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Data Matters: Let’s Look Within To Find Our Exemplars

Friday, February 17th, 2012

The following blog post was originally produced for the NGen Fellows blog on the Independent Sector website.

When it comes to leadership, data matters. I’d argue you can’t be effective as a leader without understanding how to tap into data to gauge the effectiveness of your work and then drive (and inspire) improvement. So I am thrilled to see that the current class of NGen Fellows has decided to focus its project on “using data for leading the nonprofit sector.”

My hope, in reading the NGen Fellows blog post explaining this choice, is that we remember that this push is not new – that we have lots of examples to learn from. The Fellows write of the imperative “to keep up with our counterparts in the private and public sectors.” But even if the assumption is correct that the nonprofit sector lags in this area, and I am not sure it is (especially when you factor in how much more complex and difficult it is to obtain performance data in our sector), I don’t think comparing ourselves to other sectors is the most effective way to motivate change.

If what we want to do is inspire nonprofit leaders to use data more effectively to improve the impact of their work, we should look within the sector for examples. In that vein, I was pleased to see that one of the project goals is to “showcase organizations effectively utilizing data to achieve more efficient operations and successful outcomes.” This should not be hard because, while we can all agree that there should be more, the fact is, examples abound.

  • Why not look to the example of the Institute for Healthcare Improvement, a nonprofit whose savvy use and analysis of data has helped dramatically improve patient outcomes?
  • Why don’t we study organizations like Nurse-Family Partnership, which has developed powerful data on its efficacy?
  • Or how about the work of the Stuart Foundation and its grantees to improve life outcomes for foster kids? (Disclosure: Stuart is both a grant funder and client of the organization I lead.)

Wharton professor Peter Fader, who is Co-Director of the Wharton Customer Analytics Initiative, has observed that nonprofits often excel in using “their data to better understand their ‘customer base,’” arguing that, “in this area, big companies with lots of resources really can learn from their cash-strapped non-profit cousins.”

I think we do ourselves a disservice by painting with too broad a brush when it comes to the state of the sector in its approach to data. We need to understand both the historical and present-day examples from within the sector of rigorous, data-driven, effective nonprofit work. And, as a former strategy consultant to major companies, I can tell you there’s a lot of shoddy use, and non-use, of data in the corporate world. (Financial crisis, anyone?)

At the (nonprofit) Center for Effective Philanthropy, where I serve as president, we have developed tools to allow foundations to get confidential, comparative feedback about their performance from grant recipients and others. (Our motto is “Better Data. Better Decisions. Better Philanthropy.”) People widely assume that we used customer-satisfaction surveys in the corporate world as our model, but we did not; our model, in fact, was the comparative reports based on student survey results put together for decades by a consortium of nonprofit colleges and universities.

If we are to inspire more leaders in the nonprofit sector to embrace the tough work of being data-driven leaders, we will be much better off looking for models within the sector. My hope is that the NGen Fellows will keep that in mind as they pursue this important project.

 

Phil Buchanan is President of the Center for Effective Philanthropy.

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To Judge or Not to Judge: The Brainstorming Myth

Tuesday, February 14th, 2012

I hate it when that happens.

In the final hour of a cross-country flight last week, I shut down my laptop as the battery flickered out and opened a New Yorker from a couple of weeks back. “Enough work,” I thought.

But rather than the relaxation and diversion I expected, I was confronted by a myth-busting article about “brainstorming” that made me realize I had been doing something stupid for years.

Although I am a big believer in debate and dissent, and lead many meetings that encourage this style of interaction, I had bought wholesale into the idea that, when trying to generate ideas, a non-judgmental-suspend-evaluation approach is most effective. So, when running certain kinds of meetings – such as those focused on generating ideas for new members of our Advisory Board or ideas for our conference program – I will say, “let’s just throw ideas on the whiteboard. No judgments for now!”

Ooops.

In a much-discussed New Yorker article entitled Groupthink, Jonah Lehrer writes,

“At the design firm IDEO, famous for developing the first Apple mouse, brainstorming is ‘practically a religion,’ according to the company’s general manager. Employees are instructed to ‘defer judgment’ and ‘go for quantity.’

The underlying assumption of brainstorming is that if people are scared of saying the wrong thing, they’ll end up saying nothing at all. The appeal of this idea is obvious: it’s always nice to be saturated in positive feedback. Typically, participants leave a brainstorming session proud of their contribution. The whiteboard has been filled with free associations. Brainstorming seems like an ideal technique, a feel-good way to boost productivity. But there is a problem with brainstorming. It doesn’t work.”

I took some consolation in the fact that the folks at IDEO, who have always struck me as pretty smart, have also bought into the brainstorming myth. Still, it’s sobering to recognize that a technique that so many assume to be effective, and that I thought was effective, isn’t.

In his fascinating article, Lehrer describes the importance of dissent in spurring creativity. Turns out, groups given the instruction to debate and even criticize each other’s ideas generate more ideas – both during the meeting and after – than those given the standard brainstorming “no criticism” rules. (Especially depressing is the fact that much of the research Lehrer cites was conducted years ago. And yet many of us marched on merrily with our brainstorming meetings.)

Lehrer then addresses the question of what kinds of groups most easily interact together in a mode that produces maximum creativity. He describes a study of Broadway productions that concluded that the most effective teams working on Broadway were neither assemblies of strangers nor bands of longtime colleagues and old friends, but rather those with an “intermediate level of social intimacy.”

Finally, Lehrer turns to the question of how to arrange work spaces to maximize productive creativity, discussing MIT’s Building 20, which became a “legend of innovation” because of the interaction among a diverse set of researchers that its layout spurred (interestingly, this was a product of happenstance, not design).

Lehrer’s piece supports the idea that dissent and debate are essential to effectiveness, even if they make people uncomfortable. And it suggests some helpful ways to spark productive debate and dissent (including going for the right level of familiarity among the group and the right proximity and space).

But the article doesn’t really deal with the important issue of power dynamics: the fact that some are going to be less comfortable speaking up by virtue of their tenure or position in the organizational hierarchy. (I have blogged about my struggles with this issue at CEP.) Put another way, it’s easy for leaders of an organization, or old-timers, to say “bring on the dissent;” harder for those who perhaps feel less secure to oblige.

I think fostering creative dissent and debate requires leaders to work hard to create the right environment.

But my judgment is that the “no judgment” brainstorming model so many of us have used should be put to rest.

Phil Buchanan is President of the Center for Effective Philanthropy.

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Seven “New” Concepts that Are Not So New After All: Reflections on a History of Philanthropy

Tuesday, January 10th, 2012

There seems to be an increasing number of books and reports about philanthropy and nonprofits, most promising to improve the efficacy of those who follow their wise words. The best of these acknowledge the distinct challenges of philanthropic and nonprofit effectiveness, and modestly build on what we know – basing their conclusions on real data. The worst of them show little understanding of history, offering up concepts (often based on only anecdotal experience) as if they’re the shiny new cure-all, when they’re neither new nor a cure-all.

As Cynthia Gibson put it in a wonderful NonProfit Quarterly article: “What’s of concern … is the increasing number of reports or studies on so-called innovative ideas or models—or ways to assess impact—that have been generated by individuals who seem to have little or no concern about whether or not what they’re claiming as ‘the next best thing’ is really just ‘been there, done that.’”

Gibson notes that, “A review of the steady stream of studies and reports issued under the guise of innovation reveals much that is merely a restatement or repackaging of ideas and concepts that have already been acknowledged or are being used by people who’ve been working in the nonprofit sector for a while.”

So it felt like a real gift to see the release, last month, of historian Olivier Zunz’s Philanthropy in America. It is an impressively well-researched book that comes at a perfect time, offering an antidote to all who think that everything interesting in philanthropy was invented today, or yesterday (often by them). Turns out, much of what we often talk about as if it’s new – or not happening at all – has been going on in the U.S. for 100 years or more.

Although I was familiar with much (although by no means all) of the history Zunz recounts, I was struck by how helpful it is to remember where we’ve been as a country when it comes to philanthropy. As Alexis de Tocqueville said, “History is a gallery of pictures in which there are few originals and many copies.”

Reading Zunz’s book, I noticed seven examples of things that are often portrayed as new – or not done – despite the fact that this is not, historically, the case.

  1. How often do you hear the lament that nonprofits never die, because the sector lacks the forces of “creative destruction” – to use economist Joseph Schumpeter’s term – that buffet the for-profit world? In a 2010 article in Harvard Business Review, Allen Grossman and Bob Kaplan write, “Apparently, Schumpeter’s cycle doesn’t operate in the social sector.” Yet, history offers evidence to the contrary. During the Great Depression, Zunz notes that “one-third of private charitable agencies in the United States disappeared” during a three-year period. (I’ve also argued that, to the extent that nonprofits have been more resistant to these forces, that’s partly the point of them – to operate outside markets.)
  2. Heard a lot about “cross-sector collaboration” or, more recently, of the term “collective impact?” A Stanford Social Innovation Review article describes the concept as the “commitment of a group of important actors from different sectors to a common agenda for solving a specific social problem” and discusses the need for a “fundamental change in how funders see their role, from funding organizations to leading a long-term process of social change.” But Zunz recounts how the earliest major American philanthropists saw their role in precisely these terms, and he cites many examples over the past century of government, foundations, nonprofits, and companies working together to address serious social problems, such as the effort to fight tuberculosis in the early 1900s. He describes the work of the Russell Sage Foundation and nonprofits to combat the disease and then notes, “Other funding partners in the fight against tuberculosis came from business, labor, and government. Life insurance companies naturally invested in reducing mortality rates among their customers.” It is likely the case that such efforts remain too rare, but there are many historical examples worth understanding.
  3. Today, that work by life insurance companies on tuberculosis might be heralded as “corporate social responsibility,” “blended value,” or, in the newest term for what appears to be essentially the same thing, “shared value.” But there is nothing new about companies seeking to do social good and make a profit – or the recognition that these goals sometimes go hand in hand (although quite clearly sometimes they don’t). Zunz recounts, for example, how the insurer “Metropolitan Life paid for a major study of tuberculosis in Framingham, Massachusetts, and underwrote a large educational campaign.”
  4. What about policy and advocacy work – which so often gets described as if it is a new push or something that funders historically haven’t done? This is perhaps the most powerful part of the story Zunz tells: the fact that philanthropy and public policy have been closely connected since the earliest days of institutional philanthropy and the subsequent spread of “mass philanthropy” in the U.S. a century ago. Zunz describes the evolution of the law with respect to this issue, but what is clear is that the earliest major foundations sought to influence policy, recognizing that this was a crucial way to make change. “Philanthropists have invested their resources in the greater American fight over the definition of the common good. They have taken all sides in all the partisan encounters that have divided our society and have strategically intervened in essential debates on citizenship, opportunity, and rights.” Zunz argues that this activity has “enlarged democracy.”
  5. And what of the push to move beyond transactional charity to influence systems and lives on a significant scale, or to combat “root causes” of social problems? Reading press coverage of philanthropy, it would be easy to conclude that, before the Gates Foundation, no one really cared if they were making a difference with their philanthropy. But there is nothing new about the quest to make a measurable difference, as Zunz recounts. He discusses the way Julius Rosenwald pursued a strategy of improving education for blacks in the South, or the influence of philanthropy on private colleges and universities to become much more focused on scientific research – and much more secular. Zunz cites a 1907 Outlook magazine article by Daniel Coit Gilman, a founding member of the American Social Science Association and a president of Johns Hopkins University. “Gilman underscored the new philanthropy’s insistence on long-term solutions to social problems instead of temporary relief for the destitute. High among its goals was the search for root causes.”
  6. How about PRIs (Program Related Investment) or the broader concept of “impact investing?” Zunz tells the story of the creation in 1967, by nine foundations, of the Cooperative Assistance Fund to invest in minority businesses. To their credit, the thoughtful present-day proponents of this kind of approach, such as Jed Emerson and Antony Bugg-Levine, are quick to acknowledge its history – but much of what is written by others seems ignorant of what has come before.
  7. Finally, how many times have you heard that nonprofits don’t know how to market themselves? And yet American history includes many examples of brilliant marketing, fundraising, and education efforts led by nonprofits. Zunz describes how nonprofits mobilized mass participation and action for positive effect in the fights against disease. He also describes the successful campaigns to encourage giving that accompanied the birth of the “community chest” and the community foundation, and the “democratization” of philanthropy. Indeed, the country’s high level of charitable giving is the result of savvy marketing by nonprofits.

Zunz himself does not make the connections to the current debates about philanthropy: he is a historian. He simply recounts the history – I am not doing justice here to the breadth and depth of what he has written – and does so thoroughly and brilliantly.

So why does it matter that so much of what we talk about as if it is new in fact has a long history?

I think it matters, first and foremost, because there is so much to learn from these examples. But I also think it matters because philanthropy and the non-profit sector seem to suffer from a sort of self-esteem problem, accompanied by (or perhaps resulting from) a strange case of amnesia, that doesn’t serve us so well.

Perhaps this is an odd observation for me to make – as someone who believes deeply that philanthropy and the nonprofit sector should push to be much, much more effective than they are today – although I’d say the same of government and business. But I think the push for effectiveness will itself be much more, well, effective, if we remember what’s been tried and what’s worked – and some things clearly have – and if we remind ourselves of the historical significance of nonprofits and philanthropy. And, in this way, Zunz’s book really is a gift. He writes:

From Andrew Carnegie to Bill Gates, and from ordinary people who purchased Christmas seals to fight tuberculosis to those who wear pink ribbons to battle breast cancer, the nation has come to view philanthropy as both a quintessential part of being American and another means of achieving major objectives …. Together they have forged a philanthropic sector that donors, beneficiaries, and the state recognize as a critical source of ideas as well as funding.

Obviously, there is also much that is sobering in Zunz’s history. He tells of considerable timidity on the part of major foundations and their leadership at various important moments. It was also striking to read of concerns about philanthropy’s effectiveness that feel all too much like the concerns I – and many others – have expressed much more recently.

An example: Baptist minister Fredrick Gates, who advised John D. Rockefeller Sr., had worried about what he called “scatteration” almost a century ago. Edwin Embree, who had worked at the Rockefeller Foundation and the Rosenwald Fund, echoed those worries in 1949 in Harper’s, discussing “the sprinkling of little grants over a multiplicity of causes and institutions.” So while that does not make it wrong for me or other advocates for effectiveness in philanthropy to push for focus, as so many of us have, we’re better off understanding fully the long history of this discussion (and, quite honestly, I did not).

Philanthropy in America: A History is ultimately inspiring – and it is an indispensable guide to where we’ve been. It can help us figure out where we need to go – and even how to get there. And it’s a humbling reminder of the truth in Harry S. Truman’s statement: “There is nothing new in the world except the history you do not know.”

Phil Buchanan is president of CEP. To read other blog posts by him, click here.

 

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The Unique and Urgent ‘Business’ of Philanthropy

Thursday, December 22nd, 2011

The following blog post is adapted from a talk presented at a meeting of the Grantmakers of Oregon and Southwest Washington.

As Suk Rhee mentioned in her introduction, I am a native Oregonian, so I know that there is no better place than the Pacific Northwest. And I am so happy to be here with you – funders who are committed to making the region even better;

  • More economically prosperous;
  • with better opportunities for all children and stronger schools in which they can learn and grow;
  • with its natural beauty protected from pollution and destruction;
  • with habitats for wildlife preserved;
  • with fewer homeless and abused;
  • with fewer struggling with mental illness and disease;
  • with discrimination – whether based on gender, race, sexual orientation, or disability – stamped out.

These are among the very toughest challenges. Yet, if you pick up the paper or read some of the increasing number of books on philanthropy, you might think it’s not so hard.  Just apply “business thinking” or “market-based solutions,” and we’re all set.

Problems solved.

In their influential 2008 book, Philanthrocapitalism: How the Rich Can Save the World, Matthew Bishop of the Economist and his co-author Michael Green argue that a new breed of “philanthrocapitalists” are working to “apply the secrets behind their money-making success to their giving.” (As if this idea never occurred to Carnegie and Rockefeller.)

They write:

“While some are skeptical about the invasion of the M.B.A.-enabled executives in suits into the Birkenstock world of charity, many philanthrocapitalists believe that the world of giving could benefit at least as much as business from a bigger role for professional intermediaries and advisors, and from the sort of transparency and accountability that exists in financial markets.”

Did I mention that this book came out in the fall of 2008? Where is Lehman Brothers when you need them? Bishop and Green thought they were really on to something, and they’re thoughtful, smart guys who meant well.

But you know charity is working on the toughest problems. If business and government could solve the problems I listed at the start, they wouldn’t exist. You know, because you do this work every day, that no sector owns the concept of effectiveness, and that there is much work in the nonprofit sector that is strategic, data-driven, and rigorous, whether those doing it are wearing Birkenstocks or loafers.

You know, because you are living it, that though people look to you and your resources jealously, they pale in comparison to the challenges you confront.  Here is some context: Annual giving in this country is $300 billion. Total state and federal spending is an estimated $5 trillion.

You know all too well, because you are experiencing it right now that you cannot possibly fill the gaps created by slashed government spending and increased need. But you also know the nonprofit sector has a crucial role to play – one that is separate and distinct from corporations and government.

And, you know, because you live on this earth – and perhaps because, like me, you are a customer of a big national bank (and wondering why), or of the local cable company – that corporations have no greater claim on effectiveness than anyone else.

As Jim Collins, author of Built To Last and Good To Great,  has said, “We must reject the idea – well-intentioned, but dead wrong – that the primary path to greatness in the social sectors is to become ‘more like a business.’”

So let’s cut through the cloud of rhetoric that has descended on philanthropy like ash from Mount St. Helens. Let’s talk about how hard it is to be effective in philanthropy. And let’s talk about what it takes to be effective in philanthropy.

I don’t have the secret formula. No one does.

What I can offer you today may well even sound like what you already know.  (I promise to try not to pretend otherwise!) But I hope that I can at least help you understand more about why doing what we already know we need to be doing is so hard.

So let’s talk about what foundation effectiveness looks like. If you want to create the most positive impact with the resources you have – and I am going to go on the assumption that if you are here, you do – then how do you make that happen?

I think it requires four things:

  • Clear goals
  • Coherent strategies to achieve those goals
  • Disciplined implementation of those strategies
  • Relevant performance indicators to assess progress

Again, I want to repeat that these are not original thoughts nor fancy new ideas – and the challenge is not in understanding that they are necessary for effectiveness, it is that they are so hard to do right.

 

Clear goals

Defining clear, specific goals is tough.  If you’re Howard Schultz, and you’re running Starbucks, the task is clear: make a profit selling coffee.  Execution might be hard, but defining the goal is not.  Sell as much coffee as you can.  Package it up in different sizes and flavors and make people feel they have to have it. You might, I hope, increase the degree of difficulty by saying you want to do it in a responsible way, with good labor practices and sourcing, and so on. But, still, the goal is straight forward.

In foundationland, it’s much tougher. How do you choose goals?

It’s subjective, after all. Values-laden.

Plus, how do you choose just one or two goals or even several, when there are so many pressing social problems, and when those problems are so interrelated?

A wonderful former foundation staff member who I had lunch with a year or so before he died once recounted to me the story of being asked for advice by the new CEO of the foundation where he worked.

“What is the greatest mistake you fear I will make?” the new CEO asked.

The answer my lunch companion gave, at least as he recounted the story, was this:

“The greatest mistake you will make is that you will be drinking your coffee and reading the paper, and you will be deeply moved by something you read. And you’ll walk into the foundation offices and you’ll say, ‘Let’s investigate this issue. We have tremendous resources. There must be something we can do.’ And you will set in motion a process that leads to the creation of a new programmatic area at the foundation.

And, then, six months later, you will be shaving, thinking about another pressing social problem.  And you’ll do the same thing.

And then you’ll look out over the foundation five years from now, or maybe ten, and there will be so many different programs, in pursuit of so many different goals, you will realize that you have squandered the opportunity that your scale offered – to really make a difference on an issue.”

And that is precisely what occurred at this particular foundation. The CEO made exactly the mistake my former colleague predicted he would.

It’s hard not to.

When Jim Collins spoke at our conference in Los Angeles a couple of years ago, he said this:

“Disciplined action begins with piercing clarity about what you choose to not do.  In a world awash with opportunity for contribution, it’s what we choose not to do – because there is so much to do.”

So ask yourself:

  • Are your goals specific, focused, and clear?
  • How many are there?
  • Are they goals that are reasonable for you to believe you can make a difference toward, given your resources?
  • How aligned are your board and staff?
  • If each person associated with the foundation wrote down the goals, would they be the same?

It seems simple.  But all too often, the alignment just isn’t there. Our research shows that a CEO’s perception that there is goal alignment among staff and board is crucial.

So, whether your foundation has one staff member or 30, job one is to get clear on your goals.

Coherent strategies

If clear goals are the “what,” strategy is the “how.”

Everyone loves “strategy.”  Everyone has one.  But do they, really?

First, let me say that strategy plays out differently in philanthropy than in business, because there are no competitive dynamics for private foundations. In business, it’s all about “unique positioning.” But if I can make tremendous impact at my foundation by doing exactly what your foundation is doing, why wouldn’t I?  I wouldn’t demur, by saying, “No, I don’t want to fund those vaccinations because it’s not our ‘distinctive position’ to do that work.”

So how to define strategy in philanthropy?

We at CEP define strategy as:

A framework for decision-making that is

1) focused on the external context in which the foundation works, and

2) includes a hypothesized causal connection between use of foundation resources and goal achievement.

But in our research, we see a disconnect between the rhetorical embrace of strategy and the reality of its actual use. This disconnect exists at both private foundations and community foundations.

Strategy in philanthropy requires a relentless focus on the logic of how you will achieve your goals.  It is about data-driven decision making, rooted in analysis and a theory of how the foundation’s efforts can contribute to the desired change. Wherever possible, it’s informed by evidence of what works and what doesn’t, the more rigorous the better. It’s also influenced by feedback loops so you can constantly iterate and improve your strategy based on a changing context.

Strategy isn’t about deciding what works on high, about being arrogant or top-down. The best strategists are always questioning assumptions – theirs and others – and getting feedback.

Take the example of the Stuart Foundation, with roughly $300 million in assets, making grants in California and the Pacific Northwest.  In their child welfare work, the foundation focused on changing outcomes for former foster kids in California.

The conventional wisdom was that older foster kids couldn’t get adopted:  couldn’t find loving families or people who would assume some responsibility. The folks at Stuart consulted widely with those on the ground, including grantees, government officials, funders and foster kids themselves. They found reason to believe this assumption might be flawed, and tested a strategy that led to older foster kids getting adopted or connected to a caring adult. The data showed that the strategy worked, so they expanded the work.

The Foundation, joined by other foundations, also invested in the kind of supports at state universities that other kids would take for granted as coming from their families. Graduation rates in some cases for kids in these programs were better than the general student population.  The Foundation also recognized that better data systems were needed to track these kids and figure out what is working. So it did something too few foundations do: it invested in a data system.

The Stuart approach became a national model.

That’s good strategy. It’s incredibly difficult, but it can produce remarkable results.

 

Disciplined implementation

But Stuart didn’t just have a good strategy.  It had good implementation.

This is where so much falls apart.

We at CEP see this all the time. Over the past nine years we have surveyed 40,000 grantees of more than 250 foundations, developing a huge comparative dataset that we can mine for our research and for the Grantee Perception Reports we provide to individual foundations, such as Northwest Health Foundation and MJ Murdock Charitable Trust, which have both participated recently.

We see foundations that work very productively with their grantees to achieve shared goals, implementing their strategies well. But we also see foundations that undermine their effectiveness by operating in ways that are not supportive of grantees;

  • they compromise the relationship and then, inevitably, their ability to hear what is really going on;
  • they place requirements on grantees that don’t serve a purpose;
  • they fail to learn from those doing the work on the ground;
  • they fail to communicate clearly about their goals and strategies, and then somehow expect grantees to be able to implement against them.

We see foundations that say they provide capacity building assistance to nonprofits, that that is crucial to their strategy, but they don’t do it in the ways our research shows are required to make a difference.  Rather than doing the kind of comprehensive or field-focused assistance that actually helps grantees, they settle for “drive-by assistance” that may do as much harm as good.

More broadly, foundations frequently don’t commit the resources that would be necessary for implementation of their strategies.  In our research, this emerges as the biggest perceived barrier to strategy implementation.  The most effective foundations recognize that major change requires major resources. They also understand that it almost always requires resources beyond what any one foundation possesses.

Lately there has been a lot of chatter about the concept of collective impact: I got an email promoting a webinar (cost: $49) that read:

“Recently published in the Stanford Social Innovation Review …. Collective Impact is an approach to solving social problems that’s based on the idea that no organization acting alone can solve large-scale issues.”

Wait, didn’t we know this already?

Effective foundations have recognized for decades that achieving significant change requires working together to make changes with other funders and with the grantees on the ground. All the great examples of impact that foundations can lay some real claim to, from the Green Revolution to reducing tobacco use to the end of Don’t Ask, Don’t Tell, involve many institutions, funders, nonprofits, sometimes other actors including companies and government, working together, under the banner of a shared strategy, coordinating implementation.

There is nothing new here.

That’s why CEP and the Monitor Institute are working together to provide a tool that Monitor Institute created, called the Strategy Landscape Tool, to groups of funders who are working toward the same goal.  This tool allows these funders to see who is funding what, by strategy, rather than by the less helpful categories by which grantmaking is typically grouped. We’re providing these for foundations working toward shared goals in specific fields or, sometimes, as for funders in Detroit, for those pursuing improvement in a specific community.

Steve Schroeder, the former CEO of the Robert Wood Johnson Foundation, has argued that “Execution trumps strategy.” I think what he means is that strategy is meaningless if it isn’t well-implemented.

 

Relevant performance indicators to assess progress.

There has been real progress on this front in the past decade.

We see, in a survey we conducted this year of CEOs of foundations that make more than $5 million in grants annually, that assessment of foundation performance is a high priority to CEOs.  They believe much progress has been made in the last decade but that more needs to be done.  We also see that foundations are using a broader range of indicators than they were when we first studied this issue a decade ago.

This is good news.

Still, there is so much confusion about assessment. Lately, there has been a bit of a backlash against experimental design and randomized control trials. But rigorous experimental design is a powerful evaluation approach when applied well. If you are going to put major funding behind a particular strategy then you should know whether it works or not. If it’s new, then support finding out whether it works.

If something has already been shown to work, then don’t assess it all over again. Take the New York State Health Foundation, whose CEO, Jim Knickman, is on CEP’s Board of Directors. The Foundation focuses on improving clinical care and patient outcomes for diabetes – doing so by supporting the proliferation of treatment approaches that have already been proven effective. Rather than funding their own massive evaluation, they have relied on the work of others who have already shown what works – and their assessment now focuses on their ability to spread what works.

So you don’t all have to fund massive evaluative studies, but it’s irresponsible not to pay attention to what is known, and not known, about what works – and to act accordingly.

Another problem is that so much assessment today puts the foundation’s needs in front of the nonprofit grantee’s needs.  But assessment should also support the work of those on the ground, giving both you and them the information to assess and improve.

In his important new book, Leap of Reason, Mario Morino writes:

“I know many nonprofit leaders who are not managing to outcomes but are strongly predisposed to do so.  They inherently know what their outcomes are and very much want to assess and manage to them.  But they are severely hamstrung by the lack of available funding to do this hard work. … At minimum funders should be supporting efforts to help nonprofits to …. (a) track the outcomes of those served; (b) undertake at least basic analysis of this information; and (c) identify how they can use the information to learn and improve their programs over time.”

When it comes to assessment, I think the first step a foundation can take is to open itself up to feedback from the outside,  recognizing that it is surrounded by those who are predisposed to say what they think foundation staff want to hear.  To have any meaning whatsoever, this feedback must be collected by a third-party that is recognized and trusted for its independence so that the feedback is candid; and it must be put in a comparative context.  Without comparative data, it is impossible to make sense of what is a good result, what are relative strengths and weaknesses.

At the Center for Effective Philanthropy, we have worked hard to create these feedback loops.  Our Grantee Perception Report has been used by foundations as big as Gates as well as those with a couple of million dollars in annual giving. Our Applicant Perception Report captures the feedback of those who were declined funding. Our Donor Perception Report gives community foundations the opportunity to understand the views of their donors. Our Stakeholder Assessment Report taps into the perspectives of policy makers and field and community leaders. Our YouthTruth project taps into the voices of those who should matter most – the people whose lives a foundation seeks to improve. YouthTruth does this for education funders through surveys of students in high schools and, soon, middle schools – and its made a powerful difference to schools, districts, and funders.

In every case, the perceptual data is put in a comparative context to make it meaningful.

And we see that foundations are improving, to a statistically meaningful degree, when they repeat tools like the Grantee Perception Report.

As you assess, remember that what you learn often has broader relevance. If you know something about what works, or what doesn’t – share it, so others can learn from it. In my view, it’s morally indefensible not to.  Again, there is no competitive dynamic here – we’re all trying to make a positive difference.

Clear goals. Coherent strategies. Disciplined implementation. Relevant performance indicators.

Not radical concepts.

But incredibly difficult – it is much, much harder to be effective in philanthropy than it is to be successful in business.  Just ask some of the folks in Silicon Valley who have recently made the transition from business to philanthropy.

Not radical concepts – not new concepts either.  In their very good new book, GiveSmart, Tom Tierney and Joel Fleishman imagine Andrew Carnegie and Bill Gates having dinner, writing, “They would quickly discover how much they had in common.”

The authors speculate that as

“rigorous, disciplined, and deeply strategic” men, “the industrial baron and the software tycoon would be highly compatible.”

They write,

“If Gates were to mention ‘strategic philanthropy,’ ‘social entrepreneurs,’ or ‘scaling what works’ in the course of the conversation, Carnegie might not recognize the phrases but he would immediately understand the concepts.”

So the concepts are neither new nor radical, but they’re incredibly hard to act on, each day.

Each one of you here today has a role in making decisions about how resources are used to influence change for the better in this amazing region we call the Pacific Northwest.  How you do that work, each day, the discipline and clarity you bring to the task…it matters.

Foundations play a role other actors in our society cannot, or will not.

When they do it well, the results can be stunning.

So do it well.

 

Phil Buchanan is President of the Center for Effective Philanthropy.

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Posted in Assessing Performance, Assessment Tools, Constituent Feedback, Developing Strategy, YouthTruth | 1 Comment »

Making Transparency Matter

Thursday, December 8th, 2011

There has been lots of talk lately about foundations and “transparency.” Perhaps the most prominent foundation transparency initiative is a website called Glass Pockets, launched about a year ago by Foundation Center. Its tagline? “Bringing transparency to the world of philanthropy.”

CEP worked as one of a number of partners to Foundation Center as it designed this effort, and we were pleased and proud to do so. We favor the general idea of foundations being more open about what they do and how they do it, and I agree with Foundation Center President Brad Smith that the record of foundations overall is not so hot when it comes to transparency. So I applaud the effort Foundation Center is making, under Brad’s leadership, to promote transparency.

In fact, as I prepared for the event on “Transparency and Effectiveness” that Foundation Center and CEP co-hosted in San Francisco this week, I started to worry about whether we’re going nearly far enough. I started to worry about whether we are settling for superficial transparency, about whether the inevitable push to create simple check-lists is resulting in good information – or misinformation.

I worry that, in the worst case, we could witness the kind of counterproductive behavior that we see in the world of colleges and universities, where preoccupation with placement on the U.S. News and World Report rankings has led some institutions to take steps to improve their standing – to game the system, really – that are counter to what is best for their students. I worry that we’re not discussing critically the information foundations are being transparent about – and I am not sure there is value in transparency without engagement. And I worry that we’re overemphasizing transparency about trivial matters and under-emphasizing transparency that really facilitates greater effectiveness.

Which brings me back to Glass Pockets. On the Glass Pockets website, 32 foundations to date are listed under the question “who has glass pockets?” because they have agreed to be assessed on whether they disclose information in categories such as “Basic Contact Information,” “Governance Policies & Information,” “HR/Staffing Policies & Information,” “Financial Information,” “Grantmaking Information,” and “Performance Measurement.”

Some don’t do too well – turns out some of their pockets may be more of a tinted glass.

But what about those who do perform well? What about those receiving magnifying glasses or bullhorns on the site (the icons Foundation Center uses to give credit, and which link to the supporting material) in the various categories as indications of their transparency? What does it take, exactly, to get credit in the various areas?

I don’t see the categories as even close to equally important. So I was particularly interested, given CEP’s focus, in foundations that received magnifying glasses on the four dimensions of the “Performance Measurement” category. The specific dimensions in that category are: “assessment of overall foundation performance,” “knowledge center,” “grantee feedback mechanism,” and “grantee surveys.”

Much of what I found was less than inspiring. One foundation receives a magnifying glass for “overall foundation performance assessment” for a consultant’s report based on interviews with leaders in the community – with absolutely no information about methodology or number of interviews conducted. Another foundation links only to the Grantee Perception Report (GPR) provided by CEP. While I think the GPR can be an important component of an overall assessment, should it be enough, on its own, to qualify as an “overall foundation performance assessment?” I am not sure.

One foundation that gets credit on Glass Pockets for conducting a grantee survey does so because it self-administered a survey several years ago and got a 22 percent response rate – and what that corresponds to in terms of number of responses is not disclosed. The questions are poorly constructed, with response option choices that virtually guarantee positive results – and there is no comparative data. Yet among the “findings” are that there are “very favorable views of [the foundation] in all areas” and that the donor “would be proud!” I wonder. (I am not exactly objective, here, I realize. We have our own approach to grantee surveys and a particular point of view about what constitutes a rigorous survey effort.)

Another foundation gets credit for having a “grantee feedback mechanism” simply because it posts contact information for a staff member that grantees can reach out to.

Some of the foundations that do well on Glass Pockets absolutely deserve to. There are funders with impressive supporting materials in the “Performance Measurement” category. But it’s impossible to distinguish between them and others whose commitment seems more cursory based only on what’s listed on Glass Pockets. You have to go to the foundations’ web sites to figure it out, and I am not sure how many of the visitors to the web site will take the time to do that. I think the natural tendency will be to assume that those receiving credit for doing performance measurement, and being public about it, are doing something really meaningful.

So what should be done? A few ideas:

  • I would like to see Glass Pockets add a space for comments on the quality of what foundations have been transparent about. If we don’t engage with what foundations are making public, if it just sits on websites, then how valuable is it?
  • I would like to see more discussions about the substance – both online and face-to-face at meetings such as the one we held in San Francisco. Is transparency a good in its own right? Or is it a means to an end of greater effectiveness? Are transparency and effectiveness ever in tension?
  • I’d like to see Glass Pockets do more to push for openness about programmatic effectiveness – so foundations are encouraged to disseminate information about what works and what doesn’t. That seems far more important to me than criteria such as whether a foundation has a staff list on its Web site, or a newsletter, or a blog.
  • I also wonder about the potential importance of the Charting Impact initiative developed by Independent Sector, BBB Wise Giving Alliance, and Guidestar USA. This effort encourages organizations to publicly answer five “deceptively simple questions,” including “What is your organization aiming to accomplish?, What are your strategies for making this happen?, and How will your organization know if you are making progress?” Only one foundation, the William and Flora Hewlett Foundation, is listed on the IS Web site as having completed a Charting Impact Report. (Full disclosure/hypocrisy check: CEP has not yet done this, although our answers to essentially the same questions can be found in our publicly available strategic plan.) Transparency (and clarity) about the answers to these questions on the part of all major foundations would be a step forward.

I think the Glass Pockets effort is a promising one. Foundation Center deserves a lot of credit for taking a stand and pushing this forward. I also like the direction of the Charting Impact initiative.

We should all work to raise the bar on what constitutes transparency that matters. I hope we can push for much, much higher standards for the depth and quality of information necessary for a foundation to get credit for its commitment to performance measurement, for example – or, for that matter, for its transparency in general.

Foundations have made progress when it comes to transparency. But there is a long, long way to go.

 

Phil Buchanan is President of the Center for Effective Philanthropy.

 

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Posted in Assessing Performance | 2 Comments »

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