New Report on Strategy at Community Foundations Sparks Debate

The topic of strategy has long been central to research undertaken by the Center for Effective Philanthropy, because we are convinced that strategy is essential if foundations are to maximize their impact on people, communities and issues.

For this reason, we have spent considerable energy exploring how to define strategy in philanthropy and how to determine the degree to which foundations do – or don’t – use strategy in their day-to-day work. Our most recent research report (released last week) looks at strategy at community foundations and concludes that, just as is the case at private foundations, there is a gulf between rhetoric and reality. CEOs say strategy is crucial, but few are really using strategy – at least as we define the term.

The majority of the feedback we have received from community foundation leaders in response to this report has been positive so far. Our findings resonate with them and their experience. But we have also received a few challenging comments from community foundation CEOs. I want to lay out the three critiques we have heard, and our response to each.

Critique 1: The fatal flaw is…the application of the definition of strategy developed for private foundations as the lens through which you evaluated strategic behavior at community foundations.

The definition of strategy used in our research was the following:

A framework for decision-making that is 1) focused on the external context in which the foundation works, and 2) includes a hypothesized causal connection between use of foundation resources and goal achievement.

Before designing this research, we sought feedback from a variety of community foundation leaders about whether or not we should be approaching this research with this definition. Overwhelmingly, community foundation leaders supported the use of this definition in our research.

Then, while analyzing the data collected through our interviews, we considered whether or not the definition of strategy should be changed or expanded. After several months of data analysis and conversation, our conclusion was that nothing in CEOs responses indicated a different definition was applicable to community foundations.

Community foundations generally met the first condition of our definition: external orientation. It was the second condition – includes a hypothesized causal connection between use of foundation resources and goal achievement – where community foundations did not come through.

Might there have been a better definition for strategy in community foundations than the one we used in our research? Perhaps. But it’s hard for me to imagine any definition of strategy that doesn’t include the very basic requirement of logical connections between use of resources and goal achievement. As a result, our finding that few community foundations are strategic would still hold.

Critique 2: Being strategic is not black or white; there’s a huge spectrum along which all of us lie.

We at CEP agree with this statement. In the methodology for this report, we explained that in order for a CEO to be categorized as strategic, half of the decision-making processes CEOs shared with us with regard to how they work to achieve the foundation’s goals had to meet the definition of strategy. This criterion allowed us to be very inclusive about who was categorized as strategic.

In addition, we did identify a group of CEOs as partly strategic, as noted in the report. The bar for being categorized in this way was even lower – requiring only one decision-making process to fit our definition of strategy.

We also tried to capture some of the nuance and spectrum by categorizing CEOs separately with regard to their donor and programmatic work. That means, for example, a CEO could be categorized as strategic in donor work but not in programmatic work.

We did receive a suggestion during the process of collecting external feedback for this report, prior to its release, that we should frame our findings more gently by refraining from using the term “not strategic.” But rather than make our decision about how to word these findings on the basis of what people wanted to hear, we made our decision according to what the data were indicating.

Critique 3: But wait – I can name many community foundations I think are strategic.

One of the main reasons that CEP conducts research is to steer conversations away from anecdotes and towards more systematic data.

Based on our data and analysis for this research, we did identify, among our respondents, some strategic community foundation CEOs – and we highlighted the work of three of them in the report: California Community Foundation; Orange County Community Foundation; and Community Foundation of the Eastern Shore. What we found, however, is that strategic foundations are more the exception than the rule.

Some community foundation leaders clearly disagree with our findings and how we arrived at them. Others, however, told us they did not find our results surprising at all. They said the fact that the majority of those we interviewed were not classified as strategic hardly seemed like news.

In all of CEP’s research, we recognize the critical role foundations play in our society. Our research is conducted to advance knowledge and contribute to conversations about important and challenging issues that foundations face. As with all of our reports, we invite you to share your comments.

 Ellie Buteau, Ph.D., is vice president – research at CEP.

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