The Raikes Foundation
Case study: HOW MIGHT WE HELP HIGH NET WORTH DONORS PRACTICE MORE EFFECTIVE PHILANTHROPIC BEHAVIOR?
This project, spanning the majority of 2015, was an in-depth exploration of the potential for Human Centered Design as a critical tool in a foundation’s strategic planning toolkit. Partnered with The Raikes Foundation, our team from Stanford PACS focused on an emergent branch of the Foundation's strategy: How to increase strategic behavior of the highest net worth donor population? Integrating design thinking methodologies with traditional strategic planning and systems planning processes, we created a typology of donor behaviors, evaluated trends and opportunities in the existing marketplace of donor-facing resources, built and tested prototypes of interventions, formed critical partnerships with existing stakeholders for future experimentation, and made a final set of strategic recommendations for the Foundation to carry forward.
Project PI: Paul Brest, former Dean and Professor Emeritus (active) at the Stanford Law School, former President of the William and Flora Hewlett Foundation. Project Lead: Nadia Roumani, former d.school Fellow and former William and Flora Hewlett Design Fellow. Project Associate and Designer: Olivia Vagelos
This project came under the heading of a fellowship sponsored by The William and Flora Hewlett Foundation, granted to Nadia Roumani. The objective of the fellowship was to understand the potential applications of Human Centered Design as a strategic planning tool for foundations and nonprofits.
Jeff Raikes wanted to understand the opportunities to facilitate more strategic philanthropic behavior among the High Net Worth (HNW) Donor population. He believed that a significant portion of the resources given away were being squandered through “retail-type, checkbook philanthropy.” As an output of this learning partnership, he and his Foundation hoped to glean insight on potential opportunities to fund, facilitate, or create interventions to promote higher impact, more strategic behavior among HNW Donors. At the outset of this partnership, the Foundation had completed a landscape analysis and basic background research and interviewed several experts.
Raikes Foundation Partnership
We partnered with The Raikes Foundation, the family foundation of Jeff Raikes, former CEO of the Bill and Melinda Gates Foundation and former President of the Microsoft Business Division. We worked closely with a team comprised of Principals Jeff and Tricia Raikes, the Executive Director of the Foundation, and a Foundation Program Officer.
We began our process by engaging in ethnographic interviews with our targeted beneficiary: high net worth donors (defined as those with capability of giving 1MN or more annually). Our goal was to understand not only what was motivating their philanthropic decisions, but what other values, beliefs, or factors might be influencing their behavior. We were curious about the lifecycle or journey of a donor, and what particular moments or trends might emerge as significant across a breadth of donor stories. We spoke with upwards of 30 donors, seeking a range of those extremely strategic and less so, those with an appetite to be more effective and those content with their practice, those actively engaged in existing resources and those “invisible” to the sector.
We also used this ethnographic approach to interview experts, stakeholders and Jeff himself. Rather than a traditional “expert interview” in which the person is sourced solely for their expertise and opinions on the topic at hand, we also sought to understand their motivations and values. What frustrated them most about working in the field? What made their best days, and their worst? This helped us to better comprehend their theories of change, identify alignment and potential partners, and navigate the complex dynamics and relationships inherent to a field as small as that of donor education.
Taking the qualitative data from nearly 50 interviews, we looked for trends and patterns, isolated specific needs and visualized the trajectories of different donor life cycles. Mapping out the existing landscape of resources, we identified gaps in the donor-education market and compared them with those that emerged from the ethnographic interviews.
redefining the question, target and behaviors
We refined the initial target market, focusing on donors with an expressed appetite for more strategic behavior and relaxing the minimum 1MN annual capacity to allow for donors earlier in their careers or giving journeys. Jeff also selected to define “strategic behavior” as that laid out in the Effective Donor Principles and Practices.
Creation of donor archetypes
There was little, if any, existing data or social science research on the behavior of donors. Existing categorizations of donors had been based on quantity of capital, age, or perhaps career - classifications that told us nothing about their motivations or how they made their decisions. Based on the narratives we collected, we created a series of donor archetypes. These connected characteristics such as their views on legacy, their preferred methods of learning, whom they looked to for guidance, their fears and their views on risk.
A disorganized, mis-targeted landscape;
The spread of existing resources on effective philanthropy is hazy. There is no place that has aggregated or organized the existing materials (books, articles, MOOCs, conferences etc.), and as a result donors can’t seem to find what they are looking for. The resources that do exist are mainly targeted at large, staffed foundations and feel inaccessible to individual donors or small foundations. Lastly, with the lack of organization donors have no sense of how materials fit into the most current discourse.
Lack of visible sector leaders;
Most donors could not identify major leaders in the sector, like they could for other sectors. There was a lack of codification of schools of thought or differentiation of different approaches to effective philanthropy. Donors wanted to make an educated choice about their practice, but were left stranded without clarity about what the options were. Additionally, there was a lack of any neutral or trusted evaluating body for the resources in the field that did exist.
For each of our donor archetypes, we formulated a series of “How Might We…?” questions that reframed the problem through the lens of that donor’s specific needs. For example, “How might we make philanthropy feel more Do-It-Yourself?” These "How Might We’s" were used to generate brainstorms of potential solutions.
prototyping and testing
We created a series of low resolution prototypes, largely out of paper and tape, and brought them to donors and stakeholders. Testing concepts built from preschool craft supplies on billionaires, though initially intimidating and entirely foreign to this sector, allowed us to invest limited resources and time and iterate quickly. Each prototype was targeted at a specific donor type, but we tested across donor types to refine and revise our archetypes. We used the prototypes to ask more probing questions about values, behaviors and interests.
from solutions to strategy
In testing our prototypes, we extrapolated a series of design principles. These, some universal across archetypes and prototypes and some more narrow, were the underlying factors that we believed would guide successful interventions. These leveraged nuanced understandings of trust, the definition of peers, and the validation of rigor, among others.
Our final set of strategic recommendations to The Raikes Foundation focused on three efforts:
The aggregation, curation and dissemination of existing resources;
This might likely include the review of existing resources for quality, the creation of an online portal or software application to enable more streamlined access, and the publishing of new content to increase the visibility and understanding of the practices of strategic philanthropy.
An orientation to build, test and learn;
We recommended moving quickly to higher fidelity prototypes involving crafted experiences to further test assumptions on behavior and barriers to applying the practices of effective philanthropy.
The leveraging of strategic partnerships;
There are significant opportunities to identify new pipelines of donors, take advantage of donors’ existing, trusted relationships with stakeholders such as wealth managers and university fundraising offices, and build new resources and valuable relationships by supporting existing work in the donor education field.
At the conclusion of this case study, The Raikes Foundation elected to fund a Lab at The Stanford Center on Philanthropy and Civil Society (PACS). The new Effective Philanthropy Lab will run a series of continued, large-scale experiments to further test our initial hypotheses about donor behavior, engage sector partners, and determine possible scalable interventions to increase strategic behavior among high net worth donors.
An extended version of our public case study can be found below:
Jeff Raikes articulated the following as his primary takeaways on the value of Design Thinking as a strategic planning tool for a foundation. Included are direct quotes from our exit interview with Jeff on August 24th, 2015.
Value of Archetypes:
Gaining a deeper understanding of donor needs and mapping the diversity within the donor population will guide the Foundation’s strategy moving forward. “The archetypes will point me toward having a more segmented approach [in order to] really understand where the [solution] is going to fit… I think we definitely got smarter about the target market.”
Necessity of defining success:
The discussions around defining the desired behavior changes of donors, though difficult, were extremely important. “I wasn’t sure whether I should be reaching philanthropists where they are… or whether I should take a stance with a stronger point of view.” Through the process he concluded that he needs to both address donors’ current needs and mindsets, but at the same time define what effective philanthropic behavior should entail and raise the bar on the conversation.
The making of choices:
Consistently tempted to create suites of solutions or interventions targeting a broad swath of beneficiaries and behaviors, Jeff appreciated the “healthy tension” in being pressed to narrow his focus. This led to the realization that deeper, more targeted engagement could indeed lead to a scalable model - rather than the strategy of rolling out a broader solution at scale that would attempt to simultaneously solve a range of systemic needs.
Ideation leading to unexpected solutions:
Engaging in ideation allowed Jeff to consider solutions and vehicles, like a software and services enterprise, that would otherwise not have been conceived.
Leaning in to experimental, experiential learning:
The HCD process helped Jeff appreciate two major benefits of crafting immersive experiences for donors. The first was the ability of such experiences to expedite and enhance the team and Foundation’s learnings about donor behavior and needs. The second was the value of experiences, rather than passive distribution of information, as a way to change donor behavior. “I would now say we are going to lead with experiential learning events in order to figure out who we engage. Then we will get sharper about what are the services [those donors] need and the role that [our Foundation and others] can provide in meeting those needs.”
Opportunities for partnership:
The interviews with existing service providers and experts in the field elucidated for Jeff those individuals’ theories of change around effective philanthropy and their definitions of success. Having clarified his own vision of success, he was able to better recognize alignment and areas of difference with these organizations. “They were on my radar screen, but it certainly enhanced my view of the opportunity to work with them.”