Resource type: News
Financial Times |
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 firsthand 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.
*The GPR was somewhat astonishing to the foundation because it revealed there were some areas that could stand improvement, especially how the foundation ar-ticulated its grant-making strategy and how it interacted with grantees,* says Ms Burd, who joined the foundation in 2006 with a mandate to assess the founda-tion*s grant-making strategy and recommend a better approach.
Over the course of numerous conversations with grantees and other grant-makers, Ms Burd learnt that what grantees needed most was unrestricted cash and funds for building and improving operations. With that in mind, the Philadelphia Foundation announced a new strategy in November 2006 that included providing un-restricted general operating support. The new grant-making programme launched this 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 grant making. This is a big shift from several years ago * one driven by 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, execu-tive director of Grantmakers for Effective Organizations, a coalition of about 300 grant-making organisations committed to building strong and effective non-profit organisations.
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 actively 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 programme officer, you will receive clear communication about the sub-programme strategy and where the work of your organisation 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,* he says.
Two years ago the foundation asked itself what it could do to help grantee organisations become more effective. The result is the fund for leadership ad-vancement, an invitation-only initiative for executive directors of selected grantee organisations. The fund averages 10 annual grants of up to Dollars 75,000, which the executive director can use to help bolster his/her leadership skills and, in so doing, build a stronger, more effective organisation.
*What we strive to do is be as responsive as possible in terms of ongoing partnerships with our grantees,* says Mr Canales. *The effectiveness of any foundation is the result of the effectiveness of the organisations it supports. Our work is done through others and so enhancing the effectiveness of the or-ganisations is an important premise for us.*
The efforts of the Philadelphia, Packard and Irvine foundations * among oth-ers * 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 Atlantic Phi-lanthropies US, writes: *I consider foundations a major force for good in Ameri-can society. Yet they have many shortcomings as well*. They operate within an insulated culture that tolerates an inappropriate level of secrecy and even ar-rogance 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. Mr 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 CEP, a non-profit organisation that focuses on the de-velopment 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 realisation 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 communica-tion between programme staff and non-profits; the application process; and the need for assistance beyond cheque-writing.
A November report from FoundationCenter, More than Grantmaking: A First Look at Foundations* Direct Charitable Activities, found that foundations are in-creasingly turning to DCAs to bolster their impact and that of their grantees. They include: convening conferences; providing technical assistance; and sup-porting -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 in-volved in working directly with grantees and colleagues to promote more effec-tive philanthropy and to strengthen their grantees,* says Loren Renz, senior re-searcher 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. This year, the Irvine Foundation posted a report on its website, Midcourse Correc-tions to a Major Initiative, on the challenges of a Dollars 60m programme aimed at improving after-school programmes in five California cities and its efforts to change course to improve the programme results.
Mr Canales says foundations *ultimately gain more credibility* if they are willing to talk about mistakes not just successes. *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 reinvent the potholes.*
Similarly, the William and Flora Hewlett Foundation published an analysis of *hard lessons* learnt from its Neighborhood Improvement Initiative, a programme to reduce poverty in three neighbourhoods in 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 suc-cess 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, Mr Brest believes the emergence of organisations such as CEP, GEO and the Bridgespan Group, a support service for non-profits and foundations, is indicative of a shift by US foundations towards strategic philanthropy.