Stories in philanthropy

‘The power dynamic is not real, it’s a creation that becomes real only because everyone wants to believe it’: Larry Kramer

Larry Kramer, President of the Hewlett Foundation and keynote speaker at the upcoming Philanthropy Australia National Conference, disputes many of the prevailing narratives about philanthropy. He’s spoken out against big bets, impact investing and risk; rejects the notion of an unalterable power imbalance between funders and grantees; and doesn’t understand why anyone would find it difficult to talk about failure. Fasten your seatbelts.

Nicole Richards, August 2018

 

Larry Kramer Hewlett FoundationThe William and Flora Hewlett Foundation, established in 1966 by the Hewlett-Packard Company co-founder, is one of the largest philanthropic funders in the US, with grants exceeding $400 million in 2017.

The Foundation directs its efforts across multiple funding areas: advancing education, preserving the environment, improving lives and livelihoods in developing countries, promoting health and economic wellbeing of women, supporting performing arts, strengthening Bay Area communities and making philanthropy more effective.

The Foundation’s President, Larry Kramer, who will make his first visit to Australia next month to take part in the Philanthropy Australia National Conference, took up the role in 2012. Prior to joining Hewlett, Kramer, like his predecessor, Paul Brest, was dean of Stanford Law School. The philanthropy learning curve, Kramer says, was steep.

“Even though I knew a lot about the Foundation because of my relationship with Paul, when I got here I discovered philanthropy is a lot more complicated than I’d understood it to be. I think that’s true for a lot of people coming into philanthropy - you quickly learn that it’s not going to be easy, that poverty isn’t going to be solved quickly or easily by bold, new, innovative ideas.”

“There’s no one right way to do philanthropy,” Kramer continues, “but there are wrong ways.”

“I think we have to resist the faddish notion that we can use quick infusions of lots of money to disrupt things and produce quick outcomes and impact. Instead, we need to find the big problems that philanthropy can uniquely work on. These are invariably complicated, with embedded systems of conflicting interests. The only way to make progress on problems like that is to become part of an ecosystem and work patiently within it.”

“We also have to be realistic about what we can do - our resources are still miniscule on the scale of the problems we work on. Philanthropy is not going to eliminate global poverty or solve racism, and it is hubristic to talk as if we will. But we can meaningfully contribute to their reduction.

“A lot of conversation in philanthropy gets goofy when there’s talk of preposterous goals that are going to be achieved in preposterous ways.”

Writing in the Stanford Social Innovation Review, Kramer has taken a stance against big-bet philanthropy, and he’s not fond of impact investing by large grantmakers either.

‘Risk’ is another point of contention.

“I think that starting with some notion that we must take risks is starting at the wrong end of things,” Kramer says. “We should start with our problems. We should pick problems that seem worth working on and ask ‘Can we make headway on this?’ If the answer is ‘yes’ then we should pursue it as best we can. The notion that you ‘should’ do something riskier just because it’s risky - I don’t get that.”

Kramer sees no need to shy away from controversy and regards philanthropy’s freedom from accountability to shareholders or constituents as a unique opportunity to contribute to civil society’s conscience.  

“Lots of foundations are scared of criticism or being talked about in the press or politically, and I don’t understand that either,” he says. “We’ve worked on issues like abortion and climate change long before they were politicised, and the criticism for doing that doesn’t bother me for an instant, nor should it. We can’t control the fact that other people choose to make this a political issue. Our reasons for working on it haven’t changed.”

The current political environment in the US has presented the Hewlett Foundation with many opportunities to publicly reaffirm its commitment to issues such as climate change. The Trump Administration’s efforts to roll back clean car standards was a recent example which prompted the Foundation to produce a public statement.

Kramer says navigating these unprecedented challenges requires a big picture outlook and keeping staff focused on the long view.

“I gave a talk to the staff after the election and said that, putting aside whether they voted Democrat or Republican, our work is our work and we could not ignore the new Administration. Our country had elected a climate denier, a person who was against family planning and abortion, and didn’t believe in conserving our inheritance from nature.

“I reminded them that you don’t actually come into this work for the outcomes you can produce. Of course, you want to do as much as you can, but it’s subject to a million things outside your control. You have to do as much as you can and be satisfied with that. We’re in this for the long run as an organisation.”

 

 

 

The issue of influence

When asked how the Hewlett Foundation offsets the power differential between itself and its non-profit partners, Kramer is forthright.

“The power dynamic is not real, it’s a creation that becomes real only because everyone wants to believe it,” he says. “The fact is that we need grantees as much as they need us.

“Let me give you an example. If I were to build a house, I’m going to need to hire an architect to build it. Sure, I can fire the architect if I don’t like his or her work, but I picked that architect because I thought they would do the best job. If I have to pick someone else, it is presumably someone I don’t think will do as good a job. So why would I be a thin skinned prima donna who will dump the person I need on a whim?”

“We both know we’re not going to accomplish our goals if we don’t have an honest partnership,” Kramer says.  

“That means supporting grantees in whose work we have faith and then letting them do the work. Seventy per cent of our grants are unrestricted operating support so we’re not tying them down.”

Philanthropy’s reluctance to talk about failure is another point of contention for Kramer.

“In philanthropy it’s hard NOT to talk about failure,” he says emphatically. “The only thing that makes it seem hard to talk about failure is how much time we spend talking about how hard it is to do. It’s self-created like the power dynamic. For me, it’s like going into a room and screaming, ‘Don’t panic!’ That’s a sure way to create panic.”

The Hewlett Foundation has long been an advocate for greater transparency in philanthropy. One of the organisation’s guiding principles is a commitment to openness, transparency and learning. Every five years, each of the Foundation’s program areas undertake a critical review of grantmaking strategies. In 2018, Hewlett’s education program is spending the year listening to what has worked and what it could improve. Social media posts use the hashtag #HewlettListens.

“Every one of our strategies has to have ongoing evaluation built into it,” Kramer explains. “It’s not about doing evaluation ‘later’ but thinking from the start about what you need to know. Every strategy has implementation markers we can track as we go along.

“We do a mini refresh at the two or three-year mark and then the formal refresh every five years for the board which uses an external third-party evaluator to do the review. For us, strategic philanthropy means three things: a clearly articulated goal; an articulated story about how it is you think you’re going to achieve that goal; and a reasonable way to track whether you’re in fact getting there.”

In order to “avoid hypocrisy” in its advocacy for more effective philanthropy, the Hewlett Foundation created an Effective Philanthropy Group, which, Kramer says, has “worked really well” to ensure internal practice matches external exhortations.

Though recent commentary in the US has suggested philanthropy has unchecked influence which could be used to undermine the democratic process, Kramer is quick to reframe the argument.

“It’s not that philanthropy has too much influence,” he says, “it’s wealth.

“People with lots of money have more influence than those without wealth and that’s absolutely true.

“Philanthropy does a whole lot of things that are really important and wouldn’t get done otherwise. It’s important for us to keep our eyes on what that means, filling those holes that aren’t going to be filled by government or business, and making sure the sector is pluralistic and experimental.

“That’s where transparency fits. We need to be open to critics, showing people what we’re doing and hearing back from them about whether it might be the wrong thing to do.”

One commonly held belief that Kramer does support is the need for greater collaboration in philanthropy.

“Too many funders want to find their own little niche,” he says. “It’s wrong to think about this in terms of ‘What’s my organisation doing that no one else is doing?’ We’ve got to think about it in terms of the field. For example, on an issue like climate we need a lot of funders to work on it to maximise our ability to deal with the problem. If there are funders working in niches all pushing in different directions, we’ll never get anywhere.

“We could get so much more accomplished if we worked together.”

 

Larry Kramer will present the opening keynote, Is Purpose Enough? on Day One of the Philanthropy Australia National Conference, 5-6 September in Melbourne.

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