|Foundations Listen for Feedback|
By Lauren Foster
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The Philadelphia Foundation was one of the last places Nancy Burd thought she would work. As head of the Philadelphia office of the Nonprofit Finance Fund, a foundation grantee, she knew first hand that it did not have a good reputation.
But during the interview process she was handed a grantee perception report, or GPR, prepared by The Center for Effective Philanthropy, and asked what she would do to improve the widespread dissatisfaction.
Over the course of numerous conversations with grantees and other grant-makers, Burd learnt that what grantees needed most were unrestricted funds for building and improving operations.
With that in mind, the Philadelphia Foundation announced a new strategy in November 2006 that included providing unrestricted general operating support. The new grant-making program was launched last year.
The foundation’s efforts to better support its grantees is part of a wider trend by the sector to become more open and innovative in the way it approaches making grants. This is a big shift from several years ago – one driven by a greater emphasis on strategy and performance.
“For some foundations, philanthropy is still charitable cheque-writing, but increasingly foundations are becoming more intentional about what they want to get done and are setting strategy and outcomes,” says Kathleen Enright, executive director of Grantmakers for Effective Organizations, a coalition of about 300 grant-making organizations committed to building strong and effective non-profit organizations.
Two others that stand out in their approach to grantees are the David and Lucile Packard Foundation and the James Irvine Foundation.
The Packard Foundation posts its GPR on its website and encourages grantee feedback. Moreover, the foundation is explicit about what grantees should expect. For example, it promises “you will be provided with realistic expectations about the proposal process and timing”, and “when you speak to a program officer, you will receive clear communication about the sub-program strategy and where the work of your organization fits into that strategy”.
The Irvine Foundation’s GPR is also on its website. Jim Canales, president and chief executive, says making information public is part of the foundation’s commitment to accountability. “These are public resources for public purposes and one way to manifest that is to approach your work in a transparent way.”
Two years ago the foundation asked itself what it could do to help grantee organizations become more effective. The result is the fund for leadership advancement, an invitation-only initiative for executive directors of selected grantee organizations. The fund averages 10 annual grants of up to $75,000, which the executive director can use to help bolster his or her leadership skills and in so doing build a stronger, more effective organization.
“What we strive to do is be as responsive as possible in terms of ongoing partnerships with our grantees,” says Canales. “The effectiveness of any foundation is the result of the effectiveness of the organizations it supports. Our work is done through others and so enhancing the effectiveness of the organizations is an important premise for us.”
The efforts of the Philadelphia, Packard and Irvine foundations – among others – are all the more remarkable considering that US foundations have long been shrouded in mystery.
In the preface to his book The Foundation: A Great American Secret, Joel Fleishman, a professor at Duke University and former president of the US arm of The Atlantic Philanthropies, writes: “I consider foundations a major force for good in American society. Yet they have many shortcomings as well ... They operate within an insulated culture that tolerates an inappropriate level of secrecy and even arrogance in their treatment of grant-seekers, grant-receivers, the wider civic sector and the public officials charged with oversight. This needs to change.”
And change is happening. Fleishman says that while the “dominant culture” is as he described, “sparks of lights are beginning to show”. In particular, he points to the creation of The Center for Effective Philanthropy (CEP), a non-profit organization that focuses on the development of comparative data to enable higher-performing foundations.
Phil Buchanan, its president, says 144 foundations have participated in the GPRs and about 36 have commissioned it twice or more to assess whether changes are working.
“It is so hard for foundations to know how they are doing,” he says. “What they want to know is their impact relative to the resources expended. But there is this realization that given how difficult it is to get meaningful performance data, it is essential, at the very least, to know what those who you are funding think about your effectiveness.”
Some of the main areas grantees single out as problematic – and ones that foundations have taken action on based on their GPRs – include poor communication between program staff and non-profits; the application process; and the need for assistance beyond cheque-writing.
A November report from Foundation Center, “More than Grantmaking: A First Look at Foundations’ Direct Charitable Activities”, found that foundations are increasingly turning to direct charitable activities, or DCAs, to bolster their impact and that of their grantees. These include convening conferences, providing technical assistance and supporting staff when they sit on the advisory boards of other charities.
“There are foundations that have been doing DCAs for many years but from this report we can see this is a growing area and younger foundations are highly involved in working directly with grantees and colleagues to promote more effective philanthropy and to strengthen their grantees,” says Loren Renz, senior researcher for special projects at the Foundation Center.
Another form of change is that more foundations are admitting mistakes – and sharing the information in order to prevent others from repeating them. Last year, the Irvine Foundation posted a report on its website, “Midcourse Corrections to a Major Initiative”, on the challenges of a $60m program aimed at improving after-school programs in five California cities and its efforts to change course to improve the program results.
Canales says foundations “ultimately gain more credibility” if they are willing to talk about mistakes. “I saw it as an obligation,” he says. “It is not just to avoid reinventing the wheel. We want to make sure we don’t re-invent the potholes.”
Similarly, the William and Flora Hewlett Foundation published an analysis of “hard lessons” learnt from its Neighborhood Improvement Initiative, a program to reduce poverty in parts of the Bay area.
“Many foundations have no idea whether grants succeed or fail because they are not strategic in terms of setting goals and defining what success would be and how to measure it,” says Paul Brest, president of the Hewlett Foundation. “It’s only once you begin to become clear that you can even begin to assess success and failure.”
But he points out that strategic philanthropy is not new. For example, the Ford and Rockefeller foundations teamed up in the 1960s to start the “green revolution”, which boosted agriculture and reduced hunger in south-east Asia and Latin America.
That said, Brest believes the emergence of organizations such as CEP, Grantmakers for Effective Organizations and the Bridgespan Group, a support service for non-profits and foundations, is indicative of a shift by US foundations towards strategic philanthropy.
Published on our website on Feb.4th, 2008