Getting Results Today

The Telluride Watch
Published: 9/12/06
By Thomas Wirth

A new paradigm in philanthropy is emerging, in the opinion of Paul Major, president of the Telluride Foundation. Without exactly knowing that they were moving in that direction, he says, the Telluride Foundation finds itself a member of the new movement.

“We are very much finding that what the newer and larger foundations are doing applies to what we hope to accomplish [in San Miguel County],” he says.

“The traditional foundation model used by some of the great U.S. philanthropists such as Carnegie, Rockefeller, Ford, Kellogg, Lilly, etc.,” explains Major, “has been to set aside estates into a private foundation with preservation of the principal in perpetuity.”  From these foundations, he says, annual grant spending is approximately five percent of foundation holdings.

The newer model is exemplified by the much-in-the-news foundation of Bill and Melinda Gates, which has recently received a $31 billion commitment from guru stock investor Warren Buffet. The Gates Foundation not only focuses on how to maximize the value of its donors’ money, but how to get results today.

This newer model embraces the concept that more can be done immediately with today’s dollars than can be accomplished with lesser amounts gleaned from an endowment over many years.

“Some very smart, sophisticated and wealthy people are thinking about how to do things differently,” says Major. “And the conclusion is we’re better off spending those dollars today and trying to make direct change today versus putting them away for generations to come.”

Without expressing the exact concept at the time, Major explains, “From day one our board members said, ‘We’d love to have an endowment for future generations in Telluride, but right now we think our money is better spent by dealing with issues today.’”

The Gates Foundation has focused its resolve on global diseases and education, he says.  It is looking at the expertise and the resources available to it now and deciding that the time is ripe.  Major explains the concept as “solving the problem versus just treating the symptoms.”

“For some issues, you don’t have a direct solution,” says Major. He says that homelessness, for example, can, in theory, be eliminated, but due to its multiple causes, it is the type of problem that will take time to show progress. Despite that fact, instead of only building soup kitchens, for example, money can be spent now to address some of the underlying causes, such as mental illness.

“This way of looking at foundation work allows us to address pressing needs more effectively,” says Major. In a growing community like San Miguel County, “and whatever your gauge is, this place is growing,” he says, “eventually things build to a critical mass where it just takes more and more money to address an issue.”

This mechanism has worked extremely well for the Telluride Foundation. It has awarded grant money of over $5.4 million in its six-year history, with over $1.5 million given in 2005. In addition to its grant monies, the foundation also contributes to the nonprofit community by “capacity building,” which helps other nonprofits grow and flourish through training and being a resource clearinghouse.

The foundation also spearheads a number of its own initiatives, mostly focusing on children, healthcare and the growing Latino population. New this year is their “Special Initiatives.”

Multi-year and capital improvement grants are not part of the foundation’s normal grant process. Just handing out money is not what the foundation wants to do, Major explains. He expresses the idea as helping people help themselves. Giving long-term grants often damages an organization, he cautions, because they become reliant on that money instead of “varying their portfolio.”

“We’re committed to growing our grant funding twenty percent a year,” Major says.  “We need other nonprofits to strategically grow their programs and we can partner in that growth.”

With that in mind, says Major, sometimes projects or organizations need longer-term help to get off the ground. The new Special Initiatives allow those programs to be evaluated and funded.

Another important aspect of the new model for philanthropy is the movement from “warm and fuzzy” to “results-oriented” giving. Major uses the Robin Hood Foundation of New York City, which focuses on poverty, as an example. That foundation, he explains, finds the best method available to gain results through rigorous evaluation.

This is the same process that the Telluride Foundation is now embracing, says Major. The first step is pinpointing the need that the foundation wants to address. Next comes identifying the best means for achieving results, be it through an existing entity or through creation of a new program or group. Last comes a need for direct analysis of the results.

It is this last step at which the Robin Hood Foundation excels, says Major. “They have an independent evaluator come in on every single grant and say, ‘This worked. This didn’t work.’ If it is a job training program grant, they don’t say ‘We gave them the money and they trained some people.’ They want to see who got jobs, how their income went up, did they retain their job, etc.,” explains Major. “It’s an investment mentality that they have brought to philanthropy.”

A final aspect of this new idea in philanthropy is, perhaps, a desire to see some of the fruits of one’s labor.  Major explains: “I think even a few years ago, Buffett was thinking that he would leave his money in a traditional foundation when he died, but after watching the Gateses he began to think, ‘Why don’t I put my energies, expertise, intellect and abilities into this for the rest of my life.”

Whereas the Carnegies and the Rockefellers of the world decided to leave a legacy of endowment for future generations, the new thinking may embrace the concept of creating a legacy “while they’re here to enjoy it,” says Major.
Many donors to the Telluride Foundation have precisely that attitude, he says. Major says that the typical donor to the foundation is someone who has an interest in the general quality of life in the region.

“If someone is only interested in donating to film, let’s say, we would direct them to the Film Festival, because going to them directly is going to give the donor the greatest return on their investment,” he explains. “We’re a resource to connect that donor to Film … or the Ah Haa School or the San Miguel Resource Center.
“Our donors are interested in supporting a lot of the day-to-day nonprofits, the emerging issues that we’re very much engaged in, and leveraging their dollars.”
Major has heard the criticism that the foundation is siphoning off all the nonprofit dollars in the region from other nonprofits. “That’s an easy criticism of us,” he says. “That we’re dividing up the giving pie in Telluride.  It’s just not accurate. We’ve got the numbers that show that we increase the pie. About 80 percent of the money we raise annually is new money. People who are giving more money than before or who have never given.”

“We’ll take other criticisms,” he jokes, “but that’s not one of them.”