Research into the international development sector and its effectiveness by the H & S Davidson Trust points to a flawed system badly in need of reform. In this series of interviews, we talk to figures in the sector in order to get their views on how we can co-create the narrative of the system we want and how we obtain it. In this interview, Andrew Milner talks to Lisa Jordan from DRK Foundation.
Lisa Jordan: When you talk about the development sector, there is not a common agenda. There have been attempts to create one – 10 years ago, there was an attempt to follow whatever the government of whatever country you’re talking about had to say, but there is no real alignment because USAID wants to work on AIDS and DfID wants to work on education, and the Dutch want to work on trade, and so you don’t get full alignment across your governmental actors, and your governmental actors are often the ones who are providing the bigger resources to the bigger NGOs. So who’s paying the piper? For me that’s the first question.
Andrew Milner: Let’s think specifically about the philanthropy sector, which notionally is a little bit freer than say the bi- or multilaterals.
Then your coordination game gets even harder! Because no philanthropy is taking its direction from another philanthropy. What we have seen is that philanthropies that want to work in Africa, for example, are beginning to realise that they really need to be on the ground in Africa to make a difference. So Dovetail, for example, out of Texas, which is a small family-based foundation and really follows what in the American vernacular is called proximate leaders, wants to fund people who are from Africa to solve issues in Africa. This is a trend right now, that has to do with overcoming the power dynamics of the development sector, which is that the white western, or even the brown western international organisation comes in and calls the shots because they have money and resources and can pay salaries far beyond what a local community-based organisation or a local NGO can pay. So, the idea of supporting proximate leaders has become powerful, and lots of foundations are figuring out that they can’t get to those proximate leaders from Texas or California or London, so they’re putting teams in the field. Generally those teams are made up of people from those countries, and that seems to be a way in which folks think that they’re going to get a more impactful – I wouldn’t say scalable – solutions. However, institutionally you carry your cultural bias with you. A good example of this is another foundation I worked for, which put a team in the field in Nairobi and then hired a lawyer from the US to lead that team for 20 years. She was absolutely committed to the African agenda but they couldn’t get over the ‘speed bump’ of hiring somebody who was native to Kenya for a long time, and not because there weren’t qualified candidates, but because of the cultural mismatch between a European-based organisation and board – completely male, completely white, – and somebody who was coming from an entirely different cultural setting.
You need a really strong CEO, one with both diplomatic skills and finesse for collaborations to work, and generally, what ends up happening is that the CEO gets picked by five of the biggest funders in the collaborative, and the smaller foundations get lost…
One of the biggest problems is that we don’t have the representation of the communities that we want to serve in our power structures and empowered in those power structures.If what they want is to have an impact in a geographically specific place, and they are committed to being there for a long time, they should have somebody from that place on their board. Not just on their staff, but on the board. That’s not an easy thing to do because let’s say I want to solve child sexual abuse, for example, and I want a worldwide philanthropy programme on that. Who do I put on my board who’s a local voice then? It’s hard to do, but having a different understanding in the centre decision-making in your organisation, means the board for many philanthropies and it’s also where the board and the staff often have a huge disconnect because the staff’s primary job is translating a reality into language that your board members can understand so that they’ll approve grants.
So if you employ local programme staff or you have a local consultative committee, that’s simply moving the problem to a different place as long as you don’t have representation on your board?
I think so. I think you have to populate representation across authorities.
You were saying that you’ve achieved scale at DRK Foundation. Would you call DRK a venture philanthropy fund?
Yes, it’s a venture philanthropy model. The RID Initiative is interested in scale and what we have found is that money is not enough to create scale, that’s the first thing. The definition of scale varies, but for us, it means whether you can eradicate the problem you are focused on with your solution – how many people you were able to serve with a solution that betters their life in one way or another. DRK operates across multiple sectors like climate, education or health and funds for-profits and non-profits. What we want to figure out is whether a solution which worked in a pilot scenario is scalable so we spend anywhere from six weeks to a year-and-a-half figuring that out and not only the idea in its current iteration, but could we see two or three other iterations to see whether or not it would work. On top of that, you look to see what are the characteristics of the team, or the entrepreneur, or the person who’s leading and are they able to create iterations? Are they curious enough? Are they brave enough to get rid of something because it’s not working and try something else that is working? Yesterday, I heard from two entrepreneurs who we would never fund because they’re not willing to change their model so that it can grow. We borrowed two things from venture capitalism, focus on the business model and scaling the solution. This focus has allowed Kiva or One Acre Fund or MyAgro or Room to Read or World Reader to grow and to serve millions of people. Thirty per cent of our portfolio is serving millions of people annually and that’s scale. We introduce the concept of the end game, which sometimes is the government, which is what lots of foundations think will be the next step, but you have to look at the context within which a Room to Read or Kiva is operating, because in some cases, the government does take over and, in other cases, if the government took over, the whole thing would fall apart. So what does scaling actually mean to those who are considering it? For us, we build or help build an organisation, we don’t do project money – we offer unrestricted support. If you ask me why development doesn’t work, it’s because it’s done through projects.
So your approach is to fund an organisation and within that, more specifically, the key people within organisations?
We will provide one grant, never more, of USD300,000 and accompanying that grant is usually a team of anywhere between three to eight people who work with that entrepreneur day in and day out for three years. I hear from the entrepreneurs that I am stewarding every day. This morning, I’m pulling three of them together, all of whom are working in the mental health space, one from Tanzania and two from the Netherlands to have a conversation about how they grow the next generation of their services. So it’s not a north-south, it’s a mental health issue and they manifest differently in different places. But the point is that money is not enough. Unrestricted support is absolutely the best way to get an organisation to grow because you can fund the organisation instead of a portion of what it does which is a big, big difference, then you put your team of the best people you can find to support the entrepreneur and the leadership team in the organisation. That’s how DRK does it, and it works more often than not. If you asked my boss, he will say the secret sauce of DRK is our non-financial support, which includes, by the way, a fundraiser who sits on our team and who, in the last four years has leveraged 1.6 billion dollars, working in conjunction with the portfolio organisations.
It is difficult for big foundations to collaborate when they are the fat boy in the canoe. They are simply to large to do anything other than drive the process.
When you see these organisations and the people behind them are there characteristic things that they need?
They need six things. They need a board that’s generative – not just a board, but a board that works. We work a lot on board development with board chairs and we also build boards. Two, they need leadership training of specific kinds depending upon their skill sets. Three, they need to understand the steps of organisational capacity and growth, which is a whole textbook in itself. They need to learn how to do financial scenario planning. They need fundraising expertise. And then they need strategy, which is about their content – how to break things down into their component parts so that you can build one piece on top of the other, and you stack them in the right way, which is really difficult for social activists or for entrepreneurs or for leaders who tend to want to do everything all at once. Virtually no foundations do this. Elia Foundation does it in Switzerland, and we do it. And Elia Foundation only does it for for-profit, social impact organisations, while we do it for both them and non-profits.
We’re not trying to solve the development problem, what we’re trying to solve are problems that people who happen to live in varying circumstances face and build organisations that can solve that problem, whatever it happens to be, whether it’s getting eyeglasses on your face or extra income in your pocket. They do one thing and they do it super well, that’s the kind of model that DRK pursues.
How do you find these organisations? Do they come to you or do you have open calls?
We have an open application process. We have 400 sourcing partners around the globe who are people like Mulago or Growald who are funding in an earlier phase of growth than we do and they ask us to look at organisations that they’ve been working with. But the thing that makes this model special is that it allows for scale of solutions. Growth and scale are two different things. Some growth has to happen with the organisation, it has to be sound and solid, has to stand on its two feet very well, and then it can scale its solution. Most foundations work in exactly the opposite way. Most of them do project funding, they get upset if there’s more than a 10 or 15 per cent back-office fee and they only want their money to go to the specific project that somebody is working on, and that is totally unsustainable. No matter how long they fund, they don’t give the money in such a way that it can build the roots of an organisation so that it’s strong and robust enough to be able to build, to be able to attract catalytic capital and go to the next phase of growth.
Why does this keep happening? You hear people say, ‘the way ahead is increased, longer-term funding, fund the organisation, don’t fund projects’ – it’s almost the new received wisdom in the sector, yet it’s not happening. Why not?
In the philanthropic sector, part of it is because leadership rolls over. and their tool of change is often money. Our tool of change is that we give the entrepreneur the thing that entrepreneurs need at a certain stage of their organisational development, which is money and knowledge. The money is not enough to solve their problems, but it’s not so small that it’s a waste of their time. From that USD300,000 that we give, we can leverage six million through our colleague who teaches them how to fundraise and then goes out and finds them maybe 250 donors in America and another 60 in Europe who are looking for good organisations to support that are doing good work. And people also know DRK is on that board which means this organisation’s probably going to do quite well. But if your only tool is money, you want to put in controls so that you can see where that money went especially if you’re working from London or Chicago to, say, Malawi. There’s a big distance culturally, physically and operationally. You don’t understand how things work on the ground, so more controls. It’s because you don’t have the bonds of trust or the common alignment of understanding about how things work in the places where you’re making grants. So you make project grants or build a landscape map, a sort of social engineering. You look at the whole landscape and say ‘I’m going to fund this one to do this, and this one to do that, and this one to do something else’ – they’re all working in the same field and they’re all meant to move one component of that field. You’re not thinking about organisational structure any more, you’re thinking through a field lens, and you think you need to spend this much money in order to make X happen. That’s your calculation, and that calculation is often faulty.
The calculation becomes, how efficient can I make my dollar? For example, we don’t work with Save the Children or Oxfam or Amnesty or any of those big groups because they’re already at scale. They now have the problems that a big corporation has. There’s perhaps not enough money going to the front lines and the weight of the organisation itself is so heavy that a family foundation, for example, probably wouldn’t want to fund there because it’s another drop in a bucket for them.
One of the things that RID is advocating is a change in the role of INGOs from being donor-led to led by local circumstances. That’s fine as far as it goes, but how do you do that when you’ve got this big institutional machinery already there which is in a sense perpetuating itself? Do you believe INGOs need to change and how can they change?
Given a choice between funding a network, a movement, an INGO, or a community-based organisation, number four on my list would be an INGO, number one would be a movement. Number three would be network and number two would be a CBO – especially using philanthropy capital. INGOs can get donations from the general public and they have a whole stream of corporate and governmental funding. I don’t really believe that society’s risk capital which is what philanthropy is, should be going to INGOs. The international NGO community in Uganda has more money than the Ugandan government. One INGO has a budget of USD 600 million on the ground. Why would a small family foundation fund that?
It’s generally easy to get to a broad set of parameters that everyone can agree on, but then it becomes very hard to satisfy all of the demands from all of the different organisations when it comes to details.
Do you think people fund these things because they’re visible?
Yes, and also because they have very clear goals. Plan International, for example, is probably doing great work for girls in different countries. but, if I’m a family foundation and I’m working off an endowment of 20 million, that’s not where I’m going to put my money. I’m going to put my money where I can create something new – impact or social change.
Do you see any sign that INGOs are becoming more sensitive to the needs of local communities and local organisations?
I think some INGOs have come a long way on this front. Action Aid is an outstanding example. They have developed an accountability mechanism which has helped to create agency amongst the communities they are working in. There are also official accountability mechanisms that have been developed since the early 2000’s to try to hold development and emergency aid groups accountable to the local communities. But more needs to be done.
Do you always work on your own at DRK Foundation or do you work with other funders?
We work very closely with Echoing Green and Mulago, we work closely with Growald, we work in a consortium called Big Bang Philanthropy which was set up by Mulago. We’ll take recommendations from people who are already funding another group that needs a DRK kind of support system. Somebody from Mulago, for instance, will call me and say: ‘will you look at this?’ And We always do. I have three organisations that Laudes brought us, for example. But our frame is different. Others use a programmatic frame; I want to end child poverty, I want to end war, I want to end sexual abuse, and so on. We’ll say, ‘that’s great, give me the list of who you’re funding and I’ll tell you who can scale a solution.’ Or, we will develop an official partnership and work together to identify solutions that can be scaled. That’s what we do.
What is your view on collaboration generally?
Collaboration is something that’s led from the middle in the philanthropic field, not from the top. The really big philanthropies can’t collaborate for the same reason that a lot of the big international development organisations can’t collaborate – you have too much money and too much of a signature on a pot of money. It is difficult for big foundations to collaborate when they are the fat boy in the canoe. They are simply to large to do anything other than drive the process.
So it needs to be more modest-sized foundations?
Modest-sized foundations can often work together because they see advantages to being interested in the same subject matter. At the Bernard van Leer Foundation, we pooled a research fund with four other foundations including UBS Optimus, Oak, KBF because there simply was not enough science behind how to end violence in children’s lives. So we built a fund to figure out what’s the best science out there. It was between maybe USD650,000 and USD800 million. Modern collaborations like Co-Impact, Blue Meridian, and so on, have strengths and weaknesses. I understand Blue Meridian really came about because the Doris Duke Charitable Trust felt that they weren’t getting scale so they came up with the idea of pooling money around particular topics.
You say collaborations are both strengthening and weakening. Can you just unpick that for me a bit?
It’s a strength because everyone learns together. Landscape maps are generated together which is generally how collaboration starts and everyone learns what’s going on in a field, and the occasional sharing of grantees is also quite nice. You get a pool of people that you can talk to who don’t really want anything from you other than your knowledge, and so that’s a very safe kind of thing. The downside is that when you’re doing projects or when you decide to pool money, everybody’s little piece must be reflected in the outcome. It’s generally easy to get to a broad set of parameters that everyone can agree on, but then it becomes very hard to satisfy all of the demands from all of the different organisations when it comes to details. The organisational imperatives of the foundations can make it difficult to actually agree upon a grantmaking strategy, and then make the grants to follow that strategy. So you need a really strong CEO, one with both diplomatic skills and finesse for collaborations to work, and generally, what ends up happening is that the CEO gets picked by five of the biggest funders in the collaborative, and the smaller foundations get lost in those collaboratives.
You talked about your experience at the Bernard van Leer Foundation. Do you think collaboratives work best when they’ve got a specific thing to focus on?
When we all agree on a problem and everybody puts an equal amount of money forward to fix that problem, yes. I’ve worked for foundations, generally at the top of them, big and small family foundations and big established foundations, and I honestly think that the way in which DRK goes about it is probably the most effective model I’ve seen, because it results in scaled organisations that have strength and resilience that are generally locally-grounded and locally-based, and are able to serve millions and millions of people. And they are new! A whole bunch of the ones that are already serving a million or above every year are less than eight years old. Food for Education in Kenya is a really good example and that’s because the person who founded the organisation got the support and money that she needed at the right time in the right dose in order to be able to scale appropriately. She feeds over 40,000 children a day all in the span of the 45 lunch period.
Andrew Milner is features editor at Alliance magazine
Comments (2)
Would you manage to help involve and partner with us through organization to registered in Kenya. We are doing some projects and including dealing with directly community at large
To the help the organisation is registered in KZN Zululand to the school uniforms for the children to the spot the difference between the children orphans HIV aids to are working with you to the help the team and equipment for the need to organise a volunteer to organaztion nkosibagcine orphans HIV aids and staff and board member please can you help the children