February 4, 2008

Dear Colleague,

Five years ago, I received an email from a program officer at one of the largest 25 foundations in the country declining a proposal for grant funding for the Center for Effective Philanthropy. It read:

It appears that there is a fundamental disagreement, internally, about whether philanthropy – as a field or domain – can or should be evaluated, measured, and/or assessed in any form. This disagreement, as you can probably guess, fueled a very lively and passionate discussion, and there was considerable debate on both sides of the issue. Unfortunately, the ultimate decision was that while we care about accountability and evaluation, we would prefer to grapple with these issues internally, rather than branch into a full-scale exploration at the ‘field-building’ level.

Today, I don’t think the internal disagreement the program officer described exists within as many foundations. We’re no longer debating whether to assess, but how. Last month, for example, an article in the Financial Times featured the story of how the Philadelphia Foundation has changed its strategy as a result of what it learned using one of CEP’s assessment tools. The story noted that the changes were “part of a wider trend by the sector to become more open and innovative in the way it approaches grant making. This is a big shift from several years ago – one driven by greater emphasis on strategy and performance.”

Foundations have stepped up to participate in – and support – our work and that of other organizations seeking to improve funder effectiveness. More than 170 have used our assessment tools, often making dramatic changes on the basis of what they learn, and 40 provided us grant funding in 2007. Grantmakers for Effective Organizations (GEO) has grown over the past five years from under 100 paying members to 315 today. And the Council on Foundations has recently made effectiveness one of its highest priorities.

Inspired by this progress and momentum, we at CEP are broadening our research agenda, developing new assessment tools, and intensifying our programming and communications efforts. I want to tell you a bit about these initiatives and invite you to work with us in 2008 – to improve the performance of your foundation and the field of organized philanthropy.

CEP Research

• With the support of the Surdna Foundation, we released an important report on foundation strategy, Beyond the Rhetoric, that raises fundamental questions about how foundation CEOs and program officers make decisions. We also launched a Web site designed to bring that research to life (you can link to it through our home page). We have now embarked on an ambitious new phase of our strategy research: this effort, which will be a major focus for our research staff in 2008, will yield practical new resources for foundations struggling to devise and implement strategies to maximize their impact.
  
  
• With support from the Fidize their impact.elity Foundation and Lumina Foundation for Education, we have launched a new study on foundations’ provision of assistance beyond the grant payment. That research, which we expect to complete by fall, will reveal how foundations approach the provision of nonmonetary assistance to grantees, and how grantees experience it.
  
  
• We began work in 2007 on a new case study series, Lessons from the Field, designed to highlight foundations that have moved successfully from assessment data to constructive action – and the challenges they faced along the way. We released the first case in that series, Improving the Grantee Experience at the David and Lucile Packard Foundation, early this year, and are working on others.

CEP Assessment Tools

• In 2007 and early 2008, we saw recently developed assessment tools become more widely adopted, fueling insight and improvement at foundations. Our Comparative Board Report (CBR), a foundation-specific self-assessment process, has been used by foundations like the Colorado Trust, Irvine Foundation, Kalamazoo Community Foundation, Surdna Foundation, and W.K. Kellogg Foundation to better understand and improve board functioning. Our Staff Perception Report (SPR) has allowed foundations like the Gill Foundation, Saint Paul Community Foundation, and William and Flora Hewlett Foundation to understand the candid perspectives of their staff. Often, SPR results prove especially helpful when viewed in combination with Grantee Perception Report (GPR) and Applicant Perception Report (APR) results, allowing foundations to understand the relationship between the staff experience and grantee and applicant perceptions of the foundation – and positioning them to make changes on the basis of what they’ve learned.
  
  
• We have also been working to develop new tools, including a Stakeholder Assessment Report (STAR), which we have made broadly available this year following two successful pilot efforts in 2007. This tool allows a foundation to understand the views of thought leaders and policymakers it seeks to influence. Still under development is a Donor Perception Report (DPR) for community foundations. Additionally, we are developing, as part of our strategy research, a Foundation Decision-Making Typing Tool that will allow staff within foundations to understand the role strategy plays – or doesn’t play – in their decision making.
  
  
• Finally, we launched the Multidimensional Assessment Process (MAP), successfully piloting a process in which a foundation conducts all our assessments simultaneously, assimilating key results and data from the tools into key findings, implications, and recommended action steps for improved foundation performance. This 360 degree process, now underway at additional foundations, provides leaders with the most comprehensive look at performance that exists today.

Communications and Programming

• CEP has a growing presence in the media, due to increased reporting on foundations’ efforts to assess and improve their effectiveness. CEP was featured or cited in 2007 by the Wall Street Journal, New York Times, Financial Times, National Public Radio, and numerous other media outlets, including key trade publications and blogs.
  
  
• We have also expanded our programming as we seek to highlight promising practices and to build the community of leaders committed to maximizing funder impact. Our conference in Chicago in 2007 was our highest rated yet in our survey of attendees, and we published a report distilling key insights and lessons learned. We have also taken our strategy research on the road, with a presentation in San Francisco last fall and one planned for New York on February 12 (see our Web site for more information). We’ll be hosting other programs featuring new CEP research throughout the year. Our next major conference, Aligning for Impact: Connecting the Dots, will be held March 30 to April 1 2009 in Los Angeles. I hope you’ll mark the dates and plan to join us next spring. In the meantime, we’ll see you at the GEO and COF conferences this fall, where CEP Vice President for Research Lisa R. Jackson, PhD will be speaking on what our data tells us about the connection between diversity and foundation effectiveness.

CEP’s Growth

Undertaking this more ambitious agenda requires that we grow. Our staff now numbers 24, with plans to add another seven this year. Our 2008 budget is $5 million – with about 45 percent of our revenues coming from fees for our assessment tools.

We rely on foundation grants to fund our research, our development of new tools, and our investment in our infrastructure – such as the establishment of a new, West Coast office, to open in October of this year. We are pleased that a group of funders has come together to provide CEP with multi-year funding to help support this work.  Led by multi-million dollar commitments from the William and Flora Hewlett Foundation and Robert Wood Johnson Foundation – and joined by the Edna McConnell Clark Foundation, Charles Stewart Mott Foundation, David and Lucile Packard Foundation, and Surdna Foundation – this “funders collaborative” is seeking to provide CEP $7 million in funding over four years to support our efforts.

We have well over $5 million committed and are working to close the remaining gap by identifying additional foundations to join this collaborative by supporting CEP at a level of at least $50,000 annually.  The Irvine Foundation is currently considering a commitment and we are looking for others to join this effort. In addition, an increasing number of foundations support CEP with discretionary grants ranging in size from $5,000 to $50,000, and we are seeking to double the number of such funders by 2010.

Your Participation in Our Efforts

For foundations to maximize their impact, they need ready access to data about how they’re doing. In the six and a half years since we received initial funding, CEP has helped foundations better understand what it means to be strategic, how to improve working relationships with grantees, and what is required for effective board governance. We have developed new tools that have transformed how foundations operate and fueled significant, positive change. We have brought foundation leaders together to learn from each other – and to help shape and define our research agenda.

Together, we have made tremendous progress. It feels like a long, long time since I received that email message from the foundation program officer.

But there is still much more to be done. I invite you to be a part of the movement we at CEP are seeking to build and support – by using our research, commissioning CEP assessment tools, participating in our programming, and providing the grant support we need to do our work.

I’d welcome the chance to talk with you about how you can work with CEP and how we can work with you. I hope you’ll join us in this important effort. Email me at philb@effectivephilanthropy.org or give me a call at 617-492-0800 x203.

I look forward to hearing from you.

Yours sincerely,

Phil Buchanan
President
The Center for Effective Philanthropy