Return on Relationship > Return on Investment

Lowell Weiss • August 2022

Former banking and nonprofit executive Philip Li is the President & CEO of the Robert Sterling Clark Foundation, which is increasing equity in New York City by means of strengthening leadership-development organizations. In July, Leap support team member Lowell Weiss sat down with Phil in Seattle for a rich, two-hour conversation about what it takes for foundations to build leadership, relationships, and trust for greater impact. The following is a shortened version of that discussion.

The Conversation

Lowell: What a pleasure to sit down together in person!

Phil: And in Seattle no less. I love Seattle. I lived here as a kid, when my dad was an accounting professor at the University of Washington. That was right before I moved to Bethesda, Maryland and started going to Pyle Junior High School, where you went as well, right?

Lowell: Yes. You’re a bit older and wiser. You were eight years ahead of me. How was it for you, the kid of Chinese immigrants, to live in Bethesda? Was it a welcoming community—or the opposite?

Phil: There weren’t many Asian families in Bethesda at that time, but my ethnicity wasn’t the biggest barrier. It was during the Nixon era, and it felt like all the other kids were really politically savvy. I didn’t speak the language of politics at all. But in the end, many people were welcoming to me. To this day, I feel grateful to a schoolmate, Emmett Hirsch, who invited me to his bar mitzvah and then helped acculturate me to life in that community.

Lowell: The first half of your career was in the world of finance. How and why did you make the switch to the nonprofit sector?

Phil: I made the switch in 1999, when I became the executive director of Coro, which brought together early-executive-level folks from the nonprofit, corporate, and government sectors for cohort-based leadership training. I had participated a few years before in a Coro program, Leadership New York, while I was working at what was the world’s largest bank at the time. When I was approached about the ED job, 95 percent of my friends told me not to take it, because the organization was financially unstable.  But I believed in the organization and what it wanted to do, and my heart was in nonprofit work; I was a volunteer tutor for new adult readers, and I served on several boards. So I took it. It was the hardest job I ever had, and it was the most rewarding.

Lowell: It sounds like the change-management and leadership-development experiences from Coro were key to your current role at Robert Sterling Clark Foundation.

Phil: Yes. When I came to Clark in 2016, after several other nonprofit roles, I came to a foundation that reflected the priorities and interests of my predecessor, who had been there for 30 years. The focus areas had little in common. During my conversations with the board. I said, “The best use of these resources would be in strengthening the leadership-development infrastructure in this city, to help grassroots leaders be more effective in their work. By providing leaders with a cohort of trusted colleagues with whom they can grow and learn, the power of these leadership programs lives. It enables these practitioners to draw on resources beyond themselves to do their work, and that’s a great benefit to the community as a whole.

Lowell: After you got the job, you made a lot of significant changes in addition to focusing on leadership development.

Phil: Yes, we did. My years of being a grant seeker while running a nonprofit informed my thinking. It wasn’t really about equity explicitly; it was about grantmaking in a different way, by honoring and respecting the knowledge of those who do the work and who know how to best deploy the resources. The hoops and challenges that I was put through by program officers who had limited exposure, let alone expertise, to my work, made me want to do it differently if I ever sat on the other side of the table. Funders are ascribed power, control, and decision-making authority in these relationships because they hold the resources—not because they’re smarter or more knowledgeable.

Based on these experiences, we switched to offering multiyear, general-operating support. We streamlined the grant process. We went to an open application process—opening our doors to folks outside our existing networks. Later, we created a Resource Bank for grantees during COVID. Whenever they needed outside help with legal matters, fundraising, HR, DEI [diversity, equity, and inclusion], equipment for managing remotely, they could find that support. We made that support available to them. We set it up so that we would have no visibility into the issues grantees talked about with the consultants. We wanted them to feel 100% safe reaching out to the consultants.

Lowell: That’s a lot of change. Where did you get the most pushback?

Phil: The hardest part was putting all our eggs in the leadership-development basket. Not because the board was opposed to focusing more. It was because it felt to some that we were simply funding a tactic, rather than advancing a specific cause.

Lowell: You’ve been at the very heart of the Trust-Based Philanthropy movement, which is focused on helping foundations do a better job of sharing power with their grantees. How did you and the Robert Sterling Clark Foundation get involved?

Phil: The Whitman Institute, which just sunset in June, deserves the most credit. They had been advocating for unrestricted grants, multiyear funding, good feedback practices, more transparency, and support beyond the check for a long time. When I started speaking about these same issues when I started at the foundation in 2016, folks suggested I connect with the Whitman Institute. They had already put in place some of the ideas I had been wanting to do. And then some. After learning more and further conversations, I asked them whether they would be open to us adopting the phrase “trust-based philanthropy.” They said yes, and so the Robert Sterling Clark Foundation became the first follower.

Lowell: How many foundations are now part of the Trust-Based Philanthropy movement?

Phil: I can’t give you a number, because it’s all self-determined. We have 30 foundations that are in the “champions” group—members of foundations that have embraced and put the approach into practice and are happy to speak about how they’ve applied the practices. But it’s important to note that trust-based philanthropy is not new. The name is new. The concepts are not. Some foundations have been doing this for decades.

Lowell: Are you seeing positive momentum for the Trust-Based Philanthropy practices?

Phil: We see a lot of interest. But my optimism is tempered. During COVID and then the racial reckoning sparked by the murder of George Floyd, more than 800 foundations across the country signed on to a pledge that focused on unrestricted funds and easing reporting requirements. The sector had an opportunity to do a massive experiment to see what unrestricted, multiyear funding, and streamlined grant processes and reporting might look like. Those of us working on Trust-Based Philanthropy thought it might help funders see the benefits of this approach. But I don’t think many foundations have retained these good practices. It’s ironic in a moment of crisis that funders trust their partners to pivot and adapt to the situation to continue to serve their communities, but when things revert back to a new normal, the funders are back in control calling the shots. It’s really about a lost opportunity to change our practices. I don’t have data, but I’d submit to you that power, control, and influence that sit with a program officer, grants manager, director, president, or board all contribute to going back to the old ways. Sharing or ceding power and letting others have agency and determination is a huge shift. It requires culture change within the organization—and that takes time.

Lowell: Given what I know of your background in finance, I know that data is very important to you. How do you go about measuring the impact of your work to strengthen leadership-development organizations?

Phil: Frankly, that was another concern of our board. “How will we know if we’re making a difference?” I acknowledged to them how hard it is. I knew that from my time as a grant-seeker at Coro. Investing in people is squishy. It’s not as easily measured as something like recidivism rates or academic progress, though those can be complex as well.

So we asked our grantees to fill out an online organizational-assessment tool. The idea was to track, longitudinally, the specific ways these leadership-development programs were strengthening their own organizations. The information was redacted so we would only see an aggregate view of our grants while each organization would get the benefit of seeing and being able to use their own data. I thought that was kind of elegant and that the grantees would get something useful out of the process. But actually, it was one of my biggest face plants as a leader. After the first year, most of our grantees were highly resistant to filling out the assessment.

Lowell: Why did you have such a hard time with the assessment?

Phil: There were two major issues. As appreciative as they were for our funding, our grantee partners let us know that our grants alone were not the things that were bringing about change. The second was that the instrument required a board member to participate in filling it out, and they just didn’t want to use that “chit” with their boards for a grant that was not big enough to justify it. Those comments felt like a punch in the gut, but it was great feedback.

Lowell: So how did you respond?

Phil: A few days after receiving that feedback, we suspended using that assessment. We shared that the intent of the assessment tool was to help make the case to the sector for increased unrestricted grant funding. When our grantees learned that, a half-dozen individuals offered to work with our external evaluation consultants to help create a new tool. With their help, we switched to annual “CHATs”—a Check-in Analysis Tool, which is an oral report with no evaluation forms and no written reports.

Lowell: And how is that working? Do you get the information you need to determine what’s working, what’s not, and how you and your grantees can improve?

Phil: Absolutely. In these 90-minute conversations, we truly get better, deeper, and more honest info. That’s not just because it’s in the form of a talk; it’s the whole package. For example, one partner ran into a big challenge and was not able to launch a program. We get the opportunity to take a deep dive on that important issue, to really understand the issues involved in a way that allowed us to help.

Lowell: Who conducts the CHATs on your end?

Phil:  We’re leanly staffed, so either our vice president or I do the CHAT. It’s one of my favorite things to do. It helps me build relationships. The learning has been particularly rich for me and us as a foundation during COVID, because I get to hear directly about all the ways the pandemic is affecting the work on the ground and the ways that our partners are adjusting and pivoting to meet the needs.

Lowell: Can you help us understand what you’ve learned about what makes a great leadership-development experience—in other words, what really works in leadership development?

Phil: We love cohort-based programs that are spread out over an extended period of time and really focus on relationship building and building connectivity. In helping folks who have made a commitment to New York City, it’s essential to give them a robust opportunity to meet others who do similar work. We also love organizations that see leadership development as core to their equity strategy. And we don’t focus exclusively on programs that are for executive directors. We’ve learned that great leaders can lead from anywhere in the organization.

Lowell: I know we love all our children equally, but can you highlight a grantee that’s doing particularly good work?

Phil: Sure. I’ll take one that’s led by a Leap Ambassador: the Institute for Nonprofit Practice, led by Yolanda Coentro. We love what they’re doing. When Yolanda brought the program to New York, she didn’t just replicate what she had done in Boston. She adapted very well to the New York context. The organization is taking very diverse cohorts, and they’re really strong in building those leaders’ capacity.

We’ve had groups who’ve run programs in other communities believing that all they had to do was import the curriculum, outreach, and recruitment done elsewhere and drop it into New York City. Context and history and understanding the dynamics of a place matters. Knowing that INP might be perceived as a competitor to others running similar leadership programs, Yolanda reached out to those groups first and talked about what INP wanted to do in the city—rather than let them find out through other channels.

Lowell: I’ll close with one last question: What should I have asked you but failed to?

Phil: It’s been a good conversation, but we could have talked more about how consumed our sector has been with the form of measurement and metrics and [return on investment] that come from venture capital and finance—part of my past! I wish we could shift more to thinking about return on relationship, or ROR. So much of what we need to do to lift up equity in New York City and around the world is based on trust. And the way to build trust is through genuine relationships. That’s what I’d like to see foundations investing in much more.