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The Price of Change

Posted by: Leslie Crutchfield on 5/19/2011

The cost of catalytic philanthropy was top of mind for donors attending a recent Philanthropy New York seminar on Do More Than Give. They’d heard leaders speak about two very different kinds of foundations: The Tow Foundation— a private, family-run philanthropy, and Thomson Reuters Foundation—a global corporate foundation. As the leaders described their efforts to generate change, audience members commented that it sounded expensive. “How much grantmaking actually gets done?”

In the case of The Tow Foundation, the hard costs of catalyzing change appeared relatively low compared to some significant soft costs.

This family foundation based in New Canaan, Connecticut, has contributed to statewide juvenile justice system reform affecting tens of thousands of young residents. Executive Director Emily Tow Jackson explained that her family’s Foundation started out the way most family funders do–they gave limited grants to local nonprofits providing services directly to kids in the community. Tow Jackson soon realized that, while the Foundation was helping a few hundred kids through these local gifts, tens of thousands more young people could benefit if the entire state system could be reformed. So Tow Foundation co-founded and gave start-up funds to a local Alliance of nonprofits and juvenile justice advocates that collectively pushed for policy change; Tow also funded litigation and other advocacy activities (see www.towfoundation.org for more information.)

The impact: Tow Foundation has contributed to dramatic decreases in Connecticut’s rates of juvenile incarceration, enhancements to how youth are treated, educated and counseled while detained, and changes to legislation that move sixteen- and seventeen-year-olds out of adult jails and into the juvenile justice system.

The cost? Hard expenses, such as grants given annually, amount to approximately $1 million. The soft costs are harder to put a value on. Over a ten-year period, Emily Tow Jackson and the Foundation’s one program officer, Diane Sierpina, worked nearly full-time on juvenile justice advocacy. Their work included some grant diligence and organization evaluation, but the bulk of time was spent participating in the change process—commissioning research on the extent of the problem, inviting experts to speak to the Foundation board and testify before state Judicial leaders, calling in chits with policy elites and the media leveraging family and professional connections, helping to convince state leaders that they needed to create a new strategic plan, and so forth.

It’s difficult to put a price tag on Tow Jackson’s time. Even if you calculated her annual salary over a 10-year period, how would you value the policy and media connections, the accumulated field knowledge, the local and national networks that the Foundation staff and board of trustees mobilized?

Net-Net, our research suggests that The Tow Foundation’s advocacy proved to be a relatively low-cost, highly-leveraged strategy for accelerating change in the Connecticut state Juvenile Justice System.

The Thomson Reuters Foundation angle is different. When Monique Villa agreed to take the helm of this newly formed foundation—created in 2008 when Thomson acquired Reuters—Villa ramped down grantmaking activities and dedicated Foundation staff time almost exclusively to catalyzing change. Staff focused on leveraging the deep legal, financial and journalism expertise among the company’s 55,000 worldwide employees and its broader global networks of clients and partners.

Take Thomson Reuters Foundation’s work last year in Haiti. Within hours of the earthquake, Villa dispatched a team of the Foundation’s staff journalists to Port-au-Prince to set up a first-of-its-kind Emergency Information Service (EIS) for the affected population, disseminating verified, actionable information by SMS messaging in Creole. While tens of thousands of Haitians desperately searched for medical care in the aftermath of the earthquake, one hospital only a mile away was fully equipped with medical staff and equipment—but virtually empty of patients. EIS helped direct injured people to the hospital. It also provided critical information on how to contact search-and-rescue teams, where to receive food and water, and how to register missing loved ones.

Further, once the immediate earthquake crisis subsided, Thomson Reuters Foundation provided lawyers and legal resources for free through two programs, Trustlaw and Trustlaw Connect. In Haiti, the local population struggled with a tragic increase in rape and other violence against women. So the Foundation reached out to its global TrustLaw network of lawyers to provide pro bono research on how other countries improved legislation on similar issues, and help Haitians establish stronger rule of law on these matters. (The Foundation provides these and other services in Haiti and other communities worldwide, see www.trust.org)

The Thomson Reuters Foundation annual budget is approximately $5 million (U.S.) It still makes select grants to NGOs providing humanitarian assistance to communities worldwide, but the majority of the funds are now deployed through staff providing critical services such as EIS and connecting NGOs and social entrepreneurs worldwide with pro bono legal help and advice through Trustlaw, among others.

How do you put a price on those contributions? Is it more valuable to society for a corporate foundation to contribute another few million in grants, or instead use those resources to leverage a company like Thomson Reuters’ worldwide expertise, global reach and programmatic contributions in ways that no other funder—private, corporate or community—could?

Would some corporate foundations be better off sticking with a more traditional mode of giving, and put the bulk of their money and time into making grants?

And what about family foundations, or community foundations for that matter? Would they be better off focusing exclusively on making grants to nonprofits and getting out of the way, as some philanthropy experts advise?

The answers to these questions aren’t obvious, and I don’t profess to know all of the solutions. I welcome your thoughts and hope you will suggest ideas of your own that can advance the debate.


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