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Data Point: Foundations’ Use of Logic Models and Theories of Change

Friday, February 3rd, 2012

The use of logic models and theories of change has been much discussed and debated in the field of philanthropy.

Some advocates for their use suggest that foundation staff members need to articulate the logic of how the foundation’s work will lead to the achievement of its goals if they are to have a chance of achieving them – and if they are ever to understand the impact of their efforts. One sector leader who holds this position is Paul Brest, president of the William and Flora Hewlett Foundation. As Brest and Hal Harvey, a former Environment Program director at Hewlett, wrote in Money Well Spent, “An intuitively plausible theory of change is better than none at all. [But] the more tested the theory of change, the sounder its use as the basis for a strategy.”

Others argue that the complexity of social problems, and the likely result of getting a logic model or theory of change wrong, means funders should not attempt to lay out the path to their desired goals. Bill Schambra of the Hudson Institute’s Bradley Center for Philanthropy and Civic Renewal Director, argues funders should not “worry about solving a problem in the abstract [or] thinking it through in advance with a bunch of flow charts and variables [because] it isn’t going to turn out the way you thought it was going to.”

So what is the state of practice among large foundations? Last year, CEP collected data on this issue through surveys of CEOs of foundations with $5 million or more in annual grantmaking and published a report that highlights trends in the field regarding the assessment of foundation performance.

The data show that:

  • 29 percent of CEOs report using a logic model or theory of change to guide all of their work.
  • 40 percent of CEOs report using a logic model or theory of change to guide some of their work.
  • 31 percent of CEOs report not using logic models or theories of change in any of their work.

CEOs who use these tools generally place assessing their foundation’s effectiveness as a higher priority than CEOs who do not. Specifically, 80 percent of CEOs who use logic models or theories of change rated the priority of assessing the foundation’s effectiveness a 6 or 7 (on a scale of 1 to 7, with 7 representing the highest priority). About 60 percent of the CEOs who do not use logic models or theories of change gave that high of a rating to this priority.

CEOs who report using logic models or theories of change also use different types of data when assessing their foundation’s programmatic work than those CEOs who do not. CEOs who use these tools are more likely to use surveys of the foundation’s grantees, conduct focus groups and convenings of their grantees, or carry out evaluations of the foundation’s program or issue areas to understand the effectiveness of their programmatic work.

To see an example of how Wilburforce Foundation has used a logic model to drive their strategic thinking, check out this recent guest post from Paul Beaudet.

What is your take on funders’ use of logic models?

Andrea Brock is Research Manager at CEP.

 

 

 

 

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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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What Strategy Is…And Isn’t – Hint: It’s Not Rocket Science

Tuesday, January 3rd, 2012

Strategy is something that people in philanthropy seem to talk about a lot.  What they do, though, may be another matter.  In recent months, I’ve had a number of conversations with philanthropic leaders who admit that they’re still somewhat perplexed when it comes to creating and implementing a solid strategy for their investments.

  • A senior consultant was asked by two large national foundations to create a strategy for them, but when he presented that strategy, the funders said they were “only interested in how many people we reached”—outputs, in other words.  When the consultant tried to emphasize the importance of linking those to a larger strategic framework, they responded, “We only care about results.”
  • The deputy director of a large regional foundation, charged with helping each of her program staff members create a grantmaking strategy, expressed frustration about their tendency to “drill down immediately to tactics,” rather than grappling with clarifying the goals and rationale for those efforts first.  She wondered how to help them understand that “without the why, they won’t be able to assess whether the tactics they decided to use were effective.”
  • A foundation official speaking at a conference said his foundation’s strategy was to “end homelessness in their community.”   An audience member, also a foundation executive, responded by observing that this seemed to be a goal, rather than a strategy, and that the two seemed to increasingly be “conflated in ways that lead to confusion about what philanthropic institutions are doing, how and why.”

These anecdotes are hardly evidence of a trend, but they’re a few of many examples I’ve seen indicating that the concept of strategy remains murky, despite all the publications and tools available to help people who work in philanthropy dispel that cloud.

But why? It’s hard to say for sure. Perhaps it’s because creating a strategy and then rolling it out in ways that will achieve impact are all different parts of one complex concept—and none by themselves are easy to do, let alone in combination.  Another reason may be that the array of sometimes expensive and confoundingly complex strategic planning products available can leave even the smartest foundation officials scratching their heads in confusion.  Others point to the influx of a new set of players in philanthropy, including young people or those whose backgrounds make them more interested in doing than in navel-gazing, which is sometimes how strategy is characterized.

Perhaps the most commonly cited reason for funders to eschew more intentional and rigorous strategy development is that there’s little incentive for them do to so, given that philanthropic institutions tend to operate with few formal accountability structures, especially those that are externally imposed.  As the public, however, becomes less enamored with institutions, particularly those that are seen as reluctant to adopt the open source ethos that’s becoming a cultural norm, there will be more, not less, demand for accountability and transparency from even the most closed-door organizations.  And unlike some foundations that define transparency as publishing an annual report or articles describing what they’re supporting, the public, especially grantseekers, have long known that real transparency is when funders are clear about what they’re doing, the decision making criteria they’re using to make investment decisions, and how they’re going to assess themselves in those efforts.  In short, people want to know:  What’s your strategy and why?

Fortunately, strategy isn’t really that complicated.  While it does require the ability to think logically and articulate a rationale as to why a particular path is chosen over another, it isn’t rocket science.  Nor should it take forever and serve as a proxy for actually doing something. How many times have you heard ‘We’re revising our strategy’ from foundations that you thought did that already last year… and the year before that… and before that…?

What strategy can do, however, is make a better rocket—and one that lands where it should. And who doesn’t want that?

To help make things a bit less mystical, and thus, more likely to be applied in daily practice, we might take a page from the book of some wise people who were developing effective funding strategies long before the advent of the strategy gurus.  One of those people was Andrew (a pseudonym), with whom I had the good fortune to work.  Andrew came to philanthropy after organizing thousands of women in one of the country’s poorest communities to secure child care subsidies they needed to stay employed—a result that led to significant changes in national welfare policy.  In addition to serving as the president of a foundation, Andrew also was the senior vice president at a family foundation with a national focus.

It’s worthwhile to note that Andrew didn’t have an Ivy League degree, hadn’t worked at a multinational consulting firm, and had probably never even read a book about philanthropic strategy.  He was, in fact, deeply skeptical of foundations and their capacity to make a difference, but was, at the same time, roundly viewed by his peers as a brilliant strategist because of his ability to home in on difficult problems with laser-like focus and get results.  He was also able to project out longer-term visions and predict which would have traction, but only as a function of rigorous evaluation and assessment—processes he built into every program he oversaw.

Lucky for those us who worked with Andrew, he was an excellent teacher from whose wisdom we benefitted.  While none of us would call ourselves strategy experts, we’ve all been able to apply what we learned from him to our work with different kinds of foundations—traditional/private, family, corporate, community, and technology.  Serving in a variety of capacities at these organizations, we’ve developed and implemented strategies that have had legs and longer-term impact (we know, because we learned the importance of building in metrics and benchmarks to evaluate that way before they’d become philanthropic buzzwords).

We’ve also learned a lot about what separates a good strategy from one that’s not so good—mostly because we’ve experienced our share of failures—and what strategy is and isn’t.  Most importantly, we learned a process through which we can create effective strategies—one that’s served us and the institutions for which we’ve worked well.

The basic tenets of that process are fairly straightforward and some have been discussed many times before, but they bear repeating.  So, in true open source fashion—something that Andrew also practiced before it landed in the zeitgeist—they are shared below.

Developing an effective strategy starts with an open mind and a willingness to step back and explore all options.   When developing strategy, it’s important to assume a position of explorer, rather than expert.  Andrew, in fact, tended to hire people who had a broad range of experience as generalists able to see the big picture and flesh that out with important details, as well as the ability to identify the gaps, assets, opportunities, and challenges associated with issues or problems.

They were also skilled at exploring and answering questions such as:

- What are the most important issues in a particular domain?
- What are the debates occurring among various practitioners and theorists about those issues?
- What kinds of efforts are being tested in communities?
- Which are promising?
- What field-building is needed to support those efforts?
- What does the data and research say about the issue/projects/trends?

People working for Andrew were asked to provide answers to those questions, but in a way that was as unbiased and objective as possible—and, preferably, based on information that had some evidence behind it.

This approach was in contrast to what occurs in some philanthropic institutions, which usually involves one of two scenarios.  The first involves hiring experts on specific subjects or issues as program staff and then charging them with developing programs based on that expertise.  The second is commissioning outside consultants to conduct environmental scans but then using only the part of those reports that “fit” with the funder’s predilection for a particular strategy as the rationale for pursuing that strategy.  Missed in both of these approaches is an awareness that deep knowledge of a particular subject can sometimes be accompanied by deep biases about what’s “best”—a stance that mitigates the likelihood of identifying alternative, new and/or more effective options for effective strategies.  Even experts, after all, don’t know everything and, in fact, can be saddled with more misguided preconceptions than the novice.

Other philanthropic institutions simply don’t give program officers the space and freedom to conduct serious and thoughtful analyses of the issues or domains in which they’re working.  A colleague who recently interviewed for a job at a foundation, for example, was asked by senior officials what she would fund if she assumed oversight over a particular program.  When she replied that she couldn’t answer that question thoughtfully because she hadn’t had the chance to look more deeply at what the field needed, what the best approaches were, and/or what was really working, the interviewers were astounded, having assumed that she’d have her strategy set in stone before she even started.  Fortunately, that didn’t deter her from getting the job, and, to the foundation’s credit, they allowed her the room to dig deeper, which led to the development of two new programs that were later nationally recognized as being instrumental to moving a policy agenda.  Those results, in turn, spurred the institution to incorporate this process across all program areas—one that’s still used currently.

Create a template for strategy development that’s supported by research, analysis, and evidence.  Inherent in Andrew’s strategy development process was a template that included the following elements: a comprehensive overview of the issue/field/area being examined (rather than just the parts that interest the program officer or its executive staff); a compelling and evidence-based rationale for why the foundation should be engaged in this issue/field/area (and not just because the program officer or executive staff think it should); a discussion of the foundation’s historical interests, experience, and/or mission and how it relates to the issue/area/field (and if there is no relation, why there should be now); a set of goals the funder could consider pursuing, as well as objectives for each of those goals; and the strategies that would be best to implement in meeting those goals and objectives.  An essential piece of each of these components was describing, in detail, the why behind them.  Why should we do this and not that?  And on what basis are we making those decisions?  What are the pros and cons of each and why?

Goals are related to strategy, but they’re not the strategy.  ‘What would success look like’ isn’t a throwaway question, and it’s been reiterated in numerous strategy how-to guides, but it’s surprising how many funders still overlook the importance of this question as a critical starting point for creating effective strategies.  As one foundation vice president remarked, “I tried to get my younger staff members to think about the goals of their programs before coming up with strategies, but they stared at me like I was from Mars,” saying that “talking about the goals was too academic and airy-fairy.”

The distinction between goals and strategy isn’t just a semantic issue; they’re different concepts.  Goals are what we are striving toward; strategies are the way we get to them.  Goals should be the starting point, but, often, there’s a tendency to rush to the toolkit.  Skilled strategists argue that it’s almost impossible to develop effective strategies by starting with tactics, activities, or even strategies themselves. Instead, the best strategies start with the end goal at the top of the pyramid, with the rest flowing down from that, including objectives, strategies to meet those goals, and then activities or tactics.

Tactics/activities have to be linked to strategies.  It’s natural for people to want to jump right into the activities but doing so without attaching them to the why will most likely lead to disappointment and, ultimately, failure—and a lot of wasted time and money.  That tendency isn’t limited to grantseekers; funders are equally as susceptible to fixating on the do without linking it to a strategy or goal.  But some funders have the opposite problem; they focus only on the issue itself, providing eloquent, academic arguments and analysis about poverty, education, or other “problems” and why they need to be addressed but then never say what, exactly, they think should be done about them.  It’s rare to see an artful and logical strategy linking both tactics and rationale, but when done well, this weaving offers a clearer picture of not only what funders are supporting, but why, how, and to what end—the essence of good strategy. 

Benchmarking and measurement aren’t just for grantees; funders should be using them in evaluating their own program planning and implementation efforts.  While there has been a lot of attention toward helping grantees build in metrics and benchmarks so they can be more readily evaluated, there has been less attention paid toward the need for funders to do likewise when developing and implementing their own program strategies. (Some of us, in fact, believe that considerable tension between grantees and funders could be reduced if funders were held to the same accountability standards to which they hold grantseekers.)

An important part of the template, therefore, is outlining, clearly, and preferably in quantitative terms whenever possible, how program staff is going to measure or assess each of the strategies and/or activities that will be part of the program.  Each element, for example, should be accompanied by indicators that answer the questions:

- What will progress look like to us—the foundation—not just the grantees—in terms of our ability to do what we said we were going to do and how will we know?
- What will we use to determine whether we’ve met our program objectives?
- How can we “operationalize” the objectives with indicators?
- What’s the timeline we anticipate to meet those objectives?
- Which can be done sooner and which require a longer time period?

Strategy isn’t a box; it’s a membrane.   People tend to bristle at the notion of indicators or metrics because they can feel limiting or as if they’re “boxing us in” and, indeed, in some ways, they are because they’re a prompt for “concretizing the vision” in ways that invite more accountability for what’s supported and what isn’t.  But programs don’t operate in a vacuum; times change as does the context within which programs are operating.  A strategy focused on long-term change around a particular issue, for example, may need to be more flexible and/or tweaked if an opportunity suddenly emerges that may not fit the original template but is one that would clearly enhance the likelihood of added impact.

Thus, while it’s important for funders to have a solid strategy behind their efforts, it’s equally important for them to review that strategy on a regular, consistent basis to see what’s working and what’s not—a process that is helped by having good progress indicators in place.  In Andrew’s model, we were asked to develop this template with a three-to-five-year timespan but with the understanding that we would, every six months or so, re-examine it to assess the progress wewere making in the context of the indicators we’d stipulated.  This process allowed us to see where there was a need for tweaking or, in some cases, making more profound changes to the original strategy.

Strategy includes an assessment of what other investors are doing.  Like many of us, funders can easily become wrapped up in their own sense of importance and/or buried in their own cultures to the extent that they forget to look around and see what others are doing.  As part of Andrew’s process, we not only shared our strategy papers/templates with other staff members but also with peers at other foundations to get their feedback and insights as to what they thought we should be doing, either in ways that would leverage or complement their efforts or address gaps they were unable to resolve. While this kind of collaboration is gradually increasing in philanthropy, it’s still relatively rare for funders to proactively engage their colleagues in open conversations about their strategies, despite the potential for enhanced learning—something that needs to change, particularly at a time of decreased resources.

Theories of change are nice, but they’re not enough.  When used appropriately, theories of change can be very helpful in developing effective strategies, but they aren’t a proxy for strategy—a trap that some funders fall into when describing what they’re doing.  Theories of change, generally, don’t usually include the how or why behind a problem or issue, nor do they explicitly detail tactics or strategies.  Rather, they offer a set of assumptions about how an investor views a particular issue or problem and how it should be addressed—a rubric from which the rest of a strategy can emanate.

Good strategies find the nexus between feasible investment options and institutional focus.  Conducting a comprehensive exploration process to pinpoint areas of possible investment is only one part of good strategy.  The other part is matching these findings with the institution’s overall focus, history, or legacy—a step that’s sometimes ignored.  A foundation that’s been historically focused on higher education, for example, isn’t necessarily going to eagerly embrace a community-organizing or ham-fisted advocacy strategy.  A funder who’s supported nonprofit technological innovation isn’t going to view a strategy focused on capital endowments as a particularly compelling way to leverage their experiences or investments.  A good planning process, therefore, will highlight the intersection between a funder’s interests and experience in ways that will help leverage the latter more strategically.

The process to develop strategy should inform, not shame.  Just as it’s hard for grantees to tell funders about failures, it’s hard for funders to admit them, largely because few institutions invite that kind of candor, nor is there much incentive for it.   Developing effective program strategies can and should be opportunities for strengthening communication and collaboration not only within philanthropic institutions but across them.  When program officers are encouraged to present their strategies to their colleagues in a atmosphere that’s intellectually challenging, yet supportive, it can lay the foundation for more openness about their progress as the strategy unfolds, including what didn’t work and what did and why—information that’s critical to deciding whether the strategy should change.

 * * * * * * * *

These are just a few of the pearls of wisdom gleaned from Andrew and others like him who’ve since helped to prod funders into being more strategic about their efforts.  There are certainly many more.  What’s important to remember, though, is that none of these require a Ph.D. to understand or integrate into practice; they’re merely a set of guideposts that can help lead to the creation of better programs, and ultimately, results.

Those kinds of guideposts are going to become even more important as funders operate in an environment in which the demand for more accountability is growing across a wide spectrum of institutions and domains, as well as in a world in which the problems facing philanthropy are more complex than ever before.  That context suggests funders will need to be even more intentional about clarifying what philanthropic investments they’re making and why and with what anticipated results.  Integrating a more thoughtful process for developing strategies with a higher potential for success can be the first step toward meeting that challenge.  Thankfully, that isn’t rocket science.

Cynthia M. Gibson, Ph.D., is an independent consultant for a wide range of national nonprofits and foundations who serves as a strategist, thought leader, and writer.

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A Foundation Asks its Constituents About How Best to Spend $100 Million

Monday, October 17th, 2011

I was struck by a September 29th blog post written by Chris Langston, program director at the John A. Hartford Foundation in New York City. In his post, Chris asks for suggestions from “grantees, stakeholders, peers, and older persons themselves” about how the Foundation can “make the biggest difference in the lives of older adults” with the $100 million it plans to spend between 2013 and 2017.

He specifies that, at this point, the Foundation wants to “discuss the nature of the problem of health and aging and the broad societal forces that seem likely to be relevant.” He goes on to explain why he believes it is so important to focus on the problems at hand before turning to strategies or grant ideas.

Much of CEP’s research, as well as our conversations with leaders in the field and clients, touch at one point or another on the complex yet crucial issues of communication, goals, and strategy. The challenging nature of each of these only increases as we consider the power dynamics that often exist between funders and the nonprofits they support, as well as the growing economic needs in our society.

The John A. Hartford Foundation’s experiment of seeking suggestions from such a wide variety of stakeholders about which problems it should be addressing through its funds – and of seeking them through social media – is one attempt to mitigate the power dynamic and hear directly from those closest to the problems at hand. So far, Chris’s post has received over a dozen comments containing suggestions, which have arrived steadily since the post appeared.

Chris’s post reminded me of several elements that have arisen in our research at CEP about what distinguishes more strategic leaders from less strategic leaders. Through our research, both qualitative and quantitative, CEP has developed and applied a definition of strategy. The first component of that definition focuses on foundation leaders who seek and consider information and data about the relevant populations, issues, communities, and fields when they are making decisions about how to use the foundation’s resources to achieve its goals. That means not relying solely on what the foundation already knows, what the board’s preferences are, or what the foundation has done in the past.

In our research, both with private and community foundations, we find that strategic leaders seek information from a variety of stakeholders when developing their strategies. In that context, Chris’s invitation to beneficiaries of the foundation’s work (i.e., older adults) to contribute suggestions also stands out. The inclusion of beneficiaries in input and feedback processes has been the focus of increasing conversation in philanthropy – in books, on blogs, in op-eds, and in CEP’s research. Today, though, the practice of seeking beneficiary voices is not a common occurrence.

As the John A. Hartford Foundation moves forward with its work, it would be helpful to learn how the input received from constituents shapes the thinking there, and what the ultimate decisions turn out to be. More broadly, I wonder if the Foundation’s openness to seek input in such a public forum will spur other foundations to take risks on similar efforts.

The John A. Hartford Foundation is by no means the first funder to open itself up in this way. In 2007, for example, the David and Lucile Packard Foundation solicited, through a wiki, suggestions for developing strategies to address nitrogen pollution.

Still, such efforts to invite input from a variety of relevant constituents remain far too rare. I can only wonder what the consequences of such lost opportunities have been for foundations making progress toward their goals.

Ellie Buteau is Vice President – Research at the Center for Effective Philanthropy.

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Data Point: Developing Shared Measurement Systems

Friday, October 14th, 2011

The use and management of data stands at the core of the work undertaken by the Center for Effective Philanthropy. The set of survey tools CEP has developed as well as field-wide research builds comparative data drawn from key constituent groups—grantees, donors, staff members and others—providing insights that enable funders to better define, assess and improve their effectiveness.

 

This data point is drawn from a survey of the CEOs of 173 U.S. foundations with annual grantmaking of at least $5 million and focuses on the current status of performance assessment among larger foundations. The survey was conducted in January and February 2011.

Our survey focused on assessing individual foundation performance. However, because foundations are typically working as one of many actors seeking to achieve shared goals, there has been significant interest in the development of shared measures.

The majority of CEOs report their foundations are already using, or have considered using, shared measurement systems:

» 26 percent said they are using coordinated measurement systems with other funders.

» 23 percent said they are considering using such measurement systems.

» 10 percent said they considered such systems but decided not to use them.

In addition, 36 percent of CEOs cited the tracking of data collected by other organizations as a source of information for assessing programmatic performance.

Readers of this blog post are invited to respond. What has your experience been with shared measurement systems?

 

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To read about current foundation CEOs’ attitudes toward assessment and what foundations are doing to understand their performance, see the report, The State of Foundation Performance Assessment: A Survey of Foundation CEOs written by Ellie Buteau, Ph.D. and Phil Buchanan and published by the Center for Effective Philanthropy.

Ellie Buteau is Vice President – Research at the Center for Effective Philanthropy.

 

 

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