Why the US needs more venture philanthropy: An interview with Brandee McHale
Brandee McHale is head of corporate citizenship at Citi and president of the Citi Foundation. The Citi Foundation is the lead supporter of Urban’s Next50. McHale spoke with the Urban Institute about supporting social progress and why she and her team focus on leaders, not programs.
What does “corporate social responsibility” mean for a bank, especially one the size of Citi?
We’re in an interesting moment in thinking about the way the private sector and corporations add value to society. The ethos used to be that companies are in business to generate profit and maximize returns for their shareholders, while “corporate social responsibility” was siloed off to the side. This structure is less and less common, with the most admired companies of today closely aligning their financial and social missions. Citi is absolutely in business to maximize returns for our shareholders, but we’re also in business to have a positive social and environmental impact for the communities where we do business. We lead with our core business. We’re a bank. So the question is how do we play a role in making sure there’s not only capital and financing available but the market-based solutions needed to enable progress for all aspects of the community where we live and work?
The Citi Foundation provides flexible funding for community change agents to research, experiment, and develop new approaches to existing issues, which is desperately needed. Why is this innovation at the community level so important? I find it fascinating that there’s recognition in the private sector that if you have a culture of innovation, you also have a tolerance for risk and a willingness to fail fast. But it’s completely the opposite in the world of philanthropy. We actually have very low levels of tolerance for risk and do everything we can to ensure that our grantees never fail. So what we’re trying to do is infuse the culture of innovation we have in our company and pull that through into our foundation.
“We’re focused on enabling and supporting the most dynamic organizations, while getting out of their way so they can do the work.”
What does that look like in practice?
A few years ago, the Citi Foundation shifted resources that we had been providing local organizations in our core markets across the US to create an initiative called Community Progress Makers. It’s a six-city open request for proposals that allows us to connect with the most innovative organizations that are testing new ways to address long-standing social and environmental challenges. We provide core operating support and the opportunity to access cutting-edge data from the Urban Institute, coaching on impact measurement, and a peer learning community. [Some of these grantees will be featured on this blog in the months to come.]
We’re also making our greatest resource—our people—available to them. Citi’s employees provide pro bono consulting services. Through our colleagues at Citi Ventures, who work with start-ups and lead much of our innovation work, Community Progress Makers have access to technical assistance, design thinking methodology, and business development consultation. Employee volunteers from across the firm provide their time and talents in a variety of ways to support these organizations.
We have found that in this process, organizations can often come to see that their initial assumptions about how to tackle a problem weren’t right. That’s part of the important work needed, and we work with them to reframe their approach. These Community Progress Makers all have a really strong track record, and they’re well respected in their fields. But they don’t always have the financial flexibility to adopt this fail-fast approach. We want to give them that flexibility.
Many foundations only back specific projects. But you’re focusing on people and organizations. What prompted you to structure Community Progress Makers this way?
Unfortunately, social change doesn’t happen in nice 12- or 24-month grant cycles. It takes a while to produce the kind of transformation we’d like to see. We know that we certainly don’t have all the answers to the complicated issues of today. We’re focused on enabling and supporting the most dynamic organizations, while getting out of their way so they can do the work.