The following is an excerpt of an article by Heather Grady, published by Stanford Social Innovation Review on 30 July 2014. The original article can be found here.

At a recent gathering of foundation and corporate fundraising professionals, Hewlett Foundation President Larry Kramer shared his perspectives on philanthropy. His remarks really struck a chord with me; they were frank and incisive, and pointed out some structural issues that relate to an initiative we are working on with colleagues from the Conrad N. Hilton Foundation, the Ford Foundation, the UN Development Program (UNDP), the Foundation Center, and the Worldwide Initiatives for Grantmaker Support network.

Our group conceived this initiative (currently called the Post-2015 Partnership Platform for Philanthropy) over the last half-year or so to do two things: 1) help philanthropy better understand the opportunities for engaging in global development goal processes, and 2) help governments and the UN system understand the added value of philanthropy’s engagement. It will also move forward what Kramer calls “a common vocabulary”—in other words, a common information base so that foundations and others involved in international development can see the extent to which their efforts are complementing each other in contributing to the global development agenda. So far, it has been a challenge to convince foundations to invest in it; many think it is a good idea, but few are actively committing financial resources. It occurred to me that if we came up with a more eponymous title, we might attract natural allies faster. But after hearing Kramer’s comments, it dawned on me that there is much more to it than that.

He put it bluntly: There are enormous problems with collaboration within philanthropy—it is “really, really difficult.” He pointed out that this derives in part from the professionalization of our sector over the past few decades. We have gotten much better at developing theories of change for our grantmaking and programmatic portfolios, and I believe on balance this is good. This is what good NGOs do already—build consensus internally on their archetype of change, and then deploy their (usually) scarce resources accordingly. But as each foundation works to develop and test its own strategies for change, it rarely matches with those of other foundations—and there is precious little incentive to combine resources to conserve funds within the sector.

A related challenge is coordinating decision-making. Kramer acknowledged that most foundations probably have four layers of decision-making: the individual program officer, a program director or equivalent, the CEO, and the board of trustees. In most cases, they must all buy in to programmatic efforts before making grants, and once committed to a theory of change and portfolio direction, it is very hard to change it or make exceptions. If an idea introduced by another foundation doesn’t quite fit, individuals are reluctant to override (if they are more senior) or challenge (if they are more junior) their colleagues. A lucky coincidence is when two foundations’ strategies align well for shared purpose—but this isn’t common.

Kramer borrowed a term from international relations to explain why this is particularly challenging for philanthropy—diffuse reciprocity (versus traditional reciprocity), a concept that he discussed in an April 2014 SSIR blog. Continue reading here.

Heather Grady recently joined the San Francisco office of Rockefeller Philanthropy Advisors as senior fellow of global philanthropy. She was formerly an advisor to the Hilton Foundation, vice president at the Rockefeller Foundation, and managing director of Realizing Rights: The Ethical Globalization Initiative. Follow WINGS on Twitter @wings_info.