An Interview with Phil Buchanan, president of the Center for Effective Philanthropy
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:
- Clear goals;
- Coherent, well-implemented strategies; and,
- 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
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.
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