New Data from CEP on Foundation Practices

Being a foundation CEO isn’t so easy if you’re going to do it well, as I noted in my last blog post.

There are tough decisions to be made and today — in the opening plenary of CEP’s biennial conference in San Francisco — we at CEP will share data about three areas in which foundation leaders might benefit from reflecting on current practice. There are an overwhelming array of choices, about what to focus on and how. And there are opportunities — both to improve performance and to better align words and actions.

1. Investing Practices

The considerable rhetoric about aligning investment practices with impact goals is outpacing the reality at large, private foundations, so far. That’s among the findings in a new CEP report released today in conjunction with our conference.

The report, Investing and Social Impact: Practices of Private Foundations, reveals that a sizeable number of large, U.S.-based independent private foundations report engaging in impact investing. But they tend to commit only very small proportions of their respective endowments or program/grant budgets toward those efforts. In addition, CEP found that few foundations are engaging in “negative screening” of endowment investments to avoid investments in areas such as fossil fuels or tobacco.

At the conference, I’ll talk about this as one of several areas in which foundation CEOs face difficult choices.

I don’t have the answers, but the data on the state of practice today suggests that the actual investments of foundations have lagged behind the talk. Moreover, I would note that there has been, perhaps, more hype than real thoughtful debate about what level of investment, if any, makes sense in the area of impact investments. I hope our new report helps prompt more discussion.

2. Staying Connected to Those on the Ground

Another challenge for foundation leaders is to stay connected to the needs of those you seek to help and those you fund. CEP’s Vice President, Research, Ellie Buteau will share during the plenary the results of two recent CEP research efforts that make this starkly clear.

Ellie will draw on our report, Hearing from Those We Seek to Help, which finds that grantees see many of their foundation funders as out of touch with the needs and perspectives of their intended beneficiaries. She will argue that the price of funders not understanding conditions on the ground is real, pointing to Mark Zuckerberg’s $100 million commitment to reform Newark, New Jersey schools as a recent example of how a well-meaning effort can come off the tracks because it isn’t sufficiently informed by intended beneficiaries.

There is a cost, in other words, to not understanding the perspectives of those you seek to help. While many funders recognize this — and the establishment of the Fund for Shared Insight is a promising sign — there is a long way to go.

Ellie will then discuss our report, Assessing to Achieve High Performance, asking why foundations don’t do more to support their grantees to assess and improve their performance. But she’ll also point to exemplars from which others can learn, such as The Assisi Foundation of Memphis and Mary Reynolds Babcock Foundation, which we highlight in our report.

3. Paying Attention to What Goes on Inside the Foundation’s Walls: Internal Culture and Staff Performance

CEP’s Vice President, Assessment Tools, Kevin Bolduc will then share soon-to-be released analysis that demonstrates that workplace climate and staff experiences ripple outside foundations’ walls and influence grantees’ experiences. This analysis, based on data from contemporaneous surveys of foundations’ staff and grantees, establishes that, unlike in Vegas, what happens inside foundations doesn’t stay inside foundations.

It’s a reminder to foundation leaders that culture and climate matter.

And Kevin argues that it matters also because there is a wide range of variation in performance across staff even within the same foundations. That’s what we found when we analyzed our grantee perception data based on which program officer within foundations were primary contacts for grantees for this Stanford Social Innovation Review article eight years ago — and it remains true today.

Indeed, for many elements of the grantee experience, there is more variation explained, statistically, by the answer to the question, which program officer was your primary contact? rather than which foundation funded you?

While there is a tremendous external pull for foundation CEOs — meetings to attend, speeches to give — the data Kevin will share suggests that CEOs need to pay close attention to the home front. When they don’t, there’s a price to be paid in terms of relationships that the foundation depends on to get its work done.

All of this, of course, is easy for us to say. As I have come to appreciate in my nearly 14 years at CEP, running a foundation is much harder than it looks — at least if you’re going to do it right.

Phil Buchanan is president of CEP. Follow him on Twitter at @PhilCEP.

Follow along the conference on Twitter at @CEPData and #CEP2015.

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