This post originally appeared on the ACF (Association of Charitable Foundations) website.
The report Impact and Learning: The Pillars of Stronger Foundation Practice defines learning as a “proactive and lifelong process of reflection and open listening” that “takes time and is an iterative process.” As the report argues, this means a stronger foundation should “regularly review its mission to ensure it is still fit for purpose” by listening and “making efforts to understand the realities of the people, issues, and causes with which the foundation seeks to engage.”
From my vantage point leading the Center for Effective Philanthropy’s work in Europe, I couldn’t agree more.
In order to stay relevant, focus on what matters, and do no harm, funders need to proactively and regularly seek candid feedback from the people they’re engaging most closely with on the work: their grantees, beneficiaries, partners, and other key stakeholders. Listening and learning needs to be a constant practice, preferably benchmarking feedback results against that of other funders and structurally tracking performance over time. This helps foundations to stay agile and adaptable, to keep program officers aware of actual needs, and to make sure that strategies achieve intended impact.
But listening and learning — let alone managing organizational change — is never easy, and having a growth mindset can be painful. It’s far easier to stick with what we know; listen to people we know, or who look and behave like us; and protect and preserve the safe bubble of the organizational culture that we’ve built and know best. This is at the very core of our behavior as human beings, and it is amplified even further when there’s no immediate external pressure. For foundations, there are no investors demanding profits, no money running out in the bank, no threat facing an organization’s existence. Without external pressure, humans tend to do what we’ve always done, unquestioningly, and focus inwards on the well being of people in our immediate environment (for foundations, inside their own organizations).
This is why philanthropy’s biggest asset — its complete freedom to be able to decide how and when to spend its resources — is also its biggest Achilles’ heel. 
Unlike other organizations, foundations can experiment, take risks, and be creative in using their resources to tackle the problems they focus on. At the same time, a lack of feedback loops or external pressure can lead to confirmation bias taking over and organizations acting in an insular way. As a result, in the worst of cases, foundations can operate like ivory towers out of touch with the realities they’re trying to change.
Fortunately, more and more funders today take the practice of proactively listening to and learning from voices they would otherwise not hear very seriously. As Impact and Learning mentions, this work takes time and effort. But we should be careful not to shoot to the other extreme. CEP’s early research on foundation strategy identified a group of funders we called “Perpetual Adjusters” — the funders who seemed to be stuck in a never-ending strategy review process. I worry about any group of rich and powerful institutions getting stuck in navel gazing — endlessly tweaking strategies within the safety of their foundation homes — while the poor and unfortunate elsewhere suffer and die.
There’s no time for this. The problems that the world faces today — climate change, poverty, inequality, you name it — are too big and too urgent to wait for foundations to settle on the perfect strategy. To learn faster, foundations need to be regularly listening to feedback from grantees and partners, while accepting that their strategies may never be perfect in the moment. And they need to trust their partners, grantees, beneficiaries, and their own staff to take risks by letting these groups run with their own ideas, strategies, and plans. In the case of grantees, foundations need to walk the walk on this by providing them with flexible, multiyear core funding.
Together, that combination of listening and trust will help foundations act fast, and ultimately fulfill their full potential.
Charlotte Brugman is manager, assessment and advisory services, at CEP. She is based in Amsterdam and leads CEP’s work in Europe.
