What is Purpose?

Professors Christopher Bartlett and Sumatra Ghoshal, citing research with hundreds of standout organizations, conclude that, “Senior managers of today’s large enterprises must move beyond strategy, structure, and systems to a framework built on purpose, process, and people.” So, what’s the difference? Bartlett and Ghoshal explain:

"...A fundamental philosophical difference separates senior executives who see themselves as designers of corporate strategy from those who define their task more broadly as shaping institutional purpose. Strategy makers view the companies they head... with a narrowly defined role in a large and complex social environment. In their view, companies are simply agents of economic exchange in a broader marketplace. They are dependents of their shareholders, customers, employees, and larger communities, and the purpose of strategy is to manage these often conflicting dependencies for the maximum benefit of the company they serve. This minimalist, passive, and self-serving definition grossly understates reality. Corporations are one of the most, if not the most, important institutions of modern society... Furthermore, their responsibility for defining, creating, and distributing value makes corporations one of society’s principal agents of social change. At the micro level, companies are important forums for social interaction and personal fulfillment."1

Foundations aren’t exclusively agents of economic exchange, but they are dependent on donors, and must strike a balance between their needs, and those of charities, majority and minority communities, and staff.

It may seem inappropriate to compare foundations to corporations on any level; however, as both tend to be concerned with using a majority of their assets to generate wealth, there are some commonalities.

Podcast guest Cuong Hoang argues that we can divine implicit purpose by looking at structure and resource allocation in philanthropy. When more than 90% of a foundation’s assets are invested in the stock market and thus benefit the donor and investor class, and more than 50% of their costs flow to staff and advisors looking after donors and investments, we can ask:

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  What is the primary function of a philanthropic foundation?
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  Are foundations primarily banking institutions, whose purpose is to expertly balance different interests while prioritizing profit on investment?
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  Are they social change institutions, whose purpose is to take a moral stand?
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  Is moral neutrality consistent with social change objectives?
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  Is neutrality really possible when an institution is so embedded within tax and legal systems with inbuilt logics shaped by dominant interests?

That brings us back to the systems change literature, with its focus on rebalancing interests and reimagining power. Here, purpose is also one of the key levers for change. Shifting systems -- and the institutions which make them up -- starts by making implied purposes visible, and making ideal purposes explicit. It is not a pragmatic exercise. It is a philosophical one. Author Charles Leadbeater and Designer Jennie Winhall, in their paper ‘Building Better Systems’ for the Rockwool Foundation, explain:2

Purpose, then, is inextricably linked to philosophy: to how we understand reality, knowledge, and value; and to the ways in which that understanding guides our intentions and actions.

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  Purpose is moral

  Purpose is the statement of a company’s moral response to its broadly defined responsibilities, not an amoral plan
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  Identifying purpose inductively

  We can glean a lot about purpose by looking at an organization's structure and resource allocation. What do they spend most of their energy and resource to accomplish?
  
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  A Question of Neutrality

  Whether an social purpose organization can effectively claim neutrality depends on the moral underpinnings of that position, but also on its ability to keep its interests independent of systems designed in the dominant interest.
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  Shifting Systems

  If an organization seeks to be part of system transformation, the most effective way to do so is to shift the purpose, or philosophical foundations, of a system.
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  Philosophy and pragmatics

  Purpose comes from a philosophical place; strategy comes from a pragmatic place. Mission, vision, and values statements tie them together.

Experiences & Observations

How might you describe your personal sense of purpose in your work in philanthropy? Where might it sit between pragmatic and philosophical concerns? Neutral vs. actively in support of a philosophical cause?

Reactions & Impressions

How do you react to the idea that we can learn about an organization's purpose inductively, by looking at how it allocates its energy and resource?

Questions & Hunches to test

Find out how others engaged with the same philanthropic foundation, or philanthropy more generally, think about the moral purpose of philanthropy. Try asking 'why?' to get deeper and deeper.