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Cambridge, MA — In new CEP research released today, foundation leaders report that their foundations are now working differently than they were in early 2020. Specifically, foundation leaders say they have streamlined grantmaking processes to reduce burdens on grantees, increased unrestricted grantmaking, and made racial equity a more explicit consideration in how they conduct their work.
This year more than three-quarters of foundation leaders reported their foundation has made changes to application and reporting processes to reduce the burden on grantees and 61 percent of foundation leaders reported providing a higher percentage of unrestricted grant dollars. Even as foundation leaders themselves acknowledge they have much yet to do, about three quarters of interviewed foundation leaders described thinking much more explicitly about race and racism and said they are increasingly focused on the role of race relative to their programmatic goals.
The report also finds that foundations with more racially diverse boards — defined as those made up of 25 percent or more of people of color — were more likely to adopt practices to support grantees and the communities they serve, and more frequently reported sustaining all of the changes they made in 2020 into 2021. Yet, nearly half of leaders said their boards were the most significant impediment to their foundation’s ability to advance racial equity.
Importantly, almost all foundation leaders said they plan to sustain at least some of the changes they have made, and a sizeable percentage plan to sustain most or all of the changes.
“Whether these changes will truly last, only time will tell,” noted Ellie Buteau, CEP VP, research. “But most leaders we interviewed indicated they’ve changed their mindset about the way their foundation works and why.”
The results are based on 284 foundation leaders who responded to CEP’s survey as well as in-depth interviews with 33 foundations and 32 nonprofit organizations who sit on CEP’s Grantee Voice Panel. This report follows up on research CEP completed in 2020, released in a series of three reports, that examined how foundations were responding to urgent calls for action as the effects of the COVID-19 pandemic became clear.
It is clear from these data that foundations have made many changes to better support their grantees — and that nonprofits are feeling the positive effects of these shifts, too. This is not to suggest, obviously, that challenges do not remain; this data also reveals disconnects, barriers, and opportunities for further change.
“It will be important to monitor how foundation practice continues to evolve in the coming years,” Phil Buchanan, CEP president, said. “We have glimpsed the capacity for real change to occur within foundations, and this will be only more crucial as we address the challenges ahead.”
CEP is grateful to Ford Foundation for providing support for this research, as well as to Charles and Lynn Schusterman Family Philanthropies, The David and Lucile Packard Foundation, Raikes Foundation, Weingart Foundation, and William and Flora Hewlett Foundation.
The report is available for free download on CEP’s website.
About the Center for Effective Philanthropy
The Center for Effective Philanthropy (CEP) is a nonprofit organization with a mission to provide data, feedback, programs, and insights to help individual and institutional donors improve their effectiveness. We do this work because we believe effective donors, working collaboratively and thoughtfully, can profoundly contribute to creating a better and more just world. For more information on CEP’s work, including its research, assessments, advisory services, and programming, visit www.cep.org.
