Philanthropists who want to ramp up their giving and move beyond writing checks inevitably want to create more effective philanthropy. But what does “success” look like? While its definition varies among donors, those who achieve the best results with their giving take a strategic approach to at least some of their philanthropic efforts.
For the philanthropists we interviewed, pursuing success and creating the most effective philanthropy possible is an iterative process. They have found it involves important decisions, including getting clear about where they want to focus their giving, getting real about what it takes to actually make change happen, and getting better over time by continuously learning and adapting. (See “Galvanizing Philanthropy”, (Harvard Business Review 2009) for more information).
Most of the philanthropists we interviewed focus their efforts by first choosing a cause, typically in one of three ways: by selecting a problem that has affected them personally, such as a disease; by selecting problems with a clear moral imperative, such as poverty or hunger; or by choosing an issue that offers an outsized social return on investment or that is underfunded. (See “Clarifying Your Aspirations,” an excerpt from Give Smart: Philanthropy That Gets Results, for more information).
Our interviewees also stress the value of building a philanthropic portfolio and emphasize the importance of being strategic with at least part of their philanthropy. This involves deciding which vehicle(s) to use for their giving, such as establishing a foundation or using donor-advised funds; deciding how much of their philanthropy will be devoted to getting results versus how much will be for personal giving; and deciding how funds will be allocated to big versus small initiatives.
As for strategies, some of our interviewees act as social-venture capitalists, taking risks that governments and nonprofits can’t. Because they don’t have to worry about being fired, nor are their investments accountable to external markets, our interviewees describe how they can afford to back early-stage ideas and organizations that hold the promise of eradicating stubborn social problems, or make big bets in order to achieve outsized returns on their investments. One such philanthropist is Stanley Druckenmiller, who says, “I like putting all my eggs in one basket and then watching that basket closely.”
While philanthropists will always have varied approaches to their philanthropy, those who seek to achieve the greatest success tend to be more deliberate and strategic about how they pursue results.
- Hear Josh Bekenstein, Laura and John Arnold, and Julian Robertson talk about how they build their portfolio.
- See how Richard Atlas, Bill Draper, Pete Peterson, Jennifer and Peter Buffett, Michael Milken, and George Kaiser arrived at the causes on which they are focused.
- Watch Eli Broad, Steve Hilton, Geoff Boisi, Paul Tudor Jones, and Carrie Avery discuss how they determined their strategy for tackling an issue.
- Hear Peter Lynch, Eli Broad, Henry McCance, Steve McCormick, and Michael Milken talk about why and how they take risks.
- Watch Risa Lavizzo-Mourey, Paul Brest, Ted Turner, Stanley Druckenmiller, David Rubenstein, and Charles Bronfman talk about why and how they make big bets.
- See Neeru Khosla, Jean and Steve Case, Jane Siebels, and Deborah Brooks discuss how they incorporate technology into their philanthropic strategies.