“Foundations” is the first in an occasional series of informal question-and-answer sessions with employees of The William and Flora Hewlett Foundation to give them an opportunity to explain their work. Jacob Harold is the Foundation’s Philanthropy Program Officer. It is his job to improve the field of philanthropy itself by supporting research in the field, sharing news about effective techniques, and advising funders in and outside of the Foundation about how to evaluate their effectiveness. Harold has a B.A. from Duke University, where he designed a major in Ethics and Intellectual history, and earned an M.B.A. from the Stanford Graduate School of Business.
Giving away money would seem to be easy. Why study it or teach others how to do it?
There’s a great quote from Andrew Carnegie about how much harder he found it to give away money wisely than to make it. The truth is, capitalism is relatively straightforward. You make a product, and you sell it. Translating that to the art of social change isn’t that easy. There are lessons to be shared across the two worlds, but social problems and effective ways to solve them vary so much. Philanthropy is hard because social change is hard. The other thing is that there rarely are clear-cut ways for donors to know which organization they have funded has been most effective in achieving its goals. It can be hard to know what works best.
Is the study of philanthropy a young field?
It’s an old practice but a young field. People talked about philanthropy going back to Aristotle and before. But it’s really only in the last twenty years or so that we’ve had the emergence of an entire community of organizations that are devoted to making it better. There have been thoughtful philanthropists throughout history. But it’s only now-when information is more transparent and the field is more professionalized-that good practices are clarified and laid out for the donating public in a useful way.
In this country we’ve had fortunes that would enable philanthropy at least since the Gilded Age. Why has it taken so long for the field to evolve?
There are now 87,000 foundations in the U.S., about 3,000 of those have a professional staff. With such a critical mass of institutions you’re bound to have professionalization and more seriousness. And the availability of information is greater. That’s partly because of technology, like the Internet, and partly because information has accrued about best practices. So we’re making progress, but the problem is that donors still don’t have all the right information.
Does the Hewlett Foundation have a philosophy of philanthropy?
Some people think of philanthropy in two categories. There’s what’s known as “responsive philanthropy,” when a foundation waits for nonprofits to come to it with their own ideas and then tries to give money to the best organizations. A foundation that practices “strategic philanthropy” will itself have a strategy and goals and then, in partnership with nonprofit organizations, do everything it can to see those goals are met. It requires much more engagement with grantees. Not every grant we make is completely in a strategic framework, and sometimes it makes a lot of sense to be responsive to support new ideas. But I’d say we subscribe much more to the strategic philosophy than some foundations.
So how does the Hewlett Foundation’s Philanthropy program help?
We’re interested in what we call the social capital market. Just as there are capital markets to finance new businesses there’s a capital market in the nonprofit world, too. A market is just a place to share information and exchange things for mutual benefit. Most of what we’re trying to do is to build institutions or support existing ones to support that market and make it easier to make good choices about philanthropy.
One way they do this is by helping donors find nonprofits that are effective and doing things they’re interested in. Keep in mind there are more than 1 million nonprofits in the U.S. alone, so identifying the best of them can be a challenge.
Several organizations we support are working on that: for example, Guidestar, with a huge database of financial information about nonprofits nationally, and DonorEdge, which started at the Greater Kansas City Community Foundation and provides programmatic information on nonprofits around the country.
Ultimately, what this is about is helping the best, most effective nonprofits get more money and those organizations that are not as effective getting less. And the only reason we want to do that is because we want to have more social impact. We want a more sustainable and equitable economy.
Does the Foundation help individuals who are interested in philanthropy?
That’s another part of this. To really do this well you need a lot of one-on-one contact with people who are serious about doing philanthropy. At the Foundation, the example of that is the Philanthropy Workshop West. It does “high-touch” training for people who are serious about giving their money away. They train ten to fifteen a year. But we’re interested in the full range of individuals who make decisions about how money should be donated. That includes everyone from regular, everyday Americans who write checks for $100 to wealthy individuals who are writing the big checks. Our focus is on larger donors but many of our grantees provide services that help all kinds of donors.
What are your aspirations for the future of your work?
I want to put all the pieces together, to help the social capital marketplace become better integrated. I envision a situation where donors have everything they need to make the best decisions about how and where to give. So we always try to facilitate partnerships to move that forward.
It’s starting to happen. We recently funded two organizations in an interesting collaboration. Network for Good, an online marketplace for nonprofits, provided the financial functions so that someone looking at a nonprofit on GuideStar could make an online donation directly to that organization. Here’s an example of two organizations offering different services coming together to make each other more effective.
This is exciting work. The stakes involved are huge. The success of the nonprofit sector is so closely tied to the success of the society as a whole.