Annual Reflection
By Phillip Henderson, President and Jocelyn Downie, Chairperson
Learning organizations need sound, critical judgments to improve. They have to face facts. And to do this, they have to learn to confront failure.
When Surdna adopted its strategic framework several years ago—a document we call our Roadmap—we named learning as a core element of how we wanted to work. We valued it as something that would help us achieve our mission of just and sustainable communities. To accelerate our evolution toward becoming a learning organization, we continue to create systems and ways of working that help us assess our performance and use that insight to improve our skills as a grant maker, and to increase our impact in the fields we fund.
While we knew it then, we are now even more acutely aware of the importance of learning to our work—and how very difficult it is to do. And, do it well.
Grant making foundations are peculiar organizations. While we are accountable to our boards and try to hold ourselves accountable to our own grantees, unlike corporations, we do not answer to shareholders. We’re inoculated from the quarter-to-quarter pressures that haunt most Fortune 500 companies. While this might seem like nirvana to most corporate leaders, as we work toward fostering sustainable communities guided by principles of social justice, we find it to be one of our biggest challenges.
When you give away money for a living, all of your jokes get laughs and your every utterance is profound. In the absence of any real market forces and the almost constant flow of positive feedback we and other foundations receive, it is easy to slide into the trap of listening to your admirers and to begin thinking that you are actually performing pretty well.
With no corporate-type accountability to constrain them, foundations are uniquely independent. For Surdna and other grant makers, this also means that if we want to achieve excellence, we have to generate that motivation ourselves. While we are a long way from achieving our goals, we believe we are most likely to stay on track if we remain committed to constantly pushing ourselves to take risks and to innovate. But also to analyze our successes, and especially to admit to and examine our failures.
When the Los Angeles Metropolitan Transportation Authority voted in 2012 to award a nearly billion-dollar contract for light rail cars to a Japanese manufacturer with plans to build the cars in Osaka, Japan, we could see that our strategy of getting transit agencies to prioritize the creation of good American jobs in awarding contracts had failed. Despite the efforts of our grantee, the Los Angeles Alliance for a New Economy (LAANE), and a broad-based coalition of labor, community and business leaders, the transit agency’s decision signaled that jobs and opportunities for economic growth were considered a nice side benefit, but cost was what mattered most.
Failure suggests winners and losers, and that a definitive end point has somehow been reached. But the failure of the coalition’s initial attempt to focus transit agencies on job creation wasn’t an end point. Failure didn’t stop Madeline Janis, the coalition’s leader; it only caused her to re-think and then double down on LAANE’s organizing efforts, which eventually led to success when the Japanese firm agreed to do some of the manufacturing in California. More generally, failure in philanthropy rarely means “game over.” Often it is a moment to re-evaluate, re-focus and re-energize. It re-affirmed for us that one of the fundamental qualities of philanthropic capital is the ability to be patient and persevere—to analyze and learn from tactical failures while re-committing to strategy.
Another failure that helped us not only re-think an investment, but also learn about the nature of failure itself, occurred more than three years into an effort to advocate for community benefits on behalf of the Oakland Army Base redevelopment project. We had assumed the base was the city’s most promising potential source of quality jobs, only to learn that there were several other economic development projects being backed by the City of Oakland. Our investment was flawed—our assessment of the local social and political landscape was inadequate, and the resulting intelligence insufficient. And, for an organization whose mantra is “collaboration and partnership,” we did not sufficiently engage with local funders.
Surdna’s trustees have cultivated an environment that allows us to learn from failures like these. That means we are increasingly comfortable talking about failure. Still, we have more work to do on identifying and learning from failures—partly because not all of them are as obvious as Oakland or the rail car contract. Also, like many funders, we were not set up to be really good at this. Historically, much of the excitement and energy that fuels program officers—their real inspiration—has come from the development of new programs.
Much of our collective grant making energy is focused on conceiving, seeking approval for, and implementing a new initiative or grant. And often, when this front-end part of grant making is done, and as relationships and trust are built, momentum changes as we begin to shift from project development to ongoing oversight. However, when we allow past performance to serve as a proxy for future performance, it does a disservice to the organization and to us. This is especially important during organizational shifts and leadership changes, and accounts in part for the failure of an organization we helped create to work at the nexus of transportation and community development. Following the departure of its founder, the organization’s inability to continue to raise funds—and manage existing funds—led to its eventual demise. While we never took our eye off the ball, we conflated past performance with the capacity to continue to excel.
To get better at learning, including learning from failures, we are increasing the relative time, energy, and attention we allocate to the “back-end” of grant making—long after the award has been made but when the work begins to yield learning. This is where we will find out how we are making progress or if—and why—a project is coming up short.
We are dedicated to continually learning from our experiences—approaching our successes and failures with curiosity, humility, and a willingness to adapt. We know that not all of our investments will accomplish what we or our grantees wish. But we also know that every grant is a bet that carries some risk—risk that we hope will help us create more just and sustainable communities.
Phillip Henderson, President
Jocelyn Downie, Chairperson