Reflections on the role of foundations Will Miller President, The Wallace Foundation Efficient Investment for Urban Education and Economic Revival The Ford Foundation January 30, 2013

Foundations in America Growing rapidly 1987: 25, : 70,000 Giving away substantial sums $47 billion annually Small in the grand scheme of things $5 billion to K-12 public education Only 1% of $536 billion in public spending on K-12 (2004) 2

The functions of philanthropy Public functions Create social and political change Locate and support important social innovations Improve economic equity Pluralism as a civic value Private functions Self-actualization of donors 3 So urce: Strategic Giving: The Art and Science of Philanthropy, Peter Frumkin, University of Chicago Press, 2006

Social risk capital “Free of market and political constraints, [foundations] are uniquely able, if they choose, to think the unthinkable, ignoring disciplinary and professional boundaries. They can take risks, consider approaches others say can’t possibly work – and they can fail with no terminal consequences.” 4 -- Helmut K. Anheier and Diana Leat, Creative Philanthropy

Value creation by foundations Selection: Carefully selecting grantees who can most effectively use scarce resources Signaling: Signaling to other funders that an activity or organization is important Improving effectiveness: Improving the overall effectiveness of grant recipients, thus improving the social return on all the money they spend Advancing knowledge: Advancing the state of knowledge and practice by learning from the work of the grantees, filling knowledge gaps in fields, and helping to set agendas 5 So urce: Philanthropy’s New Agenda: Creating Value, Michael Porter & Mark Kramer, 1999, Harvard Business Review

The Wallace Approach (Our theory of change) Understand the Context (Engage with the external environment to identify knowledge gaps, field interest, and time lines) Catalyze Broad Impact (Improve practice and policy nationwide) Generate Improvements and Insights (Build promising new approaches and new evidence/knowledge) 6

K-12 More kids are succeeding, but the achievement gap in math is widening 7 NAEP 4 th Grade Math Proficiency African Americans4%17% Whites27%52% Both achievement and opportunity gaps persists Affluent parents increased spending on enrichment activities for their children 9x more than low income parents from 1960 to today We lag in some international comparisons High school graduation: 22 nd of 27 OECD countries Odds of children of less-educated children going to college: 26 th of 28 OECD countries

8 Problems complex – few silver bullets Taking action rarely the province of a single sector Especially true in a time of strained fiscal resources A job too big for one institution

Partnerships are not easy Problems can stem from: Insufficient resources Activities tangential to mission Tension between partners 9 Francie Ostrower, Stanford Social Innovation Review, 2011

A collective impact model Collective impact Shared agenda and approach -- metrics based on agreement about what success looks like Development of trust among partners who closely coordinate their actions A team to plan, manage and support the effort Persistence over a long time frame Adapted from: Collective Impact, John Kania and Mark Kramer, Stanford Social Innovation Review, Winter 2011

Collective impact: Columbus, IN Trust: Weak at first, built by working on the facility needs of the institutions Shared agenda: Ensure youth have training to get jobs Metrics: Move focus at community college from enrollment to relevance of coursework and graduation Team: Community Education Coalition Persistence: Columbus Learning Center opened in

Say Yes: What we might learn 12