Strategic Aspirations and Operational Constraints: The Missing Link

The moments that foundations set aside to develop program strategies are exciting opportunities for expansive and deep thinking about how to make sustained system change and how to contribute optimally to solving a major social or environmental problem. In the headiness of the “big think” moment, when the Post-It notes are on the wall and the theories are being debated, it’s all too easy to overlook the operational details that make or break the ability of brilliant new ideas to bear fruit in the real world. Leadership, staff, and grantees are best served when a foundation understands its own operational constraints as strategies are developed, so that the game plan that emerges is well matched to the money, labor, financing instruments, political influence, and attention span available.

Foundation leaders who want to make sure that they’re simultaneously thinking about the strategic “what” and the practical “how” should realize they have expertise to draw upon within their own teams. Staff from administrative departments like grants management, finance, legal, communications, and human resources, as well as support staff from program teams, can be true partners in strategy development, highlighting the operational ramifications of one strategic direction versus another. From their institutional perspectives, administrative and program support staff can help think through five basic questions that any strategic grantmaker should have front and center in their minds as they develop programs and strategies.

Will we have the staff to implement this strategy?

Many of the choices faced while setting a strategic direction have dramatic implications for the people who are expected to do the work, including and far beyond the grantmaking itself. Strategies that require engaging new partners, preparing many small grants, bringing together grantees or co-funders for joint work, managing in-depth evaluations, and/or edging close to the legal limits of what nonprofits can do create heavy workloads — not only of front-line program officers, but also for those who are responsible for scheduling, planning meetings, preparing expense reports, processing grants and progress reports, and protecting the organization from legal and reputational risks.

Beyond sheer workload, some strategies require specialized in-house or contracted expertise. To do a good job of supporting biomedical or social science research, for example, a funder needs to be able to know about key gaps in the body of evidence, judge the appropriateness of methods, and be up-to-date on standards regarding ethical and transparent research. In another instance, place-based approaches may require deep contextual knowledge and legitimacy at the community level. To achieve this, program staff will need skills related to listening, observing, and creating space for others to set the agenda.

Will we have the grantmaking and administrative money to succeed?

Most philanthropic strategies are based on a hypothesis about how the grantmaking will eventually mobilize large new resources from other sources, often from the public purse. During strategy development, it’s common to put lots of brainpower to work gaming out how this might happen. At least as much time should be put toward a more mundane set of questions: How much money are we likely to have available to directly support grantees’ work over the next few years? Is it enough for them to do what we’re hoping they will do? (These are particularly salient questions for foundations that have committed — or would like to be able to commit — to full and fair support of nonprofit organizations.) And do we have the administrative budget available for the travel, consulting time, and other supportive activities that will increase the chances of success?

Do we have the right financing instruments?

Solid strategy development requires aligning the strategic intent with what the foundation is able to do. Foundations that offer only “plain vanilla” grants must adhere to strict rules regarding lobbying, engagement in elections, and returns to private investors. This may make it difficult to succeed in fields that are heavily politicized or involve engagement of the private sector, and/or those where opponents have a far wider array of assets to draw upon. Moreover, grantmaking foundations have a responsibility to ensure funds are spent on a stated charitable purpose. That requirement may make it difficult to engage in a strategy based on supporting organizations that themselves do not have financial management systems that meet auditors’ standards.

Is our political profile an asset for this strategy?

Although private philanthropies are proscribed from taking partisan positions, much of the work of foundations in the United States maps to a domestic political landscape. Reproductive rights funders, for example, are currently seen as aligned with the political left, while those funding research and advocacy on the merits of deregulation are seen as right of center. Foundation leaders need to integrate into strategy development a clear-eyed perspective on their own institution’s profile. That profile will open some pathways for influence, but will likely close others.

For international funders, the questions are equally important, but trickier to sort out. American foundations may be seen by communities and governments in other countries as extensions of the U.S. government, for better or worse. Complicating matters, U.S.-based program staff may struggle to understand the subtleties and histories of domestic politics and alliances in other countries. Recognizing these challenges can help shape where a funder works and how it identifies trusted grantees.

Do we have the patience?

Given the ambitious nature of most foundations’ goals, it is often the case that philanthropic strategies will not result in major changes in only a few years. In the face of slow progress, some foundations carry on and make only incremental adjustments, but others make dramatic shifts. In addition, some foundations have lots of turnover, often with consequent strategic swings.

A foundation that is likely to shift direction after a year or two is wise to avoid strategies that require making major investments in building networks or enticing nonprofit organizations to build out large teams for one grant. A foundation with high levels of senior management turnover may do itself — and the fields in which it works — a favor by retaining significant funding in a “strategic opportunities” pot, so an incoming leader can do some early grantmaking in new directions while maintaining current grantees through at least one renewal cycle. In contrast, a grantmaker that has leadership support for long-term strategies and relationships, and low staff turnover, has more latitude to successfully build organizations and networks, anticipating payoff in the (potentially distant) future.

By integrating operational considerations into strategy development — matching “what we want to do” with “who we are” — foundation leaders will be able to start strategy implementation more quickly and smoothly, thus increasing the chances of success. Further, engaging administrative and program support staff from the outset will help create a shared understanding of the aims and the means to achieve success, and makes the most of the creativity and knowledge throughout the organization.

Ruth Levine is a policy fellow at the Center for Advanced Study in the Behavioral Sciences at Stanford University and formerly director of the Global Development and Population Program at the William and Flora Hewlett Foundation. Follow her on Twitter at @RuthLevine5.