Chapter 2: Accelerating change with Passing Gear philanthropy

Gathering firsthand data from the perspective of people most affected by an issue, especially when their voices are infrequently heard, is essential for an accurate reading of reality.

The data in Chapter One paint a picture of the South that is both hopeful and sobering, one that depicts both inspiring forward movement and frustrating inertia on the South’s long path toward becoming a region that works well for all its people. Today, too many Southern people and places still fail to flourish. Historic inequities too easily encumber an equal opportunity for all people to thrive. But our region’s progress over time signals hope that further advances are possible. Passing Gear Philanthropy can be a catalyst creating the South we aspire to.

Relative to private industry and public investment, individual and institutional philanthropy has historically been an undersized contributor to the South’s advancement toward a more flourishing region, a “‘bit player’ in the South’s great transformation of the last half of the twentieth century,” as Karl Stauber has written. Yet, occasionally and increasingly, Southern philanthropy has shown it can punch above its weight to inspire, accelerate, and deepen society’s forward march. The lessons and methods of Passing Gear Philanthropy are fodder and fuel for moving us to a better place.

In the 2007 report, Philanthropy as the South’s Passing Gear, MDC wrote about the limits and possibilities of philanthropy as an essential ingredient of social advancement:

On the one end, philanthropy is restorative. It can correct excesses, unintended consequences, and harmful results when private markets and public policy miss the mark or fail to act [and]…reminders of philanthropy’s restorative role abound in our history. The activities of Eartha White, a legendary nurse, businesswoman, social worker, and political activist in the history of Jacksonville, Fla., make the point. She created a home for unwed mothers, a nursery for children of working mothers, an orphanage for black children, and a nursing home for elderly African Americans. From soup kitchens to homeless shelters, the South has traditionally favored charitable efforts as an everyday restorative when confronted with harsh realities such as poverty, illiteracy, and poor health.

On the other end, philanthropy can be catalytic, imaginative, and pioneering. It can test new ideas, build new institutions, and lower the cost of social innovation by subsidizing risk. In her book, [Claire] Gaudiani credits this kind of “investment oriented” philanthropy with creating a host of innovations that have promoted social equity and competitiveness in America: the private pension, the scholarship fund, the free library, the modern medical school, and higher education for racial minorities… While the South can point to [some] exceptional examples of catalytic, imaginative, investment oriented philanthropy…the region will need more bold, forward looking philanthropy to spur equity and competitiveness.

Staying the course toward a flourishing region makes the adoption of Passing Gear principles by Southern philanthropy more essential than ever before.

What is Passing Gear Philanthropy?

Paul Ylvisaker was a prolific and inspiring champion for equity and opportunity. Over an exceptional career as a Ford Foundation executive, Harvard Education School dean, urban policymaker, scholar/teacher, and foundation trustee, he wrestled with how society’s institutions could add maximum value to the task of human/social progress. The potential of philanthropy to seed and accelerate change became a prime focus of Ylvisaker’s energy, and through direct experimentation and thoughtful analysis he developed in the 1980s a new aspirational identity for American philanthropy: “society’s passing gear.”1 “Passing Gear” was an apt metaphor for a country where mobility, idealism, and restless impatience to attain new frontiers was in the DNA, and where, in the last decades of the 20th century, social progress and intractable problems were both vividly apparent.

In the early 2000s, while working with a set of Southern foundations that were eager for deeper impact on structural inequities in education, youth development, and community renewal, MDC began experimenting with an assertively facilitated, values-driven process to engage foundation trustees and staff in the deep analysis and imaginative problem solving that the “passing gear” concept seemed to require. To operationalize Ylvisaker’s vision, we drew on the powerful scholarship of Ron Heifetz, Parker Palmer, Susan Wisely, and Donald Schoen to forge to tools and articulate the mindset and methods to develop what has since become Passing Gear practice.

Passing Gear philanthropy is focused on accelerating progress toward shared wellbeing by guiding foundations to deploy resources unconventionally to address structural barriers to equity.

Passing Gear Philanthropy—The Core Concepts

Passing Gear Philanthropy Involves “Adaptive Work”: At its core, Passing Gear Philanthropy is philanthropy that seeks to address what Harvard professor Ron Heifetz calls “adaptive challenges,” problems that arise when our ideals are challenged by the reality of current circumstances and that test the limits of “current technological know-how or routine behavior.”2 Passing Gear philanthropy is a response to the “cognitive dissonance that results when [a foundation] examines current reality through the lens of the ideal.”3 Passing Gear philanthropy channels the “restlessness” that arises when a foundation decides to embrace that cognitive dissonance and reconcile glaring social contradictions. It whets, informs, and directs a foundation’s appetite toward a focused vision of what must be “faced and changed” in order to address the nagging gap between society’s aspirational ideals and its routine performance.4

Heifetz, Ronald A. Leadership Without Easy Answers. Cambridge: Harvard University Press, 1998, Print.
Building Communities of Conscience and Conviction. MDC, 1997.
4 “As Much Truth As One Can Bear.” James Baldwin, The New York Times Book Review: 1962.

Poverty, under-education, health inequities, and environmental degradation in the South are all areas where the gap between our ideals and current reality cannot be closed by current technological know-how or routine behavior. And increasingly the issues that the South must face and change are interconnected, producing so-called “wicked problems” that cry out for inventive responses. Such deep challenges require people to embrace change and to innovate solutions that defy the simple application of conventional knowledge. Passing Gear philanthropy seeks to engage society’s inventiveness and focus its capabilities on situations where current performance is missing the mark. Just as downshifting helps a car accelerate around a slow or stalled vehicle, Passing Gear philanthropy cultivates the will, imagination, and know-how to enable caring and concerned people to address contradictions between the ideals we hold about the world we inhabit and the disappointing realities we confront daily.

Passing Gear Philanthropy Requires Imaginative Inquiry in Analysis, Strategy, and Implementation: Exercising the adaptive leadership that Passing Gear philanthropy requires involves clear analysis and imaginative strategy. It does not prescribe the actions a foundation should take. As Craig Dykstra, a scholar of religion and leadership and a longtime officer of the Indianapolis-based Lilly Endowment, has written, such leadership requires that we “read reality truthfully and take action responsibly.” Passing Gear philanthropy is grounded in sharp, nuanced analysis of the current situation and the ways in which the “adaptive challenge” is causing harm and leading society to fall short of its capacity for humane, compassionate, equitable, and sustainable outcomes. It is grounded in open-eyed, open-minded, open-hearted examination of the world as it is, a carefully measured calculation of the distance to be traveled to achieve alignment with our animating values, and the creation of an inventive and courageous path to bridge the divide. As we will see in Chapter Three of this report, an increasing number of Southern foundations are practicing such adaptive leadership today across our region.

Thoughtful action aligned with clear analysis is a further hallmark of Passing Gear philanthropy. As veteran Miami philanthropist Ruth Shack has memorably stated, the job of philanthropy is to “know our community deeply and to respond with affection.” Deep knowing requires strong analysis of the context in which a foundation seeks to act. It involves what leadership scholar Warren Benis has labeled “hindsight” (historical analysis of the patterns of response and avoidance that have produced current conditions), “foresight” (looking into the emerging future through the examination of trend data), “peripheral vision,” and “depth perception” (by tapping the viewpoints of likely and unlikely informants who “read reality” from perspectives other than our own).

By “reading reality” through the lens of clearly articulated values, Passing Gear philanthropy defines the adaptive contradictions that require attention. It uses “imaginative inquiry” to probe the reasons that the adaptive contradictions exist and persist, to understand where and why there is positive forward movement, and to generate imaginative responses to current conditions. The capacity to “interview ” the data is a key tool for understanding how to move from analysis to action: “What lies underneath the South’s stubborn patterns of stalled social mobility?” “How do we understand and untangle the numerous factors that contribute to vexing problems?

Over time, Passing Gear foundations make the work of imaginative inquiry a cultural norm, or a “habit of mind,” as they regularly and consistently seek to read reality truthfully, interview data and history to sharpen their analysis, incorporate expertise and disciplined reflection to inform strategy, and rigorously draw lessons from examining the impact of their own work and that of their peers.

Passing Gear Philanthropy Recognizes and Deploys a Full Range of Philanthropic Methods and Tools to Address Adaptive Challenges: Passing Gear philanthropy seeks to focus attention on addressing the “upstream” factors that cause problems to persist rather than “downstream” symptoms that should command traditional/conventional charitable attention. Philanthropy scholars Susan Wisely and Elizabeth Lynn note an evolution in American philanthropy’s mindset and assumptions about how to address social challenges. The history of American philanthropy begins with charitable giving inspired by the Good Samaritan’s response to immediate need, an approach that involves “acquiescing to the way things are,” in the words of philanthropy scholar Amy Kass. Then, as society industrializes and social inequities begin to proliferate, philanthropy evolves to reflect Andrew Carnegie’s belief in supporting mechanisms—such as public libraries—for able and ambitious people to advance themselves, which Kass describes as benefiting those “well situated with climbing skills.” Later, during the Progressive Era, when social analysis shifts to reveal limits to Carnegie’s self-help doctrine, a more activist philanthropy emerges to focus on removing structural barriers to progress and on driving deep social reform, taking what Kass labels “a proactive role to solve public problems.” And when the limits to well-meaning, top-down philanthropy become apparent, a new philanthropic tradition arises to foster democratic problem-solving through public engagement, “building connections among ordinary citizens” with the goal of spurring “new visions and fresh actions.” To Wisely and Lynn, each of these “philanthropic traditions” has value and each has inherent limitations. In their framework, some philanthropic traditions are better suited than others to addressing the causes of embedded social problems or at unleashing humanity’s creative capacity to invent adaptive solutions to deep structural inequities. Given Southern philanthropy’s historic predilection for charitable relief over social reform, success at meeting our region’s significant adaptive challenges will necessarily involve shifting the prevailing mindset and assumptions about the role and purpose of philanthropy to one that is more compatible with upstream investing.

Passing Gear philanthropy recognizes that foundations are about more than their financial assets. Ambassador James Joseph, CEO Emeritus of the Council on Foundations and Chair Emeritus of the MDC board of directors, has illuminated five dimensions of philanthropic capital that together constitute a formidable reservoir of resources for addressing Heifetz’s adaptive challenges. Foundations have the ability to leverage their social capital, the influential networks and relationships that are indispensable to reform. They can marshal moral capital, by alerting society to social contradictions that are “hidden in plain sight” (See “Inequity Hidden in Plan Sight,” above, right.) They can deploy intellectual capital, sponsoring research, cultivating knowledge, and building the capacity of leadership to turn that knowledge into action. They can make courageous use of their reputational capital, the weight that comes from privilege to support nascent or unpopular causes that require a brave early adopter. Finally, foundations can deploy their financial capital creatively. Social, Moral, Intellectual, Reputational, and Financial capital (now known by the acronym “SMIRF,” popularized by Minneapolis foundation leader Randi Roth) belong in the toolbox of every Passing Gear philanthropist.

Finally, Passing Gear philanthropy is about action and reflection, learning while doing. Precisely because adaptive challenges test and even defy known solutions, Passing Gear philanthropy involves willingness to “enter into new confusions and uncertainties,” as Donald Schon writes in The Reflective Practitioner.5 The more Southern philanthropy is willing to assume the risk of adaptive work, wisely engage challenges that have eluded conventional solutions, and adds to our collective knowledge of how to close the gap between the current reality and a flourishing, equitable future, the more it will be “Passing Gear.”

5 Schon, Donald A. The Reflective Practitioner: How Professionals Think in Action. New York City: Basic Books, 1984, Print.

How Does a Foundation Become a “Passing Gear” Philanthropy?

Passing Gear philanthropy is focused on accelerating progress toward shared well-being. It operates from the premise that by applying a set of core concepts and in a disciplined way, it is possible for a foundation to cultivate a strategic mindset and to deploy its resources unconventionally to address structural impediments to equity. In our work with foundation staff and trustees, MDC guides them through a formative process designed to spark imaginative inquiry and produce a strategy for applying a full range of philanthropic capital to advance what we refer to as a “North Star” vision: a motivational picture of desired future conditions that matches the foundation’s aspirational values. MDC’s facilitated process is organized into two phases that correspond to Craig Dykstra’s defining requirements for leadership. First, we help foundation decision makers “read reality truthfully” through a deep contextual and environmental analysis that results in elevating the issues that are calling out for foundation action. Then we help them “take action responsibly” by creating a strategic roadmap that is intentional about deploying the foundation’s tangible assets and intangible resources to move beyond immediate charitable relief to institutional and community practice, culture, systems, and policy.

Reading Reality by Examining History: Among the most important tools for cultivating Passing Gear insight is the close examination of history. Too many planning efforts pay scant attention to history, preferring instead to stand in the present and gaze into the future. But changing current history, practice, and policy first requires understanding how current conditions came about, exploring why they endure, and assessing what can be learned from past attempts at change. The Passing Gear process invites foundations to examine history by working with staff and trustees to build and analyze a physical “history timeline” that paints a visual portrait of the factors, forces, and choices—both intentional and unintentional—that have produced the current situation that is calling for change. Creating a visual picture of the arc of history, replete with turning points, bold advances, pushbacks, and reversals creates a powerful narrative canvas. When foundation leaders then “stand back” from the historical picture and examine patterns from a critical distance—much as a museum goer would do with an actual painting—patterns emerge that illuminate often concealed truths about community, culture, systems and leadership. MDC supports this critical analysis by facilitating a process in which foundation decision-makers “interview the timeline” through focusing questions to analyze the community’s behavior and the foundation’s role in it:

• When did we exhibit foresight in addressing a key opportunity or challenge?

• When did we exhibit courage?

• When did we fail to act?

• Whose interests were advanced by the choices made by leaders?

• Whose interests were ignored or subordinated?

• What does history tell us about our appetite and capability to engage in addressing upstream challenges to shared well-being and attacking vexing problems that contradict our aspirations?

• In light of this analysis, what ways of working should we carry forward? What ways of working must change to produce the change we seek?

The answers to these questions illuminate how a community or system habitually responds when faced with the need or opportunity to change. This understanding is essential for developing effective foundation strategy.

Reading Reality by Examining Data

What is the emerging future likely to look like? How are key trends shaping the environment in which the foundation is being called to act? After examining the lessons of history, the Passing Gear process engages foundation decision-makers in exploring data and scenarios about the future. To support imaginative inquiry about the emerging future, MDC develops data on demographics, education, income, wealth and poverty, health and wellness, and other critical factors, disaggregating the data by race, gender, and age and extracting trend information so that disparities and patterns are more apparent. By facilitating probing discussion of these data in a group setting, the Passing Gear process enables foundation leaders to see “around the corner and over the transom” as Ralph Smith, a veteran foundation leader, has said. Since few foundation boards and staff take time to build a collective reading of the future, the act of “interviewing data” together is powerful and helps reinforce a culture and mindset of critical analysis necessary to sustaining Passing Gear practice. Gathering firsthand data from the perspective of people most affected by an issue, especially when their voices are infrequently heard. This is essential for an accurate reading of reality.

Taking Action Responsibly: Defining the North Star

Having examined history and its lessons and the context for change, the Passing Gear process then considers questions of the foundation’s values, vision, and aspirational purpose:

• What core values define who we are and what we stand for?

• When we read reality through the lens of those values, what calls to us? What aspirational change in the current situation do we seek to bring about through our actions and influence? What is the North Star that should define our designation and be our point of orientation in the journey of change?

• How will we know when the impact of our proposed actions will match the aspirations our values require?

• How can our accountability extend to the people who are directly affected the by the issues we are working on? What voice can and should they have in shaping our strategy and assessing our effectiveness?

Wrestling with these questions is hard work. Much of MDC’s Passing Gear experience has been with foundations that are motivated to address the gap between current reality and shared well-being. We have found it important to help these foundations clarify and name the values that support their convictions and sustain their commitment as a first step in deciding “what to do.” Guiding values typically describe both the ground rules that the foundation considers necessary for a healthy and coherent society, such as fairness, equity, and respect for the dignity and human potential of all people, and operational rules for how the foundation wishes to operate—transparency, honesty, humility, and openness to learning. Helping a foundation get clear on the values that drive both their purpose and their process is key to “taking action responsibly.”

Defining a North Star—an aspirational GPS for the world the foundation hopes to secure—is pivotal to the Passing Gear process. Here is where the foundation determines its aspirational appetite. The conversation between values and data shapes the North Star precisely because Passing Gear seeks to address the cognitive dissonance that results when the current situation is examined through the realm of the ideal.

The North Star describes what would result if the dissonance could be resolved—what the world would look like if aspirational values and the world we experience could be brought into alignment. The North Star is also a provocation to the foundation: alignment between values and data can be achieved either by changing the outcomes that the data describe or by diluting the convictions that define the foundation’s character and ambitions. The choice of “aiming low” is always present, but it is incompatible with true “Passing Gear.”

Defining a North Star—an aspirational GPS for the world the foundation hopes to secure—is pivotal to the Passing Gear process.

Passing Gear philanthropy recognizes that foundations are about more than their financial assets.

Taking Action Responsibly: A Plan to Achieve the ‘Winning Aspiration’

Once the aspirational North Star is clear, the Passing Gear process turns to how: what is the foundation’s strategy and what is the plan to realize it? How does the foundation move from a cluster of concerns to focused work? Questions abound at this point, among them:

The Role of Expertise: Where do research and experience say we should place our bets? Of the many things it is possible to do, what is necessary, feasible, and likely to produce a social return on investment given the foundation’s time horizon, resources, and tolerance for risk? What knowledge and expertise needs to reside in the foundation in order for our work to be effective? What knowledge and expertise do we need to cultivate in order to complement our internal capacity? How can expert knowledge be tailored to the context in which we work? How can the foundation strengthen its capacity for research-based exploration and imaginative strategic inquiry?

The Optimal Deployment of Capital: What mix of our tangible and intangible capital (SMIRF) can we deploy toward the North Star? How can we leverage and augment those forms of capital that we lack? What underutilized capital exists in the institutions, communities, and populations that we care about and need to engage?

A Broad Meaning of “Acting Responsibly”: Responsible action involves accountability. To whom is the foundation accountable in carrying out its transformative work? Here the Passing Gear attributes of “hindsight” and “foresight” can offer a corrective challenge to conventional thinking. The Roman historian Tacitus described patriotism as “praiseworthy competition with our ancestors.” How can a foundation be responsible for upholding the highest and most humane ideas of the past? And the Iroquois Confederation regularly considered the impact its major decisions would have on the seventh future generation. What could “taking action responsibly” mean when considered against such imaginative consideration of past and future?

• How will we measure progress, impact, and Social Return on Investment?

• How will we learn from experience?

In helping a foundation determine which of the Wisely/Lynn philanthropic traditions and which forms of capital are best suited to addressing the contradictions it wishes to “face and change,” MDC often employs what we call “the allocations game” (see page 13). The game invites foundation decision makers to decide how they would allocate their philanthropic SMIRF across one or more of the four traditions to forge a powerful response to the issues the foundation seeks to address. Each member of the board or staff completes an individual allocation and then the allocations are compared and the strategic assumptions behind them are discussed. Sometimes the allocations and underlying assumptions are in harmony, but frequently not. By modeling a hypothetical deployment of SMIRF across the philanthropic traditions, this engaging Passing Gear tool provides an illuminating snapshot into whether a foundation’s decision makers are unified about their “theory of action” and social investment (see “Interviewing the Grants” previously on this page). Setting strategy can be fun.

Fundamental questions of strategy and tactics converge in a Passing Gear Action Plan for the foundation. Models for strategic planning abound. MDC has found that the “strategy cascade” framework as developed by Roger Martin at the University of Toronto and by staff of the Monitor Institute offers a fresh and accessible way to consolidate strategy development and planning. By asking four high- level questions, the Monitor Group’s version of the strategy cascade provides a clear template for summarizing the thinking generated by the Passing Gear process as seen below:

• What is our vision and theory of change? What social challenges are we working to address and how do we believe that we can make a difference?

• Where will we play? What part of the problem should we work on, what role should we play, and where will we focus our efforts?

• How will we succeed? What actions, adaptations, and economic model are required and how will we measure our success? (see “Evaluative Thinking,” previous on this page)

• What capabilities will we need? What skills and abilities will we need, individually and collectively, to create the impact we’ve set out to achieve? (See “Office of Second Thoughts,” below)

Below we can see how the Passing Gear process informs these fundamental strategy questions. By following the PGP process, a foundation can address fundamental strategy questions at a deep and discerning level:


At its core, Passing Gear philanthropy is about the wise and courageous deployment of the social and economic privilege foundations enjoy in a democratic society.


When a foundation chooses to embrace a Passing Gear identity, it is deciding to leave the secure harbor of traditional charitable activity and venture into challenging, sometimes uncharted depths. Institutional courage is involved whenever a foundation feels the call to address deep contradictions between society’s ideals and unacceptable performance on issues that define shared wellbeing. At its core, therefore, Passing Gear philanthropy is about the wise and courageous deployment of the social and economic privilege foundations enjoy in a democratic society. With all its potential and all its unresolved pain, the South needs more of its foundations to embark on that courageous voyage.

So the words of a 16th century prayer have poignant meaning for Southern philanthropy as it contemplates embracing the Passing Gear challenge:

Disturb us, Lord, when
We are too pleased with ourselves,
When our dreams have come true
Because we dreamed too little,
When we arrived safely
Because we sailed too close to the shore.

Disturb us, Lord, when
with the abundance of things we possess
We have lost our thirst
For the waters of life;
Having fallen in love with life,
We have ceased to dream of eternity
And in our efforts to build a new earth,
We have allowed our vision
Of the new Heaven to dim.

Disturb us, Lord, to dare more boldly,
To venture on wilder seas
Where storms will show Your mastery;
Where losing sight of land,
We shall find the stars.

We ask you to push back
The horizons of our hopes;
And to push back the future
In strength, courage, hope, and love.