Excerpt from Leap of Reason Update, April 2017
Let’s be honest: foundation presidents’ annual letters tend to be pro forma at best. But this month we found a lovely and rare exception, by F.B. Heron Foundation President Clara Miller. Hidden behind bland design and a boilerplate title, you’ll find a sharp indictment of typical foundation thinking and a bold prescription for “this messier, less compartmentalized, and more urgent world.”
Nearly 20 years ago, when Mario was a naive newbie in the world of philanthropy, he was invited to speak on a panel focused on nonprofit finance. One of the other panelists was Miller, who then led (and had founded) the outstanding Nonprofit Finance Fund. She impressed the hell out of Mario! To this day, both of us look up to Miller as one of the very best minds and bravest truth-tellers in the field.
In her most recent president’s letter, Miller fires a shot across the bow to make leaders rethink their core assumptions about what it really takes to produce meaningful change. But she starts by calling out multiple areas where she and her colleagues at Heron have fallen short of their aspirations. She openly admits, for example, that she underestimated how hard it would be to operationalize her promise to leverage 100% of the foundation’s assets–grants and investments–in pursuit of its anti-poverty mission.
Changing strategy and systems is never easy, but mindset and culture have been the real challenges for Heron. “As the saying goes, culture eats strategy for breakfast, and we have found that to be true on our journey,” Miller writes. “This has not been a straightforward process of restructuring or reorientation. We have been remodeling the plane while flying it, and the degree of uncertainty sometimes takes its toll. And all of us have had moments where the unconscious takes over.”
To fulfill her pledge to move all of Heron’s $300 million endowment into “impact investing,” Miller had to work hard to tear down the wall between the giving side and investing side of the foundation. “Talk about culture change!,” she admits. It’s been difficult to find “people who are willing to question their own expertise on the way to create a new set of assumptions, practices, routines, and measures while testing them in real time.”
After looking in the mirror, she then turns her gaze to practices by other foundations that undermine their own effectiveness and that of the organizations they support. She is blunt about her disappointment “that so few of my fellow philanthropoids embrace basic financial practices that can help all players become more effective (and candid) about using money as a tool for good.” She notes that “even the idea that finance is important at all seems to elicit discomfort or even hostility among some program officers.” And she is highly critical of the typical foundation’s go-it-alone approach. “In the philanthropic world, it seems almost axiomatic that the traditional practice of direct grant making and direct social investing yields the best mission results…. To the contrary, we believe that relying solely on direct investing has, in the end, less influence and narrower impact in most cases than investing through high-quality funds and intermediaries.”
We encourage you to grab a nice cup of coffee, sit down in a comfy chair, and give Miller’s cri de coeur the attention it deserves. You’ll understand why “platform” and “network” approaches are the wave of the future for givers who truly want to support performance and achieve impact. You’ll see a great example of a foundation of modest size lighting the way for the world’s largest institutions. And most of all, you’ll see courageous, adaptive executive and board leadership in action.
Learn more at Leap of Reason Ambassadors Community.