Letter from Steve McCormick
To Change the Game
September 25, 2012
In my last few letters I've shared some thoughts on risk, collaboration and progress through failure--particularly about what those concepts mean to a private foundation. Tying all of my letters together is my central belief that that our foundation should be acting as a changemaker, not simply a grantmaker. Gordon and I were recently invited to provide a short essay for a booklet published by the Silicon Valley Leadership Group, entitled "Game Changers." You can see the booklet here: http://svlg.org/wp-content/uploads/2012/09/GameChangers2013_Digital.pdf, and the full text of our piece is below. Our essay captures our shared belief in the powerful role that philanthropy can play in turning bold ideas into lasting change, across the spectrum of critical social issues.
By Gordon Moore and Steve McCormick
excerpt from the Silicon Valley Leadership Group’s “Game Changers 2013”
The landscape of private philanthropy has expanded quickly and substantially over the past decade, despite lingering economic malaise. As one indicator, the number of foundations in the United States alone rose from 56,000 in 2000 to almost 100,000 today. The dramatic growth in philanthropy is projected to continue, not just in the U.S, but around the world. At the same time, the ability, responsiveness, and willingness of governments and other public institutions around the world to address critical social issues is diminishing substantially, while many social issues are becoming more global, complex, and potentially catastrophic in their consequences.
Meaningful, lasting solutions to seemingly intractable problems will not come from traditional actors, and they won’t come through incremental change. We must test bold new ideas, move with a sense of urgency, and engage multiple stakeholders to tackle major social problems. The times call for philanthropy not only to step up but to step out, to shift from being charitable (doing good) to asserting leadership (changing the game) in igniting and supporting efforts to effect breakthrough solutions.
Philanthropists are uniquely positioned for this. They can:
- Act fast, striking “when the iron is hot.” Quick-strike capital can be as important as patient capital. It is often highly catalytic, not only stimulating others to take action, but also fueling focused attention.
- Take risks, supporting unorthodox—but well-conceived—ideas and approaches that public entities and private investment capital won’t fund.
- Be persistent, staying with an issue for the long haul. “Patient capital” is essential to take on big, complex, significant problems.
To become game-changers, however, philanthropists must reconsider some long-held conventions. For example, they must:
- Think in terms of making investments, not donations. Investors seek outcomes, continuous improvement, and lasting results.
- Seek to be changemakers, not simply grantmakers. Philanthropists have valuable strengths and assets in addition to capital. For example, they can provide the expertise, connections, influence, advocacy, and the credibility and neutrality to incentivize stakeholders to work together.
- Be agile—willing to “fail fast,” and to learn and adapt quickly.
- Reframe what constitutes failure in philanthropic investing. In conventional investing, failure means loss of capital or a less-than-desired return, but for philanthropy, failure is—paradoxically—not enabling grantees to take well-conceived risks.
- Use meaningful measures. It’s difficult to chart progress in the not-for-profit sector. Measurement requires creativity, coupled with discipline, to establish the right indicators—qualitative as well as quantitative. But, as the saying goes: “if you don’t know where you’re going, you’ll never get there.”
- Align with others. No philanthropist alone, not even Bill Gates, has the resources and reach required to move the needle on our most pressing problems. Philanthropists must be willing to find—or be found by—the right partners to make meaningful progress on big issues. This may mean working with a range of actors across multiple sectors. In some cases, this may even require funders to follow, rather than lead.
The new mindset required for higher impact philanthropy defines the ethos of Silicon Valley, a place where vast wealth will continue to be generated for a long time to come. Our community is poised to be the vanguard for philanthropy and to become a truly game-changing force, creating solutions to our most critical social problems.
Steven J. McCormick
President, Gordon and Betty Moore Foundation