Leslie R. Crutchfield, John V. Kania, Mark R. Kramer (Jossey-Bass, March 2011)

Leslie Crutchfield believes donors can effect transformational change. Having studied how several nonprofits scaled their impact from nothing to national—and sometimes even to global—Crutchfield gained a pretty good sense of how they achieved success. A key component of ramping up impact, she learned, is effective advocacy. When donors go beyond grantmaking and get their hands dirty engaging in activities that create change, says Crutchfield, the result is “catalytic philanthropy.” Thanks to help from 21/64, Dori Kreiger, Managing Director of Family Philanthropy Services at the Council on Foundations, sat down with Crutchfield to discuss her new book, Do More Than Give: The Six Practices of Donors Who Change the World, and the sector’s latest buzzword.

After the success of Forces for Good, what inspired you to take on this latest work, Do More Than Give?

The essential driving question of Forces for Good was: What makes great nonprofits great? We studied 12 nonprofits that had scaled their impact from nothing to national to sometimes even global. Forces for Good was released in 2007, and in the subsequent three years I was invited to present to diverse groups of nonprofit leaders and donors about our findings and was often asked how to apply the principles in Forces for Good. At the time, I advised them to use of the six practices of high-impact nonprofits as a framework to inform grantmaking.
However, I realized that donors could do more than fund great nonprofits. They could embrace these six practices we discussed in Forces for Good, including advocacy—but I didn’t know of a lot of foundation examples. Then I read Mark Kramar’s article, “Catalytic Philanthropy,” in the Stanford Social Innovation Review, I thought, ‘this is it.’ Catalytic philanthropy is high-impact donors doing the highly leveraged work that the great nonprofits do in Forces for Good. I was discussing with Mark Kramer and John Kania of FSG various collaboration opportunities, and it was a natural fit to co-author Do More Than Give: The 6 Practices of Donors Who Change the World.
“Catalytic philanthropy” seems to be the latest buzz phrase in the sector. How do you define it?

At a high level, “catalytic philanthropy” is what donors do when they go beyond grantmaking to engage in the activities that create transformational change.
The term “catalytic” comes from chemistry. It is the idea that adding a catalyst to a substance will create a change. If you mix a cup of flour with a cup of baking soda and add some water, you get about two cups of pasty stuff. If you combine a cup of baking soda with a cup of vinegar—kaboom! Combining these ingredients with a catalyst produces something that is different–and of much greater volume—than what you started with.
Catalytic donors give money and when combined with the actions they engage, they create more impact than if they were just giving grants. It enables the donors—including those that would consider themselves smaller donors, as profiled in the book—to achieve greater impact. It’s how they punch above their weight.
How have you seen multigenerational engagement in family foundations strengthen a family’s ability to be catalytic philanthropists?

Multigenerational family foundation leadership can cut both ways. Engaging multiple generations can either increase a family foundation’s ability to be catalytic or work against it. It really depends on the family. For example, multigenerational engagement is what tipped the Jacobs Family Foundation into exercising catalytic philanthropy, as they combined first-generation business know-how with second-generation community development experience to revitalize the Diamond District community of San Diego.
In the book, we write about this in “Practice 4: Empower the People.” Catalytic donors don’t view community members as ‘recipients of charity’ or ‘a problem that needs to be solved.’ Catalytic donors recruit people from the local community to both create solutions and be part of implementing solutions. The Jacobs Family Foundation has a distinct approach of working directly with local residents to uncover community needs, rather than making top-down grants.
The Jacobs family also worked with the community to exercise another best practice in the book, “Practice #2: Blend Profit with Purpose.” The Foundation harnessed market forces to advance social goals. Rather than find nonprofits serving the area and make grants to them, the Foundation instead purchased a piece of land with an abandoned aerospace factory on it, and developed a commercial enterprise zone that today provides a vibrant economic center for the community. Board members listened and helped give local residents what they said they truly wanted: a bank, restaurant, and grocery store.
How could a Next Gen family member influence a shift in his or her family’s philanthropy from the traditional linear model of philanthropy to a catalytic philanthropy approach?

Next Gen members can ask questions of themselves and the foundation board such as: How can we leverage the family’s network to advance a policy’s goals? How are we using the 95 percent of endowment assets that we keep after the 5 percent payout? Is our investment policy working to advance our philanthropic goals? Most importantly, what cause can we get behind with older generations?
As the book’s authors, we don’t believe that every single one of the foundation dollars must go toward catalytic philanthropy—but we would like to see a greater percentage of resources allocated toward it.
Evaluating and measuring impact are indicators of success in the linear model of philanthropy. How do you know you’re succeeding with a catalytic philanthropy approach?

The way we talk about success is that we need to move beyond a retrospective evaluation mindset. Catalytic donors instead embrace a forward-looking, learning mindset, as encapsulated in “Practice 6: Learn to Create Change.” We found that catalytic donors measure the impact of grants and nongrantmaking activities in a forward-thinking way. They ask, How can we learn from the last period of activity to inform our strategy going forward?
A great example of this practice comes from the Bill & Melinda Gates Foundation about its Sound Families program. A decade ago, the Foundation had launched a major initiative to give grants and create transitional housing for homeless families in the state of Washington. At the end of the grant period, after building thousands of housing units of housing, Foundation staff thought they were done. And yet, they weren’t done. The Foundation achieved impact against the specific grant objective but had failed at the overall outcome of reducing homelessness, as homelessness had increased in the area. So Gates Foundation staff changed their strategy, gearing it to affect the whole outcome of reducing homelessness, not just the specific issue of transitional housing. Now Gates is taking the catalytic approach by making grants and helping all of the players in the system to work together better in the region to effect change.
Catalytic donors demand that they and their grantees are outcome focused.
What surprised you when writing Do More Than Give?

The hardest thing for catalytic donors turned out not to be any one of the “six practices of donors who change the world,” but rather, getting committed to a cause.
Committing to one cause can be particularly difficult for family foundations. As you engage more generations in a family foundation, you naturally increase the complexity of a family foundation’s decision-making process. Multiple generations may mean different geography, different politics, different interests, and more. Multiple generations make it harder to be catalytic. Catalytic philanthropy is rare because it’s difficult for a combination of generations to be willing to find and commit to one common cause. And yet, it is possible and the book highlights examples of those who we hope can inspire others.