Feature

So much has changed our world in the last decade—it's as if we're explorers in an uncharted territory. Who knows the best way to move forward anymore? Fourteen grantmakers got together to discuss how their organizations might be truly transformed by the digital age and other external forces. Now they're trying mightily to "walk the talk"—and to broaden the conversation to include more foundation colleagues.

As members of the Marco Polo Inquiry Group, we are committed to working within our foundations, between our foundations, and to reaching out beyond our foundations, to communicate and share in new ways, so that we can optimize our assets of money, networks, knowledge and expertise, to participate in solving our communities' most critical problems in more powerful ways.

So reads the opening paragraph of the "Marco Manifesto," a work-in-progress document that captures the ambition and commitment of a group of 14 funders, and several colleagues working with foundations. (My role has been to serve as the inquiry's project director.)

This group first came together a year and a half ago because the individuals involved wanted to get their arms around the ways their foundations were being challenged by external forces to listen, learn, lead and communicate differently.

They also wanted to act on what they learned—not just talk.

The group's work is far from done, but it has already produced some important outcomes, including a set of seven points that distill the essence of what the members are aiming for (see "Seven Emerging Lessons," page 36), a paper about the new work of communications in foundations and a list of resources that were helpful as the group pursued its inquiry. We have also spelled out some ambitious next steps.

The Beginning

Two things brought this group of mostly CEOs to the table. One was an intuitive sense that in a networked, knowledge-creating and information-driven society—where leaders struggle to build reponsive, open and adaptive organizations—communications was becoming something far bigger (and closer to our desks) than annual reports and Web sites and public education campaigns.

The other was a desire to connect some hard new thinking on communications with another set of conversations increasingly prevalent in philanthropic circles. What is effective philanthropy, and in what ways are foundations being called on to leverage their assets to the fullest public benefit?

Rather than have everyone take the time to ponder it all alone, we decided it would help to think deeply together and figure out what all the changes going on around the foundation world—demographic, economic, technological, governmental changes, that is—meant for the ways foundations work.

And the foundation members of the group knew they didn't have all the answers. In acknowledging this, they took their cue and their name from a grantee comment that had become a driver for much of my work on foundations and the ways foundations connect to their communities and partners in turbulent times. As the grantee so evocatively put it: "I would respect [foundations] so much—and I do respect the ones who do this—if I felt they were in a searching mode . . . that they didn't always 'know'. . . that they were Marco Polos in a new landscape."

Setting Out

In fact, the starting point for the group's inquiry— the group now known as the Marco Polo Inquiry Group—was the final report from a study of the expectations of foundation stakeholders that my firm, Millennium Communications Group, did. It was in this study that the grantee comment about being Marco Polos surfaced. That study produced a series of recommendations for a new kind of foundation communications strategy—one that would help foundations frame their assets more expansively than "grants," forge powerful two-way connections with a broad set of stakeholders, and better equip foundations to become seekers, navigators, knowledge creators and "partners-in-inquiry" in today's fast-changing world.

The Marco Polo Inquiry Group's task was to explore those recommendations to the fullest. The group has done its searching and navigating work through a series of half-day meetings over the course of the past 15 months—drawing significantly on the time and intellectual leadership of the participants as well as their financial investment.

Staying Away from the "Shoulds"

The members of the group that first assembled in October 2000 held the common vision that the work of foundations is fundamentally about social change and public problem solving. And they straightforwardly acknowledged that this was not a sense of mission all foundations necessarily shared.

They also made a critical early decision about the voice of the group: They very explicitly (and importantly, for what they've produced) stated that they were speaking only for themselves and not from any sense of what all foundations "should" do.

Beyond those common convictions, the group was deliberately diverse. Though with one exception all participants were from California, the foundations they came from represented a deliberately wide range of asset size, location, foundation type, operating style and number of years of operation. They also brought different perspectives from a range of positions—in addition to the CEOs who made up the majority, there were senior program officers, trustees, the executive director of a funders' collaborative, and leadership from a regional association of grantmakers. The participants deliberately wanted to keep all these perspectives and points of view in the conversation that would ensue.

Learning from Each Other

To fuel our thinking, we drew on the work of a number of "provocateurs"—many from the business world who talk and write about current issues like knowledge management, customer satisfaction, communities of practice, and the social and organizational implications of the wired world. We spent time connecting our reading on these subjects back to what it might mean for foundations. (See "Resources" box on selected readings, page 41.)

There has also been substantial cross-foundation learning, which reflects one of the important core ideas of the Marco Polo Inquiry Group. For example, Los Angeles Urban Funders (LAUF) is a collaborative with more than 30 members whose operating principles have been designed expressly to create a culture of experimentation and group learning across the member foundations. The group explored LAUF's experience with strategies to "transform philanthropy" through collaboration.

The Charles and Helen Schwab Foundation has made knowledge sharing a defining characteristic of its work, and participants were highly interested in what Schwab is learning about the staffing, programming, communications and organizational culture that come from that. Marco member Jane Pisano, former associate provost at the University of Southern California (USC) as well as a trustee of the California Community Foundation, shared her perspective on the role (and interplay) of leadership and communications in the organizational transformation that has catapulted USC from "a second- or third-tier university" into the very top ranks.

The group also created a number of "navigational aids" for its work. We mapped the players—new and old—in the California philanthropic landscape. We charted the evolution of the communications function in foundations. We also created a framework that lays out predictions for ways the digital age will drive deep organizational and cultural changes all across foundations, not just in technology areas (see "Map Making in Progress" on page 41).

Some Preliminary Outcomes

Now, 15 months into it, we Marcos have a few things to show for the time we have spent. The seven emerging lessons are the touchstone, defining the kind of leaders the Marco foundations aspire to be, regardless of size, structure or focus. One member called the lessons an "Apostle's Creed."

These lessons portray foundations as but one player in a much larger ecosystem of public and community problem solving. They put a very high priority on working and sharing across foundations, and they position foundations as both sources of knowledge and "enablers" of learning and knowledge creation from others. They call for using communications to exert a different and more transformational kind of leadership, in their own organizations and in the broader community. And they point to a new definition of accountability in a networked and multiparty world that is most definitely not "foundation-centric."

The Marcos have also developed a powerful thesis about the foundation communications that flows from those lessons. In our vision, communications is a core strategy for accomplishing mission—thus, much more about impact than image. It is a leadership function, with clear calls for the CEO and the trustees, as well as the program staff, to participate.

There is a central role in communications for encouraging learning and capturing and sharing knowledge. And communications is just as vital in small or unstaffed foundations or ones without designated communications staff as in large foundations.

The Marco group calls for the practice of communications at three critical levels or arenas of foundation life: within the foundation, across foundations and beyond foundations.

The Next Level

Now the Marco group is embarking on a second level of work. We are developing the in-depth communications framework that emanates from the Marco lessons, which will aim to lay out the full range of strategies that foundations may choose to apply as they work to achieve their missions and deliver value. This work will be done first within the group itself.

Then, through a series of meetings and some electronic dialogue, the process will invite the participation of many other players from philanthropy and beyond.

The group will launch a Web site (www.marcopolos.org) in spring 2002 to support participation in the framework project and share Marco content and resources as they are developed. And the group will continue as a learning cohort, working and sharing together in today's ever-changing landscape.

Seven Emerging Lessons

This evolving document distills the conclusions the Marco Polo Inquiry Group is drawing from its work on the way participant foundations are called on to "listen, learn, lead and communicate" in the new landscape. In publishing these lessons at this "midpoint," the group invites other interested grantmakers to add their perspectives to the thinking and to the ideas the lessons reflect.

A Larger Ecosystem. In all our foundations, whatever their size or focus, we need to make our walls more permeable: to become more connected to the world and the other players around us, more attuned to what others expect of us and to where we add value to a larger process. We need to become better consumers of ideas and experience from other players and sectors and more skilled at designing joint responses to shared needs.

Cultural Adaptability. The wired world is changing the fundamental nature of our political, organizational and social life. It sets up high expectations for open access, transparency, rich and "storied" data, knowledge sharing and rapid response time; it flattens hierarchies, calls boundaries into question in both positive and negative ways, and makes "linking to learn" and "learning by doing" the order of the day. Most of our foundations are ill-equipped culturally to operate in this world.

Customer Satisfaction. We find the idea that foundations "don't have customers" (or don't operate in a marketplace, or don't have anything analogous to bottom-line accountability) to be misleading and shortsighted. For us to be the organizations we want to be, performance matters. The measure of our performance is not just the evaluated outcomes of our grants. It's also the value our customers—be they donors, grantees, elected officials or program partners—experience from our work.

Knowledge. We need to get better at learning from and with others, at recognizing grantees as the source of much of "our" knowledge, at enabling others as knowledge creators, at turning grant output into usable knowledge for others, and at determining what skills, systems and cultures inside foundations best support this knowledge work.

Communications as Leadership. The drive for change in foundations comes most directly to the leaders at the top. It demands of us a different set of skills and priorities than we have traditionally been asked for. It compels us to value and practice communications as a leadership skill—for its full power to help build cultures of teamwork, learning, innovation and responsiveness inside the foundation, and to put the full weight of our foundations behind the work of building constituencies for equity and change outside our foundations.

Cross-Foundation Work. Creating a culture of shared work and shared learning across foundations is profoundly important. Echoing the "silos" that exist within many of our foundations, we have developed as institutions our lone capabilities and identities. There is much we can learn from each other. There is much redundancy—deriving from our instinct to "invent it here"—to eliminate. And there is much potential in thinking of our different organizations as composing a system of problem solving.

Expanded Accountability. In distilling the themes above, we hold ourselves to a new definition of accountability. This new "higher standard" accountability is based on the conviction that unknown, isolated and perceived-to-be-inflexible organizations will become less and less able to create value in our networked society—thus generating lower return on exempt assets and ultimately becoming less accountable in the context of public benefit.

Map making in progress

Several predictions come from the Marco Polo Inquiry Group’s preliminary map of the new communications environment and its implications for foundation practice. A session at the Council on Foundations annual conference (in Chicago, April 29–May 1; see www.cof.org for more details) will invite others to expand and refine the framework this is taken from, and the resulting document will then be posted—and built out with examples of relevant practice—on the Marco Web site (www.marcopolos.org, coming spring 2002).

From the Marco Group’s list of 12 characteristics of the wired world:

• The expectation of "seeing inside" an organization, right away, and from all around the world, grows.             
• Customer/partner input and preferences exert more influence over business and nonbusiness organizations of all kinds.             
• Control—of messages, boundaries, participants, timing, etc.—is more and more challenged.

From the group’s list of 24 critical implications for foundations:

• Relationships with partners. There’s a greater need to have extensive working knowledge and experience of other sectors inside the foundation, and for more traffic in and out of foundations.             
• Use of board and other leadership/advisory cohorts. Boards will be increasingly looked to for the ability to take knowledge and relationships out from foundations, and to bring knowledge and relationships back.             
• Leveraging knowledge assets. There’s an increasing possibility that foundations "point to" or "enable" the knowledge of others, rather than serve as "repositories of" or prime creators of knowledge.             
• Transparency and open access. The "one click and you’re in" world creates much greater demand for letting people see inside foundations and understand their decisionmaking. There’s also a much greater likelihood that others will create spaces or conversations where foundations are transparent or exposed.      
• Materials/public information. There's less potential to control messages, timing, stories, ownership or decisions about when something is "known" in a quantifiable way and ready to be shared. There is less room for definitive statements and more incentive to tell stories; provide rich, voiced data; point to ideas and share work underway.

Resources

The Cluetrain Manifesto by Rick Levine, Christopher Locke, Doc Searles and David Weinberger (Perseus Publishing, 2001).

“Co-opting Customer Competence” by G. K. Prahalad and Venkatram Ramaswamy (Harvard Business Review, January/February 2000).

The Deliberate Evolution by Lucy Bernholz (a short paper created for the Marco Polo Inquiry Group, 2000; see page 32 of this issue).

“The New Organizational Frontier” by Etienne Wenger and William Snyder, in “Communities of Practice” (Harvard Business Review, January/February 2000).

“What’s Your Strategy for Managing Knowledge?” by Morten Hansen, Nitin Nohria and Thomas Tierney (Harvard Business Review, March/April 1999).

“Your Job is Change” by Robert Reich (Fast Company, October 2000).

Marco Participant Alexa Culwell

"It Has to Be Actionable"

Alexa Culwell is CEO of the Charles and Helen Schwab Foundation, located in San Mateo, CA, and created in 2001 out of the merger of the Schwab Foundation for Learning and the Schwab Family Foundation. The vision of the merged foundation is "to invest in people to transform their lives." Explicitly stated foundation values include empathy, passion, urgency, responsiveness, innovation and knowledge sharing.

Thinking about the foundation's approach to its work, Culwell recalls the Schwabs' emphasis on responsiveness and sharing. "They feel strongly that foundations need to leverage each other's knowledge in order to have better impact," Culwell says. "To do this they wanted us to become adept at both disseminating knowledge and bringing it in."

This thinking is translated into practice in the foundation. Its 60-person staff is expected to know and live by the foundation's value statement, which was written in 2000 during a long-range visioning process. There is a Web site with a vast store of user-friendly information, in Spanish and English, for parents of children with learning differences.

The foundation has a chief knowledge and evaluation officer. It provides a weekly distillation of news and commentary related to each of the issues the foundation is working on for all staff, partners and grantees. And Schwab is a founding member, along with the Peninsula Community Foundation and the Sobrato Family Foundation, of the Organizational Capacity Grants Initiative (OCGI), a nonprofit capacity-building initiative where the funder CEOs invest significant time in learning from and with their counterpart nonprofit leaders.

Of her aspirations for the Marco group, Culwell says: "When the Marco Polo Inquiry Group started meeting, my whole contract for being there was that it had to be actionable at the end … if we were going to emerge with a set of aspirational language, some kind of manifesto for just the sake of putting some high-minded ideas out there, then it would be a complete failure."

Marco Participant Sterling Speirn

Making the Foundation a "Knowledge Bridge"

Sterling Speirn is the president of Peninsula Community Foundation (PCF), the 37-year-old community foundation in the heart of Silicon Valley that broke a national record last year by registering $230 million in gifts received in a single fiscal year.

Speirn came to the foundation from Apple Computer, and for him, philanthropy is a highly contemporary, fast-moving and deeply personal enterprise.

The PCF Web site speaks of "philanthropic exuberance," and the foundation itself—which was using the phrase "venture philanthropy" as early as 15 years ago—sponsors a Venture Van that takes would-be donors on trips to learn about community issues and organizations.

"Our formula," wrote Speirn in the foundation's annual report, "for turning the promise of philanthropy into progress is simple: connect our donors with the resources they need, and encourage their high engagement around the issues they care about the most."

Some of the issues most on his mind: realizing that foundations are "competing for mindshare" with other forms of philanthropy; developing a whole new vocabulary that reaches the donors, captures the promise and expands the grantmaking/program officer constructs; building a culture where donor service is part of every department ("we're all bilingual and bicultural here," he says with an obvious twist on the usual meaning); and figuring out how to make PCF the "knowledge bridge" between the nonprofit organizations and networks that PCF works with and the donors who care about those issues.

His big idea from Marco so far: "The most fascinating thing to me is this learning and sharing across foundations. We all capture and manage knowledge within our foundations.

"But who will say, 'Now how do we organize that across foundations?'—not as lighthouses, to brag and tell the world what we're doing, but just to share what we know and learn from each other. Who will build the Yahoo! for philanthropy?"

”We don’t have a communications function per se in the foundation. But we think a lot about communicating and sharing information, and I found great value in learning about how Schwab went about the search for a chief knowledge officer, and what that person is going to do.”
—Claire Peeps, Durfee Foundation

“More often than not, we foundations haven’t worked together particularly well in California. There are foundations that are adamant that that’s the nature of the field, that we weren’t made to work together, that we’re intrinsically different, that our trustees want to work that way . . . and that our role is to be strong, independent, and keep out of each other’s faces. I think that’s a failure to adapt to changing conditions.”
—Peter Pennekamp, Humboldt Area Foundation

As we worked, I became really impressed by how much the new communications environment is forcing change upon foundations—the number of issues, the speed at which things are done, the pressure on institutions to dissolve their boundaries, the influx of information, the absoluteness of transparency . . . by the extent to which these demands are really challenging to foundation cultures . . . and the extent to which we greatly lag behind the private sector in our ability to respond.”
—Steve Toben, Flora Family Foundation

Members of the Marco Polo Inquiry Group

Lucy Bernholz, Blueprint Research & Design, Inc.

Dennis Collins, Irvine Foundation

Alexa Culwell, Charles and Helen Schwab Foundation

Diane Ford, Sobrato Family Foundation

Elwood Hopkins, Los Angeles Urban Funders

Gabriel Kasper, David and Lucile Packard Foundation

Barbara Kibbe, David and Lucile Packard Foundation

Lorna Lathram, Omidyar Foundation

Tom Layton, Wallace Alexander Gerbode Foundation

Kathleen Odne, Dean and Margaret Lesher Foundation

Allan Parachini, California Community Foundation*

Claire Peeps, Durfee Foundation

Peter Pennekamp, Humboldt Area Foundation

Jane Pisano, California Community Foundation and University of Southern California*

Marcia Sharp, Millennium Communications Group, Inc.

Sterling Speirn, Peninsula Community Foundation

Steve Toben, Flora Family Foundation

Caroline Tower, Northern California Grantmakers*

Gene Wilson, Ewing Marion Kauffman Foundation

*affiliation as of project inception, October 2000