The Effective Philanthropy Learning Initiative

Background

The Effective Philanthropy Learning Initiative was borne of two explorations aimed at better understanding High Net Worth (HNW) donor motivations and behavior:  a Hewlett Foundation-sponsored fellowship and a collaborative case study developed by Stanford PACS and the Raikes Foundation.  At the conclusion of the case study, Raikes elected to fund the launch of the Effective Philanthropy Learning Initiative to run a series of experiments further testing our initial hypotheses about donor behavior, engaging sector partners, and identifying scalable interventions to increase strategic behavior among HNW donors.

Hewlett Foundation-Sponsored Fellowship

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Screen Shot 2016-03-06 at 9.40.21 PMFrom 2014-15, with support from the Hewlett Foundation, the
Stanford Center on Philanthropy and Civil Society (Stanford PACS) launched a year-long research project aimed at integrating human centered design (HCD) and strategic planning for foundations and nonprofit organizations. From September 2014-August 2015, Nadia was the Walter and Esther Hewlett Design Fellow at PACS, working in partnership with Paul Brest.

While HCD has its roots in designing better products and experiences for users, we began with the hypothesis that foundations and nonprofit organizations could integrate the tools of HCD with conventional strategic planning to achieve greater social impact. We focused on how understanding the needs of beneficiaries and other stakeholders through ethnography could help frame a foundation’s goals, and how brainstorming, prototyping, and testing possible solutions could help develop sound strategies.

Over the course of the initiative, we collaborated with the Raikes Foundation in Seattle and Guidestar in San Francisco on two separate case studies.  We have summarized the Raikes Foundation case study below.

Raikes Foundation Case Study

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The collaboration between Stanford PACS and the Raikes Foundation (RF) arose shortly after RF began to consider how to increase the “strategic behavior” among high net worth donors – raising the impact and effectiveness of their philanthropy. The Raikes Foundation is the family foundation of Jeff Raikes, former CEO of the Bill and Melinda Gates Foundation and former President of the Microsoft Business Division, and Tricia Raikes.

 

OBJECTIVE

Jeff Raikes wanted to understand the opportunities to facilitate more strategic philanthropic behavior among High Net Worth (HNW) Donors. He felt that a significant portion of resources given away through “retail-type, checkbook philanthropy” were not being used effectively. As an output of this learning partnership, he and the RF hoped to glean insights on potential opportunities to fund, facilitate, or create interventions to promote higher impact, more strategic behavior among HNW Donors. At the outset of this partnership, the Foundation had completed a landscape analysis and basic background research and interviewed several experts.

PROCESS

We engaged in this case study from January to August 2015. We began this case study with the following guiding question, How might we help high net worth donors practice more effective philanthropic behavior? Integrating design thinking methodologies with traditional strategic planning and systems thinking processes, we created a typology of donor behaviors, evaluated trends and opportunities in the existing marketplace of donor-facing resources, built and tested prototypes of interventions, formed critical partnerships with existing stakeholders for future experimentation, and made a final set of strategic recommendations for the Foundation to carry forward.

Ethnography

Process

We began our process by engaging in ethnographic interviews with our targeted beneficiary: high net worth donors (defined as those with ability to give in the high six figures annually). During these interviews, our goal was to understand not only what was motivating their philanthropic decisions, but what other values, beliefs, or factors might be influencing their behavior. We were curious about the lifecycle or journey of a donor, and what particular moments or trends might emerge as significant across a breadth of donor stories. We spoke with upwards of 35 donors, seeking a range of those extremely strategic and less so, those with an appetite to be more effective and those content with their practice, those actively engaged in existing resources and those “invisible” to the sector.

We also used this ethnographic approach to interview experts, stakeholders and Jeff himself. Rather than a traditional “expert interview” in which the person is interviewed solely for their expertise and opinions on the topic at hand, we also sought to understand their motivations and values. What frustrated them most about working in the field? What made their best days, and their worst? This helped us to better comprehend their theories of change, identify alignment and potential partners, and navigate the complex dynamics and relationships inherent to a field as small as that of donor education.

Synthesis

Taking the qualitative data from nearly 50 interviews, we looked for trends and patterns, isolated specific needs and visualized the trajectories of different donor life cycles. Mapping out the existing landscape of resources, we identified gaps in the donor-education market and compared them with those that emerged from the ethnographic interviews.

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Refining the target user and desired behavior change

We refined the initial target market, focusing on donors with an expressed appetite for more strategic behavior and included donors earlier in their careers or giving journeys. We also worked to clarify “strategic behavior”, and began by using the baseline of effective donor principles and practices as outlined previously by the Donor Education Network (DEN).

Creation of donor archetypes

Most existing categorization of donors has been based on asset base, amount of philanthropic contributions, gender, age and career – classifications that told us little about their motivations or how they made individual donors make their decision. Based on the narratives we collected, we began developing a series of donor archetypes. These connected characteristics such as their views on legacy, their preferred methods of learning, whom they looked to for guidance, their fears and views on risk.  Below is an initial overview of those archetypes, which the Effective Philanthropy Learning Initiative will continue to revise and refine.

writing checksCheckbook Philanthropist

Donors who may be generous but are largely reactive in their giving. They have not articulated or selected a problem they are trying to solve with their philanthropic work. However, at this moment they are content with their practice of giving. They have not articulated or selected a problem they are trying to solve with their philanthropic work.

light bulb

Personal Strategy Wrestler

Philanthropists who lack a strong network of philanthropic peers or advisors but are hungry for a way to workshop and get feedback on their personal strategy.

Question Mark

Active Seeker

Curious, voracious consumers of knowledge who are early on in their philanthropic careers. They are trying to source the landscape to understand what resources they may invest more time or money in for their education further down the road.

huddleHuddler

Huddler Donors who have identified an issue area of importance to them, are actively thinking about strategies for that area, and are hungry for insights on their issue. They want to collaborate intellectually with others working on the same problems.

ToolboxDo It Yourself-er

Tenacious donors early in their philanthropic careers who view philanthropy like an engineering problem. DIYers are looking for applicable tools to assist them in developing their own decision-making structures. They are approaching philanthropy from a “build-to-learn” perspective and want to be able to apply some rigor to their work.

brainstorming

Investor

Data savvy, risk-experienced donors with careers as financial professionals, who want to make calculated bets on organizations that are striving for impact..Many are looking for “signalers” to follow.

Our interviews also included a number of millennials, for whom we begun to create some preliminary archetypes. These include some younger HNW donors who have the capacity to make significant philanthropic contributions today, and also some who are likely to have significant resources in the near future. We believe that a strategic investment in their learning process now may lead to a more outcome-oriented life-long philanthropic approach. Our preliminary archetypes for millennials include:

  • The lonely family philanthropist – A relatively young person who has been charged with administering the family’s philanthropy earlier than expected, and may not feel they have full agency because of the need to fulfill the original donor’s intent.
  • Slow-burn employee – Employee at a successful tech company who is accumulating significant resources; does not self-define as a philanthropist but desires to be charitable.
  • Nickels to Millionaire – First generation entrepreneur who will gain significant wealth overnight by selling her company. Has not previously thought about philanthropy but urgently wants to decide on a tax-beneficial philanthropic structure.
  • Culturally obligated entrepreneur – Expat engineer (for example from countries like India or China) turned entrepreneur with strong cultural and familial obligations back home, who wants to give but is more risk-averse.
  • Financial bet maker – VC/finance millennial who is now financially and professionally secure. She thinks in terms of portfolios, and is comfortable making bets, but doesn’t know where to make the right bet in the social sector and doesn’t have time to do research.
  • Risk-taking serial entrepreneur – Experienced serial entrepreneur who has a high appetite for risk because he can always just start a new company. Feels confident in his ability to solve a social problem and then move on.
  • Bootstrapping engineer entrepreneur – Engineer-turned-entrepreneur who sees a problem and approaches it systemically as an engineering problem with a mixture of humility and self-confidence.

Ideation

For each of our donor archetypes, we formulated a series of “How Might We…?” questions that reframed the problem through the lens of that donor’s specific needs. For example, “How might we make philanthropy feel more Do-It-Yourself?” These “How Might We’s” were used to brainstorm potential solutions.

Design take 2             ideation

Prototyping and Testing

We created a series of low resolution prototypes, mostly in paper and in app and website mock-up tools, and brought them to donors and stakeholders. Testing concepts built from basic materials allowed us to invest limited resources and time and iterate quickly. Each prototype was targeted at a specific donor type, but we tested across donor types to refine and revise our archetypes. We used the prototypes to ask more probing questions about values, behaviors and interests.

strat prototype

CASE STUDY INSIGHTS

There is demand

There is demand from donors for education and resources on impact-oriented philanthropy, although the extent of that demand is still unclear. HNW donors are looking for information and resources readily applicable to their own philanthropic goals, rather than general frameworks. They seek information that is appropriate to the scale of their philanthropy rather than that of foundations with large staff and considerably more resources.

A disorganized, mis-targeted landscape

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The resources currently available to assist high net worth donors in practicing effective philanthropy vary widely in quality, are poorly organized, and are not readily accessible to HNW donors. Donors are not aware of existing resources or find them too generic to suit their particular goals or too “academic.”  There is no place that has aggregated or organized the existing materials (books, articles, MOOCs, conferences etc.), and as a result donors can’t seem to find what they are looking for. The resources that do exist are mainly targeted at large, staffed foundations and feel inaccessible to individual donors or small foundations. Lastly, with the lack of organization donors have no sense of how materials fit into the most current discourse.

Lack of visible sector leaders

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Most donors could not identify major leaders in the sector, like they could for other sectors. Apart from a small circle of practitioners and academics, donors were unaware of the current discourse and the relevant thought leaders. Standards have not been widely or publicly set for the practice of effective philanthropy.

Need to Connect and Share Lessons in the Donor Education Sector

Organizations currently in this space rarely share learnings publicly or coordinate efforts to expand the market. The experts we interviewed were willing to collaborate in this learning process, and interested in future engagement.

Need to design solutions that are more user-facing

Many available resources are leading with the dissemination of information, and are not taking into account the user experience with that information.  In testing our prototypes, we extrapolated a series of design principles for products and services targeted at different donor archetypes. We believe these principles, leveraging nuanced understandings of trust, the definition of peers, and the validation of rigor, among others,  will guide successful interventions.

CASE STUDY CONCLUSIONS

This case study proved to be effective in two ways:

  1. We discovered insights about high net worth donor behaviors, and promising insights around tools and resources that could help these donors increase their philanthropic impact,
  2. The case proved that using design thinking as a strategic planning tool can be beneficial to a foundation’s process of clarifying its target user, the desired behavior changes, and different ways to accomplish that goal. The end of the case study includes Jeff Raikes’ reflections on the value of using design thinking as a strategic planning tool for a foundation.

The full case study includes details about the final strategies recommended to the Raikes Foundation.

Raikes Foundation Case Study

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