Developing Strategy

Developing strategy is a tough assignment for foundation leaders, and there are few forces compelling them to tackle it. Funders do not face the competitive pressures that influence corporations, and private foundations do not have the fundraising imperatives that drive nonprofit charities. Further complicating strategy formulation is the fact that many funders have a grantmaking structure that involves several distinct programs, each with its own goals.

Yet most foundation leaders believe that strategy increases a foundation’s ability to create impact.

CEP believes there are three core elements of foundation effectiveness: Clear goals, coherent well-implemented strategies, and relevant performance indicators.

You can’t develop a strategy without clear goals and you can’t measure progress against those goals or know whether your strategy is the right one without relevant performance indicators.

Our report, Beyond the Rhetoric: Foundation Strategy (2007), explores foundation CEOs and program officers’ attitudes toward and perceptions of strategy. In this study we identify four different types of decision makers. Our interactive strategy sub-site brings these findings to life.
 
In our latest report, Essentials of Foundation Strategy (2009), we follow up on the results reported in Beyond the Rhetoric with a large-scale quantitative study of decision making. The report tests our definition of strategy on a larger population of foundation leaders and identifies four key characteristics that differentiate those who are more strategic from those who are less strategic.
 
Take our strategy self-assessment to learn where you fall on the strategy spectrum we identified in this research. Use our discussion guide to discuss results with your peers.
 
The Stuart Foundation’s Child Welfare Program provides a compelling example of what can be accomplished by a foundation that has clear goals, coherent, well-implemented strategies, and relevant performance indicators. This case study describes how Stuart implements its strategy to achieve its goal to improve life outcomes for foster youth.
 
Becoming Strategic: the Evolution of the Flinn Foundation illustrates the benefits of taking a strategic approach to maximize a foundation's impact. It describes how a foundation has narrowed its focus and assessed its performance.
 
This case study describes the Gill Foundation's strategic approach to contributing to the LGBT civil rights movement. The case shares details of the Foundation's strategic planning process and subsequent restructuring to better serve its grantees and advance its mission. Watch a video of Rodger MacFarlane describing the foundation's approach.

Research in Progress

In 2009, we launched a Community Foundation Strategy Study. Community foundations are not immune from competitive pressures in the way that private foundations are. They are often just as focused on development and donor work as their programmatic and grantmaking work. Because of these differences, we are embarking on a separate study to understand strategy’s role at community foundations.

Some Questions Our Research Can Help You Answer

Wondering what clear goals, coherent, well-implemented strategies, and relevant performance indicators look like in action?

The Stuart Foundation’s Child Welfare Program has a goal to improve life outcomes for youth aging out of the foster care system. Its strategies include fostering lifelong connections and creating educational opportunities for this population. It measures progress through performance indicators such as the number of youth Stuart-funded programs help develop lifelong connections and college graduation rates for this population. Read the case study.

Are you concerned that if your foundation becomes more strategic it  will appear arrogant and less receptive to outside perspectives and feedback from stakeholders?

Our findings indicate that just the opposite is true. More so than other categories of decision makers in our study, strategic respondents frequently seek advice from stakeholders — grantees, experts, and others. Read a case study to learn how the Doris Duke Charitable Foundation does this well.

Does your foundation have trouble saying ‘no?’

Learn how other foundations manage the challenges of staying focused. Leaders from Robert Wood Johnson and Flinn Foundation describe how they “closed the door gently” on grantees who no longer meshed with their strategies Read the case study.