A Working Definition of Foundation Effectiveness

What does foundation effectiveness look like? This is a question CEP’s board and staff grappled with in 2010, during a planning process, assisted by Lowell Weiss of Cascade Philanthropy Advisors, and re-engaged and re-affirmed last year as we planned again. If we at CEP are seeking to help foundations to be more effective, it’s crucial we be clear about what that means.

So here’s our take. What’s yours? What are we missing? What would you take issue with? Do you think most foundations operate in ways consistent with this definition? If not, why not? What’s most difficult and why?

Alright, enough with the questions. Here it is:

CEP believes foundation effectiveness — and impact — require all of these mutually reinforcing basic elements:

1. Clear goals

  • Specific and achievable
  • Driven by heartfelt concern
  • Clearly communicated and well–understood at all levels of the foundation and by key external audiences, especially grantees
  • Approved and monitored by the board

2. Coherent strategies to achieve those goals

  • Based on an analysis of the problem or issue, the social/historical context in which the problem or issue exists, the capacity of organizations working to address the problem or issue, costs and benefits of alternate strategies, and the potential pace of change
  • Informed by input from organizations and individuals closest to the problem
  • Rooted in a well-conceived theory of how the foundation’s efforts can lead to the desired change, why it is the best option, and, when possible, evidence that the strategy has worked elsewhere
  • Grounded in knowledge of what others are doing to address the problem and how the strategy relates to those other efforts
  • Aligned with foundation staff and board capabilities
  • Clearly communicated and well understood at all levels of the foundation and by key external audiences
  • Revised, as appropriate, based on what is learned through the monitoring of relevant performance indicators

3. Disciplined implementation of those strategies

  • Driven by strong executive leadership that inspires the highest levels of performance and is committed to continuous improvement informed by data over time
  • Managed and staffed by people with capabilities matched to the chosen strategies, which requires careful attention to professional credentials/experience as well as racial and cultural backgrounds
  • Built on clear expectations, appropriate resources and support, solid processes, and constructive feedback for staff and board
  • Rooted in intentional efforts to build high-quality relationships with those the foundation chooses as its primary agents of change (often, but not exclusively, grantees)
  • Mindful of what other actors are doing and open to opportunities for collaboration

4. Relevant performance indicators to assess progress

  • Help leadership assess progress relative to goals and strategies
  • Enable leadership to assess the organization’s overall performance — and to compare performance with that of peer funders, whenever possible
  • Help leadership learn from their implementation of strategies and improve these strategies over time based on an understanding of what works
  • Facilitate the assessment of performance of grantees and support grantees’ efforts to assess themselves
  • Help assess the performance of the board, CEO, and staff members — to motivate them and improve their performance

Phil Buchanan is President of CEP and a regular columnist for The Chronicle of Philanthropy. You can find him on Twitter @philCEP.

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