I had the privilege of curating one of the breakout sessions; ‘Reframing failure…’ for the 2018 Philanthropy Australia National Conference. The panel was moderated by Prof Kristy Muir CEO Centre for Social Impact UNSW and the panelists were: Larry Kramer, President of the William and Flora Hewlett Foundation, Alexandra Gartmann, CEO Rural Bank and Trustee Helen Macpherson Smith Trust, and David Tennant, CEO Family Care Shepparton. It was a thought-provoking session that has prompted me to deeply consider what hasn’t worked, our learnings, and what we need to change to improve our practice. I had a number of take-outs from the session:
- Apply a different risk appetite to organisations of different scale and sophistication;
- A poor outcome is not necessarily the fault of the grantee. Be flexible, especially with multi-year grants that are subject to changing circumstances; and
- Talk openly about learnings.
This annual report is a good place to start talking openly about what we need to improve.
The professionalisation of the philanthropic sector is taking us into an increasingly accountable world. We talk of systems change, replication and scale, collective capacity, community-driven action, accountability frameworks, theory of change and logic models, and catalytic philanthropy. And there is increased pressure on us to show that strategies are working and whether we’re making a positive difference.
I’ve come to the conclusion that philanthropy comes in all shapes and sizes and that all philanthropy is good as long as we do no harm. HMSTrust is a medium sized testamentary trust with a specific remit that is both legally binding and honours the legacy of our benefactress. We continuously strive to improve our philanthropy, but we need to be mindful not to let the measurement tail wag the outcome dog.
Risk appetite in assessing an application
An observation made at a recent Trustees’ meeting was a trigger for reflection. It was noted that none of the grants approved for funding in a particular round were assessed as ‘high risk’. Have we unwittingly slipped into the trap of applying the same criteria and expectations to a startup or grassroots organisation than we do for an established medium to large organisation? Has our focus on streamlining operations inadvertently reduced disparate criteria to a common ranking, resulting in an unconscious move away from supporting high risk initiatives that at best deliver on expectations and at worst lead to learnings that can be shared?
As an independent funder we are largely protected from the external forces that impact the organisations we support. Our timeframes, targets and requirements are largely self-imposed, but our grantees are vulnerable to forces outside their control. A poor outcome could be the fault of a grantee’s poor management or governance, a flaw in our assessment process, or it could be due to an unpredictable political, economic, social or environmental factor that has derailed the project entirely or has had an adverse impact on expected outcomes.
We’re continually trying to improve our grantee reports to make it easier for our grantees, while still providing us with the level of information that can inform our grantmaking. We consider the reports against expectations and milestones that were agreed with the grantee at the start of the grant, we assess the report which includes both grantee and HMSTrust learnings, and we rate the report against the initial assessment. This process provides us with valuable insights, but are we giving due consideration and weight to the cause behind a poor outcome? When we start relying on aggregated data we’re in danger of missing context which can influence our decisions.
These musings remind me of another philanthropic conference, where I attended a session by US data scientist, Cathy O’Neill, author of the New York Times bestseller ‘Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy’. An important read for anyone who scores teachers and students, sorts resumes, evaluates workers, assesses disadvantage, measures impact, or approves (or denies) grants.
We look forward to the inevitable robust debates with staff and Trustees around the questions of risk, in pursuit of our vision for a strong, just and sustainable Victoria.
Lin Bender AM