Social change is messy and complicated, and it can take a long time to come to fruition, typically by way of a winding, sometimes meandering, path. Such a context requires patience, comfort with complexity, and the humility to recognize that bets are just that—guesses about what might work over time.

Certainly, monitoring and evaluation have an important place in assessing the strength of investments over time as well as the yield (or unanticipated consequences) of past efforts. What is often missing, however, is sufficient clarity about the problem or challenge a bet is intended to address.

At Knight Foundation, we are beginning to use the term learning organization to describe not simply the rote mechanics of surfacing insights from past and present work, but to also encompass the ability and judgment to identify addressable challenges, formulate smart bets, and then rigorously interrogate and scrutinize those bets and the contours of the problems they are meant to attack.

Such clarity is important for several reasons.

First, among private foundations’ greatest assets is their inherent flexibility. Within the parameters of donor intent (where stated) and the law (where applicable), foundations are free of many of the influences and incentives that bind other types of institutions. We have no shareholders, no investors, and no political constituencies to which we owe allegiance. Without a clear understanding of what problem a foundation is addressing, extreme flexibility can buffet foundations, pulling them in various directions and subjecting them to the caprice of various stakeholders (including, even, program staff). 

Second, while the combined resources of private foundations are immense, they are actually scarce compared to the systems they seek to influence. In 2015, Knight Foundation paid out $124 million in grants. That same year, our home county of Miami-Dade adopted a budget of $6.79 billion. Simply taking on a problem because it’s worthy risks overextending the limited capital and capacity of philanthropy. It’s often a small piece of a larger issue that makes the most sense for philanthropy’s resources.

Under these paradoxical conditions – extreme flexibility and relative scarcity – foundations face a unique challenge, in that they must address societal challenges that pass at least four tests: 1) they are within donor intent, 2) they are worthy, 3) they are addressable—that is, something can be done about them with philanthropic capital, and 4) they line up with the foundation’s unique strengths and capabilities.

This is why learning defined as a problem orientation is so critical. We can, we should, and we must evaluate the impact of our investments in grantees. But we should do so to inform the quality and direction of our bets.

The Knight Learning and Impact program tries to support the development of a learning organization through a dedicated focus on three areas:

• Context: We invest in and develop research that aims to provide a clear understanding of the fields in which we seek to have impact and the forces that affect them. We want to understand our addressable “market.” This is an essential capacity if one hopes to “thrive in the gray,” as our CEO wrote in the opening essay of this series.
• Discussion: We create spaces for staff, grantees and other partners to have open and challenging dialogue about these conditions and the efficacy of their work in influencing them.
• Impact: We work with staff, grantees and partners to assess and then share the effectiveness of the foundation’s efforts to support social change through support of grantees and others.

Through these activities, we try to hold ourselves to the standard of being social investors. We do this not to crassly graft a financial equivalent or reductionist metrics onto our work. Instead, we seek to mimic a set of behaviors that we believe will help us support greater impact: understanding market conditions with rigor and open-mindedness, developing a credible investment thesis, and seeking a return.

This is a work in progress. We look forward to sharing what we encounter, where we stumble, and where we succeed.

Sam Gill is vice president for learning and impact and senior adviser to the president at Knight Foundation. Email him at [email protected] and follow him on Twitter @thesamgill.