley.
Philanthropy News Digest: You've written and stated in various forums over the past few years that community foundations are at a crossroads. Is that the same as a crisis? And what, in your view, has brought the community foundation field to that pass?
Emmett Carson: A crossroads is not the same as a crisis, unless you're talking about a crisis of identity. For people who are content to focus on asset accumulation — the donor focus, as I call it — there's no crisis at all. That's how they interpret their mission: to accumulate assets. On the other hand, for those who say the issue is not just how much you raise, but what you do with that money, then yes, you're talking about something altogether different. That's why I've talked about a crossroads in the past, and by that I mean, where does the community foundation field want to go from here? Do we want to look like Fidelity and Vanguard, which are transactional institutions that do little to inform their donors about the value of doing good in their communities? Or do we want to be something more? I think we want to be something more. I think we should be something more.
PND: Does the entry of Vanguard, Fidelity, and other financial services firms into the philanthropic arena represent an opportunity for the community foundation field or a threat?
EC: It's both. It's an opportunity in that those firms have spent enormous sums of money — money that community foundations, as a rule, don't have — to market and explain the concept and value of donor-advised funds to literally hundreds of thousands of people. They've done a great deal to explain, to market, to make information about donor-advised funds available to people who may not know such a thing exists.
On the other hand, the Fidelities and Vanguards of the world are a threat to community foundations in the sense that they dumb us down. They aren't interested in improving a particular community or in addressing issues from a values perspective or a social equity perspective. Their interest is in charging a fee and completing transactions with charities specified by their customers. I believe community foundations stand for more than that. I believe community foundations stand for collective action and people learning from each other to address problems within their community with shared resources. That's a different kind of institution. And yet the threat represented by some of the financial giants has led some community foundations to think — wrongly, I believe — that they ought to look and act more like a commercial fund than a traditional community foundation.
PND: As president and CEO of the Minneapolis Foundation, you've been an outspoken advocate for what you call social change grantmaking. How do you define that term? And how does social change grantmaking differ from more traditional philanthropic strategies and approaches?
EC: I use the terms "social change" and "social justice grantmaking" interchangeably. Let me explain.
I have never come across a foundation with a mission statement that says its job is to promote the status quo....
First, I have never come across a foundation with a mission statement that says its job is to promote the status quo. I have heard foundations talk about wanting "to advance," "to improve," "to enhance," "to do better." By definition, those kinds of phrases evoke change. Part of the challenge for foundations is to live up to the dreams of their founders. Now, many people — too many people — interpret that as advocating a progressive agenda or a conservative agenda; in other words, they put a political lens on it. But if you're Melinda Gates and you say you want to eradicate disease in the Third World, that's not a progressive or conservative agenda. That's a social justice agenda, in that disease typically prevents people from fully participating in society. It's not making a value judgment about a particular political or economic system.
PND: Do you believe social change should be a component of every foundation's grantmaking?
EC: I think every foundation has the obligation to review their mission statement and ask whether they are being called to engage in promoting social change. It may be a change that you and I don't agree with, but that's the beauty of the American system of philanthropy. When you have competing ideas vying for legitimacy in the court of public opinion, everyone benefits; we all learn more, foundations tend to invest more, and, at the end of the day, we end up with an improved understanding of what kind of society we would like to become.
PND: Are there barriers or structural impediments that discourage foundations from directing more of their resources to a social change agenda?
EC: I think so. First, foundations are exceedingly sensitive to bad press or people disagreeing with them. It's curious, because you would think that institutions largely insulated from public opinion by virtue of their endowments would be willing to take more risks. Secondly, it's often the case that the boards and staff of foundations who take over after a founder is no longer on the scene are far more conservative and worried about the image and reputation of the founding family's name than the founder himself. I suspect that's because the typical founder tends to be entrepreneurial and more interested in making a difference than the professional managerial types who usually succeed him or her. Again, I would point to Bill and Melinda Gates, who have been very willing to take risks and challenge conventional wisdom.
PND: Do foundations need to have an explicit theory of change in order to be effective change agents?
EC: No. I don't think that level of detail and meticulousness is necessary, or even useful. I do think foundations need to have a clear idea of where they're trying to go and why they think that's a good thing. A foundation can believe, for example, that full-day kindergarten is good for a community. It can believe that immigrants in a community, however they got there, probably ought to have access to basic health care. And it should be able to articulate why it believes those things. That's all it needs to get started.
PND: Is it important for foundations to be able to communicate their change agenda to stakeholders, both internal and external?
EC: I believe foundations are responsible for articulating and promoting their missions. And as I said, most mission statements articulate a vision of a better society, regardless of whether the particular focus of the mission statement is the arts, the environment, education, or health care. That's a change agenda. So the real question is not whether foundations are able to articulate a change agenda; it's whether they actually act on that agenda.
[T]he real question is not whether foundations are able to articulate a change agenda; it's whether they actually act on that agenda....
PND: How does the Minneapolis Foundation measure success in a social change context? Do you look at concrete outcomes, or are you more interested in seeing movement toward solving the particular problem you're trying to address? Or is it a little of both?
EC: It's both. If you can get the public to think about an issue differently, that can create enormous change. Similarly, investing in a new idea that works, or doesn't work, can encourage others to adopt a particular approach, or to avoid it.
PND: To what extent, in your view, is foundation impact a function of grant size or the dollar amount of a foundation's grantmaking program?
EC: Not much. Impact is a function of vision, of taking risks, and of understanding how to use money to leverage the change or changes you're trying to bring about. I've seen community foundations initiate meaningful community dialogues with a relatively modest investment of funds. In fact, some would argue that the more money you have for grants, and the larger your grantmaking program, the more problems you're bound to have. But while I don't think grant size or asset total is a determinant of impact, I do think they are a determinant of the kinds of strategies you can use to create impact.
PND: Can you give us an example?
EC: Sure. Every year, we convene a series of public meetings called "Minnesota Meeting" that focus on a particular topic of interest to the community. In the past we've held meetings on education, on immigration, and we're currently holding meetings around the topic of racial disparities. Funding for Minnesota Meeting represents a modest cost relative to other grants we've made, and yet we draw upwards of eight-hundred-plus people to each meeting. The meetings are also broadcast on Minnesota Public Radio, are taped and re-broadcast on local public television stations, and are broadcast live by satellite to several out-of-state locations. And I can tell you, you can literally see how those meetings transform people's thinking about an issue.
I'll give you another example. From time to time, we publish reports on an issue we care about. One such report looked at the criminal justice system in Minnesota with regard to people who had been convicted of a felony. In Minnesota a felon is entitled to restoration of the full rights of citizenship after they have served their sentence; that's been the case since 1857. Well, we made a grant — I think it was for $15,000 — to retain a blue-chip law firm, which confirmed that, notwithstanding existing law, there was no process in Minnesota whereby a felon who had served his time could have his voting rights reinstated. There's a process to take you off the voting rolls, but no process to get you back on. Well, our report was introduced into the Hennepin County Commissioners' public record, and the commissioners subsequently established a process through which convicted felons who had served their time could have their voting rights reinstated. Why is that important? Well, in Minnesota stealing anything valued at more than $500 is considered a felony, which means an eighteen-year-old kid could be caught and convicted for joy-riding and wouldn't be able to vote in the state for the rest of his or her life. That's not right. For a small investment of $15,000, however, we were able to document that the existing law was being ignored, and a process was put in place that returned that right to felons who had paid their debt to society. It didn't take a lot to leverage that modest investment into big change once we understood what it was we were trying to achieve.
PND: Is collaboration part of your leveraging strategy?
Collaboration is wonderful when partners share a vision....
EC: Collaboration is wonderful when partners share a vision. But you know what they say: Too much water in the brandy ruins the drink. The question you have to ask is, Are the partners in a collaboration adding brandy to the mix or are they adding water? Too often, I think, we substitute a desire to be seen as team players for actually wanting to get things done. I would much prefer to collaborate with one or two partners who really believe passionately in what it is we're trying to achieve than be involved in a multi-party collaboration where the partners agree on very little — and I think a lot of people in the field share that view.
On the other hand, if you're a foundation with modest resources and you're interested in taking something to scale, how do you do that without collaborating? It's a dilemma we all face. If you're trying to get to the top of the mountain and the people you're collaborating with are only willing to go as far as the first ridge, it doesn't necessarily help your agenda to partner with them. I'm aware of collaborations that have spent all their time and resources trying to get people to go beyond the first ridge, whereas if the respective parties to the collaboration had struck out on their own, one of them, at a minimum, would have made it up the mountain and back again by the time the other partners made it to the first ridge. Those are the decisions one has to weigh. So I'm not against collaboration, but I'm not automatically for it. If it can be helpful in achieving the goals an organization has set for itself, well, it's worth a try. If, from the outset, on the other hand, the goal of the collaboration is that first ridge rather than the mountaintop, then I think you have to ask whether it's the best use of your resources.
PND: A lot of people in nonprofit organizations seem to be intimidated by the foundations they approach for funding. Do you think the lopsided power dynamic between funders and their grantees hampers foundation effectiveness?
EC: It certainly makes it more complicated. As you say, funders and grantees are locked in a power relationship, and it doesn't benefit anyone to ignore power relationships in society. But the real question for me, as a funder, is whether nonprofits are my vendors or my customers. And the short answer is, they can be both. Unfortunately, too many nonprofits think of themselves as customers exclusively, when they ought to be thinking of themselves as vendors.
PND: Interesting. Can you give us an example?
EC: As a foundation president, I'm interested in what a nonprofit organization can do to advance the mission of my foundation in the community or communities we serve. Take education. If I want to improve test scores for the 40 percent of African-American kids who are dropping out of high school, my "customer" is the kid whose test scores I'm trying to improve. The "vendor" in this scenario is the nonprofit which says, "I can help you do that." If a nonprofit can indeed help me improve that kid's test score, then you bet I'm going to be concerned about its organizational health and capacity — at least until another "vendor" comes along and says, "I can help you improve the test scores of African-American kids, and I can do it better, faster, cheaper, and for more kids than your current vendor." Well, as they say in the movies, that's an offer I can't refuse. It's not that I don't like the first vendor. It's not that I'm being unfair to the first vendor. It's about me trying to create the best outcomes for my customers. That's what my mission statement says. The mission statement of the Minneapolis Foundation states that we work "to improve the health of the community." It doesn't say we work to improve the health of nonprofits.
Unfortunately, too many nonprofit organizations see themselves as a customer of rather than as a vendor to foundations....
I'm not saying that to be provocative. What I'm saying is that it changes your mind-set when you start to think of nonprofits as vendors rather than as customers. It doesn't mean nonprofits aren't our partners, or that they don't deserve to be treated with respect and courtesy. Unfortunately, too many nonprofit organizations see themselves as a customer of rather than as a vendor to foundations. If, instead, they viewed themselves as vendors and said, "Hey, you have an interest in health care, or an interest in education, or an interest in job training, and we do that better than anybody else; we can help you meet the needs of your customers in that area better than anybody else," it would lead to different kinds of conversations, instead of the one that goes, "If I don't get this grant, I'll have to lay off staff" or "I won't be able to pay my benefits." Sorry. That's not my problem. My customers are my problem, and you're of interest to me only insofar as you can help me serve those customers.
PND: Let's stick with that metaphor a minute. Is it sometimes difficult to find vendors with the capacity and skill sets required to help you maximize your investments in the community?
PND: What do you do in a situation like that?
EC: It depends. The issue becomes, do you try to grow a nonprofit from scratch, or is there another organization out there that could do the job if we made a strategic investment in its capacity? As always, the devil's in the details. But I will tell you that there is work that doesn't get done at community foundations because they aren't always able to find organizations that have the capacity to spend a million-dollar or half-million-dollar grant effectively.
PND: How common a problem is that?
EC: It's a problem most funders face at some point or another. That is, they'll have a specific problem in mind and a concrete idea about what kind of organization or organizations they want to work with to address that problem, and they'll look across the nonprofit landscape and won't see any organizations prepared to step into that role. I mean, I've been in meetings with organizations and have said, "Hey, we liked what you did in this area or with this program, would you ever be interested in doing X, Y or Z?" And they'll say, "No, that's outside the scope of our mission. That's not our role." I'm sitting there thinking, "Boy, I'd like to give them a grant," and they're sticking to the letter of the mission statement. Don't get me wrong — I applaud them for that. But it's not always the foundation that says, "Nope, we don't do that."
Look, to a certain extent, foundations sail along with a fixed view of the world and then something exogenous happens that changes the whole picture. Now, many foundations will see that as an opportunity but won't be able to find a nonprofit that's equipped or ready to take advantage of that opportunity, and so the opportunity is lost. And sometimes a nonprofit will recognize an opportunity before a foundation does because the foundation isn't down in the trenches working to address the problem, whatever it may be, and again, the opportunity is lost. It's one of the great frustrations of foundation work.
PND: One of the exogenous factors likely to reshape the nonprofit sector over the next decade is the retirement of the baby boomers, particularly at the organizational leadership level. Is that a problem in your community?
PND: What, if anything, are you doing about it?
EC: The short answer is, not much. And I'll tell you why. It goes back to what we were talking about a minute ago, and it's something I feel strongly about: It's not our job. If my mission statement stated that our job was to advance the health and well-being of the nonprofit sector, then I'd be very worried about the looming leadership deficit; it would be one of my highest priorities. Don't get me wrong: I do worry about it, as it relates to issues and areas we care about. When I see turnover in the institutions that are doing the best job for me in those areas, it's an issue for me. But if you say to me, "Well, you know, it's happening in a whole lot of areas," helping the sector deal with that transition just isn't my number-one priority.
PND: You've suggested that a key justification for the existence of foundations is that they, uniquely, are positioned to provide the risk capital to test innovative solutions to systemic problems. Do foundations take as many risks as they should?
I believe the field shies away from risk, and it does so for a number of reasons....
EC: Well, I think, the glass is half full and half empty on that score. I look at Bill and Melinda Gates and the monies they're expending in the fields of education reform and global public health and I say, "Yes, that's risk. That's innovation. That's trying some new and different things." But overall, I believe the field shies away from risk, and it does so for a number of reasons. We're afraid of criticism. We're afraid of failure. We are afraid of talking about values that may make somebody else uncomfortable.
PND: And wary of political retaliation?
EC: Absolutely. We find ourselves in an environment in which people are quick to attach labels to ideas and opinions. We find ourselves in an environment in which certain kinds of free speech are questioned. We find ourselves in an environment in which the right to assembly around certain issues is being questioned. That can be chilling. Those of us who work in the field ought to feel we are the most empowered to speak out, but in fact we feel the most vulnerable because we are regulated by Congress. As a result, we're reluctant to do anything that would lead to additional regulation that might compromise the unique role we play in our democratic society.
PND: As the head of one of the largest community foundations in the country, what do you see as the greatest challenge for Minneapolis and Minnesota over the next decade or so?
EC: The challenge and opportunity in Minnesota over the next decade is one and the same — immigrants. Immigrants have brought a wonderful diversity and vibrancy to Minnesota. Southeast Asian Hmong, Somalis, Russian Jews, and Hispanics, among others, have strengthened our labor market, added to our cultural richness, and helped to connect us to an ever-smaller global village. Unfortunately, many people see immigrants as a threat, do not appreciate their wealth of talents, and conveniently forget their own family's origins and background, while blaming immigrants for the community's social ills.
PND: As your community grows more diverse — racially, ethnically, and socioeconomically — what are you doing to make sure the programs and grantmaking of the Minneapolis Foundation reach the groups and people most in need?
EC: We try to do that in several ways. First, we make every effort to have our twenty-five-member board and our staff reflect the diversity of the community we serve as well as bring the skills and talents we require. Second, we encourage staff to attend meetings of various community groups and to develop relationships with various community leaders so that diverse communities feel they have a channel through which they can share their ideas with us. And lastly, we have provided endowment funds to another foundation, the Headwaters Foundation for Social Justice, to work with nonprofit organizations, especially from communities of color, that require technical assistance and organizational development before they seek more traditional funding.
PND: What do you think the community foundation field will look like in ten or fifteen years? Will community foundations continue to flourish in the face of competitive threats from major financial services firms and other new giving vehicles? Will they still be relevant in a world in which the problems confronting society are increasingly global in nature? Will the continued spread and power of information technologies render their traditional role as gatekeepers obsolete?
EC: I think community foundations ten or fifteen years from now will comprise a network of institutions focused less on the transactional aspects of the work — finance, gift, planning, administrative cost structures, and so on — and more on what is in the best interests of individual communities. So, you might see campaigns, projects, programs that community foundations across the country are doing simultaneously while, at the same time, sharing knowledge more freely and regularly around specific topics and best practices. I think you'll see networks within those networks using the Web and other online tools to showcase how they have improved conditions for members of their community. You might even see community foundations step up and present a specific change agenda and policy recommendations to different levels of government based on their unique understanding of rural communities, or urban communities, or low-income communities. I firmly believe community foundations are capable of achieving all that and more with the support of their donors, nonprofits, and, most importantly, their customers — the people in the communities they were established to serve. I believe that is our destiny, and it only remains for community foundations to believe it, embrace it, and actively work to make it happen.
PND: Well, thank you, for speaking with us this afternoon.
EC: Thank you.
Mitch Nauffts, PND's editorial director, spoke with Emmett Carson in July. For more information on the Newsmakers series, contact Mitch at firstname.lastname@example.org.