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Finding an Answer Where You Least Expect It

Paul Grogan is a catalytic philanthropist who’s not afraid to do the right thing, even when it may look like the wrong thing for a community-based foundation to do at the time. Paul told a fascinating story at our recent forum at The Boston Foundation, which clarified for me a key aspect of how donors catalyze change: The best way to solve a social problem isn’t always to fund a nonprofit organization. Sometimes, the answer lies in funding a for-profit to tackle it—as difficult this may be for the more than 1.5 million nonprofits operating in the U.S. alone. My ears certainly pricked up when I heard it.

Paul shared an example of how The Boston Foundation took on the challenge of helping working-poor families in Massachusetts bootstrap themselves into higher-paying, sustainable careers and escape the cycle of poverty that entraps many working at low-skilled, minimum wage jobs. The traditional answer to this problem has been to donate to nonprofit job-training programs, and give low-skill workers a different set of tools to bring to the job marketplace. But so far that has largely only solved one-half the problem because the higher paying, higher skilled jobs still don’t exist for them to move up into. Local businesses would need to change how they trained and promoted low-skill workers and create those career paths. So Grogan re-framed the problem from one of workforce development to one of economic development, and set about finding ways to motivate major industry leaders in the city of Boston—namely, for-profit hospitals—to create these opportunities.

The Boston Foundation and its funding partners ended up creating and funding new types of workplace partnerships, which focused on specific industry sectors. One example is the Building Services Career Path, which focused on creating better opportunities for low-skilled building custodians that met the needs of the employers as well as advanced opportunities for the employees (to read more, see Practice #5: Lead Adaptively in Do More Than Give).

The irony of this approach is that The Boston Foundation and its partners ended up funding for-profit hospitals to create and run these programs. Paul asked at the Forum, “wouldn’t it be better if The Boston Foundation had given those funds to a local nonprofit who really needed the money?” But that wouldn’t have solved the problem—or more precisely, it would have only solved half the problem.

We write in Do More Than Give that catalytic philanthropy is hard. But this exchange at The Boston Foundation highlighted for me that catalytic philanthropy is also amazingly counter-intuitive. As someone who’s spent more than 20 years in the nonprofit sector, I definitely could see how, on the surface, it just seems wrong that a community foundation would be funding a bunch of well-endowed for-profit enterprises in town when there are so many well-intentioned—and deserving—nonprofits who could use the funding, and who really need it to survive. But now I see things differently. Because the goal of catalytic philanthropy isn’t to make grants to nonprofits. The goal is to solve problems. And sometimes the solution is not where you first expect it.

Leslie Crutchfield

Senior Advisor