It is time to see if non-profit organizations that deploy significant resources use the same rigor and standards to measure themselves and their internal operations as they expect from the beneficiaries they support.

We find several foundations that deploy hundreds of millions of dollars in grants often do not bring principles of diversity, inclusion and outcome measurement to their day to day operations. Nor are they necessarily transparent about their organisation and HR practices.

This is evident across both newer entities set up by entrepreneurs who have recently created wealth, and independent foundations that have operated separately from their corporate entities for decades.

So, how do these organisations work internally?
I was fortunate to spend some time at our recently concluded forum in Salzburg with highly experienced HR and talent professionals from some of the world’s leading foundations and these were some of the key challenges they shared:

• It is not often that you see the impact these organizations are trying to make through their grantees reflected within their own organization. Diversity and inclusion are usually par for the course when evaluating beneficiaries’ performance. However, few philanthropic organisations tend to mirror this ethos in their own staffing.
• Including the ‘voice of the beneficiary’ in funding and outcome measurement discussions which many may see as common sense is only recently being formalized within a few funding organisations.
• Transparency and sharing of best practices with respect to HR issues around the philanthropy sector does not appear to be the norm, although there is a group of HR professionals representing large philanthropic organisations in the US who do meet regularly and share their HR challenges.
• Collaboration while talked about many times does not happen very often in practice. This is especially true in markets where institutionalized philanthropy and social investment are fairly nascent. There appears to be a carry-over of feelings of competition as might have been the case in the businesses from which these organisations originated rather than a collaborative spirit which is essential if we are to maximise social impact.
• It is very rare to see HR leads of prominent philanthropic organisations speaking at industry events where there are beneficiary organisations and other peer funders present.
• There is a perception that large funding organisations are opaque, and distant from the issues they seek to address. It has also perpetuated a feeling of “them and us” with funders sometimes being seen as arrogant and unilateral in their approach and decision making.

How, then, can large funding organisations stay grounded, objective and humble?
What should be the attributes and skills the professionals working in these organisations, and seeking to build a career in philanthropy, need to develop?

This is never an easy task for a HR/talent manager to put into place. Like at any organisation organisational culture, it needs to be driven from the top. This becomes even more challenging when the top leadership at large donor organisations is the founder / wealth holder / principal who has made his/her career through setting up a business organisation that espouses a “winner takes all” philosophy and may bring this culture to their philanthropic efforts. Ideas to foster social change often reflect the legacy building desires of these principals and are not necessarily focused on changing outcomes on the ground.

Even when the founder does, with all sincerity, want to drive social change, this is hampered by his/her larger than life persona where the team may feel implicit pressure to come up with suggestions and recommendations that are pleasing to and in line with the thoughts of the trustees rather than reflecting ground realities and the voice of beneficiary.

Beneficiaries who often feel that building relationships with individuals in grantmaking organisations are key to them receiving funding are reluctant to share honest feedback with the teams working in these organisations, especially when things are going wrong. This leads to difficulties in course correction and organisational behaviour.

A few tips to start developing talent
As we seek to professionalize the philanthropy sector, there are some key issues that I urge us to think about:

• It is essential to build a culture of honest feedback and openness in large donor organisations as without this, it will be even more difficult to attract talented millennials to this sector and build a professional philanthropy sector especially in newer markets like Asia.
• Capturing and sharing learnings around effective grantmaking is very important. Reluctance to share failures, especially those experienced by large foundations, is not helpful as new entrants repeat them. This leads to a colossal waste of financial and human resources which are scarce and precious to begin with.
• Ensuring that grantmaking and social investment is a collaborative effort that brings beneficiaries on the same table as the philanthropist and social investor. Achieving social outcomes is mutually beneficial for both investor and investee. This can be only achieved by working together to ensure success towards achieving the desired social outcomes. For too long this has been a one way process which has often lead to a “benefactor-beneficiary” relationship which is frankly out of date and offensive in the 21st century. Including this element in the KPI’s of grantmakers would be one way to make this relationship a more equal one.
• When deploying large sums across multiple geographies, what is the optimal size of the funding organisations? It would be helpful to have a mapping of the kinds of soft skills needed and a clear leadership development strategy in these large organisations that can be established as best practice for the sector to emulate.

It is clear that we need an increasing focus on how we structure and develop teams within social investing organisations, so that our human capital can grow at the same pace that the social investing ecosystem does. This will be beneficial to our funding industry and have an immediate knock-on effect on those that receive our capital. As with any sector, its long-term success truly depends on developing the right talent.

Salzburg Global Seminar 2018 – New Horizons in Social Investment, was held in partnership with AVPN, at Schloss Leopoldskron, Austria, on Oct. 27 – 30 2018. Participants from different sectors, regions, and expertise worked together to explore talent management practices which could help increase their social impact globally.

Naina Subberwal Batra is Chairperson and CEO at AVPN

This article was originally posted on AVPN Blog on 10 December 2018. The original article can be viewed here.