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

Over 80% of Nonprofits Innovating, Measuring Effectiveness

May 27, 2010

Eighty-two percent of nonprofit organizations reported implementing an innovative program over the past five years, according to a new survey released by Johns Hopkins Center for Civil Society Studies. This trend remains strong across small and large organizations — challenging the myth that larger, more established organizations can not re-think their approach to their work.

Plastic Ruler

As more nonprofits measure success, government and grantmaker support falls short.

The study, conducted as part of the Listening Post Project, surveyed 417 nonprofit organizations working within major areas including children and family services, elderly housing and services, community and economic development and arts organizations. An “innovative” program or service was defined as “a new or different way to address a societal problem or pursue a charitable mission that is more effective, efficient, sustainable, or just than prevailing approaches.”

Eighty-five percent of respondents also indicated that they have been measuring their effectiveness as well. Despite the rosy picture that these numbers paint, two-thirds report that they have been unable to start an innovative program or service over the last two years.

The major barriers to nonprofit innovation reported:

  • Lack of funding (86%)
  • Inability to bring to scale due to lack of “growth capital” (74%)
  • Narrow governmental funding streams (70%)
  • Tendency among foundations to encourage innovations, but not sustain support (69%)

Similarly, attempts to measure programmatic effectiveness were also stunted by a lack of funds. Respondents did, however, make some recommendations about different efforts that could be undertaken to improve the ease of measurement, and innovation.

Recommendations to overcome performance measurement and innovation include:

  • Creating better tools to measure qualitative impacts (82%)
  • Less time-consuming measurement tools (81%)
  • Financial resources to support measurement and research functions (79%)
  • Greater help from intermediary organizations to fashion common evaluation tools (67%)
  • Training for personnel on how to accurately use tools (63%)

The philanthropic and public sector have been challenging nonprofits to innovate and evaluate. Nonprofits have clearly answered this call to action. Despite strong adoption of these practices, there’s still important work that can be done to help nonprofits innovate, evaluate and maintain the best programs and services. The complete survey report can be downloaded here (pdf).

Join the conversation: Do you have any personal stories of innovation to share? What organizations, whether nonprofit or philanthropic, are doing things right when it comes to establishing easy-to-use scorecards for different focus areas? Please share your thoughts.

– Cary Lenore Walski, MCF web communications associate

Photo CC Mykl Roventine

The Art of the Steal: A Lesson in Ethics and the Public Trust

March 22, 2010

This week, some of MCF’s staff went to see The Art of the Steal, a film documenting the fight over The Barnes Foundation and its $25 billion collection of post-Impressionist and early Modernist art.  This private collection includes seminal works by Cézanne, Picasso, Renoir, Degas, Manet, Monet and Van Gogh, but this isn’t a movie about art.

It’s about governance, transparency, donor intent and the interpretation of these principles by people who are entrusted to act in the best interest of the foundation.

Over his lifetime, Dr. Albert Barnes amassed an incredible collection of art at his foundation in Merion, Pennsylvania, unrivaled by many of the large, prestigious art museums in the United States, including the nearby Philadelphia Museum of Art.  But Barnes did not amass this collection to be viewed extensively by the general public; he established the foundation to “promote the advancement of education and the appreciation of the fine arts.”

First and foremost, Barnes thought of his foundation as a school for artists, a place where sincere students could view important and influential works of art away from the tourism of art museums.  Henri Matisse said the Barnes Foundation is “the only sane place to see art in America.”   Barnes was explicit in his trust documents that the collection should not be sold, moved, or loaned for any purpose, unless those demands became unreasonable or impossible due to unforeseen circumstances.

Therein lies the crux of the struggle to control the Barnes collection.  While Barnes loyalists say that to remove the collection at all would be a direct contradiction to Barnes’ original intent, several powerful people and institutions in Philadelphia, including the former Governor of Pennsylvania, several well-known philanthropists, and the Pew Charitable Trusts, have vied to move the collection to Philadelphia, where it would be more accessible to the general public (and a huge tourist attraction for the city.) They claim that The Barnes Foundation is financially unstable and has no other choice but to move the collection.  The film chronicles this fight, leading up to the dramatic decision as to the future of the foundation.

The Art of the Steal is definitely a movie with an agenda and a point of view (read this New York Times article for a full review of the film).  Funded and produced by several former students and teachers of the Barnes, the film is one-sided and paints the other side in an unflattering light.  Many of the people that the film accuses refused to participate in the movie, but some have made statements in response to the movie, including the Pew Charitable Trusts and Bernard Watson, chairman of the Barnes Foundation board of trustees.

No matter on which side of this argument you fall, The Art of the Steal provides an excellent case study on the topic of ethics.  Whether you have heard of this controversy before or not, you will walk away from the movie questioning how people can ensure that foundations and nonprofits maintain accountability with the public and whether a controversy like this could have been avoided.

At the Minnesota Council on Foundations, our members created, endorsed, and do their work by the Principles for Grantmakers & Practice Options for Philanthropic Organizations to prevent situations like this from happening.  Updated in 2009, the Principles are a how-to of principled philanthropy. Not only do they outline what philanthropic organizations are legally required to do, the Principles are also aspirational, encouraging foundations to reach for more than what the law says is necessary.  All MCF members are required to subscribe to the Principles.  In the preamble of the Principles, it reads:

“We acknowledge the fundamental roles and responsibilities of engaged individuals and the public, private and nonprofit sectors in a just and equitable society.  As a community of grantmakers, we embrace philanthropy’s role in a civil society.”

It is controversies like the one depicted in The Art of the Steal that remind those of us in the nonprofit and philanthropic sectors that we must work daily to uphold the public trust.  We must take responsibility for the privilege of sustaining a just and equitable society.  We must respect and honor the people who turn to our organizations in search of support and guidance.  And we must appreciate the opportunity to assess ourselves against written and unwritten standards of ethical principles and practice, and value the chance to reach for a higher standard.

The Art of the Steal is playing now at the Landmark Edina Cinema.

– Stephanie Jacobs, MCF member services manager A New Website Bringing Transparency to Philanthropy

March 15, 2010

There are 97,000 foundations in the United States, and each year these foundations control more than $500 billion worth of assets and distribute $46 billion a year in grants and programs (Smith, 2010.) The influence of philanthropy on the well-being of the nation is profound, yet strangely, although foundations wield so much power, the average individual often struggles to even define what philanthropy is.

In the past, many working in the field of philanthropy, although not actively trying to keep the public “in the dark” about their activities, were complicit with this general state of ignorance in the sense that they did not strive proactively to educate the public about their work. This old way of conducting business has fallen into disfavor with many large grantmakers, and is a powerful example of how these foundations are now making efforts to communicate clearly about their grantmaking and practices.

Launched in January by the Foundation Center, in conjunction with a number or partner organizations,’s mission is to “bring transparnecy to the world of philanthropy.” The site has a wealth of information on a number of large, well-known foundations such as:

The transparency of each foundation’s practices are rated on the site in a series of reports that look at 28 key indicators of transparency and accountability, including if they explain their grantmaking process, whether they provide a public assessment of their performance, and if they offer opportunities to share program evaluations and lessons learned with the public and grantees.

Other features of the site include a search tool called the “Only Foundations Search” that allows the user to search the websites of thousands of private foundations for information on their grantmaking activities. The search tool can be found at the bottom of the homepage. In addition to the search function, there are also resources that share general facts about philanthropy based on the Foundation Center’s research, as well as special focus pages that delve into to specific topics — like relief work in Haiti.

Join the conversation: Although many leaders in the philanthropic field are praising and its mission to encourage philanthropists to communicate about their work, there are some who feel that private foundations are not obligated to share this information. Do you support the mission of philanthropic transparency, or do you feel that this focus on transparency unduly impinges on the activities of private foundations?

– Cary Lenore Walski, MCF web communications associate