Funding Without Prescription

December 9, 2016

Source: Stanford Social Innovation Review
Author: Rachel Greenberger

For the past five years, I have taught food entrepreneurship through Food Sol, a startup I co-founded at Babson College. For my work guiding food entrepreneurs of all kinds, I look for patterns and predictions in consumer trends, new business models, and disruptive ideas to improve the food system. I’ve long been fascinated by the original social enterprise in food, Newman’s Own. For me, the name conjures an image of that eternally dashing actor Paul Newman, and then I think of his philanthropy. I wanted to know more about how his company fits into the context of the US food industry.

In the 1980s, Newman’s Own pioneered in two major ways: It placed natural and organic foods on mainstream supermarket shelves, and it led the charge into the nascent realm of brands on a mission.

As most people know, Newman started his company purely as a means for giving back: 100 percent of its profits go to charity. But as the company grew, it blossomed into the first significant business case for social enterprise in food. Now, three decades later, grocery shelves teem with brands for good. Meanwhile, Newman’s Own and its foundation quietly continue at the cutting edge in philanthropy.

In late 2014, the foundation announced $10 million in grants to dozens of nonprofits working to increase fresh food access and nutrition education in underserved communities. Of this, $4.5 million was earmarked for a “nutrition cohort”—a bold experiment in collective impact among six nationally recognized nonprofits.

“We noticed that a handful of our grantees were of similar age, scope, and mission,” says Kelly Giordano, managing director of the foundation. “The leaders of these organizations had never all been in the same room together, and we thought: Well, why shouldn’t they be?”

The foundation awarded capacity-building grants over a three-year period to National Farm to School Network, The Food Trust, FoodCorps, Wholesome Wave, Fair Food Network, and Wellness in the Schools to develop their individual infrastructures and programs, with the stipulation that each send its executive director to the first gathering of the cohort, in early 2015.

Giordano recalls that initial meeting: “We told them, ‘We want you to lead here, to determine what the collective impact will be. We are not here to prescribe. If after this meeting you don’t feel the cohort will serve you, you don’t have to meet again, and you have your grants with no strings attached.’”

It was a bold beginning and not without its challenges. “I had a healthy level of skepticism,” remembers Oran Hesterman of Fair Food Network.

The six executive directors were tasked with pinpointing the areas for development they most valued. Curt Ellis, of FoodCorps, reflects on the invitation: “It is a high-risk thing for a funder to convene a group of grantees and expect them to play nicely together. I came in skeptical about what sort of arranged marriage I was being walked down the aisle to … ”

In research I led at Babson College on funding strategies among food-focused nonprofits, we consistently heard the term “bundling” to describe nonprofits linking arms before collectively pursuing investment. So although the foundation’s approach was not necessarily novel, its implementation certainly is.

As collective impact leaders know, putting well-meaning people in a room together is never enough. The reality is that few conveners—let alone funders—know how to respond to the desires of those they assemble. Even fewer know how to fuel those desires.

The foundation employed an independent consultant to facilitate the early dialogues, and consistently emphasized that although it was there to provide logistical support, the cohort members needed to drive themselves. Robert Forrester, president and CEO of Newman’s Own Foundation, says, “We were willing to move at the speed of trust.”

That took time. The cohort was being asked to contravene two of the nonprofit sector’s most deeply embedded beliefs: that other grantees are competitors and that being candid in front of funders can jeopardize future investments. Ultimately, it formed a peer-to-peer learning collaborative and chose four learning areas, all tied to the members’ organizational health: fundraising development, board development, succession planning, and employee performance management and development.

Over time, a culture of open communication supported earnest, tactical disclosure of strengths and weaknesses in front of the funder. In perhaps the most impressive outcome to date, members have introduced one another to their other funders, in effect sharing pathways to money.

“We are working in a field not seen as valuable in philanthropy,” says Hesterman, who has been involved with sustainable food systems since before Newman’s Own launched. “We are all competing for limited funds. But through the cohort, we have come to new shared beliefs that this is not a zero-sum game and that, if we work together, we can bring more dollars into the field—for ourselves, each other, and the future.”

What, then, is at the heart of the collaboration challenge? Mission-driven leaders certainly don’t lack determination and motivation. The difficulty lies in what Hesterman acknowledges: Most nonprofits operate from the belief that the world is resource-constrained. Achieving resilient outcomes demands that players begin to see (or create) abundance where previously they saw only scarcity. Shifting that mindset requires a willingness to focus on the question at hand and loosen one’s grip on perceived solutions. Individual leaders must continually choose curiosity over certainty.

In his book The Necessary Revolution, systems scientist and educator Peter Senge writes, “Collaborative efforts are in their infancy. As more people realize that the core challenges of the Big Three global systems (energy and transportation, food and water, material waste and toxicity) cannot be solved in isolation, these collaborations will spread and become more sophisticated. … This is where real leverage for the future lies.”

Newman’s Own Foundation has brought to the nutrition cohort a carefully calculated strategy, patient capital, and a willingness to let go of knowing—and thus controlling. The cohort’s work is a compelling model for how leaders—of any sector, in any issue area—can pursue collaborative change for good.

First posted on Stanford Social Innovation Review December 9, 2016.