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08/31/2021

Our Commitment to Experimentation

As a Think and Do Tank, we at Common Future approach our work with a commitment to experimentation. But we don’t throw things at the wall to see what sticks. One of our writers sat down with Caitlin Morelli, our Director of Knowledge and Insights, to learn how she sees our approach to experimentation.

Authors: Common Future, Caitlin Morelli

Let’s start off broadly. Can you explain how we approach the idea of experimentation?

The problems we’re grappling with today require us to think way beyond business as usual. Climate change, the racial wealth gap, inequitable access to healthcare, take your pick — these are all issues perpetuated by institutions that were passed the baton to solve them a long time ago. My colleague likes to say “we are the solutions we’ve been waiting for,” which nicely summarizes how we think about experimentation. If we want our economy to work for all people, we have to create (or in many cases co-create) those pathways.

Another colleague, Jess Feingold, recently wrote that “the future cannot be planned,” meaning the complexity of the issues we’re up against requires us to conduct experiments in the near term to learn and iterate. We can’t possibly know what specifically will get us from A to Z, but we know who should be leading us there and what principles must guide us.

Sometimes though the word experimentation doesn’t honor the idea that much of the work in our network has been happening for years or decades. Whether that’s supporting small businesses or organizing for affordable housing. There’s a lot of collective community wisdom that isn’t captured in that word. Often, we see programs that build off of successful initiatives in other communities or mix up the component parts. So a program may appear to be experimental to outsiders, but to call it that is almost a disservice to the expertise behind the work.

That’s not to say there won’t be experimentation as we seek to reimagine an economy to work for all people. Building these systems will require new products and platforms. New financial models. New legal structures to share asset ownership. We’ve also noticed that experimentation in these realms is often equated with risk, and risk is equated with investing in communities of color. It shouldn’t need to be said that there is nothing inherently risky about this approach.

How does this approach to experimentation resonate outside of the organization?

We have a lot of our conversations with funders who value experimentation, which is just code for innovation. It often comes back to their search for things that are new and sexy. Fintech is a perfect example. Communities don’t usually need an app but a community bank branch or access to an affordable loan.

As an intermediary between community organizations and funders, we often share the point of view that investing unrestricted funds that are guaranteed for multiple years in the capacity of a small organization can be the key to unlocking innovation down the line. We argue that this long-term approach is necessary, particularly one that gives community organizations the breathing room and flexibility to experiment in the first place. Often this means funding their core work or investing in organizational capacity — the stuff that isn’t sexy.

The pandemic, racial reckoning, and climate doom of the past year and change have only revealed the gravity of a task like “restoring community wealth.” One-size-fits-all approaches funded by VC haven’t worked. Solutions pioneered by the elite consulting class haven’t worked. Broadly, there is positive reception to our approach of doing things differently, meaning shifting power to a more diverse community of leaders developing new, localized strategies.

You mentioned that Common Future is also incubating and co-creating new products and initiatives. What do those look like?

We’re always asking ourselves: where are the intervention points? What infrastructure or capital is missing from the field of community-led economic development and what is our role to play? Common Future’s character-based lending pilot is a great example: a fund for BIPOC small businesses managed by BIPOC community lenders who lend on the basis of trusted relationships. The innovation isn’t really in the fund itself. There’s no groundbreaking process or magic terms — it’s just an affordable loan.

The experiment was to figure out the backend, legal, technical, and operational components to get this off the ground. It was one of the team’s first big attempts at co-creating a product in partnership with our network. This required us to think differently about how we held space for discussion and decision-making, facilitated conversations, or raised capital from the right places. The hypothesis is that trusted relationships, not formal credit, will be the basis of successful loans.

We’ve also incubated and served as the fiscal sponsor to a number of initiatives, from The Racial Equity Asset Lab to Potlikker Capital, a next economy loan fund that deploys integrated capital to Black American farmers.

So what I’m hearing is that a lot of funders, or just people in general, equate experimentation with novelty, which often looks like tinkering around the edges of a system. And what our organization is interested in is experimenting at the root — not only changing the “what” but “how” and “who’s in charge.”

Absolutely. We’re not interested in unicorn technologies or short-termist solutions, which isn’t to say opportunities to disrupt the market or financial capital. As I see it, there is an element to our work that looks at the future through a lens of the past. That prioritizes the wisdom of communities; a return to the ways that people used to interact.

Mutual aid is a great example. Many of our network organizations launched mutual aid efforts in 2020 that filled gaps for critical support in their communities. A number of nonprofit lenders that we work with have launched their own version of character-based lending, meaning affordable loans for entrepreneurs with whom they have trusted relationships. Most solutions across our network seek to restore ownership, autonomy, and dignity to BIPOC communities which may not mean reinventing the wheel, just putting different people in charge.

What we’re not doing is asking, “what is new about this work?” Because the failure has not been in their approach. It’s the structural barriers like access to capital and historic disinvestment from philanthropy, finance, and the public sector that all but ensure these community-led solutions cannot thrive.

We recently wrote about the importance of unrestricted funding. How does flexible financial support experimentation?

There is research to show that people living in poverty often adopt a scarcity mindset, meaning that attention goes to figuring out basic needs instead of making sound long-term financial decisions. There is a constant stress that isn’t dissimilar to what organizations experience when they don’t have sufficient capital. If you constantly have to fundraise to meet your basic operating needs, you won’t have the capacity to imagine the next frontier. Unrestricted funding is what gives organizations the power to vision beyond the one-year plan and ask: “what do we see in ten years?” If we’re talking about changing systems, community leaders need to have the ability to dream in decades, not months.

For us, unrestricted funding has allowed us to invest in the things that we believe in but may not have a track record for yet, like growing our capital strategies and policy departments. It allows us to forgo reporting the number of jobs created by some program we funded — which we shouldn’t claim as our impact anyway — and instead report on ecosystems. How much stronger are the organizations we’ve partnered with? Have they been able to launch new programs, hire staff, or grow revenue? Are they in more conversations on the national stage with policymakers or funders? Flexible funding allows us to pay attention to what matters to us, not our funders.

How does Common Future foster an experimental environment on your team?

We just went through a team-wide strategy planning process (hats off to our COO, Jennifer Njuguna!). One strategy to emerge was around incubation, specifically what we call field-defining interventions. Our goal is not necessarily to scale every idea but to demonstrate proof of concept and offer the data, learnings, and momentum for others to jump on board. The character-based lending pilot is a good example. You can also look at how our executive team is prioritizing well-being by experimenting with a four-day workweek. The goal isn’t only to support staff but to model a new way of working as a people-centric organization. Unsurprisingly, this has been one of my favorite experiments.

We’re also developed tools internally to encourage staff to spot opportunities for experimentation in their work. No matter where you sit at the organization, everyone is encouraged to surface trends or areas of opportunity. This could be something from a conversation with a network leader or a new report that someone shared in our learning Slack channel. We are designing processes for teams to conduct due diligence as a way to build a pipeline of potential field-defining interventions.

Implied in experimentation is the possibility of failure. How does the organization relate to that?

Jennifer Swayne Njuguna really said it best, but I’ll give it a shot. In the nonprofit world, we don’t talk about failure much, maybe because of the power dynamics that influence how we must present to our funders. Often failure morphs into a moment to pivot or redefine strategy. I don’t think that’s necessarily bad. Failure feels definitive, like 100% of it didn’t work. But often an approach might kind of work, or teach us something that points to a better way. Maybe we didn’t meet our initial goal, but created pathways for new relationships that are essential to our work. Is that failure? I don’t think so.

I think our team is still striving to find comfort in failure, but when you’re striving for change that will likely span generations, I’m comfortable blunting the edge of that language, so that the door of possibility always feels open. So that we keep trying.

This interview has been edited and condensed.


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