Taking Aim

Times are changing for foundations and donors. The launch by NCRP of Philamplify, an initiative to publicly assess foundations, along with the introduction late last year of the website Inside Philanthropy, got me thinking about the shift in the past decade when it comes to public critique of foundations and mega donors.

I thought back to a conference CEP held in New York in 2003 when my colleague Kevin Bolduc stood in front of an audience of foundation leaders and criticized the Lilly Endowment – then as now one of the 10 largest foundations in the U.S. – for not having a website. (It does now, don’t worry.)  His critique was made in the context of sharing analysis of early findings from our surveys of nonprofits to inform the Grantee Perception Reports (GPRs) we had just created and were providing foundations.

Our data showed how important clear foundation communication of goals and strategies is to grantees. Kevin’s point in singling out Lilly Endowment was to illustrate that, although clear communication is what nonprofits were saying they needed to work effectively, too many foundations remained opaque in their communications.

Kevin and I had discussed in advance the fact that he planned to call out one of the largest foundations by name in front of an audience of foundation leaders. Given that we were largely funded by foundation grants and had a tiny budget and just a half dozen staff at the time, it wasn’t lost on us that antagonizing large foundations carried some risks.

But we both felt like it was an appropriate, if stark, illustration of our point. Although our aspiration was for CEP to work closely with committed foundations to help them assess and improve their performance, we also thought it important to get specific about the need for change.

Immediately after his presentation, with the audience still milling around, I was scolded by a program officer from one of the half-dozen foundations supporting us at the time. “You can’t do that kind of thing,” he told me – loudly.

The program officer expressed his disapproval and we agreed to disagree. To his credit, he didn’t pull the foundation’s funding. But he made it very clear that he thought public critiques of foundations were over the line.

That’s crazy talk, of course, and the good news is that I don’t think that would happen today (if a foundation were critiqued for whatever the 2014 version of not having a website in 2003 is). Public criticism of – and debate about – foundations seems only to be increasing, and foundations seem to be recognizing that this is unlikely to change.

In a thoughtful Atlantic piece titled “The Importance of Criticizing Philanthropy,” Ben Soskis celebrates what he sees as a trend of more public criticism of foundations and major philanthropists. He takes issue with an April Chronicle of Philanthropy op ed by John Arnold, the 40-year-old multi-billionaire. In the op ed, Arnold protests his harsh treatment at the hands of critics spreading “vitriol and misinformation” and vows not to let it deter him from pursuing his goals through his foundation.

But Soskis suggests that such critiques are a sign of health:  “In the midst of this latest Gilded Age, as the prerogatives of concentrated wealth march onwards with little resistance, an aggressive – even at times antagonistic – engagement between the public and their benefactors shouldn’t be considered  a mark of incivility. It should be considered a democratic imperative.”

I think that’s right.

Look, I am a huge believer in the potential of foundations to do good (or I wouldn’t be doing what I am doing). Foundations are in a position to take on issues others actors in our society can’t or won’t and to make contributions that, as the historian Olivier Zunz has put it, “enlarge” our democracy.

But I also think Soskis is correct when he argues that “given the power that private philanthropy can wield over public policy, a spirited, fully-informed public debate over the scope, scale, and nature of that influence is a democratic necessity. It’s our closest approximation of holding our mega-donors accountable.”

Indeed, over the last century in the U.S., we have seen those debates play out, at times with great intensity, as Soskis notes – and as Zunz’s comprehensive history of American philanthropy chronicles.

But Soskis argues that this has not occurred so much in recent years – a period he sees an historical aberration. He describes a “brief, balmy season at the closing decades of the century and the opening of the new one” in which “philanthropy began to enjoy the benefit of the doubt.”  If he is right, then the seasons appear to be changing, as witnessed not just by Philamplify but by other initiatives such as Inside Philanthropy, the foundation watchdog website that also offers grantees the chance to anonymously rate program officers and foundations.

This idea, of a website for public ratings of foundations, has been batted around at nonprofit conferences and cocktail parties for at least a decade. The analog used to be Zagats, more recently Yelp.

I think the idea is a tough one to implement, however, because of the difficulty of getting enough of a critical mass of raters to make ratings remotely representative or meaningful. This challenge is compounded by the unique dynamics of the foundation-grantee relationship which are, in fact, not at all analogous to the relationship between customers and a business.

Still, these efforts are a sign of increased interest in public debate about foundations.

But perhaps the biggest shift has been in the media’s approach to major donor and foundation philanthropy.  Although we have not studied the trend empirically, critical articles about major foundations and donors seem more common than they were even five years ago, even though the New York Times and other major media outlets no longer have philanthropy beats (of course many never did).

This trend, if indeed it is a trend, seems especially true in the area of education, the most frequent primary focus of giving among larger foundations (according to data from a survey we fielded last year).  To take one recent example, the New Yorker just published an exhaustive chronicling of Mark Zuckerberg’s $100 million commitment to Newark – specifically highlighting the missteps and ways in which the effort to reform the schools there have fallen short.

Many of the critiques will miss the mark, of course, and some – perhaps including some of those leveled at Arnold, provoking his op ed  – will veer toward the nasty, inaccurate, or unfair. But for foundations and major philanthropists seeking to address major issues facing our society, or to influence policy or major public systems, criticism is healthy.

Good intentions are terrific – and philanthropy should be applauded and celebrated for its distinctive role in making our country what it is – but good intentions alone are insufficient. The history of philanthropy is rich with great examples of phenomenal impact, but also stunning failure and unintended consequences.

The time is past for large foundations and major donors to think, if they ever did (and I think some did), that they can avoid tough questions about their goals, how they are pursuing them, and how they know if they’re making progress.

We at CEP seek to work with foundations to help them do their work better, and our approach is very different than, for example, that taken by Philamplify. We work with foundations that seek us out (which, to date, includes 52 of the largest 100 and hundreds in total); we leave it to the foundations to decide whether to make public results of Grantee Perception Reports (GPRs) and other assessments we provide (and many do) – although we make public aggregate results in our research reports; we put results in a comparative context; and we don’t try to influence foundations’ selection of goals.

But more and different approaches from different organizations raising different questions are, in my view, signs of progress and health. We need more rather than less discussion and debate about what foundations do and how they do it.

To the extent that this discussion and debate pushes foundations to clarify for themselves their own approaches to achieving their goals – even if that means consciously rejecting the critiques that they feel are off base or driven only by ideological differences – that is a positive result for all who care about philanthropic effectiveness.

Phil Buchanan is President of the Center for Effective Philanthropy (CEP). You can find him on Twitter @PhilCEP

assessing performance, effective philanthropy, , foundation performance, foundation transparency, Grantee Perception Report, overall foundation performance assessment, performance assessment, performance measurement, philanthropy
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