Philanthropy’s Road Less Travelled – and How it Makes All the Difference

By Thomas J. Tierney, Chairman and Co-founder, Bridgespan Group

All of us who have created a career in the nonprofit and philanthropic world have certainly taken the road less traveled, to use poet Robert Frost’s phrase. In my case, it was one that I couldn’t have imagined beforehand in both its bumps and its rewards. But a decade after launching the nonprofit professional services firm The Bridgespan Group, I think I’ve learned a few lessons along the way about philanthropy. So for the benefit of those who are using their resources in the service of society, or are contemplating doing so, I want to offer some observations, or maybe “rules of the road.”

Further, I’d like to share some perspectives about reaching the promise of tomorrow. As I see it, we are truly at a crossroads in both the emerging scale of philanthropic giving and the simultaneous need for creating the highest impact from each philanthropic dollar. Let me say, also, that I am deeply optimistic that philanthropy will rapidly progress toward its ultimate destination of finding answers to many of the word’s most intractable problems.

Let me start, then, with Observation No. 1: Delivering real results in the social sector is much harder than you probably think.

My own transition from running Bain & Company to the nonprofit sector looks fine in the rearview mirror after 10 years of helping to lead Bridgespan. But even my very departure from Bain wasn’t personally easy. At the time, I heard that one of my partners, an incredibly talented person whose judgment I’d never doubted, had said that mine “was the stupidest career decision” he'd ever heard of. And he’d heard of a few.

On the face of it, it certainly looked that way. This took place during the first quarter of 2000. The stock market was peaking. I was leading one of the hottest consulting firms going. It was growing by more than 30 percent a year. And, most satisfyingly, the firm was finally on track after coming back from the brink of bankruptcy nearly a decade before.

To explain, our nadir had come in 1991, when Bain’s revenues were so low that we almost couldn’t make payroll. An investment banker came to us during that process, looked at us, and said, “Don’t bother trying to save this firm. You don’t have a prayer.” We then proceeded to pull off the mother of all turnarounds. So much so, that by 2000, I finally felt like I knew what I was doing; I’d become at least a reasonably accomplished multinational chief executive.

Forty-six years old and in my prime, I was about to leave an organization spanning more than 20 countries, to join three other people in cubicles to start a charity – as an unpaid volunteer. The decision did seem a little bit crazy. It wasn't a natural act. I sought and found encouragement from a few philanthropists with whom I still work. They bucked me up but didn't tell me everything I needed to know. I thought I already knew a lot.

Bain & Company, being Bain & Company, had created thousands of Power Point slides analyzing the non-profit sector. There was no statistic, no detail we had not captured on a Power Point slide. Nevertheless, when I dove into the sector, I was shocked. Things simply didn't operate the way I thought they'd operate.

I thought philanthropy gave money to nonprofits and saved lives. How hard could it be? My simplistic premise: It just required more money and better nonprofits to save more lives. Well, surprise, it turned out the sector doesn't work that way at all. Thankfully, I was able to help recruit a great team to keep me out of trouble.

That leads me to Observation No 2: All philanthropy is personal. It's deeply personal.

Philanthropists talk about collaboration and partnering, but giving one’s money away is a highly individual act. It’s driven by beliefs and aspirations. It's always balanced to some extent by facts and realities. But whether you care about the environment, or care about kids, or education or whatever, the passion comes from inside. Consequently, personal motive matters a lot with philanthropy.

Some folks want to give back. And they give back to an institution, perhaps a university that greatly influenced their life. Some folks want to express personal feelings. My mother-in-law passed away from cancer at a very early age. My wife and I regularly give money to combat cancer. We don't calculate a social return on investment for those contributions. We’re going to do it, period. People often give because it makes them feel good. They feel like they are supporting a cause in a general way, as so many did with hurricane Katrina. In other philanthropic situations, impact is front and center—people give with the hope of achieving some form of concrete results.

The problem with the inherently personal nature of philanthropy is that it gets messy. It’s hard enough when you’re doing it by yourself, but it gets far more complicated when your spouse is involved, your kids are involved, and other board members of your family foundation are involved. It's personal for all these participants in their own different ways. So philanthropic decision making can get very messy very quickly.

This personal nature of philanthropy has an important implication. The implication is around impact clarity—the more clarity about goals the better. What exactly is an A+? The more that the various philanthropic participants agree on the specific personal goals, a shared bull’s eye, the more likely you will be to get results. The big issue we see all the time with philanthropists is that there’s fuzziness around exactly what they are trying to achieve with their money. You’ll never hit a bull’s eye that you can’t see clearly.

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