Data Point: Foundation CEOs’ Greatest Concerns for Foundations

Many people use the start of a new year as a time to think about the future. Some make predictions, others make resolutions. A few have recently shared their hopes for what foundations will do in 2014. But what are foundation CEOs themselves concerned about for the future? In early 2013, we asked.

Foundation CEOs voiced a variety of concerns about the future of foundations, ranging from a sense that foundations are not collaborating enough to concerns about foundations’ use of data. There was no one concern that a majority of foundation CEOs shared.

In response to an open-ended question about their concerns for the future of foundations, CEOs most frequently mentioned three: foundations’ risk aversion and inability to adapt, government action regarding foundations, and economic or financial challenges facing foundations.

Of CEOs surveyed, 16 percent expressed concerns about foundations’ lack of flexibility—their perceived unwillingness to make risky bets or to adapt and change with the times. One CEO was concerned about “the trend toward less risky investments and that too little funding will go toward policy change and advocacy, in favor of programs that can be more easily measured.” Another said his concern is “institutions becoming bogged down in process, analysis paralysis, and bureaucracy to the detriment of calculated risks and a willingness to try ideas and modify their work as needed.” Similarly, others expressed concern that foundations are not willing to adapt their priorities to respond to the changing needs of the times. One CEO worried about “[foundations’] ability to adapt their programs and grant procedures to the demands of the day…[and] their reluctance to take risks and to be willing to speak out/lead on issues facing our society.”

Another 16 percent of CEOs were concerned that the government would interfere with foundations’ work by changing regulations in ways that result in less autonomy for foundations. One CEO shared his concern about “the bad practices of a few [foundations] creating an environment in which foundations become a target of political activism by either Congress or AGs [attorneys generals] that leads to increased regulation.” Another was concerned about “regulatory and tax policies that restrict philanthropic freedom or prevent the creation of wealth that endows foundations.”

Finally, 15 percent of CEOs were worried about the effect of the economy on foundations, particularly foundations’ ability to maintain their endowments coupled with the increased demand for foundations’ services that has been augmented by cuts in government services. One CEO worried “that [foundations’] available resources fall farther and farther behind relative to community need and political expectations.” One CEO believed that “the unique role of (endowed) foundations… is being squeezed by pressures to reduce governmental support for basic human needs (food, housing, health, education) and by business practices that focus too much on profit rather than broader societal responsibilities. This reinforces public expectations that foundations can fill gaps via charity and limits foundation experimentation and their role in catalyzing societal improvements.”

To read more about this study, see the report, How Far Have We Come? Foundation CEOs on Progress and Impact, published by the Center for Effective Philanthropy.

 

Ellie Buteau is Vice President of Research at the Center for Effective Philanthropy. You can find her on Twitter @EButeau_CEP.

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