Mile High Giving

Philanthrocapitalism is going strong in Colorado. On Thursday, Matthew met with Dorothy Horrell and Alesia McCloud-Chan of the Colorado Association of Funders in Denver, the “Mile High City”. (No, Mile High Philanthropy is not a cheque you write on an aircraft.) They were enthusiastic about the progress being made by philanthropy in Colorado by focusing on impact and the measurement of performance, and by a high degree of collaboration between philanthropists (and others).

Whilst recognising that the economic downturn will hit giving, they also saw a silver lining in the opportunity it will give to push through efficiency improvements in the non-profit sector. That may include encouraging similar non-profits to engage in “mergers, as a matter of survival”, said Horrell, who thought that the logical case for merging that, in some cases, has existed for a long time was too easy for non-profits to ignore when money was plentiful, but will be hard to ignore now. Funders will no longer automatically “rush to the rescue of a non-profit that is on the ropes.”

Already, non-profits have started laying off staff in anticipation of funding cuts, and Colorado’s funders are discussing how best to allocate what will be scarcer funds among them. Horrell says that the emphasis will be on focusing on those non-profits which have demonstrated success and impact. At the Bonfils-Stanton Foundation, funded by the late daughter of the founder of the Denver Post and her husband, which Horrell runs, one important question will be to figure out which of the non-profits it funds “cannot be allowed to fail”, and to focus on them. Bonfils traditionally gives around two-thirds of its grants to support the arts, a tradition that should allow it to keep on supporting artistic causes, which are likely to lose out badly from other donors who switch to causes that address more pressing needs during the downturn. It will try to focus on signature projects that it feels have to survive. “We will ask, if it didn’t exist, would you have to create it? And how important is our support to its success?”

One project that they are confident will continue to attract charitable funds (even as public money is harder to come by) is a fine philanthrocapitalistic example of how having clear strategic goals and a willingness to collaborate can make a big difference. Denver’s Road Home is a project to dramatically reduce homelessness in the city within ten years. Since 2005, 15 foundations and some wealthy individual philanthropists have worked together in partnership with business and the city government, and have already reduced homelessness by 11% and chronic homelessness by 31% through a strategy known as “housing first”, in which putting a roof over a person’s head is seen as the starting point to getting their life back on track (as opposed to other fashionable approaches that, say, focus first on job training).

This seems an excellent example of the sort of positive partnership between a mayor and philanthropy that we write about in the book, focusing on Mayor Michael Bloomberg in New York and Mayor Cory Booker in Newark. Another example in Denver is the successful education initiative led by several foundations that resulted in electors voting in a referendum to have merit pay for school teachers.

As Horrell told Matthew, foundations can play a crucial role in funding innovative approaches to social problems. “The big question is how do we invest in doing social change? It is not just a matter of doing better what we have always done. Even more so in an economic downturn, we are called to act and think quite differently.”