This is the third post in a series on “The Art of Philanthropy,” a high-altitude look at the power foundations hold, related issues, and potential solutions.
Conversations within and between foundations used to be centered largely around just what was funded and why. I was struck by this when I moved from education to philanthropy in the mid-90s, as good schools and good teachers not only devote time to what they teach and why they teach it, but also how it is taught. Of course, there were some conversations about effective approaches to grantmaking, but these were too infrequent and generally avoided the deeper lying issues foundations should have discussed. This did not change until the Center for Effective Philanthropy (CEP) was founded in 2000 and hit its stride.
This series has discussed the corrosive impact foundation power has on grantor-grantee interactions, how that limits the long-term impact for which effective foundations strive, and how it puts the art of philanthropy out of reach. I hope those who have read the first two posts in this series would agree that the historical overemphasis on the what and why in grantmaking, without enough on how, has contributed to the lack of progress in the sector’s struggle with the power dynamic.
Like government, foundation power should be checked. And since grant seekers have no chance to vote, checks and balances must come from within foundations. This means that all foundations should look deeply into their interactions and develop guiding principles for how they engage with grant seekers and recipients. This is particularly true today, as foundations are using more sophisticated funding models and evaluation methods.
But, of course, this is hard to do. How often do you laugh when you hear people say it’s easy to give money away?
Therefore, a good starting point is to recognize the internal complexity of foundation work. While foundations are each unique and use different approaches to support a range of causes, all grantmaking foundations share common elements. By zeroing in on these, we can find a framework for how any foundation (and the sector, as a whole) can think about grantee interactions.
Process, Relationships, and Expertise
The art of philanthropy requires foundations to balance three elements — process, relationships, and expertise — day to day, month to month, year to year. These building blocks of philanthropic DNA are common to every grantmaking foundation. Each element has technical aspects and the approach taken for each forms a subculture within a foundation. Standing alone, these elements are fairly easy to implement, but since each has a cause and effect on the other, blending all three is difficult.
How foundations balance these elements at the staff and board level will determine grants awarded, and, of course, the eventual impact a foundation has in the short and long term. Each element brings potential positives and negatives, while also providing checks and balances for the other two.
Any foundation capable of balancing process, relationships, and expertise will capture the internal discipline and creative tension necessary to fulfill its potential and help grantees do the same.
A healthy process goes well beyond grants management software, proposal deadlines, and other administrative concerns. Yet the importance of process can be overlooked in favor of relationships and expertise. A strong process includes a rational decision model to guide the foundation through an unbiased, comprehensive review of proposals. This requires trust in its design and the discipline to follow it.
Any effective process asks a foundation to challenge assumptions while maintaining objectivity in the relationships it develops and the expertise it employs. Done well, this should lead to effective guidelines that encourage creativity and allow the foundation to discover hidden gems within the pools of proposals it receives.
Done poorly, process becomes an afterthought, leads to irrational decisions, or drags everyone into the weeds with bureaucratic guidelines, impractical deadlines, and burdensome reporting — all of which can damage relationships, maximize the power imbalance, or call philanthropic expertise into question.
The difference between a strong and poor process can be slight, so vigilance is always required.
Effective relationships allow foundations to provide an enhanced experience to their grant seekers. Proper relationships cushion power and exert foundation leadership in a gentler, more collaborative manner. They help uncover hidden gems, provide a platform for grantee expertise, and allow foundations to determine what matters most to potential grantees.
Healthy relationships allow a foundation to set reputations aside, connect with nonprofit staff doing the actual work (not just the fundraisers), and develop a deep understanding of the issues nonprofits face. Together, this helps foundations evaluate proposals on the real basis of programs and people.
When relationships are overplayed, they compromise process and can result in bias that sees foundations fund their friends, overlook stronger grant opportunities, or miss on quality proposals from those who sense the game is rigged. Poor relationships also allow foundations to lord their expertise over stakeholders, alienate them, and again, lose potentially stronger proposals.
CEP’s recent publication, Relationships Matter: Program Officers, Grantees, and the Keys to Success, does a terrific job detailing effective relationships.
Program area expertise requires no justification when it is used properly and includes an understanding of the need for broader grantmaking expertise. Done well, this will inform a foundation’s process and relationships, and lead to the best possible grant awards. However, since program expertise often sounds the most compelling, it becomes easy for foundations to use it as a default, at the expense of process and relationships.
Foundation-centered expertise can also eclipse grantee input and limit a foundation’s scope to the bias of its resident experts, leaving too much of the marketplace of ideas unexamined. And without the counterbalances of process and relationship, a culture of expertise can stray easily toward foundation arrogance or the convenience of prescriptive approaches.
A Major Strategic Decision
Together, process, relationships, and expertise shape all foundation interactions with grantees, the proposals they submit, and the degree of enthusiasm with which grants are carried out. Used properly, these elements provide significant checks and balances for any foundation’s operations.
These elements also offer a framework for discussion on how foundations give grants. Since these conversations revolve around strategic considerations, they must also rise, in part, to the board level.
What is funded and why it is funded are always important. That is a given. But how grants are made is equally important. The art of philanthropy begins with balance and ends without it. Therefore, the approach a foundation takes is a major strategic decision and provides the only way to mitigate the corrosive impact of foundation power.
William Keator spent 20 years in philanthropy. He is currently working on an education-related book.