Unaccountable Philanthropy Please

A few months ago I noted that you can’t really divorce the concern about meltdowns at progressive non-profits from the structure of prevalent models of funding. A lot of feedback on that one, basically everyone except the Jacobins who thrill to this theater agreed with the broad idea that funding should allow leaders to lead.

Implicit is the idea that you’ll lead and be accountable to funders and whatever other governance arrangement you operate in. So here’s another idea about philanthropy, and one that at least to certain ears will sound more crazy: I’d like to see more unaccountable philanthropy. A lot more.

via Wikimedia

Over roughly the past fifteen years or so philanthropy became wed to a model of metrics. Being accountable – as distinct from being transparent – is a common refrain and a focus of strategy. There is a whole cottage industry around accountable philanthropy.

This approach is often seen as a way to make giving more equitable – in practice it can have the opposite effect. I’ll have a post on that soon. And privately you hear a lot of foundation types grumbling about what they see as a management consultant-driven and metric-fetishizing approach to giving they think hampers effectiveness. (I’m not anti-management consultant, I have a friend who is a management consultant…some of my best friends are…)

Of course, quite obviously, some metrics are important and reasonable. For example, if you take money saying you’re going to produce five reports, then you should produce five reports. If the money is given for work on school choice, or SEL, or teacher quality, then work should be done on those issues. If you are going to build something, then build it. I’m not arguing for carte blanche.

I’m talking about something different, risk.

Everyone was very excited about this new DARPA- like approach in education. (And the work IES’ Mark Schneider is doing to try to modernize the federal role in education research is thankless and essential.) I have argued for an approach like this myself. Sara Mead and I did a project about it for Brookings in 2008. I tried to convince OMB this was a good idea back in 1999 (unsuccessfully, obviously).

Still, there is probably something to the cautions Rick Hess raises and my views about the constraints of government here are changing. And there are some fundamental differences with DARPA and education including clear mission focus* and having a single regulated buyer as opposed to the prism-like structure of K-12 procurement. That’s also true in some other areas of government innovation often compared to education, for instance NASA.

The federal government does have a role to play in R&D and in innovation. But what the federal government is really good at, especially where social policy is concerned, is writing checks. As we’ve discussed here this is why unflashy but effective programs like Social Security are so important. And it’s why in education perhaps scaling effective ideas is a more important and has a better record in terms of the federal federal role than trying to be an innovator.

What does this mean for philanthropy? Well for starters, the philanthropic sector is a place (at least in theory) where you can take a risk. Both because you can and because you must.

Philanthropies – like other tax-exempt public charities and non-profits – have to meet certain legal standards and they also must disburse a minimum share of assets. But within those rules they can more or less do what they want – so the question of risk appetite is up to them. The philanthropic spend on K-12 schools is somewhere in the neighborhood of 1% of total K-12 spending. To make a difference it has to be catalyzing rather than additive. Or it should do things government can’t or doesn’t. It’s really the whole point.

When I say unaccountable philanthropy I also don’t mean reckless, without proper diligence and consideration, or absent a broader theory of change. That’s all important work (and a place I will note that effective consultants can add real value). Despite some fashionable ideas today, casually giving away money can cause real chaos. Nor do I mean absent transparency. Even beyond the legal requirements on foundations real transparency about success and failure is important to learning and progress.

Rather, I mean taking some real risks, leaning into the messiness of innovation and failure that is inherent in progress. And as importantly creating space for that kind of work, not only substantively but also politically.

Right now we basically have it backwards. Government takes the risks, often badly. Philanthropy often addresses public sector shortfalls – and not just in education but across a range of social policy issues.

So for instance, there’s a case to be made that having philanthropy underwrite curriculum reviews through EdReports is not the best way to finance that work and either the private sector or government would be more preferable.**

Philanthropy funds a lot of things that work, on average or even more consistently than that, because government won’t for various political reasons. Urban charter schools are probably exhibit A here. The track record is strong, but these schools still need philanthropic support to grow (and in some cases to operate because they get so much less money per-pupil than other public schools around them).

But there are plenty of other examples. – and also certainly some compelling counterexamples where government has moved the needle. Yet is underwriting successful initiatives or initiatives where a good business plan is the best path to sustainability really the highest-leverage use of philanthropic dollars? There are also counter examples of some grantmakers funding initiatives with a lot of risk or failure potential.

Philanthropic capital is risk capital, especially in a sector with a lot of market gaps and externalities and screwed up systems given the haphazard nature of the system. And we really need some risk taking because even at its best the current model is not delivering the results people want to see. Some funders are obviously doing this – in the political and practice space. But it’s far from the norm.

Perhaps the shorter version of this post would be – what’s the point of having billions if you don’t take on some risk with them and are not willing to whether the political hits? I don’t know, because I don’t have billions. But I’d like to think if I did I’d be less worried about being accountable to various politics or ideologies or whatever and more into making some dice roles with an eye toward progress. Even if you’re not bought into the theory of change it at least seems more fun than much of the status quo today.

*One reason innovation in education is often synonymous with fad is the lack of a clear mission. Success or the most important thing often looks five different ways to five different people in our sector. You certainly don’t want to romanticize military procurement or the private sector but clear outcomes do help a lot.

**A different issue for another time is how philanthropies can distort markets and innovation by picking winners and losers in the early stage of an innovation cycle. The CW in parts of our sector is that philanthropies support “privatization.” The messy reality is that they may impede it if you define privatization as a broader role for the private sector in education.