Off to GEO 2014: Some Thoughts on Foundations – and Effectiveness – Today

My first Grantmakers for Effective Organizations (GEO) conference was in 2002, but I remember it very clearly. It was a big deal to me because it was the first time I attended a significant conference and spoke about what CEP was learning in its early research.

The “audience” numbered 17 at a “roundtable discussion” hosted by Vince Stehle, who was at that time a Surdna program officer and is now head of Media Impact Funders and a member of the CEP Board. Ever since, the GEO conference has been, for me, a good time to take stock of where larger foundations are in their quest for effectiveness – and impact. I think foundations have made a lot of progress, and there are some stellar examples from which we can learn, but I think there is much room for improvement.

With the 2014 GEO gathering days away, here are some thoughts.

First, there is no doubt that foundations have made progress in their efforts to assess and improve performance since that 2002 conference. In this 2011 report, we documented the increased effort being put into assessing foundation performance – foundations tapping into a broader range of data to answer the question, “how are we doing?” and CEOs placing a high priority on assessment. In a report we released a few months ago, we see that CEOs believe their foundations have made real progress in assessing impact.

Among the shifts with respect to assessment – and I am proud of CEP’s role in this – is the increased gathering and use of candid and comparative feedback from grantees, with about 250 foundations that have commissioned CEP’s Grantee Perception Report (GPR) at least once since 2002. We know that foundations that repeat the GPR tend to see meaningful improvement: that is, their grantees see those foundations as having a more positive impact on their organizations, and experience them more positively in a variety of ways.

Second, despite this progress, there are huge gaps and challenges with respect to foundation strategy and assessment of strategy. Too much foundation work is still being done without enough regard to efficacy, and the kind of disciplined implementation of sound strategy that is necessary for impact. It’s great to see funders such as Edna McConnell Clark that have focused on supporting demonstrably effective programs, and to see other funders co-funding with EMCF.

But I worry that there has been too much importation of a “business mindset” when it comes to strategy and performance assessment, and an over-emphasis on institutional competition instead of collaborative efforts to achieve impact. I make this argument in my most recent column in the Chronicle of Philanthropy.

Third, and related, I think there is too often a kind of denial of complexity, as Darren Walker, president of the Ford Foundation, argued in a CEP webinar this week. As Larry Kramer, president of the William and Flora Hewlett Foundation, put it on the same webinar, we make a mistake if we treat foundations’ efforts “too much like science” in a way that “forces you into narrow categories” at the expense of “long-term relationship-building and long-term collaborations as opposed to a push for the immediate pay-off.” Or, as Patti Patrizi and her colleagues pointed out in an excellent Foundation Review article, “strategy implementation is highly unpredictable” in philanthropy.

I like the way Kate Wolford, president of the McKnight Foundation, summarized her approach on the CEP webinar this week: “Let’s be disciplined about our theory of change but hold it lightly, and  foster a culture or openness to other perspectives and data and insight that cause us to change and adapt our strategies to help move the ecosystem forward.”

Fourth, the failure to appreciate the complexity of the work has led to a tendency to be seduced by the consultant-driven formula or framework of the moment, as I argue in this month’s Alliance. As Barry Knight and Jenny Hodgson argue, also in Alliance, “we should run a mile from management books or consultancy advice that promote a single, simple answer – otherwise we will fall prey to unevaluated fashion.”

As Michael Mauboussin points out in his book, Think Twice: Harnessing the Power of Counterintuition, those who fall for anecdote-driven “new” solutions to complex problems often pay the price. “The right answer to most questions that professionals face is, ‘It depends,’” he writes. Look, I am all for innovation. Social impact bonds, for example, may prove to be a powerful new tool in our sector – I hope so – but we need to resist the hype that seems to suggest they’re the panacea, and that they’ll make you breakfast and fix your marriage, too. Same goes for B Corps, impact investing, or any of the proliferating number of “fill-in-the-adjective Philanthropy” (catalytic, place-based, venture, high-engagement, design, etc.) buzzwords.

Fifth, despite the call from foundations for nonprofits to be more data-driven, and to do more to assess and improve, too few foundations are providing either the financial or non-financial support for organizations to do the work of being outcomes oriented, as Mario Morino and David Hunter (among others) have argued, and as we documented in 2012. More broadly, we see in a study we did last year that nonprofits often don’t feel foundations understand their most pressing challenges – or that they are helping them to confront them. For a conference of grantmakers for effective organizations, this should be a wake-up call.

To be sure, there are many, many foundations, such as Interact for Health in Cincinnati, that get it – and are stepping up to support nonprofits in powerful ways. I do not wish to paint with a broad brush. I am commenting on what worries me, what I see too often – not suggesting there aren’t exemplars.

Because there are. I am inspired everyday by foundations with a wide array of programs and approaches: foundations like Jim Joseph Foundation, a relatively young foundation focused on Jewish education that has done its work with focus and discipline and made a big difference in its field in a short time; or Haas Jr Foundation, which has invested significantly in nonprofit leadership development and of course played a crucial role in the progress on gay rights we have seen in this country; or Robert Wood Johnson Foundation, which has approached its work on childhood obesity in the same rigorous and strategic way it combatted tobacco use – and with an openness about what it is learning.

Foundations can and do play a distinctive role in our society – taking on issues other actors cannot or will not. And there’s a lot to be inspired by. But there remains a long way to go, too. Maybe I am being too tough in my critique, but I think it better to err on that side than the other if we really care about foundations maximizing their unique opportunity to make a difference.

See you in LA.

 

Phil Buchanan is President of CEP and a regular columnist for The Chronicle of Philanthropy. You can find him on Twitter @philCEP.

Disclosure: Some of the foundations mentioned are grant supporters or clients of CEP.

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