An Unprecedented Bet on High Performance

29
Jan

In a monthly newsletter, we don’t often get the chance to weigh in on late-breaking news. Today, our timing is just right to offer our two cents on a billion-dollar announcement that is a huge deal for all of us who care deeply about high performance.

Today, Edna McConnell Clark Foundation (EMCF) CEO Nancy Roob sent a letter unveiling Blue Meridian Partners, a new funding collaborative that will provide the largest-ever infusions of private capital to high-performance nonprofits serving children and youth.

We suspect that many observers will focus on the unprecedented size of the fund (a commitment to fund at least $1 billion in grants, with $750 million already raised). But size isn’t the only or even the biggest news. In our view, there are three key elements that deserve big-time attention and admiration:

Blue Meridian Partners’ investments are explicitly designed to encourage and support high performance. They will be long-term (5-10 years), unrestricted, large investments that give outstanding leaders the flexibility to focus on growing their organizational muscle and impact. This investment philosophy aligns perfectly with all the key tenets of “The Performance Imperative” and Leap of Reason.

EMCF is bringing to the table a rare combination of high-powered new players and established foundations. The venture includes big institutions like EMCF, the Duke Endowment, Hewlett, and Packard. It also includes individuals whose participation is truly newsworthy. For example, the chairman of the venture will be Stan Druckenmiller, the former hedge-fund genius whose partnership with Geoff Canada propelled the success of the Harlem Children’s Zone. Other notables include Steve and Connie Ballmer, Art and Becky Samberg, and George Kaiser.

EMCF is making a huge statement by sharing decision-making authority. While EMCF will incubate and manage the venture, EMCF’s board will cast just one of six equal votes. For a decade, EMCF has brought other partners to the table to aggregate capital for growing high-performance nonprofits. But it has never before shared governance authority. It decided to do so now to open the floodgates to collaborative, performance-driven funding at a scale never before attempted in the field serving disadvantaged children and youth.

We’re beyond thrilled for Nancy and her EMCF colleagues for making this vision a reality! Blue Meridian will create positive peer pressure among new and established donors and set a new bar for collaboration on behalf of disadvantaged children and youth. It’s a giant leap of reason for our entire sector.

And now for brief updates from around the Leap of Reason community:

  • We’re pleased to share “SIBs: What’s Missing?,” a synthesis of a recent online discussion on realizing the promise of Social Impact Bonds. Like any new funding model, there are lovers, haters, and doers when it comes to SIBs and Pay for Success financing models. In this short piece, leaders from the Leap Ambassadors Community recommend learning from the doers and amplify five lessons learned thus far: the importance of developing government wherewithal, selecting high-performing organizations, restricting use of the term “impact,” ensuring impact as the payment metric and rigorous evaluation to validate results, and thinking long term. If the discussion resonates with you, please share with your own networks.
  • We loved “What Money Can Buy,” Larissa Macfarquhar‘s New Yorker profile of Ford Foundation President Darren Walker. In addition to giving us context to understand Walker’s very encouraging steps toward reinvention and renewal at the 79-year-old foundation, it also illustrates that empathy is a critical success factor for anyone who aspires to create meaningful social change. As the profile makes clear, Walker came by his deep connection to Ford’s mission through a childhood in Louisiana and Texas that was very different from that of any previous Ford president.
  • We recommend Patrick Lester‘s SSIR blog post “The Promise and Peril of an ‘Outcomes Mindset’.” Lester decries the disappointing track record of outcomes-based public policies and concludes that the divergence of outcomes and impact is the primary reason why outcomes-based policies fail.” Lester ends on an up note, pointing to strong recent experiments with evidence-based policy and rigorously evaluated Pay for Success initiatives.
  • We also recommend “Reconsidering Evidence: What It Means and How We Use It,” by our longtime friend Lee Schorr. While we don’t agree that “experimental program evaluation … is suddenly ebbing,” we do appreciate Lee’s well-informed reminder there’s no one-size-fits-all approach to assessing impact—and putting all our evaluation eggs in any one basket is not wise.

Events/Webinars for Raising Performance:

Best wishes,
Mario and Lowell