Most people would think that giving away money is simple. It is not. When funds are limited (always?) who do you choose to give them to? And how? Will the grant strengthen the recipient or create a dependency? Will other potential grantees be jealous or angry? How much lasting good will the grant create?
A proverb says “Give a hungry person a fish, and you provide food for a day. Teach a person to fish, and you provide food for a lifetime”. I think this maxim provides guidance to answering the other questions: using philanthropy to create recurring good should be the lodestar.
David Campbell started All Hands Disaster Relief after the 2004 tsunami in the Indian Ocean killed 227,898 people in 14 countries. He was a recently-retired serial entrepreneur with extraordinary skills and a giant heart. David traveled alone with just under $10,000 of his own money, the legal limit to carry across the border, and rapidly organized volunteers to help the survivors. He did not hand out money, instead he organized some volunteers to build shelters and others to re-build the fishing fleet. Funds were used to purchase materials, communication gear, and tools. The result was a re-created community that was able to feed itself and a volunteer corps with disaster relief skills. Cloudsplitter Foundation was an early supporter of David and of the concept that money could be used to leverage other resources. Many of those volunteers moved on to other disasters when All Hands became a full-fledged organization. Today it has tens of thousands of volunteers working across the globe and is one of the most respected and highly-rated not-for-profits.
If the Cloudsplitter Foundation simply wanted to give funds where there was a need it would do so more efficiently by turning its assets over to another not-for-profit that was efficiently distributing funds. Our mission, however, is to use leverage to change the conditions that caused the need for those funds in the first place, e.g., to teach a person to fish. This is a serious challenge, because the ways to do that are not obvious, because the underlying problems are complex. Consider the plight of children under four, the years when almost all their cognitive and emotional development takes place. Multiple studies have shown that helping these children develop verbal and social skills will benefit them for the rest of their lives. This is something that comes naturally in many families, where babies are sung and read to and stresses are relieved by loving parents and relatives. But there are too many families, including affluent ones, where multiple time-killing jobs, divorce or abuse, alcohol or other drugs play a significant role in a toddlers development. Children are frequently ‘warehoused’, entrusted to a neighbor or relative who has neither the time nor the skills to give the child the direct attention each child needs. These children are handicapped from the get-go.
The Cloudsplitter Foundation kicked off the Birth-to-Three (BT3) initiative by joining with the Adirondack Foundation who volunteered to take on the administrative task of convening representatives of the family service and health agencies in Franklin, Clinton, and Essex Counties of New York. The resulting steering committee, made up of people with similar jobs, but who had frequently never met their counterparts, has for four years improved and coordinated services across the three counties. Four other family foundations joined as sponsors. The most recent BT3 initiative has been to expand the number of trained day-care providers, the people who can most directly change a child’s future. This is an ongoing project that the Cloudsplitter Foundation will continue to fund because it not only does good for the beneficiaries, the kids, but is also creates a permanent force for continuing good – better family advocates and a cadre of trained daycare providers.
When problems seem intractable, like the BT3 need, foundation funds can (and did) pay for professional studies of what was the status quo in support systems, and what were the options to make them better. Those studies let volunteers, both private funders and professionals from state and county agencies, design and implement groups of experts to take on the issues. Under $250,000 in donated funds created a structure and team that is now recognized as leading the local effort to help create healthy and contributing citizens decades in the future.
There are many other examples of how philanthropic funds can be used at a higher level than direct gifting. The Foundation has made numerous “leveraged” grants, where the grant recipient must do something to actually earn the grant. AdkAction is an example of this. AdkAction was a small not-for-profit dedicated to taking on projects that no one else was managing but that needed doing: expanding broadband across the region, promoting arts-based tourism, recreating habitat for vanishing pollinators, addressing the ‘food desert’ problem in small communities, and much more. AdkAction members contributed $75 to $125 a year in support, but the organization had only 200 members. They needed to hire an Executive Director to take them to the next level, with a goal of 600 members, a break-even point for self-sufficiency. The Foundation underwrote the hiring of an executive through a multi-year grant conditioned on that new hire increasing membership steadily to that goal. Three years later that goal is in hand, and AdkAction is a major force in issues critical to the region, including leading the attack on road-salt contamination of Adirondack waters.
In 2019 the Foundation added a Grants Consultant whose role is to help local not-for-profits attract new funding from new sources. The Foundation will bear the cost of this effort in the belief that the expense can be rewarded many times over with new and previously unavailable funding.
In summary, the Cloudsplitter Foundation’s goal is to be a second-order influence on the social and environmental needs of our region. A second order effect is where every action has a consequence, and each consequence has a subsequent consequence. In other words, this means that a single action can initiate a series of cause-and-effects. E.g., teach a person to fish and that person will become a teacher too. In the case of philanthropy, this means that money is used to create mechanisms to solve specific problems rather than being donated directly to that need. Money is the stimulant that lets the problem and its solution be clearly defined and the lubricant that lets the mechanisms that are defined work.
We have many other problems that need solving but that seem intractable: the opioid epidemic, lack of reasonably-priced housing, help for seniors wanting to age at home, under-paid caregivers, youth flight, inadequate transportation, uncoordinated arts and cultural facilities, food insecurity, under-sharing of available support dollars, and much more. The challenge for the Cloudsplitter Foundation board and our advisors is to continue to pick these off with creative solutions that leverage our limited funds to create second-order effects.