This post was originally published on December 16, 2010 on www.glasspockets.org.
In a recent op-ed in Philanthropy Journal, I wrote about the importance of foundations sharing information about whether or not they are being effective in pursuit of their goals. In that piece, I acknowledged that a review of the Glasspockets web site shows that very few foundations have an assessment of overall foundation performance that they make available.
I’d like to take a few steps back from considering how many foundations have an overall performance assessment they make public and ask about the thought process that fuels the development of such an assessment. How do foundations determine which relevant performance indicators to include in such an assessment?
The fact is, it’s virtually impossible to answer the question of what indicators to use without a solid answer to the question, ‘What are the foundation’s goals?’ While this may seem like a simple question for foundations to answer, our experience and our research indicate that it is not.
In the Center for Effective Philanthropy’s 2009 study on foundation strategy, 40 percent of CEO and program staff respondents to our survey did not provide, when asked, a single specific goal that their foundation was working to achieve. By specific, I mean a goal that includes a well-defined issue area, target population, or geographic location.
We found that of those that did provide a goal, the goals varied dramatically in their specificity. For example, here are three goals all aimed at strengthening nonprofits. Consider how well each of these goals might guide a foundation in selecting the relevant performance indicators to help the foundation understand its progress towards each of these goals:
- “Strengthening organizations.”
- “Strengthen the nonprofit sector: Assist nonprofit organizations with their effectiveness in terms of improved governance, transparent financial operations, creativity and sustainability.”
- “To enable organizations with whom we partner to develop scorecards and internal systems for evaluating the impact of their work.”
Even with clear and specific goals, performance assessment for foundations is tough work. Given that a foundation is typically not the sole actor contributing to progress in a given area of work, it is difficult to determine a reasonable expectation for progress for which a foundation should hold itself accountable.
For example, if a foundation is one of many organizations working to strengthen the nonprofit sector in a particular state, how do its leaders determine to what extent it is responsible for the ultimate strengthening of those organizations? Here, I would argue, the specifics of a foundation’s strategy, and how that strategy gets implemented, are key factors that provide further guidance for the selection of relevant performance indicators. But, as we have also learned in our research, many foundation CEOs and program staff do not use strategy to guide their work.
Many foundations have a long way to go before they’ll be able to contribute performance assessment data of substance to the Glasspockets website. They have to first clarify their goals, strategies, and the extent to which they are holding themselves accountable for the change they’d like to see.
In the quest for transparency, it is important for foundations to refrain from selecting certain indicators simply because they are easily quantifiable. Rather, foundations must commit to having the difficult conversations and doing the soul searching required to get clear on what they are trying to achieve — and how — before they can begin to consider measuring success. Why don’t these conversations happen more often at foundations? What would enable more foundations to productively discuss these complex issues with both their internal and external constituents?
Ellie Buteau, PhD is Vice President—Research at the Center for Effective Philanthropy.
