Philanthropy harbours an interesting paradox. Structurally, charitable foundations can be designed to operate in the long run, in principle in perpetuity. For example, the largest charitable grant-giver to London-only causes, the City Bridge Trust, dates back to 1097. This notion of ‘historical time’ is an important driver of philanthropic action. But how can one make a difference over long periods in a changing world?

This article argues that intervening at the inflection point is critical to achieve this ambition. Well-timed and skilfully designed philanthropic interventions can tip issues, fund new initiatives with an astounding potential for self-sustained scaling, and pilot innovations that the public sector can replicate.

In the past, catalysing major change was often an unexpected by-product of supporting good people, rather than a planned outcome. The Medici family, for example, employed Galileo as one of the tutors of Cosimo II de Medici. On 7 January 1610, using a telescope, he noted that Jupiter had four satellites. Observing them over several days, it became clear to him that they were in orbit around Jupiter. This contradicted the geocentric model of the universe. Adopting a heliocentric view proved to be a major inflection point in the history of Western science.

Galileo’s career exemplified why the relationship between philanthropists and grantees can be so symbiotic: because of philanthropists’ ability to take the long view, to bet on new people and new ideas, and their ability to endow them with the resources and legitimacy needed to conduct groundbreaking work. Supported by the Medici family, Galileo was appointed as university professor and exempted from teaching so he could focus fully on research. When his findings were disseminated through Europe, the Medici offered a steady job and access to a valuable network. Naming the four moons of Jupiter after the four Medici brothers helped to associate the family with what were at the time controversial scientific findings, thus providing a hedge against some of Galileo’s opponents.

Philanthropic action remains long-term and dynamic but it has become more strategic since the time of Galileo and the Medici. So, how can one raise the ability of today’s philanthropists to hit inflection points?

Our advisory work suggests that it is best to look at three types of inflection point that define the constraint-opportunity set of philanthropy. These relate to:

• The issue To be solved, either an issue needs to be sufficiently ripe in terms of public attention and availability of solutions or a long-run commitment to ripening it must be made.
• The grantee Maximizing the catalytic effect of the grantee is critical, too. This requires awareness of the development of the grantee organization: is it in a steady state or about to experience a step change, such as rapid growth or refocusing of the mission?
• The donor Philanthropists’ giving preferences change with time, so interventions that properly anticipate built-in inflection points in the personal growth process tend to be more effective in sustaining long-term satisfaction and commitment.

The issue

Issues are not static, but ripen over time. Knowing when to intervene is a function of a philanthropist’s ability to identify emerging issues, appetite for risk, and patience to wait for results. It is fundamental to decide where to place bets in this ‘issue cycle’:

• early stage, by funding research leading to the discovery of new phenomena or solutions;
• mid-stage, by focusing on disseminating findings, advocacy, and rolling out solutions;
• mature stage, when a set of solutions is in place, by focusing on improving the efficiency of solutions at hand.

Consider the issue cycle of battered child syndrome (BCS), as described by organizational theorist Karl Weick. BCS refers to a pattern of injuries to the limbs or ribs of a child which cannot be explained by the medical history offered by the parents. This is because they result from assaults by the parents, who then either don’t report them or present them as accidents. Since these injuries can often be detected only by X-ray, BCS was undetectable by the medical community for centuries.

The syndrome was first described by John Caffrey, a paediatric radiologist, in 1946. Looking at six cases where medical histories did not match physical injuries, he speculated in a radiology journal about intentional ill-treatment as a possible cause. However, it took over a decade for BCS to gain credibility in the paediatric community. In 1961, strong empirical evidence from a national survey that identified 749 cases was finally presented to the American Academy of Pediatrics. This triggered a public policy response. By the mid-1960s, laws in all US states required that suspected BCS cases be reported. Subsequently, the number of reported cases skyrocketed. Estimates put the number in the US at 7,000 in 1967, 60,000 in 1972, and 500,000 in 1976. Over 30 years an important issue had matured and produced a major institutional response.

The grantee

When a philanthropist seeks to respond to an issue at a specific stage the question is: which grantee can create the greatest positive impact at a given point in time? This is not automatically the organization that pioneers an intervention: as issues mature, new organizations tend to adapt and improve the pioneer’s intervention model. This requires mastery of the step changes that lie in the organization’s path.

Take human rights. The British Anti-Slavery Society, the world’s oldest surviving international human rights organization, stretches back to 1787. Over time the organization has experienced several inflection points. When it was created, slavery was standard practice and the challenge was to lobby for legislation to abolish the slave trade in Britain and throughout the British colonies (accomplished in 1807 and 1833, respectively). After the gradual abolition of slavery during the nineteenth century the focus of work shifted towards compliance. By the 1890s, the Anti-Slavery Society’s original mandate had been largely fulfilled.

The organization has since made several changes in direction to ensure its continued relevance. The codification of human rights in the United Nations Universal Declaration of Human Rights in 1948 set the stage for the emergence of new players, including what is probably the best-known international human rights organization today – Amnesty International.

The key thing for the philanthropist to consider is that the appropriate form of support is contingent on where an organization stands in its evolution:

• Is it a start-up that has identified a niche and seeks to roll out its services?
• Is it large and established and likely to open up additional programme areas?
• Or, having accomplished the mission, is it ready to be wound down, merged, or have its mission changed?

Effective philanthropy seeks to anticipate the inflection points (or step changes) the grantee faces, and provide appropriate assistance in mastering them.

The donor

Another important inflection point to hit relates to the stages of the donor’s life. Like issues and institutions, philanthropists’ needs and giving preferences also change as their lifecycle progresses. Applying Daniel Levinson’s framework is instructive in this respect.

The philanthropist’s personal growth path (adapted by Daniel Levinson)

Thoughtful philanthropy seeks to open up spaces in which a philanthropic identity can develop in line with the personal growth process.

For young adults the challenge is mainly to learn the ropes of giving and build philanthropic experience through internships or field visits. Often this is best done through a subfund. For example, the Surdna Foundation, established in 1917 by John Emory Andrus, created the Andrus Family Fund in 2000. Its objective is to provide fifth-generation family members with an opportunity to learn about, and participate in, organized philanthropy. At this stage, such a space for experimentation is typically more important than looking for inflection points of issues and grantees.

Later in life, philanthropy can serve as a new source of meaning and a second career. Take for example Sir Tom Hunter, a UK entrepreneur who built a sports retail chain of 250 stores employing 7,500 people over a 14-year period: ‘When I cashed out first time round I started to get begging letters. … I was 37 and needed a challenge. I needed to make more money, but I wanted a purpose for that creation of wealth. I found it in philanthropy.’[1] The ambition level at the middle stage is higher. Looking for issues at an inflection point and grantees that one can help to make a step change therefore moves up the philanthropist’s list of priorities.

Finally, when the focus shifts to what the philanthropist will leave behind, the urgency to identify inflection points increases further. Rather than experimentation or providing a source of meaning for one’s current life, the emphasis is now on relevance well into the future. This requires picking issues and grantees well and possibly leaving a structure behind that can express values and hold together the family. Many choose issues that are ripe and grantee organizations that are stable.

Conclusion

Philanthropy which successfully creates impact in the very long run is no accident. It involves solving the paradox identified at the start – of balancing the desire for perpetuity with the ability to act over the short term.

Ensuring the continued relevance of philanthropic vehicles over multiple generations in a changing world is no small feat. Adopting an approach that encourages successive family members to act on personal inflection points tends to be a good way to unlock the critical mass of passion needed to make a difference.

Paired with a commitment to intervening at inflection points in the external environment, when a limited intervention greatly accelerates the maturing of issues and grantee organizations, such philanthropy can be instrumental in tipping issues and piloting innovation. What if Jeff Skoll had not funded An Inconvenient Truth? Or if a philanthropist had helped John Caffrey to disseminate his findings on BCS more quickly? The issues of global warming and BCS would probably have advanced at different speeds.

Notwithstanding, we must acknowledge that acting over long time horizons creates substantial uncertainty. Actions produce both intended and unintended consequences. Given the critical importance of hitting the points where the established strategic picture dissolves, we have chosen ‘intervening at the inflection point’ as the annual theme of the UBS Philanthropy Services education platforms in 2007.

1 See http://business.timesonline.co.uk/tol/business/economics/article708294.ece

Dr Maximilian Martin is Global Head, Philanthropy Services, at UBS. Email maximilian.martin@ubs.com