The Path to Effective Philanthropy: Honest Conversations

February 27, 2014

It was a treat this week for MCF and our members to host a conversation with Phil Buchanan, president of the The Center for Effective Philanthropy (CEP).

Our exchange was energetic, provocative, fun and sometimes funny.  I was struck by how often we circled back to core concepts and philanthropic fundamentals.

The discussion aligned serendipitously with MCF’s Principles for Grantmakers.  Here are a few snippets that illustrate the challenges — and opportunities — of putting principles into practice.

Effective Governance
According to MCF’s Effective Governance Principle, grantmakers are expected to be good stewards of assets, to fulfill donor intent, to make sound decisions and to perform all fiduciary responsibilities.

Buchanan called for foundation boards to govern effectively by not rubber stamping staff members’ grant recommendations.  “If the board is approving every grant, they’re not taking time to see what it all adds up to and they’re not asking the hard questions.”

And he challenged foundation CEOs to practice “radical openness” with their boards – i.e., to say everything they’re thinking and to spark “messy conversations.”  Good governance doesn’t emerge from perfectly scripted board meetings at which “the most spontaneous thing that happens is when someone gets up to get a cup of coffee.”  (Yes, it’s okay to laugh at ourselves.)

Engaged Learning
The MCF Engaged Learning Principle calls for continuous learning and reflection by engaging board members, staff, grantees and donors in thoughtful dialogue and education.

Of course, learning and continuous improvement through performance assessment is at the heart of CEP’s mission.  (Buchanan readily acknowledged that he is not the expert in philanthropy . . . and he cautioned us to be wary of those who say they are.)

Because philanthropy is “wicked tough,” funding programs on theory alone is not enough.  It’s vital that grantmakers establish performance indicators and are data driven.

And they sometimes need to follow, not lead.  By replicating proven programs, foundations can learn from others and succeed.  (For more on shared goals, read Buchanan’s opinion piece in this week’s Chronicle of Philanthropy.)

Transparency
Through MCF’s Transparency Principle grantmakers strive to build healthy relationships with the public, applicants, grantees and donors by using clear, consistent and timely communications.

Being transparent includes sharing the so-called “failures.” (Our host Kate Wolford of The McKnight Foundation noted that we might be more apt to learn from our missteps by reframing them in more positive, multi-dimensional terms.)

Buchanan reported that it’s up to foundations to share the results of CEP assessments.  Some don’t share at all, some partially share with grantees (and sometimes add a positive spin!), and some share widely, warts and all.

He noted that foundations that are truly transparent are viewed as trustworthy and credible.  For example, Robert Wood Johnson Foundation is fully committed to evaluation and transparency, making it all the stronger.

Cynics may say that foundations don’t need to be accountable to anybody.  But as Buchanan reminded everyone, if grantmakers aren’t honest and don’t cultivate positive relationships with their grantees, how can they obtain the candid information they need to improve philanthropy . . . and improve lives?

More to Come
Keep watching our Philanthropy Potluck Blog for future postings about philanthropic effectiveness, including video conversations with MCF President Trista Harris, Buchanan and other big thinkers.

Like our grantmaker members, MCF is committed to hosting robust conversations within and across sectors . . . because leadership for the 21st century requires honest, provocative discussion.

– Wendy Wehr, MCF vice president of communications and information services


Examining the Hurdles to a Rigorous Performance Assessment

September 28, 2012

As grantmakers have been looking to increase the impact of their funding dollars, nonprofits have come under a great burden of proof to illustrate the effectiveness of their programs and initiatives. One of the most common tools for nonprofits to measure their social impact is through a performance assessment, but nonprofits often lack the resources to perform a thorough assessment and many grantmakers do not offer financial support to carry them out even as they become more influential in the grantmaking decision process.

It is important for grantmakers to understand the challenges and opportunities that nonprofits face as part of a performance assessment. Lauren Gilbert of BELL recently wrote Five Hurdles to Nonprofit Performance Assessment for the Center for Effective Philanthropy discussing her own experience. She outlined five hurdles beyond cost that nonprofits must address when going through a rigorous, independent research assessment. The hurdles included:

  • Capacity: Nonprofits do not always have the infrastructure, personnel, or experience to plan and carry out an independent performance assessment.
  • Required Partnerships: Foundations and grantmakers often assume that nonprofits can find willing community partners to assist in carrying out evaluations, but finding and maintain partnerships may be difficult.
  • Human Element: Creating a control group can often mean nonprofits must deny their services to some participants, creating real world consequences for the individuals and communities being studied. Gilbert warns nonprofits not to lose sight of the humanity involved in the testing.
  • Receptiveness: Nonprofits, policymakers and grantmakers need to be receptive to outcomes of the performance evaluations. Gilbert emphasizes that research should be utilized as more than a tool for growing funding revenue bases.
  • Imperfect Science: Measuring social impact is an imperfect science attempting to evaluate less tangible outcomes that are greatly influenced by outside factors. The constraints applied to the studies can also greatly affect the results leading to misleading conclusions in side by side comparisons. Less rigorous assessments often produce more favorable seeming results.

Grantmakers continue to develop new best practices when it comes to measuring the effectiveness of their grant dollars in the communities they seek to impact. As they do, they should keep in mind the challenges that grantees face in undergoing a performance assessment. Above all else, assessments should be focused on finding the most effective means to carry out our missions and benefit the communities we serve, not just as a way to justify more philanthropic investment.

– Kaitlin Ostlie, MCF administrative assistant

Photo cc KKfromBB


Social Media Engagement Lessons From Knight Foundation

August 15, 2012

Last week, I sat in on a webinar from the Center for Effective Philanthropy on their new report, Grantees’ Limited Engagement with Foundations’ Social Media (PDF).

The report contains some worrying statistics:

  • 80% of surveyed grantees said that their nonprofits use social media, but only 16% of respondents said that they personally follow the efforts of the foundations funding them.
  • Social media ranked as the least helpful of five communications avenues to learn about these foundations.
  • Interacting and sharing ideas with foundations was ranked below getting foundation news in a list of ways social media could be useful, even though one of the main features of social media is supposed to be its interactivity.

Although I have some questions about the survey’s methodology (such as, are executive directors the right people to ask about following their funders’ social media?), the concerns that it raises are undeniably important: how can foundations do better in reaching their grantees using social media, a communications avenue that grows more important every year?

Knight Foundation’s Elizabeth Miller

Fortunately, Elizabeth Miller, communications associate at MCF member Knight Foundation and a panelist on the webinar, offered some key insights when sharing the Knight Foundation’s engagement efforts:

  1. Create a social media positive culture throughout the foundation. In other words, make the entire staff feel welcome and encouraged to engage on social media, instead of leaving it up to one organizational account. One outward sign of this is the Knight Foundation staff webpage, where Twitter handles are included for each individual who has one, including the president and CEO. That way, grantees and others can carry their personal connections with Knight Foundation staff over into the realm of social media.
  2. Actively engage with grantees. Knight Foundation staff follow the social media accounts of their grantees, and if they know of a big event, significant report or other highlight, they will use social media to spread the word and encourage their community to check it out. This not only helps grantees reach their goals, it also shows a connection and interest in the nonprofits Knight Foundation is funding. If you are interested in having your social media accounts be an interactive space, the best way to make it happen is to start interacting yourself!

The entire webinar is now available to watch on YouTube.

Join the conversation: Do you work for a foundation that uses social media? A nonprofit that follows a funder’s social media? What’s been your experience with what works and what doesn’t?

-Chris Oien, MCF web communications associate


Stakeholder Engagement: A Guide for Grantmakers

August 27, 2010

Do Nothing About Me Without Me, a guide for grantmakers on increasing stakeholder engagement, begins with a simple but inspirational African proverb about the importance of working together:

“If you want to go fast, go alone.  If you want to go far, go together.”

Grantmakers for Effective Organizations (GEO) partnered with the Interaction Institute for Social Change (IISC) on this report because there is a disconnect between grantmakers’ sentiments around stakeholder engagement and their perceptions of how inclusive they are in decision-making. 

And this perception is not without merit: while a slim majority of the surveyed grantmakers believe that it’s very important to solicit outside advice and collaborate with external groups, only 36 percent of respondents said they seek advice from grantee advisory committees or solicit feedback from grantees through surveys, interviews, or focus groups.

Why don’t more grantmakers involve external stakeholders in decision-making?  According to the survey, many grantmakers are comfortable with the status quo, prefer to get their information from experts rather than community members, or think it takes too much time and effort to involve outside constituents.  Valid or not, these excuses prevent many grantmakers from letting more diverse voices influence their work.

Yet, the benefits of stakeholder engagement are evident; inviting external constituencies to the table results in:

  • Deeper understanding of problems;
  • Truer sense of grantee needs and challenges;
  • Improved strategy;
  • Greater effectiveness;
  • More accountability and transparency; and
  • Increased buy in.

So how do grantmakers involve stakeholders in decision-making?  Do Nothing About Me Without Me provides several case studies of organizations that do this work successfully.  The report also offers a range of activities for grantmakers, depending on their current level of stakeholder engagement. 

Minnesota also has its own examples of foundations involving communities in their organizations:

  • Getting started: If your foundation is just beginning this work, surveying grantees for feedback and input is a great first step.  Some foundations also commission Grantee Perception Reports from the Center for Effective Philanthropy.  The McKnight Foundation published its report online for greater transparency and accountability.
  • Gathering input: Other grantmakers involve grantees and community members in focus groups, listening sessions, and community convenings around public problems.  For instance, the Central Minnesota Community Foundation has convened community meetings around important local issues, such as ways to promote collaborative planning with St. Cloud, Sartell, and Sauk Rapids.
  • Sharing decision making: For grantmakers that are able and willing to share decision-making authority with a group of constituents, they may consider either adding nonprofit and community representatives to their board, or appointing a panel of nonprofit staff and community members to decide on grants. Family foundations can expand their boards to include non-family members.  The Sundance Family Foundation has benefited from assembling a small, talented board of directors made up of several people from the community. At the Women’s Foundation of Minnesota, the Social Change Fund and girlsBEST Fund each has its own committee that is charged with making funding recommendations to the board of trustees. Committee members include staff, board members, and community volunteers that participate in reading proposals, conducting site visits, and evaluating applications. The process incorporates perspectives of many different decision makers.

Join the conversation: How does your foundation involve stakeholders?  If you are with a nonprofit, how have funders engaged your organization in their work?

-Stephanie Jacobs, MCF director of member services


Admitting Mistakes, Finding Solutions: The Gates Foundation’s Grantee Perceptions Report

July 19, 2010

Bill and Melinda Gates and their philanthropic partner Warren Buffet have been in the news a lot lately following the announcement of their ambitious $600 billion giving pledge, an open challenge to the nation’s billionaires to commit to giving away half of their fortunes to charity.

However, there’s been other recent news regarding The Bill & Melinda Gates Foundation that you may not have heard. As I read today in this post on the Philanthrocapitalism blog, a recent Center for Effective Philanthropy Grantee Perceptions Report found that the foundation is facing communications challenges with its grantees.

The report is based on a survey of 1,544 of Gates’ grantees. On the positive side of the ledger, it found that the foundation is perceived by grantees as having a profound positive impact on work in the grantees’ fields, particularly in the areas of knowledge building, public policy and creating effective practices.

However, the assessment of the Gates Foundation’s communications was not so rosey. Grantee partners reported that the organization’s goals and strategies are unclear, and that similarly they felt that the foundation had a poor understanding of their goals and strategies. Respondents also noted confusion about the foundation’s decision-making and grantmaking processes and expressed frustration over program officer turnover.

As you may know, the Bill & Melinda Gates Foundation is a member of MCF. So you may be wondering why we would report on one of our members performing poorly at, well, anything. The truth is, although the report found that the Gates Foundation has a need for improvement, its transparency about those challenges is admirable and should serve as a model for those grantmakers that value transparency and accountability in their work, both key tenets of MCF’s own Principles for Minnesota Grantmakers.

The Gates Foundation has been very open about its involvement in the assessment process and the results, posting the findings here on its website, along with the audio from a number of grantee community calls. The foundation also has been clear that it will be addressing these shortcomings by reevaluating its communications and creating new strategies for enhancing cohesion and clarity between program managers and executives at the foundation and its grantee partners.

That’s why I salute the Gates Foundation for being upfront about the challenges that it faces. It’s through this process that the organization will be able to enhance its relationships with grantees, and ultimately the impact of its grant giving.

As physicist Tom Hirshfield once wrote, “If you hit every time, the target is either too big or too near.” Philanthropy is a bold endeavor with high stakes. By learning from our collective mistakes through accountable and transparent practices, we can capitalize not only on success, but failure too, and ameliorate the world-changing work that we all share, while at the same time affirming the public trust.

- Cary Lenore Walski, MCF web communications associate


Have You Heard of Catalytic Philanthropy?

August 31, 2009

There is an intriguing article in the latest issue (Fall 2009) of the Stanford Social Innovation Review with the title “Catalytic Philanthropy.”

Catalytic philanthropy is defined by individual philanthropists igniting social change around a specific issue.

"Catalytic philanthropy" is defined as an individual philanthropist igniting social change around a specific issue.

The author relates a fascinating story of how Tom Siebel, founder of the software company Siebel Systems, has had a significant impact in reducing the abuse of methamphetamines in Montana and in reducing the crime that typically stems from meth abuse.

Siebel personally dug into the root causes of meth abuse in Montana and developed a strategy, which he called The Meth Project.  He brought together experts in the field as well as an advertising agency to develop a compelling ad campaign that would reach a significant majority of young people in Montana.  The ads, which were tested in focus groups, are described by this author as being “world-class” and “gut-wrenching.”

As a result, between 2005 and 2007:

  • Meth use in Montana dropped 45% among teens and 72% among adults.
  • Meth-related crimes dropped 62%.
  • The percentage of teenagers who were aware of meth’s dangers increased from 25% to 93%.

In the article the author, Mark R. Kramer, who is a cofounder and managing director of FSG Social Impact Advisors, and who was also a cofounder of the Center for Effective Philanthropy, identifies and describes “Four Practices of Catalytic Philanthropy:”

  1. Take Responsibility for Achieving Results.
  2. Mobilize a Campaign for Change.
  3. Use All Available Tools.
  4. Create Actionable Knowledge.

He also provides several other examples of catalytic philanthropy, including some work done by the F.B. Heron Foundation with the Minneapolis-based Community Reinvestment Fund.

Kramer notes that conventional philanthropy, “Serves an essential function in supporting major nonprofit institutions, enriching many lives, and providing assistance to countless individuals in need.” He also notes that venture philanthropy and social entrepreneurship have important roles to play.

He identifies catalytic philanthropy as an alternative to these approaches.  Though catalytic philanthropy typically requires far greater engagement on the part of the donor, it is also more likely to have a major impact on a challenging social concern about which the donor cares deeply.

Join the Conversation: Can you think of other examples of catalytic philanthropy?  Does catalytic philanthropy seem like a viable strategy for accomplishing your philanthropic goals?  Does it seem too risky or time-consuming?

- Cindy Moeller, MCF director of professional development and member services

Photo CC Arash RK

How Do You Measure Your Foundation’s Effectiveness?

August 3, 2009

An Interview with Phil Buchanan, president of the Center for Effective Philanthropy

Is your foundation hitting the mark? CEP provides free effectiveness assessment tools.

Is your foundation hitting the mark?

Last month the Center for Effective Philanthropy’s President Phil Buchanan took some time to come out to Minnesota and present information to MCF’s members on CEP’s current research.

He also provided some insight to help funders as they strive to improve their effectiveness. As a follow up to the program, I thought it would be interesting to get his thoughts on some of the burning questions central to the discussion at the meeting. Here’s what Phil had to say:

What does foundation effectiveness look like?

We believe foundation effectiveness require:

  1. Clear goals;
  2. Coherent, well-implemented strategies; and,
  3. Relevant performance indicators to gauge progress.

Put another way, it’s the what, the how, and the how will we know? This sounds simple – and it is.  But putting this into practice isn’t easy.

Choosing goals in a world of so many pressing, important challenges is hard.  Developing a sound strategy that is based on clear logic – that A is likely to lead to B which will lead to C – is extremely tough, too.  And defining performance indicators is maybe the toughest part of all.

Why is it so hard?  Because it’s not like business, where the goal is to make a profit as simply as possible and where there is a universal measure of performance.  As Warren Buffett said, “In business, you look for the easy things to do.  In philanthropy, you take on important problems and it is a tougher game.”

We see in our research that foundation CEOs and program officers who are really strategic act differently than those who aren’t.

  • They are very focused on the external context – looking outside the walls of the foundation: they are data-driven and, contrary to the perception of some that to be strategic is to be isolated, they are more likely than their peers to get feedback from grantees and other stakeholders.
  • They’re very focused on the logical connections between what they do, each day, and the achievement of their goals.
  • They are more public about their work, making clear their goals and strategies on their Foundation web sites and in other forums.
  • And they define performance indicators that they use to gauge progress and to iterate their strategies.

The most powerful examples of foundation impact that I know have resulted from foundation staff working in these ways:

I think one of the important things to remember is how isolated foundations can be.

They are surrounded by those who are either grantees or aspiring grantees, and who may be inclined to be less than totally candid and forthcoming with feedback on how the foundation is doing – whether its goals and strategies are clear and sensible, or even whether the foundation is operating in ways that are helpful to grantees’ ability to do their work.

One of the key things we at the Center for Effective Philanthropy have tried to do is create tools that allow foundations to hear candid and comparative feedback from grantees and others inside and outside the foundation’s walls.

For a local example of how this kind of data can be useful, see this interview with Kate Wolford of the McKnight Foundation.

How do foundations best deploy all their resources to maximize their impact and achieve their goals?

Another common characteristic that can be found in the best examples of foundation impact is a creative use of an array of resources to achieve philanthropic goals.  Of course smart grantmaking to organizations that are executing key elements of the foundation’s strategy is obviously key.  But, so too is the use of communications and advocacy resources, as well as creative alliances with other funders, grantees, policymakers and others.

Foundations have an opportunity to look across fields and communities in ways that others can’t. They can and should take advantage of that to catalyze change.  We’re seeing foundations trying to take a more holistic stock of all their assets – including their endowment – and how they are being used to further their programmatic strategies.

How is the quest for impact affected by the current economic environment?

The downturn just makes the imperative to maximize effectiveness and impact all the more important.  Foundations should make decisions about where to cut –and where to spend more – based on tough-minded examinations of available data about what works and what doesn’t.  Where that data isn’t available yet, then the logic should be scrutinized.

If a foundation program officer cannot articulate clearly a logical hypothesis for how his or her choices contribute to the achievement of whatever goal has been articulated, then it’s time to question the existence of that program.  And where the logic is especially strong – and the goal compelling – the reward should be more resources.

I also think it’s absolutely crucial, in the current environment, that foundations listen to those outside their walls.

We have added some questions to the survey that informs our Grantee Perception Report that get at grantees’ perceptions of how their foundation funders have responded to the downturn: have they communicated clearly? Have they been helpful to grantees?  Foundations need to ensure their thinking is informed by the experience of those doing the work on the ground, each day.  That’s something we at CEP can help foundations with.

For more information on CEP’s work with foundations on measuring effectiveness and impact, visit their website.

Join the Conversation: What is your organization doing to improve its effectiveness or impact? What data is driving your decision-making process?

- Lisa Johnson, MCF’s manager of professional development and e-learning

Photo CC cliff1066

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