Established in 2000, with offices in London and New York, the Institute for Philanthropy is one of the world’s leading organizations providing education and thought leadership in strategic philanthropy. In December 2011, Kurt Hoffman, best known as the founder and first director of the Shell Foundation, became the Institute’s third CEO. How will the Institute develop under his leadership, Caroline Hartnell asked him. As a doer by nature, one thing Hoffman would like is to see the Institute move beyond donor education to engage philanthropists in more active learning by doing. But first, he says, he needs to understand philanthropists better.

How do you see the Institute developing under your leadership? And how will your background – first in academia, focused on science, technology and innovation to tackle poverty in developing countries, and later as first director of the Shell Foundation – affect what you do?

I think it will affect a lot of what I do, and I think it has been a great training ground. As an academic, particularly in my early work on poverty and global environmental issues, I undertook research and fieldwork on many of the social issues that philanthropists and other social actors are concerned about. This gave me a good grounding in the rigour of research and trying to understand the causes of poverty and climate change. Because my career has been mainly to do with global poverty and the global environment, I have had much less exposure to the causes of social ills in a mature economy, so I’m having to learn about that.

Second, I got a lot of exposure to the world of institutional philanthropy because one is always in the business of putting proposals together and trying to raise money. And I suppose I came out thinking that that world doesn’t work very well in terms of finding ways to channel resources to solve problems. There’s always a lot of support for good academics who can write clever papers and reports, but almost never in that world of academia are you asked to demonstrate whether what you have written has actually made any difference. So I didn’t learn a lot about how to solve problems!

The Shell Foundation was different. There I was right in the middle of a new international effort to deploy ‘social risk capital’ on a significant scale. It was corporate funding, but it was made available to the foundation in an untied way and the challenge was how to use it most effectively to catalyse change. I was also embedded in an organization that was, from a business point of view, pretty expert at solving problems. So the Shell Foundation experience was a good one for learning how you actually solve problems.

I think when it comes to the Institute these experiences will manifest themselves in a number of ways. One of our plans is to develop Think Philanthropy, which is the use of evidence-based research to assess trends. I think I’ll be able to build on the work that’s been done by Daisy Wakefield and others and develop the scale and rigour of that.

But I think probably the most important thing I hope to do is to enhance the educational mission of the Institute, which has been strongly developed through the TPW (The Philanthropy Workshop) programme. I believe passionately in learning by doing – I’m a doer, I like to make things happen – and I’d like to see the Institute equipping philanthropists or other sources of social risk capital with the skills to use their resources effectively, learning by doing and coming up with scaleable solutions in the process. This could be solely within TPW or we could have a programme that brings together opportunities for philanthropists to get involved in ongoing projects or to incubate pilot projects and help them to grow, or that encourages some joint funding. I’d like the Institute’s programme to focus more on doing as a demonstration of best practice.

Would you also like to see the Institute more engaged in the philanthropy sector?

Yes, I would. There are two dimensions to that. First, we want to build on the expertise, skills and knowledge developed through TPW – there’s a lot of value there that can be brought to the sector more widely. Second, apart from getting philanthropists to act strategically, there are other things that have an impact on the net benefit of what philanthropists do where I feel we could intervene – for example, the effectiveness of the delivery part of the value chain, the level of communication between beneficiary and resource-giver, and the giving criteria or grant criteria. We don’t want to lose sight of the philanthropy and education side but we do want to expand our focus.

Does this include becoming more engaged in public policy debates that relate to philanthropy? If so, how do you see the role of philanthropy in society in an age of shrinking government funding and public sector cuts? Do you see it as the role of philanthropy to fill the gaps?

First, a little qualification: we want the Institute to encourage philanthropists as a sector to engage in the public debate. Whether we’re going to set ourselves up to influence public policy is an open question. I don’t think we’re going to become a major advocacy organization for advancing a particular cause, although we might be open to saying some useful things about more general issues like tax benefits. Personally I have a lot still to learn about the mature economy context for philanthropy policies, so I can’t currently say which policies are good or bad.

I think philanthropic effort is probably the most important source of social risk capital we have. Public money and institutional funding come with more restrictions and restraints. So philanthropists are a really valuable source of social risk capital that’s flexible and can be pointed in whatever direction seems to have the most benefit.

What do you mean by social risk capital?

I’m talking about financial resources that can be used to tackle social issues. It’s really a question of where you allocate the funding that’s available. It’s understandable that people who have resources tend to want to concentrate on the things that really drive their passions, and one can’t deny them that. But I do think it’s important that philanthropic social risk capital should above all catalyse solutions. There’s never going to be enough charitable money to solve problems alone, so you need to use the money as a catalyst – I mean investing in ways that bring other people in to bring other resources to tackle problems or to pilot effective solutions.

One can’t tell people what to do with their money: if they want to fill gaps in social provision as the state withdraws, that’s fine. But certainly it’s an important role for philanthropists to catalyse, experiment and innovate, and to help society tackle big problems.

Do you feel that people working with philanthropists often put too much emphasis on personal motivation – for instance developing family values or having fun – rather than meeting society’s most pressing needs?

All of us involved in the civil society sector are driven by personal motivation or a passion to do things so I don’t think there’s any difference between philanthropists and anyone else trying to solve social problems. You can’t get away from personal motivations, and neither should you: they’re a huge driver – in the same way that business entrepreneurs, with their personal passions, are huge drivers of wealth creation and job creation. Just from my own experience of engaging with philanthropists, I see them tending to focus on really difficult problems in difficult places. I see a lot of intellectual engagement but I don’t see a lot of laughter and having fun. They’re pretty serious about what they do.

But there is a challenge for philanthropists to achieve a balance between pursuing the things they care about and looking at the other bigger ills in society and thinking about ways to work collectively with other partners to solve them. We’re at an interesting moment in time because all of a sudden the mature economies have come back into the picture as places with big problems that need fixing. In the past, philanthropists in the US and the UK have funded national enquiries and commissions that have played a big role in helping society think about the big issues – how do you fix the education system or support people in old age, for example. There’s definitely a role for philanthropists to help society, but they need to be part of the discussion about what the solutions are.

Do you feel that campaigns such as the Giving Pledge and the recently launched Give More campaign are too focused on quantity rather than quality?

Well, I’m going to straddle the fence and say that anything that gets all segments of society giving more is a good thing because there’s still a big hole in the resources needed. Localgiving.com, for example, is a fantastic initiative that unlocks a whole new source of giving to benefit local community projects that are often below the radar.

But I don’t think it’s enough just to give: you have to look at the effectiveness of the giving. You can’t say that problems will be solved just by more resources coming into play. We could probably extract as much social benefit by improving the efficiency and effectiveness of the execution side. The two have to go hand in hand.

Finally, what do you see as the greatest challenges facing you in your new role?

Given the Institute’s recent history and the excellent work that has been done on the donor education side, and given that we want the Institute to engage with a broader set of issues, we have to build our visibility and credibility. We have to demonstrate a greater willingness to become partners with other players in the sector, to advance the philanthropy sector and the delivery of social benefits. So, for example, we want to develop a social media strategy, but we have to start by talking about things that we know about and not the things where we don’t have a credible track record. We also need to find some opportunities that go beyond the education side where we can begin to demonstrate a track record in delivery. Going back to my passion for seeing things through to the end, I think that’s one of the most important things we have to do. We have to build a track record and then demonstrate to philanthropists and others successful ways to do things.

But I think the biggest challenge for me is getting to understand philanthropists. I’m comfortable with other sources of social risk capital – I know the impact investing community very well, I know the institutional and corporate funders very well, and that helps me think about how to design programmes to support or encourage them – but I need to understand philanthropists better so that we can tailor what we offer to get the best out of them. In a year’s time, once we’ve gone through this learning phase, we will be able to focus on things where we can really catalyse changes.

For more information
http://www.instituteforphilanthropy.org
Contact Kurt Hoffman at kurt.hoffman@instituteforphilanthropy.org