Putnam Consulting Group with Kris Putnam-Walkerly

No matter how much money you have, you won’t be able to make the change you want in the world if you’re unable to tap into the right communities that get impacted by the problem you wish to solve. Douglas Nelson’s guest today is Kris Putnam-Walkerly, founder of Putnam Consulting Group. In this episode, Kris shares the experiences that led her to write her book Delusional Altruism, which explores the common errors many philanthropists make. She explains how many entrepreneurs apply their innovative and money-generating skills to social change yet still forget the value of engaging diverse coalitions of people in solving systems change issues. Join this conversation to discover other ways donors get things wrong and how they can make things right.

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Listen to the podcast here

Putnam Consulting Group with Kris Putnam-Walkerly

On the show, our guest is Kris Putnam-Walkerly. She’s a trusted advisor to the world’s leading philanthropists. She’s the President of Putnam Consulting, a speaker, and author of the book, Delusional Altruism: Why Philanthropists Fail To Achieve Change and What They Can Do To Transform Giving.

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Welcome, Kris.

Thank you for having me.

I have been looking forward to having you on the show to have a conversation about how donors get things wrong and how they can make things right. Before we get to that, I’m interested in learning a little bit more about your background. How did you come to be an advisor to the world’s leading philanthropists?

Thank you. What I do now is advise funders of all kinds, high-wealth donors, leaders of foundations, and corporate giving programs. I came into this work thinking I was going to be a social worker. I was getting a Master’s in Social Work and thought that I would run nonprofit social service agencies. That was my career goal at the time. I took some classes in Evaluation. In grad school, I learned that I liked to evaluate projects. I like to learn what was working and what wasn’t working in order to make sure the outcomes for people were better. I went to work after grad school at Stanford University as an Evaluator of Youth and Gang Violence Prevention Programs throughout California. That was funded entirely by one foundation, The California Wellness Foundation.

They were a new health conversion foundation and were one of the few then. Quite frankly, still now, they had a ten-year time horizon of funding. They were trying to change people’s perception of youth violence from a criminal justice problem to a public health, prevention issue, and how to prevent youth violence. It was interesting to me to see this foundation in action. If you’re a funder, if nothing else, you have a lot of money, but money doesn’t necessarily solve problems. If you bring in the right people and experts or you talk to community members who are experiencing the challenges and coming at it with a multi-tiered solution, meaning they were trying to help families, communities, and youth in neighborhoods. They were also trying to fund research on gun violence and everything in between then you can create a lot of change.

We all have a lot to learn from each other. Click To Tweet

I thought, “I should go work for a foundation after this.” I went to work for the largest one in the country. At that time, it was The David and Lucile Packard Foundation. That’s the family foundation of David Packard of HP. I learned a lot. I began consulting on the side and doing some consulting for The California Endowment and the Charles and Helen Schwab Foundation. I learned that I loved consulting and philanthropy and decided to go out on my own.

You had the background at the Packard Foundation. The idea of helping donors give away their money is pretty much every not-for-profit or social profit executive’s dream. As you made the transition to advising exclusively, what were some of the patterns that you saw particularly for new donors or new wealth that was wanting to see change, identify problems, and solve them in the community?

Over time, the patterns emerge such that I wrote a book called Delusional Altruism if that gives you any idea. I’ve had hundreds of clients. I’ve talked to thousands of funders. My belief is that, for the most part, everyone is trying to make a difference, change the world, and have a positive impact in the communities, but a lot of funders are getting in their way. That’s what I mean by delusional. I don’t mean crazy. I mean they’re clinging onto misguided beliefs and practices that aren’t serving them well, even though they think they might be. Often, they don’t even realize this is happening.

A few examples about them and the one that you referenced of a lot of entrepreneurs, people are very innovative and creative, create change quickly in business, generate a lot of money, and want to apply those skills, approaches, and tactics to social change. That’s awesome, wonderful, and there is a lot of room for speed and innovation in philanthropy. One of the challenges is just because you were super smart at creating a new tech innovation doesn’t necessarily mean you’re going to figure out how to end domestic violence. You’re a hedge fund manager, you’ve made a lot of wealth, or whatever your success comes from, you have a lot to bring, a lot more than money, you have a lot of expertise, and we all have a lot to learn. If these problems were easy to solve, they would have been solved a while ago.

One of the opportunities to seize the innovative thinking, out-of-the-box thinking that an entrepreneur might bring, and also recognize the value of engaging diverse coalitions of people in solving systems change issues. If you’re trying to support access to early childhood education in your community, you can’t do that alone. You need to engage the school district, parents, and the public transportation department because that’s how low-income parents might be getting their kids to preschool. That requires a different way of thinking. Everyone has a lot to learn from each other.

How much of it is the ego that, “I’ve been successful in this in my business. Now, I’m going to be successful in solving the issue of domestic violence, where there is not an app for that?” Does it start with ego? Does it start with that Delusional Altruism?

Ego is a part of it, but everyone brings ego. At the same time, the nonprofit leader who’s been working in domestic violence, mental health, or substance abuse for decades also brings their ego of, “This is how things are done.” We all have a lot to learn from each other. It’s funny you said there’s isn’t an app for that. Actually, there is an app for that. One of my clients, the Blue Shield of California Foundation, which is one of the few funders that does focus on domestic violence was focusing on innovation and funded the creation of an app that crowdsourced funding for domestic violence survivors to pay for hotel rooms when the shelter beds were full.

There are a lot of opportunities. I want to catapult innovation and move things more quickly. We need ego to drive some of that change. That’s perfectly fine, but what holds funders back more than that is a scarcity mindset. I read about this. It’s the first chapter in the book, Delusional Altruism, because I think it’s the most pervasive problem. It’s a belief that’s almost like less is more in philanthropy. It’s a misguided belief that the more spartan your operation, the greater value you can put into the community. The less I invest in the nonprofit, the more money there is to serve the people they’re trying to serve. The less I invest in myself as a funder, the more money I have to give to others.

To embrace the pivot, change your mindset that there is no new normal coming around the corner because there never was a normal. Click To Tweet

It seems noble. It seems like, “Overhead should be low in nonprofits. $0.99 of every dollar should help the people and only $0.01 should go for overhead. How could I invest in my executive coaching as a funder? That money should all go out the door to help people.” It’s delusional because we need to be the best philanthropists. To have the greatest impact as nonprofits, we need to be the best of ourselves. We need to invest in ourselves, our learning, strategy, technology, the ability to evaluate ourselves, make course corrections, having good supportive directors, or whatever it is. That requires investment.

That investment is important. What we’ve seen with the pandemic is the stronger nonprofits were heading into the pandemic. Meaning they had strong systems, processes and great financial management. They knew how much cash they had on hand, had a great relationship with their board chair, or whatever it might be, the better they were able to pivot during the crisis, innovate, and emerge successfully.

The concept of resilience and adaptation that has been so important for organizations requires that there be an infrastructure in these organizations, whether they’re funders, operating charities, or fundraising organizations. If they haven’t had the investments into their platforms to make them sustainable, viable organizations, they were punished in the first part of the pandemic. It’ll be interesting to see how many of them are able to emerge in anywhere near the form that they were at prior.

That’s true for funders because a lot of funders were caught flat-footed without the ability to make online grant payments. Truly, I would say all funders in the world could be divided into two camps in March of 2020. Those that could make online payments and those who could not. There were a lot of them that the only way they could make a grant was through a physical check that required multiple people to sign it. It was physically locked in an office that they were prohibited by law from obtaining. They were in a state of panic. It’s delusional altruism. They want to get the money out the door and help their grantees rapidly, “We’re willing to do it without applications,” but they hadn’t invested in their own infrastructure and technology to be able to do that. They were stuck and businesses, too.

One of the things that’s most important is having a clear strategy and strategic plan to guide you. With a strategy, which should be, “What are we trying to accomplish in the next year? Where are we now? What are the 3 or 4 things we need to focus on to get us from where we are now to where we want to be and a plan to do that?” That guides a lot of organizations, businesses, nonprofits, and funders to have that decision-making framework knowing that it’s going to have to adapt and change. Knowing that disruption is always the status quo. We always need to be flexible, adaptable, and resilient, but, as you said, you have something to change and tweak.

Absence of a strategy, if a crisis shows up, whether it’s a global pandemic, an earthquake, half of your staff resigned, or whatever it might be, you have nothing to work from. I remember talking to one of my clients, the Moses Taylor Foundation in Scranton, Pennsylvania. I was interviewing one of their grantees who had been funded by the foundation to do strategic planning. Their strategic plan was created in February of 2020, then the pandemic hit. He said, “Thank God we had that in place because we had something to work from, adapt, and shift. We weren’t working from a vacuum. We had a planning mindset. We knew how to do it.” That’s critically important.

Most people think we need to have a strategic plan or an organizational purpose that drives and guides the work. One of the things we encounter quite a bit with clients as well is, “Our last strategic plan got finished, got put on the shelf, and gathered dust. Now, we’re doing a new one.” One of the questions that I always ask them is, what’s going to be different this time? What’s it going to take to make this to be something that doesn’t get dusty, gets used, and gets changed as you go to reflect the way circumstances change? You mentioned the phrase planning mindset. That is so incredibly valuable, especially for board members but certainly for executive directors and CEOs of social profit organizations. How do you keep that fresh and top of mind that we need that North Star to guide our work on any given Wednesday?

Both nonprofits and funders think of a strategic plan like a box to check off for this thing they’re supposed to do, but no one uses it, as you said. Another challenge is that it feels like conditions are constantly changing and there’s one crisis after another. It can feel impossible to plan ahead. What’s the point of creating a strategic plan if things are going to change next month? That’s a problem because the strategy shouldn’t be your decision-making framework. It should help you identify, “What are we trying to accomplish in a year? What are the 3 or 4 most important things for all of us to be focused on right now?” It’s aligning your team to what’s most important, making progress on those, and then having the confidence that not only will you have to change things along the way, because conditions will change, that you can. You build that into the work.

There’s a resource I’d be delighted to share with the readers. It’s called 8 Things Every Philanthropist Can do to Change the World – Even When the World Keeps Changing. It’s a free download. It’s eight separate practical steps of how you can create a plan, not just a philanthropist but a nonprofit, about anything, your strategic plan, fundraising plan, or board development plan. Recognizing that the future is no more uncertain now, we need to embrace that mindset shift of rather than letting that paralyze us, let it free us. Anyway, the guide is available if you go to EightThings.org. It offers practical steps and guidance that will be helpful to nonprofit boards and organizations as well as funders.

We have to do this quickly. A strategy can be developed in a week. I’ve helped my clients develop their strategies in a week or a month tops, but it’s not in a year. They said their problem was, “Too often, these strategic planning processes take way too long. By the time you’ve created your strategic plan, it’s already out-of-date because it’s twelve months later.” You get so lost in implementation. I suppose a lot in philanthropy and funders will spend a year creating a strategic plan, and then they’ll decide it needs to be pretty. They’ll hire people to write it out better, add the foundation’s history and all the stuff, and add some infographics.

They’ll go to the graphic designer to be designed. It goes back to the board for approval, but the board is not going to meet again for two more months. You have now spent eighteen months. This is common before you begin implementing your plan. Now, it’s out-of-date and you’re so stuck in your ways. What you need to start doing is implementing it immediately. Too many organizations say, “It’s going to take a while. We have to move all those meetings to our calendars. We have all this stuff going on. We’ll start implementing it next quarter or something.” Now, it’s two years later.

Is it a failure to decide or a fear to decide that causes those long-term planning cycles? We see that a lot in our work. You’re not going to advance your mission, staring so lovingly at your own navel for so long. You do need to make a decision to act as a movement and as an organization. When you fail to do that, you fail. What holds it back? Is it that they’re not sure what to do or they don’t want to decide?

It’s fear. I wrote a whole chapter about fear in my book because it’s a huge problem. It contributes to the scarcity mindset. It’s fear of making the wrong decision and not trusting yourself. Funders and nonprofits want to wrap themselves up in a data blanket. They want to be able to claim to the rest of the world, “We did all of our research. The fact that we’re selecting this issue to focus on, that issue to focus on, or we decided not to do this, you can’t get mad at us, people in the community, because we did all this research. We had learning tours, listening sessions, and focus groups.”

The failures are going to get us to the solution faster. Click To Tweet

It’s a scarcity mindset and it’s rooted in fear. Folks need to get over themselves and get on with it because we should be refreshing our strategy on an annual basis. If this pandemic has shown us anything, it’s the futility of trying to plan out five years because things will change. Think about twelve months ahead. Every twelve months, take a day and refresh your strategy. Also, within that year on a quarterly basis, maybe even every two months, take time, as in block out time in your calendars, to pull up a strategy and say, “What progress are we making? What conditions have changed in our community or the world that warrants us to change or within our organizations? What kind of course of action do we want to make, document them, and keep moving?”

Too often, because these strategic planning processes take so long, by the time you’re done, you’re exhausted. You’ve had monthly meetings, a two-day board retreat, it’s Friday, you go home, you have a glass of wine, and you want to forget all about it. Monday morning shows up and then you’re like, “What happened? What did we do?” When I facilitate strategic planning, I don’t end the session without getting clarity on, “This is a plan, but what are the top three things that have to happen next to begin implementing it? Who is accountable for each of those three priorities? It can’t all be one person. It can’t all be the executive director for sure. What’s the date and time that we’re going to meet up again, like two weeks from now, and talk about progress? What’s the progress on these three priorities?” The next day, the implementation should be beginning. Not, “We’re so exhausted. Our calendars are so busy.” You need to block out time in your calendar. You need to get rid of the old stuff that you had planned and focus on the new stuff. What are your new priorities?

We frequently ask clients we’re working on any planning exercise to block time before we start the work. We try not to do retreats that end on Friday because it is the glass of wine or the walk in the park. They come back on Monday. They’ve been out of the office for a day or two days. All of that’s backed up, too. It’s not until Wednesday afternoon that they’re thinking about it again and then they’re not remembering it. The urgency gets lost. You’ve mentioned confidence three times in our discussion so far that funders need to have confidence in their own decision-making. Are there moments in working with funders where you’ve seen that confidence kick in? I’m sure you do a lot to support that. What is involved in taking next step and acting with confidence? What are the hallmarks of organizations with funders that are acting with confidence?

It’s an interesting question because I would bet a lot of nonprofits would be surprised to hear that their funder lacks confidence. Confidence comes from continuous learning. The funders that have the greatest confidence in what they’re doing are continuously learning. They’re not doing massive, one-off data gathering exercises every 3 or 4 years when they do strategic planning. Their staff are constantly engaging and talking to nonprofits, understanding what’s happening on the ground, engaging in coalitions, and bringing back that knowledge to each other in staff meetings, “Here’s what we’re finding out.”

There’s a learning focus and disciplined organizational learning process that doesn’t have to cost much money. It just has to be intentional and documented so that when you make a decision that you need to pivot, you’re doing it based on evidence, not based on what you heard on the plane or at a conference. That’s informing your work. Also, it’s the organizations or the funders that have built trusting relationships with their grantees, such that they know the grantee will come to them when there’s a problem.

Too often, there’s a dynamic where the nonprofit is fearful of losing money. They’re going only to paint a rosy picture when there’s a problem. They can use the funders, not just a grant but help thinking through it but they’re too embarrassed to show the problem because they don’t want to worry the funder. What a funder should want is a trusting relationship such that they can have conversations about what’s working and what’s not working so that the funder can be there in meaningful ways to the nonprofit.

You’re describing a nimbleness of action and trusting relationships, which is critically important to any organization in the sector. One of the questions I had for you that I want to make sure we get in is funders make mistakes. Good funders, in my experience, acknowledge when they’ve made a mistake where they call it learnings, “We learned not to do that again.” Most popularly, the Bill & Melinda Gates Foundation publishes letters of what they’ve done wrong. I’ve seen a number of other funders, particularly in the United States, picking that up and doing similar things. In your conversations and the work that you do, how often are funders willing to say, “We didn’t get that quite right. We sure learned a lot with that program?” Is that a thing that they can do?

They do and they could do more of it for sure. Some of that fear is fear of messing up, fear of making mistakes, fear of trying that new innovative idea and then not working, fear of funding the nonprofit and it doesn’t work out as planned. That fear of screwing up is prevalent and it does pull many funders back. The Hewlett Foundation comes to mind. The Barr Foundation in Boston, Massachusetts, is a little bit different example, but they were very transparent when they were doing strategic planning. They were blogging about what they were learning and doing when they were doing the strategic planning. It was very open and honest, which is another form of transparency that is quite important. Certainly, the Gates Foundation and others, but there could be more of that.

Globally, I would say the US philanthropic community is more vocal about what they’re doing and learning. They’re sharing what they’re learning and doing on what’s working well and to a lesser extent, what’s not working so well as compared to a lot of other countries. There are a lot of places like the Netherlands, for example, where the idea of sharing what you’re doing as a funder feels like bragging. There’s a lot less communication about even what’s working culturally. Different cultures have different approaches to this, but certainly, more can be done.

To have the greatest impact as nonprofits, we need to be the best of ourselves. Click To Tweet

You want to have some reason or some fear of failure holding you back a little bit so that you don’t run off with every idea that pops into your head or comes up around the board table. The phrase that I hope with my magic wand stricken from the sector entirely is, “You know what we should do because what follows after that is almost inevitably unhelpful.” You do want some rigor and fear like, “We need to make sure we get this right or as right as we can,” but at the same time, for organizations that are seeking to solve these intractable social issues, “We’re going to make mistakes because as you said, they would be solved if they were easily solved.” That confidence to be wrong is something both funders and social profit organizations can learn a lot from or look to emulate a little bit more. Make those choices, be nimble, have trust, and acknowledge when that didn’t work. Acknowledge when it’s time to learn and try something else.

A couple of thoughts on that, one is you’re absolutely right. Failure is important. If you think about the COVID vaccine that we’re all beginning to get, I can only imagine dozens and dozens of medical research failures, ideas that were tried and didn’t work. Thank God someone tried them and learned that it didn’t work and then moved on. Somebody else moved on or took that learning and did something different. That’s why we were able to get this vaccine developed so quickly and a lot of other reasons. That’s important. If we think about that mindset of like, “The failures are going to get us to the solution faster. Let’s hurry up and not try to fail, but try our best,” when things fail, talk about it because then we can all learn from it.

Some of the advice I shared in my book is to start with the right questions. One of the questions we all should start with is asking ourselves, “What’s the risk?” Innovation is important, but not every innovative idea is worth pursuing. It’s important to take up a lens of risk assessment because everything has some risk to it. It’s important for funders to generate innovation, fund innovative, and risky ideas, but to ask yourself and only support the ideas that have good, prudent risks.

What are the potential costs and benefits of supporting this innovative idea? What kind of implementation will be required? It can be a fabulous idea, but the implementation is impossible. Is it a strategic fit with what we’re trying to do? There are lots of great ideas, but a lot of them are going to take you completely off course. It is worth taking some time to assess risk and putting your idea through a few different filters to see if it’s still worth pursuing. If it’s worth pursuing, then, by all means, pursue it. You still have opportunities to cancel it if you decide it’s not working, but it’s certainly worth trying.

I facilitate a lot of decision-making with funders. One of the things we do is create what I call a Risk List, which is you’re launching a new initiative, developing something, brainstorming and putting up on the easel paper, “What are all the risks? What are all the worst things that can happen?” It’s all that stuff that you’re thinking about, but not saying like, “Let’s put it all up there.” Talk about, “Is this real? Is this even possible? Is this such a crazy idea? Let’s not even worry about it. It’s not likely to happen,” or “What can we do to mitigate against these risks? Work on those.” At the next meeting, bring a list back and say, “Have we addressed some of these? We don’t need to worry. We crossed them off. What new risks have we got up to add?” You’re dealing with it. It’s present and you’re tackling it in a preventative way.

We use a tool that’s very similar. We call it the pre-mortem, “If this doesn’t work, what will have gone wrong? What are the things that are going to jump out of the shadows at us and trip us up? Let’s imagine it.” It helps because often, what holds organizations back are our concerns about risks that are extremely unlikely, but they act as the biggest breaks on innovation, trust-building, and engagement with the community and stakeholders that are served.

If you write it all down and you’re going to say, “That’s ridiculous.” That’s probably not going to happen. If that happens, every so much will have gone wrong that this won’t matter. The consequences of getting this piece wrong if our worst fears come to pass won’t be that bad, either. Give people the confidence to move forward. A lot of our readers are CEOs and executive directors of social profit organizations reporting to boards. What advice would you give to organizational leadership working with boards there trying to reorganize themselves and pivoting one last time as we come to the end of this pandemic?

Three things. One is, there is no one last time of pivoting. To embrace the pivot, it’s changing your mindset that there is no new normal coming around the corner because there never was a normal. The sooner we can lean, breathe, and embrace it, the better off we are. It’s, “How do we maintain these flexibility and agility muscles we’ve been building and using all year forever?” It’s recognizing that things are always going to be changing. We do need to keep planning ahead but planning for a change like assuming there’ll be a change and confident that we can shift and pivot with it. If there’s any new normal, that’s it. One is embracing that, not thinking, “Thank God we’re all vaccinated. This is all over. We can get back to where we were and put it down.” Be prepared for constant change and be okay with that.

Secondly is to learn from our experiences in 2020. All organizations, businesses, nonprofits, and funders need to, if they haven’t already, reflect on in terms of asking a few questions like, “What did we try that worked well? What did we try that was a disaster or didn’t work as planned? What do we wish we had done differently that would have helped us? What did we coincidentally put in place before the pandemic that helped us during it? What do we want to maintain going forward? What are some of these changes and new best practices we want to maintain?”

Also, even like, “How could some of them spread throughout our organization?” Meaning if we found ways to be more efficient in fundraising, where else can we find efficiencies across our organization? To write those down, I’m a fan of like, “Let’s be accountable to this. Document them. Pick five that you think are the most important or two.” Assign someone to be accountable to make sure the organization does that. They don’t have to do all the work, but they need to make sure it’s being done.

Innovation is important, but not every innovative idea is worth pursuing. Click To Tweet

Set a date like three weeks from now, some future staff meeting or your next board meeting, where you’re going to come back and say, “We decided we wanted to continue these super-effective board meetings where we got a lot done and we didn’t dilly-dally. Here are the changes we’re going to keep making to our board agendas. Here’s how we’re going to give you information that’s more meaningful that helps you digest it without overburdening you. We did change our strategy early in 2020. We’re going to adapt to it again in the next few months. Here’s our plan for doing that.” It’s holding yourself accountable for making those changes.

There is a lot in that advice. One of the things that jump out at me is the number of organizations that I’ve spoken with that feel a lot freer in a lot of ways because of the things they didn’t have to do. I’ve been surprised with a smile on my face and then I worry about them when they say, “We’ve got to get back to it this 2021.” “Why? If your calendar was freed up and if your overheads were down because you weren’t doing certain things, these events that you thought were raising that much money turned out they weren’t raising that much money. You were basically subsidizing their operation rather than using them as revenue generation. Don’t do them anymore. Walk away.” That goes back to our conversation about confidence. It’s the confidence to implement what we’ve learned that is going to mark the speed with which organizations return to their former pace or are able to keep the pace that they’ve gained.

Also, it’s the confidence to honestly look at what you didn’t do well, what didn’t work, and own it. Give yourself some grace with that. It’s not too late. You can make the change now.

Kris, thank you so much for joining us here on The Discovery Pod. The book is Delusional Altruism: Why Philanthropists Fail To Achieve Change and What They Can Do To Transform Giving. If you want to look at the tool that Kris mentioned, EightThings.org. We appreciate having you on and sharing your wisdom with us.

Thank you so much for having me.

Thank you.

 Important links:

• Putnam Consulting
• Delusional Altruism: Why Philanthropists Fail To Achieve Change and What They Can Do To Transform Giving
• Kris Putnam-Walkerly – LinkedIn
• The California Wellness Foundation
• The David and Lucile Packard Foundation
• The California Endowment
• Charles and Helen Schwab Foundation
• Blue Shield of California Foundation
• Moses Taylor Foundation
• EightThings.org
• Bill & Melinda Gates Foundation
• Hewlett Foundation
• Barr Foundation

About Kris Putnam-Walkerly