posted on: Tuesday, November 24, 2009

by Julia Craig

Last week, NCRP Executive Director Aaron Dorfman, Senior Research Associate Lisa Ranghelli and I attended the 38th Annual ARNOVA conference in Cleveland, Ohio. During the opening plenary on Thursday evening, David Abbott, CEO of the George Gund Foundation and chairman of the Fund for our Economic Future of Northeast Ohio, told the inspiring story of the Fund’s work collaborating with nonprofit and foundation partners to improve economic opportunity in the Cleveland region.

Together, the Fund’s nearly 70 members raised more than $60 million to address the structural economic problems in particularly hard-hit post-industrial northeast Ohio. Each member contributing more than $100,000 over three years has one vote in the decision-making process, a governance structure that means, as Abbott noted, no member always gets its way, which is a novel concept for many foundations. The Fund came about because a number of foundations wanted to better address the crisis nonprofits were facing and effectively respond to their partners’ needs.

Abbott gave a few examples of how this has played out, such as by helping nonprofits respond to new federal funding opportunities and brokering collaboration among nonprofits in the human services field. But, he said, this is not the real opportunity for funders. “To me, the real opportunity is to marshal our philanthropic resources to make a difference in the underlying conditions that put nonprofits and our communities in peril. That is especially true in the older industrial communities of America where the market forces that have stripped us of much of our capacity have not recovered… because the issues are deep-seated and structural.”

The Fund has taken a regional approach to the problem and focused on increasing northeast Ohio’s relevance in the global economy. The Fund has leveraged its investments in start-up ventures with nonprofit partners into greater venture capital for high-growth companies. The Fund has even drawn attention to the ways in which local government structure contributes to economic costs, prompting citizen involvement in advocacy to change decision-making structures.

Abbott told the story of a highly successful philanthropic collaboration, but he also recognized the precariousness of the partnership. Foundations are not used to giving up their individual power to collective will, and as Abbott said, “The individual response to need makes us feel good – especially if we ignore the inadequacy of that response.”

Abbott recognized that current members of the fund may lose interest and it may lose its ability to respond to the economic structural problems of the region in a meaningful way. He also noted that philanthropists tend to be overly optimistic about what they are achieving because they usually operate in a world of “isolation and adulation” that doesn’t always reflect reality. Collaboration, then, is a risk: it involves stepping out of that bubble and potentially “foregoing effusive praise.” This is an important message for funders to hear and understand.

The Fund represents something unique in philanthropy, as does Abbott’s perspective as a foundation leader. He recognized the temptations of individual action and the challenges of taking the long view. He also acknowledged that some have questioned whether it is the role of private philanthropy to make investments in economic development and structural change, but pointed out that one of the main reasons for the Fund’s genesis was that its members saw a void. Abbott ended his talk on an upbeat note, hoping that other regions will see the success of the Fund and develop their own meaningful funder collaborations. His message of the urgency for collective action was one that resonates with NCRP’s values.

Aaron, Lisa and I were excited to hear a philanthropic leader expressing these ideas. What do you think? If you were at ARNOVA, what did you take away from Abbott’s speech? Are foundations doing enough to address the problems of the recession? Does the Fund for our Economic Future represent a viable solution for other regions? Leave your thoughts in the comments.

Julia Craig is research associate at NCRP.