Stories in philanthropy

Why foundations can afford to fail often and badly: Diana Leat

World-renowned philanthropy researcher, Dr Diana Leat, says it’s time philanthropy challenged the media narrative of immediacy in response to natural disasters and emergency events. She cautions philanthropic foundations to beware of the danger of being “permanently successful” and ardently believes philanthropy’s greatest asset isn’t the money, but its ability to go faster than public opinion.

Nicole Richards, November 2018

The practice of philanthropy around the globe may have plenty of regional nuances, but esteemed London-based philanthropy researcher and author, Dr Diana Leat, has seen many parallels, particularly when it comes to disaster responses. 

“It’s interesting,” Leat says. “On the morning I landed in Australia, I picked up a newspaper at the airport and there was an article about how the CWA [Country Women’s Association] was being criticised because they weren’t getting the charity money raised for the drought out the door quickly enough,” Leat says.

“There is this expectation, that I think is largely whipped up by the media, that when you give, it’s a case of a dollar in and a dollar out. That you give your money and it immediately goes on something like a conveyor belt and gets transferred to the people to whom you’ve given it.”

“Of course, it cannot be like that, but the media put enormous pressure on fund distributors: ‘Why are you sitting on this money? You raised $5 million, so why have you only distributed $3 million?’

“You’ve got to be fairly thick skinned to resist that sort of pressure, and it can be damaging to the distributing organisation’s reputation if people think they’re being slack or slow.”

Leat, who was in the country for a series of events presented by the Australian Centre for Philanthropy and Nonprofit Studies (ACPNS) and Philanthropy Australia, has written extensively about philanthropic practice, most recently in the book Philanthropic Foundations, Public Good and Public Policy (2016). She is a board member of The Blagrave Trust and was a trustee of the Diana, Princess of Wales Memorial Fund until it wrapped up its operations in 2012. Leat has recently undertaken a review of grantmaking in the aftermath of London’s four terror attacks and the Grenfell disaster, the report of which is forthcoming later this year.

One of the key themes from the review is the issue of immediacy and urgency, both of which are heightened in today’s hyper-connected world. 

“I think we need to start challenging this narrative of immediacy,” Leat says. “We need to have a more sophisticated discussion about what the funds are for and explain that it takes time to distribute the money responsibly and well.”

“One of the major differences in the issues of giving and distribution from the London bombings in 2005 and the Grenfell fire in 2017 was that in 2005 social media existed but didn’t have the significance it has today,” Leat continues.

“Before the Grenfell fire, there were only three organisations that had Grenfell in their name. Within weeks of the fire, there were 200-plus organisations with Grenfell in their name. It was a media explosion.

“Many of these were average people who had set up fundraising platforms and raised crazy amounts of money but had not considered what on earth they were going to do with the money and how they were going to distribute it.”

Chief among the complexities of disaster response philanthropy, Leat says, is the fact that the situation is unfolding in real time, with myriad variables.

“In the early stages of disaster response, you don’t know how much money you’re going to raise, and you don’t know how many people are going to be likely recipients,” she says.

“You’ve got no information about supply and very little information about demand.”

“It is important to not have a hugely bureaucratic set of hurdles to climb over, but you do need some due diligence and checks.”

“Another tension of course is where there are issues of death and bereavement,” Leat continues.

“It’s a very sensitive issue to be offering people money and they don’t necessarily want to acknowledge that the person has died, or they don’t want to be taking money so soon. It can seem as though you’re offering them money to make up for the fact that someone has died, when clearly it won’t.

“Sometimes, to suddenly receive very significant sums of money when you barely know what day of the week it is, it’s not very helpful. It’s not money that you need at that moment, but it probably will be needed in six months or a year or two years’ time. So, yes, it’s important that people’s immediate needs are met, but after that there isn’t necessarily such a rush.”

Leat believes philanthropy’s true potential for impact lies in its ability to criss-cross sectoral borders and take action that may be well ahead of popular opinion. Achieving that potential also requires a staunch willingness to fail.

“My mantra in relation to endowed foundations is that their money is relatively tiny compared with overall public expenditure,” Leat says.

“It’s not their money that’s their greatest asset it’s their independence and their knowledge – their soft assets. Endowed foundations need to be identifying those things that only they can do, the things that businesses can’t do because they have to please shareholders and customers and they can’t go too much faster than public opinion.

“Politicians certainly can’t go much faster than public opinion. Fundraising nonprofits also have to keep their funding base, their donors, happy.

“So, that leaves the endowed foundations to put their heads above the parapet and try the really difficult things that probably will fail actually, but foundations can afford to fail. Politicians can’t afford to fail, and business can’t afford to fail.”

“As long as foundations are not completely screwing up their investment, they can afford to fail as often and as badly as they need to.”

“If we, in philanthropy, want to be permanently successful and permanently having an impact, then we’re never actually going to try anything truly difficult.”

 

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