Rebecca Eastmond visited Finland in 2012. During her visit, she met up with Erik Båsk, Secretary General of the John Nurminen Foundation. This article has been published in Charity Times in the UK. Published here as blog on June 16, 2013.
One of the pleasures of working as a philanthropy advisor is meeting great people who are using everything they have to nudge the world in a positive direction. In this vein, I was introduced to a very interesting man in Finland. His name is Erik and he is the Secretary General of a family foundation created in 1992 to preserve and share the family’s collection of maritime treasures.
At a board meeting in 2004, the board took the decision that there was little to interest them in focusing only on preserving Finnish maritime heritage when the Baltic Sea was dying. The Baltic Sea is one of the most polluted sea areas in the world. The most visible and serious symptom of this are the poisonous blue-green algae blooms across that occur every summer, at worst killing off the marine life that depend on it and making it impossible to swim in the sea. Nine countries border the Baltic Sea, and some 90 milion individuals across 14 countries live in the catchment area of the sea. This means that even if they live hundreds of kilometres off the coast, they have a relationship of some kind with the sea via the lakes and rivers that flow into it.
What could one family foundation with limited resources do to halt an environmental catastrophe?
The Philanthropy Centre at J.P. Morgan Private Bank works with clients to help them to maximise their philanthropic impact. As a member of this team at JP Morgan, my job is to help our clients go further, faster with their giving.
The first step in developing a philanthropy plan is to think about what makes you angry, what makes you upset, what do you want to change in the world?
The desire to DO SOMETHING – to help a person in need, to preserve a language, a building or an ecosystem, to protect the basic rights of vulnerable people – is inherent in all of us. It’s a fundamental, human inclination. Recognising what you really care about is the first step along the road to being a great philanthropist.
What Erik told me about the work of the foundation is pretty much an exemplar of “how to do philanthropy”.
The board members took this first step with their initial, emotional response to the destruction of the Baltic Sea ecosystem on their doorstep. It was something that they felt very angry about and wanted to stop – and they harnessed this feeling.
The second step towards effective and impactful philanthropy is to step outside your emotional response, and engage your brain.
It would have been easy for the trustees to decide that the scale of the problem was beyond them. However, the second thing that the trustees did was to avoid leaping to any conclusions. Instead they gathered data about what was actually happening in the Baltic Sea so that they could understand what was already happening and where their limited resources could be best brought to bear.
They learned that the Baltic Sea cannot handle the amounts of phosphorus and nitrogen that are released into it each year. It is these nutrients that cause eutrophication – the flowering of algae.
Cleaning the Baltic Sea was out of the question – and even if they could do it, the problem would recur as more nutrients flow in to the sea. The board consulted the leading expert research organisations and learned that it’s cheaper to remove phosphorus from (municipal) wastewaters of big cities than it is to remove phosphorus from the sea. They discovered that the phosphorus released into the Baltic comes largely from agriculture (45%) and sewage (20%) and it came from every country that feeds into the Baltic, with Poland, whose population is close to 40 million people, being the largest contributor at 36% of the annual phosphorus load.
The Foundation had very limited funds, no obvious authority to lobby for anything and no obvious place to build from.
However, they took the third step towards effective philanthropy, which is finding a sweet spot where their limited funds could have maximum leverage and they FOCUSED. The trustees reviewed the data that they had gathered. They decided that agriculture was too political for them to effect any real behaviour change. They wondered what they could do about sewage treatment.
EU standards for sewage treatment don’t require chemical phosphorus removal to the levels that are needed in the Baltic – as most of Europe borders larger water masses – but the trustees felt that this lobbying the EU was likely too slow and too risky to make sense for their small foundation.
They wanted to do something cost-effective, fast and replicable.
So, they hired Russian speaking experts and built a partnership with The Russian water utility that supplies water and wastewater services to St Petersburg to fund and upgrade sewage treatment at the three plants that deal with St Petersburg – the largest city on the Baltic. Work began in 2005. Just this one action reduced the annual phosphorus load going into the Baltic by 1,000 tons, equalling the annual phosphorus load from entire Finland into the Archipelago Sea and the Gulf of Finland. It stands as an example of what can be done. The Foundation is now the lead organisation working with a consortium of funders to treat the waste in 17 towns across Russia, Poland, Latvia and Belarus (some very far away from the sea but feeding directly into it).
The trustees’ view is that they should concentrate their work on the East of the Baltic as the European countries on the West of the Baltic will follow suit once they see what has been done. The trustees and their partners aim, through the work they have completed and the new projects now underway, to reduce the annual amount of phosphorus going into the Baltic by 2,500 tons, and estimate that the total cost of doing this will be around 10 million euros.
Contrast this with the 230-275 million Euros spent annually in Finland to fund water protection measures in agriculture since 1995 (Between 1995 and 2007 the amount of nitrogen released into the sea has risen 14% and phosphorus emissions have fallen just 6%).
Contrast this also with the many small cheques which the trustees could have written to organisations that share their concern about the environment and are trying to make positive changes in one way or another to the local and wider environment.
Writing small cheques can be fun – and sometimes a small cheque can make a huge difference – but a philanthropist with a scattergun approach to giving won’t ultimately achieve strategic change, unless she is very lucky indeed with one of the cheques she writes. By focusing on the one area where they could have the most impact for their money and keeping their eyes firmly fixed on the goal, the trustees of this small foundation have already achieved important results with their phosphorus reduction project.
I didn’t discuss this with Erik during my time in Helsinki, but my guess is that throughout their first project in St Petersburg the Foundation trustees were also keeping a close eye on how effectively their funding was being used. They were certainly requiring monitoring results and data.
This is of course the third step in effective philanthropy – once you know what you want to do, be sure you are actually on the road to achieving it.
It is prudent to recall John D Rockefeller’s words – “How you give your money away is just as important as how you invest it.”
I’m convinced that 90 per cent of philanthropists’ work should be invested in due diligence and setting clear, shared objectives BEFORE making a gift. It’s at this stage that you can ensure that you and your grantee share the same vision of success.
There are a number of key questions to consider during a due diligence process. How well do you know the organisation you are supporting? Does their vision fit with yours? Does their approach to fulfilling their vision fit with what you want to achieve? What evidence of its outcomes does the organisation have? Does it have support from external experts in the field? Does it clearly define what success looks like and how does it measure whether it is on track?
Are you comfortable with the management team? Do the executive and the trustees share common goals and work well together? Is the organisation REALLY clear about its aims, or is it liable to be distracted by new opportunities? Can the organisation attract and retain good people? Are the staff committed?
How do the finances look (you’d be surprised how many charities are effectively insolvent) and how does the organisation generate income? Does the finance team have the experience and judgement they need? How stable is the organisation’s funding – are they tied to one or two major funding sources or do they have more of a balance of funders?
If you have the time to dedicate, think about how you can create a real partnership with the organisations you are supporting financially (it helps if there aren’t too many of them). Philanthropists have a tendency to believe that the only thing they bring to the party is their money. This is rarely the case.
We encourage our clients to put shared goals in writing – whether they are providing core support for a charities’ costs of running or funding a new project – and ensure that the charity is happy to maintain a dialogue that will allow you both to adjust if and when circumstances change. It’s likely that the plan you agree at the outset will need to be adjusted along the way as circumstances change and evolve. Keeping a good line of communication will ensure that this happens as easily and positively as possible.
In terms of ongoing measurement, we advise our clients to think about what they need to know in order to make good choices about whether to continue working with this organisation and/or what else they need to do in the context of their broader strategy. Measurement should also be helpful for your grantees – what do they need to measure in order to help them learn and improve their work.
It’s important to only measure things that will be of real assistance to you as a philanthropist in shaping your future work and funding decisions. Gathering data for the sake of it is of no help to anyone.
With luck, your partner will already be measuring the things that you are looking for – and you won’t need to add any more work to the pile. If not, agree measurement that will help and is appropriate to the size of your grant and the organisation.
Rebecca Eastmond, Managing Director, serves as a senior philanthropic advisor and leads J.P. Morgan Private Bank’s Philanthropy Centre for Europe/Middle East/Africa (EMEA).The Philanthropy Centre is focused on providing clients with insights and services to help meet their philanthropic goals through innovative advice, thought leadership and collaborative opportunities. She joined J.P. Morgan in 2008.
Ms. Eastmond began her career as a private client lawyer at Allen & Overy, advising high-net-worth individuals and large grant-making charities. In 2002, Ms. Eastmond left Allen & Overy to develop the pilot of The Prince’s Foundation for Children & the Arts. In 2005, she was appointed by HRH The Prince of Wales as CEO of the new charity, and worked with a core group of donors to grow the charity — which from 2008-2009 helped over 33,000 children across the UK.
Ms. Eastmond is a National Advisory Council member for Teach First and serves on the board of the Philanthropy Review. She currently serves as trustee of The House of Illustration and of the grant-making trust, the David Cock Foundation. She read law at Oxford University and is admitted as a solicitor in England and Wales