The Six Practices of Donors Who Change the World

Practice #1: Advocate for Change

Advocacy is an uncomfortable concept to many donors, and it is restricted in numerous different ways by governments around the world. But system-wide change is rarely achieved without a range of advocacy efforts, including raising awareness and educating the public on the issues, as well as directly lobbying.. Donors who eschew these tactics miss an important opportunity to advance their cause.

Practice #2: Blend Profit with Purpose

Until recently, large companies, private foundations, and wealthy individuals typically avoided mixing business with charity, while the recipients of charity saw philanthropy as their only source of potential revenue.  But some of the world’s leading corporations are finding that they can do more good through their core business activities than through their philanthropy or corporate social responsibility programs.    Foundations are even finding ways to invest their endowments that yield market-rate returns while furthering their social objectives.  Across both the nonprofit and for-profit sectors, catalytic philanthropists are learning to tap into the power of business as an engine for advancing the greater good.

Practice #3. Forge Nonprofit Peer Networks

Instead of focusing on a few grantees, donors are in a unique position to see needs across entire fields and build alliances and foster collaboration between nonprofits that otherwise would be locked in a competitive cycle pursuing independent strategies as they vie for scarce resources. It’s popular today for funders to say they “partner” with their grantees, and almost every donor participates in some form of information-sharing and cooperative behavior. But what these congenial convenings lack is the force of mutual accountability that comes when funders and nonprofits alike hold themselves and each other responsible for larger outcomes they seek to achieve, and funders “give power away” by sublimating their own ideas to the goals of the larger network. Catalytic donors understand the power of collective impact: They see the forest despite the trees.

Practice #4: Empower Individuals

Listening to stakeholders turns out to be a powerful vehicle for change – not only because of the ideas that emerge, but because it helps people figure out answers for themselves.   Catalytic donors don’t just treat individual community members as “recipients of charity.” They instead view individuals as essential participants in the process of solving the problem for themselves. They solicit individuals for ideas and involve them in campaigns to build political will, organizing them on the ground to create change at the neighborhood, regional, national or global level.

Practice #5: Lead Adaptively

To work effectively across all sectors of society—government, business, nonprofit and individuals—catalytic donors must learn a rare, critical leadership skill: The ability to perceive changes and opportunities in their environments orchestrate— and subtly but persistently—the activities of key players to advance their causes. The key to success is rooted neither in donor personalities nor in the fact that donors hold the purse-strings. Catalytic donors are inordinately influential—not because they hold the formal authority afforded to elected officials or the CEOs of foundations and corporations—but because they are adaptive leaders.

Practice #6: Learn to Create Change

Catalytic donors are obsessed with measuring and evaluating their own performance—as well as the effectiveness of their grantees. This sets them apart from most donors, who rarely bother to invest in evaluations, let alone read the year-end reports their grantees submit. But catalytic donors don’t conduct “evaluations” in the conventional sense of the term. They are less interested in receiving reports on past progress and more interested in building systems that enable them and their grantees to learn about what’s working and what needs to be fixed in real time in order to advance a cause. As a result, they build learning organizations.