On the CEP blog this week and next, CEP President Phil Buchanan is discussing, in a series of eight posts, recent critiques of large, staffed foundations and assertions that recently-established, “lean” foundations are paving a promising new path without being saddled by “bureaucracy.” The following is the third post in the series. To make sure you don’t miss a single one, subscribe to the CEP blog and get each post in your inbox as soon as it goes live.
There’s been, as I have been discussing in previous posts, a lot of beating up recently on the very idea of foundation staff. But there are in fact some good reasons why, once a foundation passes some threshold of assets, staff are rather necessary.
Part of the reason is that most nonprofits — including many of the really effective ones — are small. This means there is a limit to how thinly a foundation can be staffed if it is to stay connected to grantees and prospective grantees — much less intended beneficiaries.
Much has been written about the large and fast-increasing number of operating nonprofits in the U.S., the apparent “inefficiency” of so many organizations often working on the same challenges, and the quest of organizations to reach greater “scale.” But while sometimes “scaling” makes sense for a nonprofit, there are many other instances in which a small, community-based nonprofit is, in fact, best positioned to address a particular need or problem. In those cases, the focus might better be on “scaling” proven approaches — and sharing lessons learned broadly — rather than particular organizations.
What does this have to do with foundation staff?
A lot. In most fields and communities, getting to know the relevant nonprofit players — to choose those that are most effective, innovative, community-centered, or best fit whatever other criteria a foundation is using to decide where to place its bets — is a labor-intensive process. The present reality, whether ideal or not, is that most foundation-funded nonprofits are small — the median budget size of the tens of thousands of grantees of the large foundations CEP has surveyed over the years is just $1.4 million.
To understand what’s going on in a community or a field, to help nonprofits connect with each other, to share lessons learned, and to avoid being isolated in ways that can undermine effectiveness (and drive grantees crazy), a foundation program officer doesn’t need to form just a few relationships. He or she often needs hundreds.
Sadly, many grantees see foundations as too frequently disconnected from those they seek to help and from the challenges nonprofits face, as my colleague Ellie Buteau described at the 2015 CEP Conference in May. It’s hard to imagine how to address this problem without adequate staff.
What I am suggesting is that foundations need staff in part for the simple reason that there are so many nonprofits. And it isn’t always the big nonprofits that are doing the best work.
I’d be the first to discourage a donor with $20 million from starting a new foundation and staffing up — a donor advised fund at the local community foundation is probably a better solution. But for those with hundreds of millions or billions in assets, establishing a foundation — and hiring staff — makes sense.
Coming up in “Foundation Staff Matter”:
Tomorrow: The story of a locally-focused nonprofit receiving support from foundations — and foundation staff — to go deeper on impact rather than expand nationally.
Tuesday: The approach of one foundation that may not be “lean” but is getting results — because it puts relationships front and center and excels in strengthening its grantees to pursue shared goals.
Wednesday: What we know from CEP’s data about what it takes for foundations to provide valuable assistance beyond the grant to nonprofits (hint: it rhymes with “laugh”).
Thursday: What we know from CEP’s data about the relationship between both staff quality and staff culture and the grantee experience.
Friday: Closing argument — why this all matters and why foundation boards should avoid succumbing to the foundation version of the “overhead myth.”
Find all posts in the series here.
Phil Buchanan is president of CEP. Follow him on Twitter at @philCEP.