Archive for December, 2010

Back to Basics: What Are You Trying to Achieve?

Monday, December 20th, 2010

This post was originally published on December 16, 2010 on www.glasspockets.org.

In a recent op-ed in Philanthropy Journal, I wrote about the importance of foundations sharing information about whether or not they are being effective in pursuit of their goals. In that piece, I acknowledged that a review of the Glasspockets web site shows that very few foundations have an assessment of overall foundation performance that they make available.

I’d like to take a few steps back from considering how many foundations have an overall performance assessment they make public and ask about the thought process that fuels the development of such an assessment. How do foundations determine which relevant performance indicators to include in such an assessment?

The fact is, it’s virtually impossible to answer the question of what indicators to use without a solid answer to the question, ‘What are the foundation’s goals?’ While this may seem like a simple question for foundations to answer, our experience and our research indicate that it is not.

In the Center for Effective Philanthropy’s 2009 study on foundation strategy, 40 percent of CEO and program staff respondents to our survey did not provide, when asked, a single specific goal that their foundation was working to achieve. By specific, I mean a goal that includes a well-defined issue area, target population, or geographic location.

We found that of those that did provide a goal, the goals varied dramatically in their specificity. For example, here are three goals all aimed at strengthening nonprofits. Consider how well each of these goals might guide a foundation in selecting the relevant performance indicators to help the foundation understand its progress towards each of these goals:

  1. “Strengthening organizations.”
  2. “Strengthen the nonprofit sector: Assist [our state’s] nonprofit organizations with their effectiveness in terms of improved governance, transparent financial operations, creativity and sustainability.”
  3. “To enable organizations with whom we partner to develop scorecards and internal systems for evaluating the impact of their work.”

Even with clear and specific goals, performance assessment for foundations is tough work. Given that a foundation is typically not the sole actor contributing to progress in a given area of work, it is difficult to determine a reasonable expectation for progress for which a foundation should hold itself accountable.

For example, if a foundation is one of many organizations working to strengthen the nonprofit sector in a particular state, how do its leaders determine to what extent it is responsible for the ultimate strengthening of those organizations? Here, I would argue, the specifics of a foundation’s strategy, and how that strategy gets implemented, are key factors that provide further guidance for the selection of relevant performance indicators.  But, as we have also learned in our research, many foundation CEOs and program staff do not use strategy to guide their work.

Many foundations have a long way to go before they’ll be able to contribute performance assessment data of substance to the Glasspockets website. They have to first clarify their goals, strategies, and the extent to which they are holding themselves accountable for the change they’d like to see.

In the quest for transparency, it is important for foundations to refrain from selecting certain indicators simply because they are easily quantifiable. Rather, foundations must commit to having the difficult conversations and doing the soul searching required to get clear on what they are trying to achieve — and how — before they can begin to consider measuring success. Why don’t these conversations happen more often at foundations? What would enable more foundations to productively discuss these complex issues with both their internal and external constituents?

Ellie Buteau, PhD is Vice President—Research at the Center for Effective Philanthropy.

How Understanding Their Fields Helped Three Foundations Make Better Decisions and Avoid Costly Mistakes

Thursday, December 16th, 2010

At CEP, we are always looking for ways that our data can help foundations forge stronger relationships with their grantees and become more effective in their work.

Recently, our research showed that when a foundation’s staff exhibits a high level of expertise in the field in which it funds, that expertise usually results in stronger relationships with grantees.

But, how exactly, do foundations gain that strong understanding of these fields? We know that in the busy lives of foundation staff, it can be difficult to carve out enough time to understand the fields in which they are making grants. What are the best source for information? How do program officers develop the necessary knowledge to advance their work? What does understanding the field really mean?

We decided to ask staff at three foundations that had participated in CEP’s Grantee Perception Report® (GPR) and were ranked in the top five percent of more than 200 foundations according to their average grantee ratings on the survey item: “How well does the foundation understand the field in which you operate?”

Our case study, Lessons from the Field: From Understanding to Impact, provides an in-depth look at how these three different foundations cultivate an understanding of their fields and then translate that understanding into more effective grantmaking.

The three foundations – the Evelyn and Walter Haas, Jr. Fund, the Energy Foundation, and the Wilburforce Foundation – want to make an impact on some of the most complicated challenges we face: civil rights, renewable energy sources, and wildlife protection.  

When we interviewed them, staff at these three foundations told us how under­standing their fields helped them make better deci­sions and avoid costly mistakes. For example:

  • Listening to stakeholders in California led the Haas, Jr. Fund to reshape a communications campaign on immigrant rights so that it took into account important regional differences.
  • A deep understanding of Chinese culture helped the Energy Foundation pilot a groundbreaking plan to significantly reduce air pollution, which the Chinese government has adopted nationwide.
  • Some extra research helped Wilburforce discover that it needed to cultivate a key constituency group in order to protect one of the largest intact rainforests on earth.

The foundations also offered very different examples of how they develop and maintain an understanding of the field. For example:

  • At Haas, Jr., understanding the field means that the foundation seeks to develop the capacity of their staff and grantees to be leaders in their fields.
  • At Energy, understanding the field involves staff developing close working relationships with experts in the field and connecting grantees with experts to enable problem-solving.
  • At Wilburforce, understanding the field means knowing as much about the people living and working near the areas it seeks to protect as it does the flora and fauna residing on those lands.

We hope that our case study provides useful ideas to foundations seeking to better understand the fields that they fund, and we welcome your feedback. The case is available for free download here.

Here’s Some Philanthropy Advice for Mark Zuckerberg

Tuesday, December 14th, 2010

Yesterday, an op-ed I wrote with President of the Rockefeller Brothers Fund (and CEP Board Chair) Stephen Heintz was published in the San Jose Mercury News. In the piece, we offer four pieces of advice to Mark Zuckerberg and the other billionaires who have taken the Giving Pledge.

Here’s Some Philanthropy Advice for Mark Zuckerberg

Facebook founder Mark Zuckerberg, at all of 26 years of age, is among the latest to take the Giving Pledge, joining a group that includes Oracle’s Larry Ellison, movie producer George Lucas, and investor Carl C. Icahn. These billionaires answered the call of Bill and Melinda Gates and Warren Buffett to dedicate at least half their wealth to philanthropy.

If all the Americans on the Forbes 400 list take the pledge, that would generate an estimated $600 billion in giving. That’s equal to twice total annual charitable giving from all sources in 2009.

But, for the Giving Pledge to really matter, what we need is not just more philanthropy.

We need more effective philanthropy. The challenge will be to sort through suggestions about what to give to and how to give it. So we offer some advice to Zuckerberg and the new class of major philanthropists.

1. Stay focused. New philanthropists are bombarded with arguments — often very good ones — for why this goal or that goal is deserving of support. But you’ll never know if you made a difference if you disburse your funds widely in small grants. The late Rodger McFarlane, who ran the Gill Foundation, put it this way. “There is an unlimited amount of injustice and suffering out there that I cannot mitigate. “… Part of the demand of this job is relentlessly focusing on exactly what we said we’re trying to do, and staying there.”

To have an impact, the Giving Pledgers will need to be specific about their goals and define sound strategies to achieve them. They also must gauge progress with performance measures.

2. Learn from history. In the nearly 100 years since the Carnegie Corp. of New York and the Rockefeller Foundation were established, there have been great examples of philanthropic success as well as stunning failures.

The Green Revolution, which brought agricultural techniques to developing countries that helped feed millions, is one example of success. The efforts of the Robert Wood Johnson Foundation to curb smoking is another. On the failures side, you have to dig a bit harder to find examples. One is the efforts of the Annenberg Foundation to improve public education in the 1990s; this one is cited frequently thanks to the Foundation’s laudable openness in sharing its evaluations.

3. Get feedback. If you’re taking the Giving Pledge, you are among the wealthiest people on the planet, and others are unlikely to criticize your choices. Your staff will start to live in your bubble, too, rarely hearing honest, critical feedback. Giving Pledgers will have to ensure they hear the brutal facts and opinions from those on the ground.

4. Don’t fall for “business thinking” as a magic bullet. Many suggest that making an impact in philanthropy just requires using “business practices.” But the problems philanthropy seeks to address are the very ones that have defied market-based solutions. Andrew Carnegie recognized this when he referred to his decision “to stop accumulating and begin the infinitely more serious and difficult task of wise distribution.” 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.”

In announcing his intentions, Zuckerberg said, “People wait until late in their career to give back. But why wait when there is so much to be done?”

It’s a very good question.

If Zuckerberg and the other billionaires commit themselves to the hard work of effective philanthropy, they will help make our world more safe, sustainable, healthy and replete with opportunity. That’s a pretty nice legacy.

PHIL BUCHANAN is president of the nonprofit Center for Effective Philanthropy, with offices in Cambridge, Mass., and San Francisco. STEPHEN HEINTZ heads CEP’s  board and is president of the Rockefeller Brothers Fund in New York.

Phil Buchanan is President of the Center for Effective Philanthropy.

Giving As Good As We Get

Monday, December 13th, 2010

A recent Harris Interactive poll suggests that Americans intend to give less in 2010 than in 2009. A combination of high unemployment and economic uncertainty have caused generous people to feel slightly less so. Despite this fact, it is also clear that Americans are giving more in new ways this year than ever before. Five years ago, we didn’t have the option to Tweet for Change, or, through Foursquare, Check-in for Change.*

One young woman who was interviewed about “check-in giving” through the CauseWorld app said, “CauseWorld makes me feel like I’m doing some good in the world every day. I don’t have much money to give to charity these days, like most people, so having a chance to direct money to some really important causes means a lot to me.” Declines in charitable giving have occurred in the past, but never before has that decline been coupled with the rise of so many other quick-hit ways to express generosity.

If the desire to be generous can be assuaged by directing someone else’s money, will we still feel compelled to give? Will we be willing to sacrifice our own money to support the causes we care about? For example, Starbuck’s has tested making charitable contributions as a benefit of checking-in. While this may be an appealing experiment to Starbucks regulars, it should be noted that these $4-latte-lovers are not offering to drop their Starbucks habit in order to direct those funds to charity.

Questions such as these were raised by Malcolm Gladwell’s New Yorker piece as well. Will casual support displace deep commitment? The jury is still out, but I think the potential difference in how nonprofits receive funding from individuals could, over time, be quite important. In aggregate, annual giving—usually defined as contributions from individuals—represents a core, stable funding base for many nonprofits. In fact, annual giving is often the counterweight to time-limited or non-renewable funding from corporations and foundations.

If, over time, nonprofits receive more and more funding from these embedded giving/contribution consolidators, will that negatively affect nonprofits’ cash flow? One recent study by Network for Good suggests the answer is yes. When offered a gift, the question nonprofit leaders often ask is not just “how much?” but “how often?” They all know that a consistent gift of X is almost always more valuable than a one-time gift of X+. So that leads to another question, how can nonprofits convert those casual givers to become regular givers?

In order to help nonprofits do this, foundations need to support the development of fundraising practices that help nonprofits engage with these new giving vehicles. Nonprofits shouldn’t simply be passive recipients of grants from social media philanthropic aggregators, they should be active participants. But as Beth Kanter regularly points out in her blog posts, an effective nonprofit social media fundraising strategy requires thought and time (and funders, that means money).

Nonprofits will need to learn how the ease of transaction (“Press # now on your cell phone to give a dollar to Haiti relief efforts”) can be maintained without nonprofits having to cede the entire relationship to a charity portal. In his recent Harvard Business Review post, Dan Pallota also points out the importance of foundations placing strategic emphasis on their grantees’ fundraising capacity. While I am a strong advocate of general operating support, I think that foundations should go further to engage with grantees about fund development and adapting to the changing technological landscape.

Those of us who fund nonprofits can often be heard criticizing the lack of strategy and financial planning among nonprofits. But if embedded giving allows people to express support for many groups, will that lessen people’s allegiance to specific groups? Maybe funders should be putting more thought, research, and money into helping nonprofits creatively respond to these new fundraising challenges and amazing opportunities.

* Geo-location sites like Foursquare and Gowalla are game-like mobile phone applications that invite people to “check-in” when they have arrived somewhere and give a quick status update, similar to Facebook. On most sites, people gain points or credits the more often they check-in. Companies are beginning to offer coupons or time limited deals when people check-in. Causeworld is a similar site which gives people points they can use like frequent flyer miles to make donations to charities.

Crystal Hayling is Former President and CEO of the Blue Shield of California Foundation and a member of the CEP Board of Directors. Crystal will be contributing more posts to the CEP Blog in the new year.

Before Strategy Was Strategy

Thursday, December 9th, 2010

When I was fresh-faced and just starting to work in philanthropy at a woman-focused community foundation, I made lists. I would write down the problem or issue I wanted to tackle, then make a list of reasonable solutions. For example:

Domestic Violence

  1. Make it a crime
  2. Lock up the criminals
  3. Get women legal services for safety & to pay for the divorce
  4. Provide counseling for the kids
  5. Get mom a job

Then I would look at the money I had available (never enough) and divide it equally among each of the reasonable solutions. Confident I was doing all I could to address the problem of family violence, I talked earnestly with the board of directors about the importance of our “multi-faceted” approach.  (Now, that word looks quaint, but trust me you used it a lot in the 80s too.)

Next, I would turn to the giant map of Los Angeles we’d hung on the wall and divided into what we called neighborhoods, but which were really more economic descriptors than geographic locations—South Central LA (Compton but not Ladera), Westside (Venice, but not Santa Monica), Hollywood (but not West Hollywood).

We would push pins into the places where we made grants—red for violence prevention, blue for economic development, green for arts, etc.—and we aimed to distribute those pins fairly and evenly from the San Bernardino mountains to the shining sea.

I did due diligence – financial assessments and site visits – on every organization that received a grant. We gave project but not general operating support. And we considered ourselves partners with the groups we funded.

And that’s how we did it.

This was what we called our strategy if someone had asked us that question, which really no one ever did. Far more frequently, what people wanted to know was “why should I give to a women’s foundation?”

Why I could talk about passionately:

  • Because the status of women is a barometer of equality in any society
  • Because if women flex our giving muscles to demand that solutions have a gender lens we will develop better solutions
  • Because women are the backbone of financial decisions in most families and communities
  • Because well-educated women give a lot more of their joint wealth to their husbands’ alma maters than they do their own
  • Because sisters are doin’ it for ourselves.

The list went on and on.

At the core of the answers to “why?” was a belief that women didn’t want to be saved. Women wanted tools to make good decisions for themselves and their families. Women wanted the opportunity for hard work to result in something more than 63 cents on the dollar.

And that belief saved us from ourselves. It put us in partnership with the (mostly) women’s organizations we funded. Over the years, those partner nonprofits joined our grantmaking committee and our board of directors. They challenged our approach—why not general operating support? They challenged our funding partners—can Virginia Slims buy a table at an event? Uh, no. Their staff members wrote checks contributing their hard-earned dollars to the Women’s Foundation* because they felt like we were all part of the movement. And they helped us to understand how to prioritize “solutions” by telling us which ones mattered most in which communities, which ones were dead wrong in others, and how to add ones we’d never thought of ourselves.

We practiced an early form, I think, of what Peggy Saika recently called “democratic philanthropy.” Now not every foundation is willing or able to be as fully participatory, but it makes a huge difference if you can be. I learned, in those early years, that folks did not take kindly to the notion that their communities or their lives were problems to be solved. By starting from a place where we stated our “why” values and listened to theirs, we found we were in alignment. And that alignment allowed us to be on the same side of the table in determining “how.” And even working through massive disagreements on “how.” But that’s what partnerships are about.

In short, we found that good strategy starts with listening. And not just sporadic listening, but listening that is built into the processes of our grantmaking. If we understand how our grantees see the world, it makes us smarter, better partners.

* I am pleased to say that the Women’s Foundation of California has come a long way since my early days of strategy development at the Los Angeles Women’s Foundation 24 years ago. The Women’s Foundation of California is one of the most thoughtful, grassroots and policy oriented foundations I know and I owe them so much for helping me learn what I know about philanthropy and social change.

Crystal Hayling is Former President and CEO of the Blue Shield of California Foundation and a member of the CEP Board of Directors.