A Theory of Change for Funders Presenter David Hunter

1. A Theory of Change for FundersPresenterDavid Hunter How Funders can Drive the Production of Social Value December 4, 2013

2. Elements of a social investment theory of change: clarity, specificity, and focus • Clarity of mission – aka “value proposition” • Focus of grantmaking/investment domain(s) • Demographics • Risk factors • Specificity of outcomes that investments will engender • Organizational outcomes for grantees – as inputs into: • Outcomes for intended beneficiaries • Clarity, specificity, and focus of grantmaking approach(es) • Kinds of entities in which the funder will invest (direct service, intermediaries, collaboratives, etc.) • Kinds of grants/investments the funder will make (program, general operating support, capacity-building, etc.) • Grantmaking/investment operations • Due diligence • Grant structuring • Providing non-financial support(s) (directly or through vendors) • Invest in knowledge production • Measurement and monitoring • Evaluation

3. A case in progress: Tauck Family Foundation Eden Werring Executive Director Hunter Consulting LLC

4. Overview and Background on Tauck Family Foundation • Private family foundation founded in 1994; assets of roughly $21 million with $1 million annual budget • Multi-generational: eight board members; very engaged family • Two professional staff members: Executive Director and Program Officer/Portfolio Manager 1.75 FTE • Youth development grants: largely programmatic; roughly $2K to $25K for 1-3 years to 40-50 organizations; Sparks middle-school summer travel program • Thoughtful and caring regarding grantees, but did not know what philanthropy was accomplishing • Interest in investing in fewer organizations and strengthening them over time • Initially contacted David Hunter for Sparks, but led to four-day theory of change process transforming foundation

5. Theory of Change workshop and beyond • Clarifying general value proposition: why we exist? Measurable social value creation vs. “the sandbox” • Rewrote mission: clear, concrete, understandable • Strategic decisions to focus, focus, focus (geographic area, target population, number, size) • “Sentimentalism” vs. compassion • New, clear and specific grantmaking approach • Investments over 3-5 years (general operating, capacity building, portfolio management, and knowledge building) • New mission led to becoming “social investor” • Strategic shift away from focusing on outputs to focusing on outcomes • Focused approach within Capacity Building Support • Mission, Strategy, and Theory of Change • Performance Management (performance leadership, managers, budgeting, systems) • Outcomes Evaluation • Investing in knowledge building and sharing – partnership with Child Trends, future R&D on skills development, cohort learning • Developing strategic business and implementation plan for foundation

6. Challenge and Logic Framework • Identified clear challenge for children from low-income families in Bridgeport, CT • Largest, lowest performing city in state with widest achievement gap • Too many children from low-income families not achieving; only 29% of 3rd graders and 13% of 10th graders at grade level • Only 3% estimated to go on to graduate college • Identified rationale for mission and logic framework • School achievement is the only documented way to navigate poverty • Research shows certain “essential life skills” lead to better academic and social outcomes • SEL skills are as important as academic outcomes and are teachable/malleable • Children need skills to be successful and organizations need capacity to measure, monitor and drive towards these outcomes

7. Tauck Family FoundationMission, Vision, and Theory of Change • Our mission is to invest in the development of essential life skills that lead to better prospects for children from low-income families in Bridgeport, Connecticut. • Our vision is that Bridgeport children will cultivate the skills they need to take control of their futures, succeed in their education, break the cycle of poverty, and reach their full potential. • Our Theory of Change is to invest over time in strengthening the organizational capacity of our non-profit investees so that they can, in turn, help Bridgeport elementary school children from low-income families cultivate essential social and emotional skills to succeed educationally in middle school and ultimately escape the cycle of poverty.

8. Outcomes **Both sets of outcomes lead to self-management capacity, of organizations and of elementary school children

9. Tauck Family Foundation – New Portfolio Together, these four organizations will reach 1,060 children in our target population within the first year of investment (10% of the roughly 11,000 children in grades K-5, in Bridgeport, CT) with potential for more in Bridgeport Public Schools.

10. Top Ten Learnings, to date • Don’t have to be hugeto be strategic • We need to “walk the talk” in terms of creating foundation’s accountability system • Approach can’t be“top down” – balance of providing “guided self-management” but not prescribing or burdening • Need to havepatience – with ourselves and with investees. It takes years. But we are all impatient because we want Bridgeport kids to succeed! • Listening to capacity-building needs of investees – need flexibility in enacting and implementing our theory of change • Learning organization – “make mistakes you can wipe off the wall.” • Strategic focus has further engaged all generations of family board members • Learning what performance management really entails: time, resources, culture shift • Need to stay focused: dig a hole and dig it deep; not taking on more investees in second year • Learning never stops; ongoing learning agenda

11. Q& A • David E. K. Hunter, PhD • Founder and Consultant • Hunter Consulting LLC • www.hunterconsulting.com • Eden Werring • Executive Director • Tauck Family Foundation • www.tauckfamilyfoundation.org