Can Failure Be the Key to Foundation Effectiveness?

Philanthropic failure – when there is clear evidence that a project, a program, a strategy or any combination of foundation investments designed to achieve a goal doesn’t work –  is beginning to gain a critical mass of attention.  From Annie E. Casey’s New Futures program to more recent examples from Irvine, Hewlett, and Gates, foundations are sharing what they have learned about things that didn’t work.

Scholarly books – by Joel Fleishman, Paul Brest and Hal Harvey, and Peter Frumkin comment on the value of failure.  Indeed, Fleishman devotes an entire chapter to how foundations fail and why it is so important to make sure the public knows about the failures.

Bloggers, notably Sean Stannard-Stockton on Tactical Philanthropy, have been keeping the drumbeat going about the importance of failure to philanthropy.  And my own foundation, Robert Wood Johnson, recently expanded the number of examples by publishing four chapters about numerous failures in its latest Anthology (Full disclosure – I authored one of those chapters and have drawn on that work in this series of CEP posts).

Review of the many RWJF programs that failed in one way or another produced four broad categories of failure:

• Difficult environment
• Strategy or design flaws
• Faulty execution
• Inability to adapt in a timely fashion

Why is failure valuable?  A principle reason is that it promotes organizational learning.  Foundations can get better at achieving their goals by understanding what happened when they tried and didn’t achieve their goals.  Like “after-action reviews” in the Army, carefully looking at past performance improves future performance.

Another value is that failures produce important learning for the field.  Almost no foundation is alone in its aims; others can take lessons and build on the mistakes.  To do that, reports of failures must go beyond noting that an initiative failed to explain why it failed.

Gates, for example, has laudably commented in several venues about the disappointing results from their investments in small schools.  Further information that explicated the logic for investing in small schools in the first place, and what they have learned from their investments relative to that logic, would go a long way to promoting more refined investments in school improvements – perhaps, under certain circumstances, even in certain types of small schools.

In a broader framework, sharing failures can also build trust for foundations – with grantees, stakeholders, and the public.  A foundation that is honest about things that don’t work establishes a basis for receptivity to honest communications about successes.

Given the benefits of openly sharing failures, it is reasonable to ask why reports of foundation failures have been infrequent.  One possibility is that foundations are ashamed or embarrassed by their failures.

Brest and Harvey in their book Money Well Spent note it may be not that foundations want to hide their failures so much as foundations don’t spend enough on evaluation, so they don’t know if they have failed.  Neglecting to invest in evaluation coupled with a lack of clear goals (mentioned in a previous post) to use as yardsticks for performance in the first place make failure, or success, impossible to judge.  In this view, the paucity of reports of foundation failure arises from the absence of an organized way to know much about performance at all, beyond impressions and examples.

By focusing on failure, a foundation is forced to have the goals and the measurement needed to assess performance, whether it is failure, success, or – much more often the case – something in between that can form the basis of learning.  When failures are able to be detected, there are other reasons they are difficult to publicize.  Failures involve people, institutions, and reputations that may be harmed through full disclosure.  Failures have the risk of jeopardizing future funding.

And failures can puncture deeply held beliefs about what works and why in bringing about social change.  They can generate conflict and disagreement among people with common aims and values.  So failure can be beneficial, but the learning and benefits to be garnered by focusing on failure are not without risks and potential hardships.

Failure is in one sense an indication that the strategic work that many foundations espouse to is very different in character from charity.  The term philanthropy is an umbrella that covers the full range of giving.  Perhaps one way to distinguish the two, and thus be able to judge effectiveness, is to ask if the philanthropic giving could fail.  If it is not possible to fail, it is not possible to judge effectiveness.

Bob Hughes is an independent consultant on strategy and organizational learning in health and philanthropy.

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Disclaimers and Disclosures: The views expressed in the CEP blog by guest bloggers are entirely their own and do not necessarily reflect the opinions of the Center for Effective Philanthropy.

Posted in	Assessing Performance
Tags	communications, foundation transparency, grantee relationships, Hewlett, Irvine, Joel Fleishman, learning from failure, strategy, Tactical Philanthropy, trust

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