Seeking Input on CEP’s Revised Definition of Philanthropic Effectiveness

Naomi Orensten and Phil Buchanan

Massive challenges face this country and the globe, including threats to key democratic institutions, income inequality, and climate change, to name just a few. Given this context, and the stakes, philanthropic effectiveness is all the more important. While effective philanthropy alone will not solve these problems, it has a vital role to play.

We know this because effective philanthropy has historically played such a role, even as we can all agree that we wish it had achieved more. It is easy to forget the progress that philanthropy has contributed to over the past many years, including advancements in civil rights and environmental protections and dramatic improvement in children’s health globally. Recognizing, even amid challenge, the change that has happened reminds us of the role philanthropy has played, can play, and will play. It reminds us of what is possible.

Because funders have the opportunity to take on pressing societal issues that others can’t, philanthropic effectiveness matters. This has always been CEP’s focus.

Being effective is necessary for funders to create as much change as possible. It’s necessary for them to have as much of a positive impact as possible. That’s why we at CEP hope funders will seek to maximize their effectiveness.

But what does effectiveness mean, and what does it look like? How do you know if you’re effective?

We think there are some essential elements of effectiveness for all funders. We have come to this conclusion based on CEP’s first-hand experience working with more than 300 foundations and more than 15 years of conducting rigorous research based on perspectives of nonprofit grantees and funders alike.

A little over a decade ago, drawing from this experience, CEP developed a working definition of philanthropic effectiveness for funders to assess aspects of their own effectiveness. Now, as part of our current strategic planning process — and in light of the changing philanthropic context and the challenges we face — we decided it was time to refresh this definition.

This definition will guide our work at CEP, and we will use it in our work with individual funders, in our programming, in our research agenda.

To make sure this document is as strong as possible, it’s important that we are hearing from the folks who work closely on these issues. We gathered lots of input (and heard some impassioned conversation) from CEP’s staff and board to make sure that our working definition is truly grounded in what it takes for funders to be at their best.

And now we want to hear your input, perspective, and suggestions.

Below is the current draft of our working definition of philanthropic effectiveness.

What do you think? What do you like? What do you dislike? Is something essential missing?

We really want to hear your perspective on this definition. Please share your thoughts in the comment section below, or email Naomi Orensten at naomio@cep.org.

We very much look forward to hearing from you!

– CEP Director, Research, Naomi Orensten and President Phil Buchanan


CEP’s Revised Definition of Philanthropic Effectiveness – October 2018

Philanthropy can take on pressing challenges that other actors in society cannot, or will not. Given this unique opportunity to deploy tax-advantaged dollars for good, individual and institutional givers alike have an imperative to maximize their effectiveness, and therefore, their impact.

Effectiveness must be grounded in the social, cultural, and historical context of the issues being addressed. Effectiveness also requires an understanding that while a sense of urgency is crucial, results do not always come easily or quickly. Finally, little is accomplished alone: individual and institutional givers should strive to be effective themselves and also in the way they work collaboratively with others.

CEP believes that effectiveness requires the following four mutually reinforcing elements.

  1. Goalswhat you seek to achieve
  2. Strategies – the ways in which you work to achieve your goals
  3. Implementation – what you do (e.g., “the work”)
  4. Performance indicators – how you know you’re doing the work effectively

1. GOALS

  • Clearly defined, communicated, and well understood by givers, staff and board (when relevant), and those organizations receiving or seeking support
  • Informed by input from those closest to the issues
  • Chosen with awareness of what other givers are already doing, both individual and institutional, and what has been tried by others
  • Shared with other funders and organizations, whenever possible
  • Ambitious yet tempered by modesty and humility – characterized by the courage to take on significant challenges and a recognition of the scale of issues being addressed relative to resources required to address them

2. STRATEGIES:

  • Rooted in a well-conceived theory of how the strategy leads to goal achievement and, whenever possible, evidence that the strategy works
  • Informed by an understanding of the problem or issue, including the social/historical context in which the issue exists
  • Grounded in knowledge of what others are doing to address the problem and how the strategy relates to those other efforts – understanding that if a strategy is a giver’s alone, it will fail
  • As with goal selection, informed by input from organizations and individuals closest to the issue, including those directly affected
  • Clearly communicated and well understood by those affected as well as those implementing the strategy (e.g., staff, grantees)
  • Supported with tools beyond giving or grantmaking, such as policy and advocacy, communications, collaborations, and impact investing, when relevant
  • Regularly revised based on ongoing learning, monitoring/assessment, and changes in context

3. IMPLEMENTATION:

  • Supported by people with capabilities, skills, and experience matched to the chosen strategies and issues being addressed, which requires careful and continuous attention to diverse backgrounds, especially racial and cultural
  • Sustained by strong operations, systems, and processes, including professional development for staff, as relevant
  • Grounded in demonstrated commitment to high-quality relationships (often, but not exclusively, grantees), built on understanding and transparency
  • Informed by the work of other actors, including the pursuit of collaboration and coordination where appropriate

4. PERFORMANCE INDICATORS:

  • Balances a focus on rigor and evidence with a recognition that many measures will be imperfect indicators ­­– there is no philanthropic analog to ROI and ultimate impact cannot be reduced to one single metric.
  • Includes short and long term indicators that are shared externally, when relevant, to inform learning and improvement and to contribute to a greater shared understanding of what works and what doesn’t
  • Includes ongoing assessment of performance, benchmarked against peers whenever possible, including, for institutional funders, measures of staff climate, grantee relationships, and board functioning
  • Supported by regular feedback loops from grantees and beneficiaries to inform learning and improvement
  • Demonstrated commitment to supporting grantees’ efforts to assess their own work

Naomi Orensten is director, research, at CEP. Phil Buchanan is CEP’s president.

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