Time is of the Essence

Opinion

Olga Tarasov (Rockefeller Philanthropy Advisors) discusses how intentional approaches to philanthropic time horizons can help donors achieve greater strategic clarity, responsiveness, and impact.

We are living in a time of extraordinary challenges to our social fabric and by extension to philanthropy, the very institution designed to deliver public good and improve the lives of society’s most excluded and vulnerable members. Today’s era—marked by struggles against institutional racism and systemic inequities, ethnic strife, political turmoil, and global public health and climate crises—is testing the tensile strength of societies in Europe and worldwide, challenging our institutions and our humanity to step up and do better. It is thus crucial for philanthropy to reconsider how to transform not only the world, but its own bad habits. Philanthropy needs to shed its business as usual norms, and reimagine how it fulfills its role and delivers impact.

The consideration of time horizon is essential to this transformation. In philanthropy, a time horizon is the length of time over which a donor or foundation seeks to engage in philanthropic giving. The time horizon can be in-perpetuity—meaning there is no end date foreseen—or it can be limited by a predetermined end date or triggering event.

“Philanthropy needs to shed its business as usual norms, and reimagine how it fulfills its role and delivers impact.”

The question that stands before foundations and individual philanthropists around the world is whether to respond to calls for urgent action by dedicating maximal resources and efforts in the finite, concentrated term or to address ongoing and often cyclical profound social issues over the long arc of history. In Europe, as in the rest of the world, in-perpetuity remains the predominant, default model for foundations. Many donors don’t realize the importance of determining a time horizon and, as a result, don’t engage in a thoughtful process. However, a number of European philanthropists and their global colleagues are more actively seeking to disrupt established norms and use a strategic time horizon lens to become more responsive, more targeted, and have outsized impact based on their chosen approach.

“These out-of-the-box thinkers are paving the way for other philanthropists who seek to sharpen their interventions and become more responsive to the realities and needs of the day.”

These donors are modeling new strategic thinking about the time horizons that best serve their raison d’être, programmatic goals and, most importantly, communities they seek to improve. These out-of-the-box thinkers are paving the way for other philanthropists who seek to sharpen their interventions and become more responsive to the realities and needs of the day. For instance, The Queen Elizabeth Diamond Jubilee Trust used the first two years of its time-limited existence to focus on strategic design of its operations, programming and exit strategy. As Astrid Bonfield, the Trust’s Chief Executive, emphasized “If you are going to achieve something tangible in a short time, you have to be forensically focused and keep in mind that every pound that walks out of the door is not coming back. You have to use the limited funding you have to be a catalyst and push impact.” This mindset enabled the Trust through its support to the program of the International Coalition for Trachoma control to reduce the number of Malawians at risk of going blind from trachoma from 8 million to zero. The Trust credits its time-limited approach for spurring a sense of urgency that helped deliver this result.

Another example of transformative thinking (and action) anchored in an intentional strategic time horizon choice is the Ford Foundation’s issuance of social bonds to significantly increase grantmaking without depleting its endowment. This unprecedented action enabled Ford to provide more substantial, flexible, and rapid support to grantees and partners. While it remains committed to the in-perpetuity model, Ford constantly seeks thoughtful and innovative ways—including new funding models—to maximize its impact against the backdrop of pressing issues, evolving norms and increasing demands. While normal annual distributions exceed the government-mandated five percent of assets for foundations, the social bond allows the foundation to provide an additional one-time allocation of $1 billion over two years to support organizations working on social justice and inequality, as well as funding under-resourced regions globally. Thus, the foundation made the intentional, unequivocal choice to stay in perpetuity, while at the same time having an outsized impact in a shorter period of time. Ford’s bold action served as an inspiration for others. In a survey of foundation leaders in July 2020, the Council of Foundations reported that 14 other organizations stated that they turned to creative debt financing approaches, including issuing social bonds as well.

Even when not seeking profound disruption but rather looking to sharpen strategic focus, the question of time is essential to honing thinking about what donors are best positioned to do, how and by what means, with whom and within what timeline. So, how should donors think about and approach their strategic time horizons in philanthropy given the plethora of considerations, deciding voices and approaches? There is no set formula that determines which strategic time horizon to choose. Rather, the appropriate strategic time horizon can be thought of as a philanthropy’s deliberate balancing act among considerations relating to:

  • What it seeks to achieve, including the questions of donor or founder intent, programmatic scope, acuteness of need, and desired impact;
  • How it works on achieving it goals, which encompasses the chosen operating model, how the approach fits in the larger ecosystem of philanthropic solutions as well as monitoring and evaluation;
  • With whom it engages in implementing its work, including staff, partners, grantees, and future generations of family members; and
  • How progress is made and sustained, and knowledge shared, which includes financial resources, knowledge retention, and legacy.

“While there is no right or wrong answer or preferred time horizon choice, it is essential for our sector to move away from default thinking and instead engage in intentional, deliberative analysis and choice.”

While there is no right or wrong answer or preferred time horizon choice, it is essential for our sector to move away from default thinking and instead engage in intentional, deliberative analysis and choice. Giving the question of time a central place in strategic discussions may also help disrupt what is often perceived as a slower-paced and reticent nature of traditional philanthropy. It is also important to remember that choosing a time horizon does not need to be a one-time event. Strategic philanthropy involves constantly revisiting past assumptions to ensure that activities still align with objectives, operating context and needs. After all, in order to achieve greater impact, it is vital for philanthropies to regularly and intentionally reexamine their philanthropic time horizons and assess related implications for strategic objectives, operating models, and approaches.

Driven by our mission to help donors around the world create thoughtful and effective philanthropy, for more than a decade Rockefeller Philanthropy Advisors have been exploring, analyzing and sharing global insights related to strategic time horizons in philanthropy. To learn more about the importance of strategic time horizons in philanthropy, how such decisions are being made, and how they impact the overall approach and operations of donors and their institutions please review RPA’s latest two-volume donor guide, which includes considerations and implementation strategies relating to strategic time horizons. This body of work also includes a candid compilation of case studies from foundations around the world and unprecedented survey reports.

This article has been commissioned for PEXnews

olga tarasov sm edited

Olga Tarasov

Director of Knowledge Development, Rockefeller Philanthropy Advisors

Olga leads Rockefeller Philanthropy Advisors’ knowledge development efforts, overseeing and advancing research, publications, and both internal and external programs to advance Rockefeller Philanthropy Advisors’ role as a thought leader in the philanthropic space. She also leads major thought leadership programs, including the Theory of the Foundation and Time Horizon initiatives, which seek to build knowledge and catalyze collaboration within the philanthropic sector. Previously, Olga worked at the National Endowment for Democracy, where she administered a grant portfolio supporting efforts to bring about social change, stimulate civic activism and improve local communities in Eastern Europe. Prior to this, Olga served as a Program Manager and Acting Regional Director at the Open Society Foundations.