Minnesota Council on Foundations Blog – Philanthropy Potluck

“I’m glad I’m on the panel this year and not last year,” remarked Trista Harris, executive director of Headwaters Foundation for Justice, at this year’s 2010 Outlook Program for Minnesota Grantmakers and Nonprofits, presented by the Minnesota Council on Foundations. “Last year, the theme seemed to be ‘Run for the hills! We’re all in big trouble.’ This year, I think it’s ‘Looking ahead with optimism and creativity.’”

While the theme was noticeably less bleak at the 2010 briefing, held Jan. 29, 2010, than it was at the 2009 program, panelists cautioned that times are still tough and will remain so for the foreseeable future. No one, though, is throwing up their hands at a loss for what to do.

Joining Harris as panelists this year were: David Etzwiler, executive director, Medtronic Foundation; Kevin Walker, president and CEO, Northwest Area Foundation; and Kate Wolford, president, The McKnight Foundation. These four foundation leaders shared how their organizations are faring in these still-turbulent times, their predictions for 2010 and strategies for the road ahead.

Headwaters Foundation was founded to create systems change rather than charity. Harris portrayed its efforts as “going up to the roof to fix the leak rather than putting a bucket under it to catch the drips.” These times of great basic needs have been particularly hard for organizations doing systems-change work. She called for foundation boards to have a balanced “portfolio” that includes not only grantmaking with clear, known outcomes, but to stretch their organizations by taking some risks. “If we can’t take risks and we don’t want failure, we’re going to be in the same place. … Sometimes grants fail or don’t turn out the way anyone planned, but we’ve learned something. Going back to only those things that are predictable and comfortable is not the way to go, because that hasn’t been enough to get us where we need to be.” She concluded her comments with hope, saying, “Anytime the economy tanks the way it has, we’re reminded that ‘those people over there with their issues’ can be any one of us.’ This situation we’re in right now will move us toward a much better state and country.”

At Medtronic, leadership is increasingly asking the hard questions and responding to the hard questions being asked of them. Etzwiler said these include: “What’s changing? Are we just looking to get the bucket in the right place or are we getting up and fixing the roof?” In addressing these, Medtronic is expanding its view of philanthropy to include corporate social responsibility and a three-pronged approach: community responsibility to support needs such as those addressed by United Way, Minnesota Food Share and others; relationship building that is engaging Medtronic employees and leveraging the immense skill base that those employees can bring to communities; and shared values, which is involving some risk-taking on the part of the company in areas where, as Etzwiler explained, “The company believes we not only have a responsibility to play a role in a solution, but lead toward a solution.” He gave the example of sudden cardiac arrest. “We’re going to put ourselves out there and tell you what we think change is going to look like over the next few years in a few communities where we think we can have great impact. To the extent we miss those endpoints, we’re going to let you know and tell you why.” He concluded, “We’re much better off now than we were a year ago. … We have no choice but to think that, with radical, well-thought out thinking and innovation, we can have a positive impact on the current situation.”

Wolford of The McKnight Foundation shared how her organization has had to weigh the dramatic roller-coaster ride of the stock market, its effect on assets, the incredible needs being felt now with a mandate that the foundation exist in perpetuity. Even with tight resources, Wolford said it is important to McKnight that it continue to support existing efforts and strategies, but not close itself off from new organizations and new ideas. In these lean times, McKnight is increasingly exploring opportunities to leverage resources in ways that have broader impact and work across silos. It’s important that we all assess “what are we best positioned to do to make a difference not only with immediate impact but in the long term?” Wolford explained. She concluded by saying that, “This year will be tough, because of the state budget situation and the elections, but we need to think about moving pieces forward. This may not be so much about money as about ways of doing things and positioning for the years ahead. We need to try to instill new ideas and use strong, reliable data to guide decisions. … Foundations also have a responsibility to contribute to the civic debate.”

Walker of the Northwest Area Foundation outlined the factors contributing to his organization’s current reduction in giving. “Flat is not the new normal for us,” he said. The foundation is maintaining its focus on reducing poverty and creating sustainable prosperity by leveraging its funding. Walker defines this as “making sure our dollar pushes other dollars in a direction in pursuit of our mission.” Their approach includes developing leaders, engaging in public policy and catalyzing important conversations. The foundation is also exploring ways to put larger chunks of its funding base to work via program-related and mission-related investments. Walker agreed with the other panelists that each foundation needs to have a funding portfolio that includes both safe bets and efforts that require higher risk tolerance, but he cautioned, “There are dumb risks and there are smart risks. I support foundations taking well-informed, smart risks that other sectors aren’t going to be able to take. That’s our privilege and our responsibility.” He concluded by saying, “Hopelessness should never become an American trait. There will be setback as we try and figure our way out of this trough, but with each passing year, the outlook will get brighter.”

- Chris Murakami Noonan, MCF communications associate