One of the first research projects undertaken by the Center for Effective Philanthropy (CEP) after it was founded 10 years ago was an effort to understand what foundations were doing to assess how effective they are.
What we learned in 2001-2002 was that foundation leaders were frustrated by how limited their ability was to determine how well the foundations they lead were doing. The data they collected was most likely to speak to the financial performance of the foundation or to the success of individual grants. But it was hard to determine a meaningful answer to the bigger question: how a particular foundation is doing in work designed to make a difference in the world.
CEP’s 10th anniversary created an opportunity to take a fresh look at the current state of performance assessment at large foundations in the United States. What our new research determined is that, in brief, progress is real, but much remains to be done.
As my colleague Phil Buchanan said at our 2011 conference, “… even though we can point to many compelling examples of foundations making an impact, there is far too much ineffective philanthropy–foundations funding programs that don’t work or having the opposite of the intended effect. That’s why assessments are so important.”
Today, CEP is releasing new research about foundation CEOs’ attitudes toward assessment and what the foundations they lead are doing to measure performance. Our new report, The State of Foundation Performance: A Survey of Foundation CEOs, draws on the responses of 173 CEOs who head foundations making $5 million or more in grants annually. Responses to the survey provide a snapshot of a movement in philanthropy that remains controversial and complex.
The majority of CEOs we surveyed believe that foundations have made great strides in being able to assess their effectiveness. A majority also believes that too few foundations understand their overall performance. Clearly, the issue carries weight. Fully 72 percent of CEOs say assessing their foundation’s performance is a high priority for them.
The search for useful metrics has expanded between our first and second reports. Our data indicate that foundations are using a broader range of information to understand their effectiveness than they were a decade ago.
- With regard to foundation operations and finances, almost every foundation looks at investment performance and administrative costs. But the kind of information that foundations are least likely to look at is data about people working at the foundation: diversity of staff, staff retention rates and what staff say it is like to work at the foundation.
- With regard to programmatic work, almost every foundation uses anecdotal feedback, grantee reports, site visits and evaluations. But the information that foundations are least likely to turn to for understanding their program work is feedback from their ultimate beneficiaries – those who are receiving the services or programs that foundations are funding.
- More than 90 percent of foundation CEOs report they conduct formal evaluations of their work, and almost 50 percent of CEOs combine information across multiple functions to generate a foundation-wide assessment.
These findings seem to support CEOs’ perceptions that there is still a ways to go when it comes to understanding their foundations’ performance, and offer foundations potential paths to follow to get closer to that understanding.
Perhaps one of the most sobering findings from this survey is CEOs’ continued desire for more involvement by foundation boards of directors in the important work of performance assessment – a key aspect of any board’s oversight responsibilities. Over the years this finding has repeatedly arisen in CEP’s research. In this new report, we gleaned more insight into what is getting in the way. The most frequent reason CEOs cited is that the board does not have a deep enough understating of the issue areas in which the foundation funds – a reason that can certainly be addressed by any foundation.
As with all of CEP’s research, we hope this report will spur conversations in the staff meetings and board rooms of those who read it.
Ellie Buteau is Vice-President—Research at the Center for Effective Philanthropy.