Tackling the Learning Curve: Reflections on Patty Stonesifer's Insights
By Clara Miller | December 7, 2006
Mario Morino's post, "Slow Down and Listen": Lessons from Gates Foundation CEO Patty Stonesifer, is an excellent summary, and what a great duo Mario and Patty Stonesifer make! I heard Patty interviewed by Diana Aviv at the recent Independent Sector conference, and was impressed then as now. Several great points were made, and here are a couple of my favorites, with some thoughts.
"There are no silver bullets," said Patty. One of the biggest surprises in her transition from the private sector has been the need to slow down, listen, and learn from the past.
The point about "willingness to learn" sounds basic but it's so important. I have seen the nonprofit field greatly invigorated by people coming from the for-profit world, and my observation is that everyone - even those of the caliber of Mario and Patty - is surprised by the steep learning curve required for success. My colleague at Nonprofit Finance Fund, George Overholser (also a for-profit veteran who was a member of the founding team of Capital One) likes to compare the nonprofit side's business environment to an expert ski slope: "It's double black diamond management in the nonprofit world! Extremely difficult." The difficulty is a surprise to those wanting to bring expertise to the social sector...it's not all that rational or predictable from a for-profit business point of view. And when the operating assumptions are adjusted to reflect reality, it gets even harder.
To date, 85% of the Gates funding has been through partnerships, and Patty stressed that partnerships would be an even greater part of their strategy moving forward, driven by both the new size of the endowment and giving requirements from the Buffett gift and the magnitude of the global problems they are addressing. She is determined to work with all major players - government, markets, media.
As Mario and Patty highlighted when they note the sector's complexity, its need for partners and the central role of government, it's a difficult proposition to stay healthy - much less expand - as a social sector organization. But program growth is what our missions and passions tell us to do. And in the end, the prime competition is frequently for "subsidy" in the form of contributions, not for market share of needy customers. It sounds like Gates is poised to help provide the kind of intellectual and material capital that will help the sector take on our most daunting challenges.
"Don't talk about 'philanthropy.' Philanthropy is just one of a suite of tools," she suggested.
I agree heartily with Patty. During her interview at the Independent Sector conference she observed that the entire asset value of the Gates Foundation is less than California's annual public school budget. Our sector is tiny by commercial standards. The largest nonprofits (such as Harvard, or the Red Cross) have annual revenue toward the bottom of the middling range for corporations, dwarfed by the likes of Walmart or Citigroup (or Microsoft). The vast preponderance of nonprofit organizations are tiny by business standards, more like a fleet of small- to medium-sized auxiliary boats, deployed to mend breaches in the social fabric, shore up flaws in the commercial system, or transport people to opportunity. The management conundrum is that the problems are difficult and large scale, yet the fleet is small, somewhat leaky and the fleet's stakeholders think the crew should be able to walk on water! (sorry) Maybe the Internet virtuosos (Omidyar, Skoll, etc.) mentioned in the Mario's article will deploy the organizing power of the web to create Dunkirk-like operations in communities.
In the end, we're all in the social sector. I once was making a somewhat desperate attempt to define "social enterprise" for a Nonprofit Finance Fund board member. I tried to think of an example of the opposite: an "anti-social" enterprise, if you will. Each of us has favorites, but there aren't all that many. Most organizations provide social benefit of some kind, some to millions of people. Philanthropy - and nonprofit organizations - simply can't do it alone and, in truth, never have.
Read Mario Morino's post: "Slow Down and Listen": Lessons from Gates Foundation CEO Patty Stonesifer