The complexities of social change require that organizations have a clear strategic vision. However, they must also remain open to the critical perspectives of diverse partners and stakeholders. This combination can result in challenging and dynamic tensions.

In 2024, McConnell developed a five-year strategy to accelerate the inclusive transition to an equitable net-zero carbon economy. While this process didn’t result in convergence around a single strategy, it improved our approach and strengthened relationships among diverse actors. This experience prompts us to ask how foundations can set up open partnerships and ongoing consultations to make room for constructive disagreement, shared learning and stronger alignment across different sectors of society.

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Our endowment enables us to make grants and investments, but progress is often more far-reaching and enduring when we take the time to work through coalitions, partnerships and advocacy designed to influence larger systems.

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How do we strike an optimal balance between the two?

McConnell funds social innovation with the intention of contributing to systemic change. While philanthropic grants can help innovative projects get off the ground and achieve scale, overreliance on a sole funder can sometimes impede progress. An initiative will only endure if it can establish self-sufficiency through revenue diversification, or sustained policy change.

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Currently we participate in pooled portfolios that contain holdings in fossil fuel companies, in order to conduct shareholder engagement on climate matters, as well as on corporate governance and Indigenous relations – an issue that is also central to the Foundation’s philanthropic mission.

At what point does the primacy of the climate crisis compel us to prioritize divestment over continuing to press for an industry-wide phase out that provides workers and communities with time and resources for transition? And what about the financial risk in holding assets whose future value is in doubt? Such questions, which do not have simple answers, are shaping our discussions about investing for impact.

McConnell’s theory of change involves collaboratively scaling up social innovations via sustained engagement with charities, the private sector, public institutions and governments. For example, in 2017 and 2018 we participated in the cross-sector Social Innovation and Social Finance Co-creation Steering Committee. Our work is increasingly structured via funder collaboratives whose shared purpose is to improve outcomes on large scale challenges.

While we have strong relationships with many stakeholders and partners, we are a private foundation and our only formal accountability mechanisms are to our board and the Canada Revenue Agency. As we seek to create more change through the “scale up” strategy of policy advocacy conducted with funder collaboratives, how do we stay accountable to communities and remain grounded and guided by their knowledge and interests?

The way most foundations operate is by investing an endowment of capital and granting a percentage (legally, at least 3.5%) to social purpose initiatives. For McConnell, this approach has made capital available over a number of years while retaining plenty for the problems of the future. Considering the challenges of our current era, we’re grateful that J.W. McConnell had the foresight to create the foundation in 1937, rather than commit all of his philanthropic capital on an annual basis.

However, in October 2018, the Intergovernmental Panel on Climate Change warned that the world had just 12 years left to address the climate crisis. Now we’re down to 10, and emissions in Canada are still increasing. As we come to this realization and its implications for our work, questions arise for all foundations: should we spend a greater percentage of our endowments? How much? Are there better ways to leverage our current spending? If we spend more today, how do we provide for the increasingly complex problems of 2050 or 2100?

As social and environmental problems proliferate, the public sector is experiencing pressure to adapt. But government processes and accountability structures can stand in the way of agile social R&D. Meanwhile, with the lifting of restrictions on civil society participation in policy advocacy, and journalism becoming a charitable activity, there is growing government interest in collaboration with civil society and philanthropy around what economist Mariana Mazzucato calls “mission-based innovation”. This can include joint convening; participation in “solutions labs”; granting for social R&D; making matching grants to extend government funding; and structuring outcomes funds to co-finance systemic change.

However, history warns that private philanthropy has the potential to erode the public obligations of the state, by occupying roles that are most appropriately held by democratically elected, tax-funded governments. As foundations engage around issues facing public institutions, how do we ensure that our efforts contribute to public sector capacity and accountability, and not diminish them?

Evaluation helps foundations understand program impact and inform decision-making. However it has a tendency to promote strategies that are easily measured. This ignores systems change approaches which are too complex and interdependent to capture with tools that measure cause and effect.

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Given the tension between the need to measure results and the emergent character of systemic transformation, how do we use impact measurement without letting it stifle innovation?

With the release of the Truth and Reconciliation Commission’s 94 Calls to Action in 2015, Canadians have a blueprint for addressing past harms caused to Indigenous peoples. It is also true that there is a risk of perpetuating old mistakes if we don’t engage in this work in the right manner.

So far most of McConnell’s reconciliation work has taken place in close relationship among Indigenous and non-Indigenous innovators. In addition to giving fledgling projects the benefit of being associated with a well-established organization, we’ve gained from Indigenous wisdom generously shared with us.

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With so many innovative civil society organizations requesting funding, McConnell is obliged to say “No” more frequently than “Yes” to proposals – in 2024, we received 685 applications and made 192 grants. We know that people put considerable time and thought into their submissions, and we endeavour to review them all carefully. Yet we understand that a declination can feel dispiriting and arbitrary.

A “No” from a foundation doesn’t mean that a particular project or issue is not worthy of support. We therefore ask ourselves, “how can we conduct the proposal review process so that even a refusal will be seen as worth the applicant’s time?” What measures of transparency about our decision-making processes can build their confidence and insight about how to move their projects forward? What is the appropriate amount of time for us to spend on this?

There is a current critique of philanthropy’s tendency to decide what is best for others, and to undervalue community organizations’ local knowledge and relationships. While some argue that the answer lies in foundations relinquishing their power and influence, another option is to share them.

When McConnell became involved with the Winnipeg Boldness Project, to improve outcomes for children and families in the city’s largely Indigenous North End, local leaders insisted that key decisions be made by the community. By agreeing, the Foundation enabled Boldness to apply polycentric governance, whereby social agencies, parents, Elders, researchers and funders are consulted on an ongoing basis.

While successful at the local level, Boldness has sometimes asked for help in influencing governments, securing other funders and connecting with similar work in other parts of Canada. Co-managing complementary spheres of influence to connect local solutions to global issues seems to be working.

Can foundations evolve their role to more openly share influence with community partners?

The McConnell Foundation’s endowment is built upon wealth that J.W. McConnell amassed over the course of his lifetime (1877-1963). A man of vision, intelligence, industry and generosity, he also lived during a period when Canada was expanding its colonial power at the expense of Indigenous peoples.

The Foundation made its first grant to an Indigenous organization in 2003, and today has an extensive portfolio of grants and investments focussed on Indigenous issues and partnerships. In 2015, at the concluding event of the Truth and Reconciliation Commission, we joined with other foundations in signing the Philanthropic Community’s Declaration of Action. We now ask ourselves and our peers, “How can foundations advance economic reconciliation in the decade ahead?”