Just as you would in business, you take your best shot and make a judgment as to whether it is working or not.
This profile is part of our “Philanthropists in Action” case study series, which examines emerging trends across the philanthropy landscape, as the ESG agenda and creating social impact climb the priority list of Family Offices and ultra-high net worth individuals (UHNWIs) around the world.
Tom McDonnell has been a key figure on the Kansas City corporate and philanthropic landscape for decades, having built a stellar career in the global asset management industry. In 1986, the McDonnell family established a private foundation, McDonnell Foundation, to focus support on education, the arts, and vulnerable women across Kansas City.
The foundation involves multiple generations of the McDonnell family and adopts an investment-led approach. "It is," says Tom McDonnell, "a 'hands-on' approach with measured risks that echoes the venture capital community."
Identifying the right causes
The over-arching focus of the McDonnell Foundation is to address the continuing economic inequalities in the US which can only be solved, says Tom McDonnell, by addressing long-term educational improvement. The foundation works with many schools and educators across Kansas City.
Yet its focus extends beyond education, reflecting the concerns and passions of Tom’s wife, Jean, and two daughters. The foundation supports daycare centers, refuges for abused women and projects that educate and equip women to take financial control over their futures.
One successful example is the Grooming Project, established by single mom, Natasha Kirsch, which trains women to become dog groomers. “An investment of US$35,000 can get women to the point where they are qualified pet groomers earning between US$50,000-60,000 a year,” explains Tom.
“What we try to do is look at the flow of a particular activity… with more cumulative solutions.”
Tom believes philanthropists need to experiment and take risks when making philanthropic decisions.
“The boards of some of the larger foundations get obsessed with metrics, yet many projects do not have definable metrics. They have opportunity."
“Like venture capital investors, we are more open to risks. We can make decisions more or less instantaneously and are willing to come in at the front end of many projects that other foundations cannot. Just as you would in business, you take your best shot, and make a judgment as to whether it is working or not.”
Philanthropic activity is very much a family affair for the McDonnells. Two generations have volunteered their time, working with children in early years education, and high school children on science and engineering projects.
The benefit is often a two-way street. Tom and his family have supported Operation Breakthrough for over a decade; a not-for-profit organization founded by Sister Corita Bussanmas and Sister Berta Sailer in 1971 to provide education and childcare for the working poor.
"It provides stimuli for innovation in children (innovation training) that includes 3D printing, engineering training, and building electric cars – long before Elon Musk,” says Tom.
“My wife has been volunteering with the younger children for over 10 years, and my son, on completing an aeronautical engineering degree, spent the summer volunteering with Operation Breakthrough, where they taught him to weld.”
Philanthropists can all too easily operate one step removed from the projects they support without that 'personal or physical connection'. "It is good," says Tom, "to be 'hands-on' and come up through the organizations. It is a way of operating that sits comfortably with new money and entrepreneurial wealth."
“New money looks at things quite differently. Many of them have built a business and there is a different interaction,” explains Tom.
Greater collaboration
"There are some 1,700 charities and registered not-for-profits in Kansas City and it can be frustrating when eight or nine of them are all doing the same thing. It is the same with family foundations,” says Tom.
Get involved where you can see people and the communities you wish to serve. See them first-hand – the people working at the homeless shelters, the day-care and look at it from their point of view. And then decide.
“If there was a more cooperative stance, if a foundation were to step back and say ‘look, you five go together… you would have enough leverage to enhance operations and really get attention’. But we don’t have that to a great degree.”
There are moves towards greater sophistication in philanthropic investment with the emergence of donor-directed foundations. The University of Notre Dame offers a donor-advised fund where half of the investments are directed to causes supported by the university and the other half to causes chosen by the individual donor.
“It is a fascinating approach and one that typically offers a lot of other donor-support services. It has true value,” says Tom.
To those starting on their own philanthropic journeys, Tom offers this advice: “Get involved where you can see people and the communities you wish to serve. See them first-hand – the people working at the homeless shelters, the day-care and look at it from their point of view. And then decide.”
