Effective Philanthropy

Q&A: Insights from Program Officers

Last fall, CEP released Relationships Matter: Program Officers, Grantees, and the Keys to Success, a report that takes an in-depth and data-driven look at what it takes for funders to build and maintain strong relationships with grantees. Our analysis of grantee perception data finds that the program officer to whom a grantee is assigned plays a crucial role in the strength of these relationships, and to that end, the report features insights gleaned from interviews with 11 program officers whose grantees provided high ratings about their funder experience through CEP’s Grantee Perception Report (GPR).

In November, CEP hosted a webinar that featured discussion among a panel of three of those exemplary program officers highlighted in the report. The webinar conversation was an engaging one, so much so that we ran out of time and were unable to get to a number of important questions attendees posed to the panel.

So we sent out those questions to several of the program officers featured in the report. Here are the answers we heard from Sarah Lovan (Program Officer, Arts, The McKnight Foundation), Nick Randell (Program Officer, The Peter and Elizabeth C. Tower Foundation), and Jackie Hausman (Program Officer, Health, Kenneth Rainin Foundation).

Q: How do you approach the difficult conversation with a grantee or applicant to inform them that you are not able to fund a program?

Sarah Lovan: With clarity and honesty. These are some of the most important conversations we have in this work. I try very hard to communicate clearly and honestly when foundation dollars are not a fit for an organization. Being clear about the reasoning behind the decision, and being honest about the probability of a grant in the future, have proven to be two critical pieces of information to share.

I also provide at least one or two other funding ideas. Sometimes people working in philanthropy have the most up-to-date knowledge regarding funding trends and priorities of other funders. This is helpful insight to pass on to grantees and grant-seekers alike. (Caveat: I typically check with the other funder before I make an email introduction out of respect. Also, I never, ever speak on behalf of another funder.)

And last but not least, always thank them for their time and effort. It’s amazing how many times I hear from folks that other funders don’t say those simple, yet powerful, words of respect.

Q: What are effective ways to transition relationships between grantees and newly hired program officers?

Nick Randell: This will probably vary depending on the complexity of the grant in question. For fairly simple grants, we would notify a grantee in writing ahead of time and then complete the transition to the new program officer in the course of a site visit or, in some cases, a remote conference call. For more complex grants, and deeper relationships, we would probably consider a transition period of six months or so where the original program officer and the new hire essentially co-monitor the grant.

Q: How do your grantees engage with other staff members at the foundation? When and how are staff besides program officers supporting the funder-grantee relationship? What are the pitfalls and benefits of those approaches?

Jackie Hausman: An important part of my role as a program officer is to be the central point of contact and primary resource for grantees. Rather than grantees needing to contact staff in various departments (e.g. grants management, accounting), I serve as the primary contact, and facilitate all grantee communications related to financial, administrative, and operational issues. Our grantees are generally universities, and due to their complex institutional structure, it is a lot easier if they have a single point of contact for their various departments.

Q: What advice do you have for a founder or board member at a foundation with a very small staff to build relationships with grantees?

Lovan: Do what you can. I don’t believe there is a way to do this work that fits in every situation. I do believe that if you listen to what grantees want, and assess what your staff is willing/able to give (both time and money), you’ll be able to find a middle ground. In some cases utilizing an intermediary organization can be useful. That way you have one relationship to maintain, but benefit from the knowledge that the intermediary is building deeper relationships with the grantees than you are. And, in some cases, I actually don’t think a grantee wants to have to develop a ton of deep relationships with funders. I think that even a brief, yet respectful, interaction can be effective and impactful.

Q: What have you seen grantees do that helps make the funder-grantee relationship successful?

Randell: As a program officer, I really appreciate brief, unsolicited program updates. Even emails that are just a few sentences long can help program officers feel more connected to the grants in their portfolio. And they need not be frequent. Consider filling that six-month stretch between a site visit and an interim report with one or two quick correspondences. This works for program officers, too. There’s no reason not to check in with grantees on things not directly related to a program officer’s grant monitoring function. Pass on an article of interest, invite them to submit a guest blog post.

Q: In instances that require being responsive and changing strategy with grantees, how do you balance those actions with the need to be accountable to your board and maintaining pre-set agendas?

Lovan: Great question. I’d love to know the answer! My approach is based on effectiveness, trust, impact, and the tolerance of the board/staff for flexibility and risk. The tolerance for risk is a great conversation to have with your board. If at the core of the work your board and staff are aligned on general principles, I think you have a great opportunity to see how adaptive you can get with the rest.


Ethan McCoy is senior writer – development and communications at CEP.

The post Q&A: Insights from Program Officers appeared first on The Center for Effective Philanthropy.

Unlocking the Potential of Beneficiary Feedback

How can we better listen to, learn from, and act on feedback from those we seek to help? 

The topic of listening to beneficiaries has received increasing attention in recent years. CEP research conducted in 2014 showed that most grantees of major foundations were collecting and using feedback from their beneficiaries to improve their programs and services. However, leaders of these nonprofits said that foundations lacked a deep understanding of their intended beneficiaries’ needs — and that they believe this lack of understanding is reflected in foundations’ funding priorities and strategies.

CEP’s most recent report, Staying Connected: How Five Foundations Understand Those They Seek to Help, explores the practices of foundations that are highly rated by their grantees on their understanding of beneficiary needs. The report finds that these funders develop that knowledge by:

  • Listening to and learning from grantees as the experts doing the work on the ground;
  • Recognizing the importance of going out into the fields and communities their work supports; and
  • Hiring staff from the fields in which they fund.

Through these practices, these five foundations exemplify a culture of learning.

This theme — and the importance of learning through listening, in particular — echoes findings of CEP research conducted in 2016, in which foundation CEOs reported that the single most promising practice for the future of foundation philanthropy is “seeking to learn from the experiences of those they are ultimately trying to help.” A full 69 percent of CEOs point to learning from beneficiary experiences as a practice that holds a lot of promise.

It is clear that there is an interest in listening better. But it is not always clear where — or how — to start.

YouthTruth: Listening to and Learning from Students

YouthTruth — an initiative of CEP’s that harnesses student feedback to generate insights and accelerate improvements — is one example of how funders can learn from the perspectives of those they seek to help. YouthTruth was created based on the simple but powerful premise that when you get timely feedback from those you’re trying to help, and listen to that feedback, you get better — whether you are a teacher, a principal, a superintendent, a nonprofit leader, or a funder. To date, YouthTruth has been used to survey more than 675,000 students in more than 200 districts across 38 states to inform school improvement efforts.

YouthTruth has recently seen some exciting momentum with education funders, demonstrating the various ways in which funders can use feedback to better understand the student experience and perspective about what’s working — and what isn’t — in schools.

In Texas…

Since 2016, a collaborative of districts and funders in Texas, Raising Blended Learners, has incorporated YouthTruth data alongside other academic and nonacademic indicators to measure the initiative’s progress. Raising Blended Learners is a demonstration initiative showcasing strategies for using blended learning, which combines online learning with traditional instruction, to improve student achievement. Through a 10-month competitive process, Raise Your Hand Texas and several state funders selected five districts to receive grant funding and technical assistance to implement new school models across 20 school sites.

These funders are using YouthTruth data in two primary ways. First, the data is helping inform the evaluation of the initiative. Similarly to how sites are using student perception data as a leading indicator of academic success, funders are also looking to the data as an early indicator. Along with other data sources to measure progress, YouthTruth data will be incorporated into the initiative’s comprehensive three-year evaluation.

Second, the funders are using YouthTruth data to affirm strategy. As districts innovate with new school models, disruptions and complications are likely to crop up. While there may be some initial dips in academic data as schools make the adjustment to a new learning model, student perception data helps round out the picture and helps schools and funders alike stay the course as the work gets established.

In the San Francisco Bay Area…

This summer, a group of funders in the Bay Area came together to explore the extent to which funders can constructively learn from the student experiences, insights, and perspectives captured by YouthTruth’s surveys. Recognizing that funders say they want to learn from the experiences of those they are seeking to help, as demonstrated in CEP’s 2016 research on the future of foundation philanthropy, this initiative is a concrete opportunity to do so.

To this end, a group of Bay Area funders are supporting networks of local schools and districts to participate in YouthTruth at no cost — thus removing any financial barrier to interested schools and districts. The funding partners seek to learn together, through this two-year initiative, how student feedback can inform the work of not only schools and districts, but also the funders who support them.

There are now six participating funders in the group, including the William and Flora Hewlett Foundation, Monterey Peninsula Foundation, Marin Community Foundation, Richmond Community Foundation, Community Foundation Sonoma County, and Career Technical Education Foundation Sonoma County. Each foundation has invited partner schools to join the initiative, and to date, 46 schools across four districts have accepted the invitation, 24 have started surveying, and more than 6,000 students have shared their feedback through the YouthTruth survey.

The initiative includes opportunities to come together as a learning community several times a year — sometimes in a peer group of funders, and other times with funders and school leaders together. This affords time and space to explore the data that is being gathered, the questions that are arising, and the opportunities the group collectively sees to use the beneficiary perception data to enhance effectiveness.

Finally, continuing the theme of learning, the group is committed to sharing the collective lessons learned about what funders can gain from more systematically listening to students, as well as the challenges inherent therein.

In The End…

As explored in Staying Connected, there are a number of ways that foundations can build their knowledge of beneficiary needs and incorporate that understanding into their work.

The foundations profiled in that report build their knowledge by listening to and learning from grantees as experts; recognizing the importance of going out into the fields and communities their work supports; and hiring staff from the fields in which they fund. YouthTruth and other efforts like it, including the Fund for Shared Insight’s Listen for Good initiative, offer another window into beneficiary needs and experiences, in the form of asking beneficiaries directly.

We believe student perception data can help foundations better understand the impact of their programs on the lives of students in several ways.  Funders can use student feedback data to change or affirm strategy, revise tactics, adjust funding levels or priorities, convene conversations, compare different approaches, and broker relationships.

We recognize that there will be challenges in this work, but we are excited to explore some of the concrete ways that funders can use beneficiary feedback to inform their work. We invite you to ask yourself: can you imagine how beneficiary feedback could be used at your foundation?

Jen Wilka is executive director of YouthTruth. Follow YouthTruth on Twitter at @Youth_Truth.

The post Unlocking the Potential of Beneficiary Feedback appeared first on The Center for Effective Philanthropy.

Here’s How to End the Culture of Sexual Harassment

This op-ed by Harry and Jeanette Weinberg Foundation President and CEO Rachel Garbow Monroe first appeared in The Baltimore Sun.

Words have power. Too often today, they are being used to tear us down and apart, making us feel helpless and defenseless. Alternatively, words can build us up, strengthen us, and give us the ability to move forward together, constructively. I choose to focus on the latter believing that none of us can afford the continued costs of remaining silent.

As a female CEO, I have a responsibility to speak out, and I am compelled to do so now. The pervasive workplace culture of sexual harassment, intimidation, and the undervaluing of women must be addressed both swiftly and firmly.

It is now time to take deliberate, verifiable, and precise steps to ensure that the ethics of our workplaces cannot be compromised by leaders who put their personal ambitions above their companies’ welfare or those who are indifferent to bad behavior or simply unwilling or unable to prevent it.

For the sake of every stakeholder involved, it is time for the values of mutual respect and kindness to find their way into the workplace.

What can we do?

First, we need to make it absolutely clear that behaviors that have been “accepted” for too many years are intolerable.

Government, corporate, and philanthropic communities need to develop mandatory codes of conduct and organizational values, both internally and externally. Employers should exercise leadership by updating existing harassment policies and creating a neutral platform for filing complaints without retribution. Organizations must also train managers and staff on acceptable workplace behavior as well as how to effectively respond to sexual harassment claims.

In addition, organizations that insist upon a safe and respectful workplace should be recognized and elevated for demonstrating best practices. We regularly recognize enterprises for their positive contributions to the environment, being family-friendly, and supporting employee health. It should not be difficult to recognize organizations that are firmly committed to keeping their employees safe and unthreatened in the performance of their professional duties.

Technology can be brought to bear to give victims an avenue for redress. An online tool named AllVoices is about to launch and should make it easier for both men and women to report instances of sexual harassment. This app will allow employees to bypass human resource departments and directly report misconduct to CEOs and company boards. (The purpose is not to bypass the process of investigating complaints of harassment but to prevent executives from denying knowledge if the allegations prove true.)

Second, companies also need to do more to promote women’s leadership roles in the workplace. In 2017, the number of women CEOs in Fortune 500 companies registered an all-time high at 32 (6.4 percent), up from 21 last year. Although the trajectory is positive, there is a long way to go.

Women should be on every CEO search committee and candidate interview list. Corporate leaders should decline to appear on speaking panels unless women are represented. Organizations should provide mentorship and sponsorship opportunities for women, creating a clearer pathway for them to become leaders. And, of course, compensation should be fair and equitable with our male peers.

Third, we need accountability. The key to reaching these goals is articulating rules that need to be followed — with clear consequences for noncompliance. CEOs need to say to their boards and to their staffs that no matter what has happened in the past, certain behaviors that constitute harassment — whether overt and explicit or in more subtle sexual innuendos and whispers — will no longer be tolerated. Period.

We also need men’s voices and actions heard and felt in this — because they matter. Men in leadership positions who are willing to stand up and support a safe and fair workplace for all need to use the power of their positions to help advance this agenda. While there has been some leadership, for the most part we are forced to ask: “Where are their voices? What are their actions? Why don’t we hear more of them?” If they are silent, they should speak. If they are speaking only to their employees, they need to speak up so we can all hear them. The collective power of these unified voices will affect the transformation in sentiment and action that we all desperately need.

In the law and society, silence usually connotes assent. We need to speak — and speak loudly. This is not a women’s issue. It is a foundational issue for how all of us live and work together. It is the basis for how we demonstrate respect and human decency in all our interactions. Let us use this moment to speak loudly and take action to strengthen and advance a mandate for the way in which each of us wants to live and how we choose to create the world in which we want to raise our children, regardless of their gender.

Rachel Garbow Monroe is the president and CEO of the Harry and Jeanette Weinberg Foundation.

The post Here’s How to End the Culture of Sexual Harassment appeared first on The Center for Effective Philanthropy.

Prioritizing Values for Better Outcomes, Better Lives

At UTEC, we work to help disconnected young people in the Lowell, MA community trade violence and poverty for social and economic success. In our work, we believe that the young people we serve are experts in their own experience. This belief is shared by most high-performing direct service agencies — and the five foundations profiled in the CEP report, Staying Connected. In reading CEP’s report, it was affirming to learn that these funders reflect some of the same core values that inform UTEC’s approach to learning from the experts we serve. UTEC’s young people have histories of incarceration or serious gang involvement — problems that many private funders aim to address — and listening to their experiences and needs is the only way we can know how we can best serve them.

UTEC’s field, youthwork, only happens within the framework of positive relationships — much like in effective grantmaking. UTEC is committed to achieving outcomes in a way that is consistent with a set of values that serve and honor our young adults. Our values do not exist only on paper or on a page of our website. These values are prominently displayed in the main entry hall of our program center, serving as a constant reminder to all who walk in, and our staff and young people discuss these values in day-to-day life. They represent the key ingredients to the organization’s culture, and even our staff performance reviews incorporate them. We take pride in these values and the role they play in our work, and we were gratified to find that many of them align directly with ideas that come through in Staying Connected.

Assume Goodness: Each of the foundations in the report emphasize high expectations for grantee organizations — and a high estimation of the expertise of their leaders. “We make sure we take advantage of the information that they are sharing,” says Helios Education Foundation President and CEO Paul Luna in the report. Funders that recognize the value that an agency brings are also best positioned to push that agency out of its comfort zone and into its learning zone — just as youthworkers who truly understand a young person’s needs can help them lean into their challenges.

See Beyond the Mask: In youthwork, it’s essential to go beyond the information that a participant first presents. The same is true for program officers. “You have to understand what is really happening, otherwise you are imposing an irrelevant solution,” says Linda Thompson, senior vice president, program administration and organizational learning at Helios. The Harry and Jeannette Weinberg Foundation notes its intensive due diligence process, and nonprofits must be willing to share both successes and challenges in order to take full advantage of a program officer’s knowledge.

Respectful Curiosity: It’s no coincidence that each of these highly rated funders spends a lot of time face-to-face with grantees and their beneficiaries. “We take a lot of their time, but we do not waste it,” Thompson says. UTEC site visits engage our young adults and staff at all levels to best reflect our program work — and, even more significantly, our organizational culture. Even a strong proposal cannot capture the positivity and personal connections that are essential to our work.

Contagious Passion: Several of the foundations in the report highlight the importance of connecting grantees to one another, whether through formal learning networks or individual introductions, to learn more about best serving the populations we seek to help. We’ve found this extremely beneficial in our own experience. For example, UTEC’s partnership with the Edna McConnell Clark Foundation’s PropelNext cohort is among our best case scenarios of the network approach. The foundation’s experienced team guided UTEC through best practices for evaluation and data collection, and the grantee cohort tested, questioned, and applauded each organization’s evolving metrics for success. Far beyond the original grant period, UTEC and other PropelNext agencies have shared performance measurement practices, sent staff on “exchange visits,” and served as individual and organizational sounding boards for one another. Additionally, as a member of the Kresge Foundation’s new NextGen human services cohort, we see a similar network evolving among that group as well.

Chip Away: With a higher-level view of a field comes a longer list of opportunities for improvement. Foundations recognize that change takes sustained strategy as well as resources. In Staying Connected, the Nord Family Foundation specifically notes the way that philanthropy can improve the impact of public dollars, especially by investing in data capacity. “It’s imperative for the philanthropic community to be a voice,” says John Mullaney, the foundation’s executive director.

Fund for Shared Insight, which provided funding for CEP’s report, also supported UTEC’s own constituent research through a Listen for Good grant. Notably, our study revealed that young adults specifically cited many of the values mentioned above in their feedback about UTEC’s program model. When asked what UTEC does well, participants cited “positive vibes/attitude” in the UTEC environment. Most respondents thought that UTEC’s positive vibe setting was a strength of the program. They also thought that UTEC was doing well preparing young adults for work and getting them off the streets. Some participants also mentioned that UTEC was good at showing love and support, and that UTEC is loyal and persistent.

UTEC’s institutional funding is roughly equal between public dollars and private funders. We appreciate that many of our state and federal grant program officers are also investing time in the best practices mentioned by the foundations in Staying Connected.

For example, this summer, a Department of Justice program officer spent nearly an hour in a wide-ranging conversation with two of our young adults, Abdiel and Tania. In their conversation, Abdiel and Tania shared their experiences in school, with the justice system, and in UTEC’s workforce development and education programming. The DOJ program officer also met with numerous program staff during her multi-day visit, and she asked each to introduce themselves with their role at UTEC and their personal story of how they came to this work. “I’m here to learn everything I can for the field, not just about what you’re doing with this grant,” she told us repeatedly.

Funders and nonprofits all agree that shared values between the funder and the funded are essential to successful social sector work. Examples like our visit from that DOJ program officer and the stories told by the five foundations in Staying Connected highlight how deep, values-driven engagement with the individuals we are seeking to help can improve both funding strategies and program design. 

Gregg Croteau, MSW, is executive director of UTEC, a community-based nonprofit in Lowell, Massachusetts that serves young adults with histories of incarceration or serious gang involvement. Follow Gregg on Twitter at @gcroteau.

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Turning Feedback from a Mindset into a Movement

By Megan Campbell and Dennis Whittle

What do people want that can make their lives better? Are we helping them get it? If not, what should we do differently? Those three questions increasingly drive the work of the most effective organizations, and CEP’s new report, Staying Connected: How Five Foundations Understand Those They Seek to Help, demonstrates the importance of asking all three.

The five foundations profiled in the report are among those ranked most highly by their grantees when it comes to questions in CEP’s Grantee Perception Report (GPR) about their understanding of intended beneficiaries’ needs. Three threads that run through the profiles of these funders mirror attributes we see among the leaders in our own network at Feedback Labs. First and foremost is simply the importance of having the proper mindset, especially among an organization’s most senior managers and board members. Second, the highest impact organizations focus on the what, as well as the how. Finally, these organizations are thinking about the big question of how to institutionalize feedback loops as a core part of their strategy — what we call adaptive management practices.

Feedback Labs supports a network of more than 400 domestic and international organizations in the aid, philanthropy, and governance sectors. Participating organizations in our network share their feedback practices and help one another solve their feedback challenges. Based on the approximately 100 collaborative sessions we’ve conducted, the importance of mindset stands out. Some organizations listen because they feel it is the right thing to do, morally and ethically. Others are motivated by the empirical research showing that feedback is the smart thing to do because it can improve measured outcomes, sometimes dramatically. Whatever the reason, when it comes to feedback, having the right mindset comes before everything else. 

That mindset is evident in the interviews highlighted in CEP’s report. As Linda Thompson of the Helios Education Foundation puts it, “Learning is one of our guiding values, as a way of strengthening our organization. So is inclusion: embracing diversity, seeking out different perspectives, collaboration. All of that feeds into the culture and how we stay engaged in order to understand not only what is happening with our partners but, more important, what is happening with the ultimate beneficiary.”

Nearly all the organizations in the Feedback Labs network are trying to use feedback to improve how they deliver services, as even small tweaks can improve efficiency and effectiveness. Just as the Duke Endowment and others highlighted in this report are, leaders in our network are starting to ask beneficiaries for this feedback: “What do YOU want to make your life better?” They then use the responses to begin a genuine conversation about what people need and what the best way to achieve that may be. When these generative conversations combine data and analysis with insights from beneficiary voice, together the two parties can come up with better solutions than either specialists or beneficiaries could generate alone. As Donald Kerwin, executive director of the Center for Migration Studies and a grantee of the SC Ministry Foundation, says in the report, “I don’t know how you would decide what to fund if you didn’t have some vision of the communities that you wanted to support and some direct knowledge of them.”

The frontier for many organizations in our network seems to be adaptive management — i.e., institutionalizing feedback loops as a core part of strategy, management, and operations. Many organizations conduct periodic site visits, questionnaires, and interviews that give them good insights, but their business processes remain largely unchanged: staff present a strategy to the board, develop projects based on that strategy, and then evaluate those initiatives when they are completed. Those evaluations are then (in theory) fed into the next strategy cycle. In practice, however, many complain that evaluations are treated merely as a formality.

Participants in our network are starting to ask, “How can we listen and learn faster? How can we adapt what we do as we go, rather than merely passing judgment on what we have done in the past? Can we create incentives to adapt based on what we learn along the way, rather than punish staff for ‘messing up’ the original design?” When these questions apply to listening to and learning from beneficiaries of funding, it’s a powerful step in the right direction for turning feedback from a ticked box into meaningful action.

The CEP report highlights the fact that beneficiary feedback is the right, smart, and increasingly feasible thing to do. The big question now is: What can we do together to make it the expected thing to do as well?  Achieving this will require a concerted effort by many groups working together.

The good news is that exciting experiments and pilots are underway. The Fund for Shared Insight now has 18 major funders involved, and has made more than 130 grants to organizations (including to Feedback Labs and to CEP, to fund this report) to help push the frontiers of theory and practice. Shared Insight’s Listen4Good program is facilitating feedback experimentation by domestic U.S. nonprofits with more than 100 grants. Some of the big funding, rating, and advisory platforms such as GlobalGiving, Keystone, Guidestar, Charity Navigator, and Root Change are actively collaborating to see if the domestic and global philanthropic “markets” can reward those organizations that actively listen and learn. Our own LabStorms, collaborative brainstorming sessions, and the Sprint Relay process are bringing a wide network together to help each other incorporate feedback as the heartbeat of their operational and strategic processes.

As Lin B. Hollowell III of the Duke Endowment says in the report, “To maintain a thorough understanding of the need, where it is today and where it is going in the future, requires a real time commitment.” It requires the right mindset and commitment to adaptive management as well. The challenges to making feedback the expected thing we do are substantial. But progress is being made, and the tipping point will come if groups continue to collaborate and experiment to create the right balance of mindset, tools, and incentives.

Megan Campbell is senior manager of research and learning at Feedback Labs. Follow her on Twitter at @whereismegan.

Dennis Whittle is the co-founder and chief executive officer of Feedback Labs. Follow him on Twitter at @DennisWhittle.

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Top 10 Most-Read CEP Blog Posts of 2017

‘Tis the season for end-of-year lists. Best albums of 2017? Pitchfork has you covered. Best books? The New York Times Book Review is the place to go. Best movies? NPR has a list to binge your way through on New Year’s Day.

Here on the CEP blog, we didn’t want to miss out on the action. So we decided to compile the top 10 most-read posts of the year into a one-stop-shop reading list on foundation effectiveness. These posts span important topics ranging from the changing landscape for community foundations, to how to build strong relationships with grantees, to performance assessment across the nonprofit sector. Of the 90 posts on the CEP blog in 2017, these 10 were the most read:

1Barbs, Jabs, and the Roles of Community Foundations by Phil Buchanan

“In light of the increasing array of choices for how donors do their giving, what is the right stance of community foundations today and in the future? Should they adapt by seeking to be more like the other options in this new marketplace? Or should they double down on their community focus, seeking to provide leadership and guide donors toward addressing key community challenges? Or does the answer differ based on local context?” Read more.


2. Changing the Conversation about Measuring Fundraising Effectiveness by Anne Wallestad

“There’s been little guidance for those funders, donors, and board members who earnestly seek to understand whether an organization is making smart decisions about its fundraising strategies and acting in ways that uphold the public’s trust. Nor have there been external guidelines or measures for nonprofits that acknowledge the complexity and diversity of nonprofit fundraising strategies. That’s what this framework seeks to change.” Read more.


3. How Funders Support Nonprofit People by Rusty Stahl

“The outmoded approach of separating people from program is not embedded in law. It relies on a set of norms that will change when foundations have the political will to change them. Funders can use their intellectual, reputational, and financial capital to recognize the inextricably symbiotic nature of nonprofit workers and their good works.” Read more.

4. Life After Charlottesville: Choosing Our Paths by Phil Buchanan

“I am in a lot of conversations with foundation leaders whose values I share and whose goals I laud who are struggling with the question of what, exactly, to do in this moment. I don’t have the answers. But I do think that all of us, myself included, would do well to be a little more willing to put ourselves (and our organizations) on the line, like my dad did, to stand up against inequality and injustice.” Read more.


5. General Support and Myths about New Funders by Phil Buchanan

“It’s not about new donors versus old. It’s about what it takes to achieve your goals. And more funders, new and old and in between, need to recognize that strengthening organizations strengthens impact. Let’s focus on that.” Read more.


6. Five Tips for Building Strong Relationships with Grantees by Caroline Altman Smith

“Relationships between funders and grantees may have their own unique quirks and power dynamics, but they are not fundamentally different from any other good relationships, which are based on mutual respect, open communication, and reciprocity.” Read more.


7. Making Data and Evaluation Work for Foundations and Nonprofits by Johanna Morariu

“It’s clear that in the areas of resourcing and staffing, foundations and nonprofits have room for improvement to get to high quality data and evaluation use. Foundations (and nonprofits) can do more to improve their ability to get more from evaluation.” Read more.


8. What Role Should Philanthropy Play in Local Communities? By Alexa Cortés Culwell and Heather McLeod Grant

“The widening gulf between the wealthy and working poor, between local nonprofits and philanthropists, and between new donors and institutional funders, is hardly unique to Silicon Valley; these forces are playing out across America. We believe nonprofits and philanthropists in all communities have an opportunity to overcome these extreme imbalances and find new solutions by working together. But new kinds of intermediaries are needed. Foundations are well-positioned to leverage their knowledge, relationships, and political capital to help lead the way.” Read more.


9. Upping the Support for Nonprofit Performance Assessment by Matthew Harty

“If the coffers were opened and the funds were suddenly available, would nonprofit organizations be able improve their performance through measurement and evaluation? If so, how might philanthropy, evaluation, and measurement experts and nonprofit leaders partner with one another to improve organizational performance, and by extension, sector-wide outcomes?” Read more.


10. Why Racial Equity? Why Now? By Keecha Harris

“These stories of funders taking meaningful steps toward committing to diversity, equity, and inclusion in the environmental sector are encouraging. But this is only the beginning of the journey.” Read more.


Ethan McCoy is senior writer – development and communications at CEP.

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The CEP Blog is a forum for a wide range of views and perspectives on what it takes to be effective in philanthropy. Join in with a comment or submit a post for consideration by emailing ethanm@cep.org. Due to the volume of submissions, we can only publish a fraction of the posts we receive. We select submissions for publication based on relevance to our audience of foundation leaders and donors.

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Nothing Should Keep Us from Listening

“We have too many people trying to problem-solve from a distance,” says Bryan Stevenson of the Equal Justice Initiative (EJI). “And when you try to problem-solve from a distance you miss the details and the nuances of the problems and your solutions don’t work very effectively.”

Earlier this year at the 2017 CEP Conference, Stevenson talked about his and EJI’s work providing legal representation to people appealing death row convictions, sharing powerful stories about his interactions with those who have been treated unjustly by the legal system. I found Stevenson’s talk to be inspiring. Yet, his call to be meaningfully connected to the people we ultimately seek to help can seem difficult from inside a foundation. The plenary left me wondering: Which foundations are indeed staying connected with their beneficiaries? Why is this work important to them? How do they do it well?

CEP’s new report, Staying Connected: How Five Foundations Understand Those They Seek to Help, provides concrete answers to these questions. The report profiles five foundations that rank among the top 15 percent of foundations that commissioned a Grantee Perception Report (GPR) between 2016 and 2017 when it comes to how their grantees rated them on questions related to their understanding of intended beneficiaries’ needs and how their funding priorities reflect that understanding.

My biggest takeaway from this research? Nothing should keep us from listening!

Here are three reasons why:

First, from the nonprofit perspective, in order to be effective, foundations must understand the end beneficiaries of the work they are funding. In my work with Fund for Shared Insight (which provided grant support to CEP for this report), I have spoken to funders all over the country about supporting grantees to listen more systematically to the people they ultimately seek to help. Unfortunately, I often hear funders say it’s not their place or role to listen directly to beneficiaries. “We trust grantees to listen to clients,” they tell me. “Our job is to listen to grantees and connect with them.”

Staying Connected highlights that nonprofit leaders want funders to understand their end beneficiaries better, and they believe that doing so makes funders more effective.  The report shares several compelling comments from nonprofit leaders that underscore this point. This takeaway was also driven home in another session at this year’s CEP Conference, moderated by my Hewlett Foundation colleague Fay Twersky. In the session, Twersky led a panel that included a funder, a nonprofit leader, and three participants in the nonprofit’s services. (The nonprofit was the Center for Employment Opportunities (CEO), and the participants were men who had used CEO’s services to help them get jobs when they returned home from prison.)

This was in itself rare. Clients and beneficiaries are not often included at philanthropy conferences, even though they are the focus of many foundations’ work — and likely the subject of much of the conference’s content. The nonprofit leader on the panel said that it is never a hassle when funders ask to learn more about participants. In fact, she said she wished that more funders would ask. Similarly, all five of the funders profiled in Staying Connected take a deep interest in the lives and experiences of their intended beneficiaries, and none worry that it isn’t their role to do so, or that they are somehow burdening grantees or “going around them” in seeking this connection.

Second, staying connected outside the foundation starts inside with a mindset of openness, curiosity, and willingness to see and do things differently — all of which is within a foundation’s control. “Spend time with [beneficiaries]. Do not assume you have all the answers. Be curious and willing to learn. Be willing to let go of your current thinking and adjust, as appropriate. Be committed to making a difference, and be willing to absorb and integrate new information to make better decisions,” says Rhett Mabry of the Duke Endowment, one of the foundations profiled in the report. Amelia Riedel, of the SC Ministry Foundation, another of the five foundations, notes, “We have a person-centered approach, not institution-centered. We are less focused on making the institution successful, and more focused on successful outcomes for the people we are trying to serve.” These values and approaches can be cultivated in any foundation.

Further, the foundations profiled show that you don’t have to make a choice between research and listening to beneficiaries. These are different and complementary ways of knowing; you can and should be open to both.  Lin Hollowell III of the Duke Endowment explains, “We do our best to make sure that we have a thorough understanding of the needs before we throw a solution at the problem. And understanding the needs often involves doing some independent research and then capturing lots of different perspectives and connecting the dots.” For example, the Harry and Jeannette Weinberg Foundation pays attention to a national survey of adults with disabilities called “Ask Me!”, and learns from that survey data to inform its work.

Third, implementing practices to stay connected is something any foundation can do well. There may be practices inside your foundation that you feel you can’t change — perhaps doing so would be too time consuming or complicated, or maybe you don’t have enough influence or authority. The great news is that listening is not one of these practices. And anyone who wants to be more connected to those they seek to help can find actionable practices in this report.

For example, the Harry and Jeannette Weinberg Foundation holds annual grantee convenings where they make time for grantees to share the opportunities and challenges they see with the people they serve. Grantees get to learn from each other about clients, and the funder can learn alongside its grantees. Several of the profiled funders also talk about how they not only make time for site visits, but also ensure that they speak with clients on those visits. They see this as time well spent.

Grant Oliphant of the Heinz Endowments is quoted in in the introduction of the report saying, “We have a responsibility to use more of [our] wealth to bear witness to the strengths and struggles, dreams and fears of America’s most challenged and vulnerable citizens, whoever they may be.” If this is the ultimate goal of our work in philanthropy, nothing should keep us from listening to those very people.

Lindsay Louie is a program officer for Philanthropy Grantmaking at the William and Flora Hewlett Foundation. One of the two main strategies in her work is Fund for Shared Insight, which is focused on supporting funders and nonprofits to be meaningfully more connected to each other and to the communities and people they seek to help. Shared Insight funded CEP’s report, Staying Connected: How Five Foundations Understand Those They Seek to Help. Lindsay can be reached at llouie@hewlett.org or on Twitter @lindsaylouie.

Note from the author: The views expressed in this post are solely my own and may not represent those of CEP, the Hewlett Foundation, or Fund for Shared Insight.

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Sharing Thanks for the Year That Was

Funder effectiveness matters.

It matters because funders have a unique ability to contribute to change. It matters because more effective funders can have a profoundly positive impact on the organizations they support — and thus on the people, issues, and communities those organizations serve. It really matters now, in a year that has been particularly challenging for many of us in the nonprofit and philanthropic community.

That’s why we at CEP are so committed to spreading more effective philanthropic practice.

As my colleagues and I on CEP’s Assessments and Advisory Services team reflect on a busy 2017, we want to take a moment to thank all the funders we’ve worked with over the past year.

We also want to thank the grantees, declined applicants, staff, and donors who generously took the time to share their experiences in their responses to our assessment surveys — and without whom we would not be able to bring data-driven insights to funders. To all who responded to one of our nearly 80 surveys, thank you for offering your honest reflections that help funders learn and get better.

  • Thank you to the 11,467 grantees that provided feedback in 2017 through the Grantee Perception Report (GPR). You helped us provide 50 funders with grantee feedback.
  • Thank you to the 727 declined applicants that provided feedback in 2017 through the Applicant Perception Report (APR). You helped us provide eight funders with feedback from their declined applicants.
  • Thank you to the 1,627 donors that provided feedback in 2017 through the Donor Perception Report (DPR). You helped us provide 12 community foundations with donor feedback.
  • Thank you to the 1,123 foundation staff that provided feedback in 2017 through the Staff Perception Report (SPR). You helped us provide eight funders with staff feedback.

But, as we at CEP well know, not everything can be quantified. Reflecting on the many presentations our team has made to foundation staff and board members, the numerous conversations we’ve had with funders about the data and their assessment results, and the many ways in which funders are using the feedback to improve their work, there’s more thanks to give. Here’s a few examples:

  • To the first-time GPR user who said, “We really needed to hear this feedback,” thank you.
  • To the foundation board member who said, “It’s not often enough that we have the grantee perspective in this room,” thank you.
  • To the foundation CEO who said their GPR results “help us understand the value of support beyond the grant check,” and whose foundation is using its grantee feedback data to provide more of the highly-valued non-monetary support to its grantees, thank you.
  • To the foundation CEO who articulated that their GPR results affirmed that the foundation’s focus on advocacy is working, and who is using the data to double down on this effort, thank you.
  • To the staff and board at a foundation who committed, based on grantee feedback, to deepening their understanding of the social, cultural, and socioeconomic factors in which grantees work, and doing more to ensure beneficiary perspectives are incorporated across their work, thank you.
  • To the community foundation CEO whose DPR results have informed their plans for ensuring that their community knowledge and leadership helps them support local needs more effectively, thank you.
  • To the foundation CEO who didn’t shy away from difficult conversations about challenging results, and who saw the data as a moment to pause and reflect when it might have been easier to deflect and reject, thank you.
  • To the foundation whose staff — acting on feedback and suggestions from declined applicants — will, going forward, explain why a proposal was declined and provide feedback to help strengthen future applications, thank you.
  • To the foundation staff members who asked grantees for their input on an upcoming strategic planning process, and who then incorporated grantee perspectives into their planning, thank you.
  • To the many funders who shared their time with other funders seeking to learn from exemplars, thank you.
  • To the many funders who publicly shared their results back with their stakeholders, and who are holding themselves accountable to ongoing improvement, thank you.

To all who have worked with us over the past year, we wouldn’t be able to do this work without your commitment to hearing — and acting on — candid feedback. Thank you.

Naomi Orensten is director, assessment & advisory services at CEP.

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The Necessity of Understanding Need

It’s no secret that working in the nonprofit sector is a challenge. Many organizations are strapped for resources, and staff are often overworked and working for less money than they could get at a for-profit company.

So why do people do it? Many who choose the nonprofit path will tell you they chose it because they want to help people. They want to tackle issues that plague particular groups or populations. They want to make the world a more equitable, livable, and all around better place.

For me, working at CEP provides an opportunity to broadly and systematically improve nonprofits’ ability to provide their services and, consequently, increase their impact. Having previously worked at a direct service nonprofit, I know how difficult it can be to fundraise to keep the lights on while simultaneously giving your all to the students you tutor or the families you house. I feel proud that, by providing research and insights to foundations, I can help those service organizations get the necessary support to better help individuals, groups, or issue areas in need.

Because, when it comes down to it, all nonprofit work is about need of some sort. And you can only address needs — whether they are the needs of an organization, a community, or a population — if you truly understand what they are. 

The necessity of this understanding may seem obvious for the types of organizations I already mentioned. Those working with students must understand the areas in which those students need the most support; those working with homeless families must understand the most helpful resources they can provide to get those families back on their feet.

It feels equally important that funders have this understanding as well. After all, how can you know what to fund to achieve your goals — or even develop useful goals in the first place — if you don’t understand the needs of those you are seeking to help? 

For some foundations, applying the resources and time to develop that understanding may seem daunting. Many would like to invest more in this task, but don’t know where to start. Fortunately, learning from the work of other foundations can help.

In a new report CEP is releasing today, titled Staying Connected: How Five Foundations Understand Those They Seek to Help, we explore the practices of five foundations rated highly by their grantees for their understanding of their beneficiaries’ needs. The report covers a variety of topics with foundation executives and program staff from the Nord Family Foundation, Helios Education Foundation, the Duke Endowment, the Harry and Jeanette Weinberg Foundation, and SC Ministry Foundation, including:

  • What they specifically do to develop an understanding of the needs of their intended beneficiaries;
  • What role the grantees they work with play in the development of that understanding;
  • What challenges they face in developing or maintaining an understanding of beneficiary needs; and
  • What advice they would give to other foundations that want to become better at understanding their beneficiaries.

Through answers to these questions, we learn that there are a few common practices among these highly rated funders. Namely, they all take the time to listen and learn from the grantees doing the work on the ground, recognize the importance of going out into communities themselves, and find value in hiring staff from the fields in which they fund.

To learn more about what each foundation does to develop and maintain an understanding of those they ultimately seek to serve, you can download and read the report here.

Jennifer Glickman is manager, research, at CEP. Follow her on Twitter at @JenGlickman.

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Listening to Students: Beneficiary Feedback in Education

Funders care about American education. Foundations of all sizes, locations, and ideological beliefs aim to improve education and support young people, and, in 2012, foundations spent $5 billion on education. With all of this investment, don’t we want to know whether or not it’s working for the intended beneficiaries — the students themselves?

At YouthTruth, we believe that in order to effectively improve schools, we should go directly to the source and ask the students themselves about what is and isn’t working. Since CEP developed YouthTruth in collaboration with the Bill & Melinda Gates Foundation in 2008, we’ve surveyed more than 620,000 students to learn about their experiences in school. This feedback data can serve as an insightful pulse point to understand how students are feeling on a national scale about a variety of topics, including bullying and college and career readiness.

One thing that educators and education funders have historically found difficult to measure and monitor is student engagement. We know that engagement matters. Research shows that it is a leading indicator of academic achievement and persistence in school, as well as a key element of school climate. While outcome data such as academic test scores and attendance rates can be used to track engagement, these measures are much less useful once students have stopped turning in assignments or coming to school — and they don’t necessarily tell us why those things are happening.

By asking students directly about their feelings of engagement, educators and education funders can get a more nuanced understanding of where things are going well and where this is room for improvement.  With these questions in mind, YouthTruth analyzed survey data from more than 230,000 students in grades 3-12, collected between the fall of 2012 and spring of 2017, to more deeply understand students’ feelings of engagement in school. The data revealed some eye-opening insights.

Across all grade levels, most students feel engaged.

Seventy-eight percent of elementary, 59 percent of middle, and 60 percent of high school students report feeling engaged. This is a positive finding, but it’s important to dive a bit deeper and understand the nuances of students’ experiences.

Most students take pride in their school work.

Most students — 72 percent of middle schoolers and 68 percent of high schoolers — report that they feel proud of their school work. This is encouraging. In the words of one student, “Everything I do in school helps me become a better person. The activities and projects I do in school are things I can be really proud of. I always want to talk about the amazing things my school does to my family and friends, and how much hope it gives me for my future.”

But less than half of secondary students feel that what they’re learning in class helps them outside of school.

Despite positive feelings about engagement and pride in their work, when students were asked about the relevance of their work, the responses are less rosy. Only 48 percent of secondary students feel that what they are learning in class helps them outside of school. When we disaggregate the findings by grade level, we see that high school students are slightly less likely than middle school students to feel that their school work is related to their life outside the classroom. This disconnect between engagement and the perceived relevance of in-school learning to life outside of school is concerning. We can imagine hundreds of thousands of students across the country wondering, “When will I ever use this in real life?”

Only about half of secondary students enjoy coming to school most of the time.

Only 52 percent of secondary students say they enjoy coming to school most of the time. This finding is particularly concerning when trying to understand why students may not be coming to school, given the recent national conversation about chronic absenteeism and its focus under many states’ ESSA plans. Students who are chronically absent — those who miss at least 15 days of school or more in a year — may be missing school for a variety of reasons over which schools have little control, such as poverty, health challenges, community violence, and difficult family circumstances. But building a school environment in which students enjoy coming to school is an important place to start.

These findings demonstrate the type of powerful insights that leaders in schools, communities, and foundations can garner when they ask students about their experiences. After all, as the ones in the classroom each and every day, students have a unique vantage point into what’s working and what’s not. It is our job to listen and learn from them. 

Download “Learning from Student Voice: Are Students Engaged?” here.

Hannah Bartlebaugh is senior marketing and external relations coordinator for YouthTruth. Follow YouthTruth on Twitter at @Youth_Truth.

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Putting Trust at the Center of Foundation Work

As a foundation that sees relationships as a key component of philanthropy and social change, The Whitman Institute (TWI) applauds CEP’s recent report, Relationships Matter: Program Officers, Grantees, and the Keys to Success. It may seem like common sense that grantees and funders alike see better outcomes as a result of program officers prioritizing relationships, but putting that value into practice clearly remains challenging for many within philanthropy.

There are numerous reasons why this is so, among them power dynamics, time constraints, and perhaps a sense that getting “too close” to a grantee may compromise a funder’s sense of objectivity or make it hard to discontinue funding. On top of that, foundation structures and cultures themselves can steer staff away from building good relationships.

It’s that last point that I want to explore here. According to a survey of 150 program officers that CEP conducted for an earlier study benchmarking program officer roles and responsibilities, program officers often feel unsupported by foundation leadership to build relationships with grantees. And, as Relationships Matter concludes, “Program staff do not work in a vacuum — they work within an organizational culture and structure. So, there are implications in our analysis for foundation leadership, too, as they consider how they best set up program officers for success in the important work of strengthening relationships with the nonprofits on the front lines.”

Trust-Based Philanthropy

The Whitman Institute’s experience may be instructive for foundation leadership open to exploring CEP’s invitation to rethink how their practices position their program staff for success.

In 2013, TWI worked with CEP to gather feedback from our grantees through a Grantee Perception Report (GPR). We were gratified to learn in our results that we were “rated more positively than nearly every other funder in CEP’s comparative dataset for the strength of its relationships with grantees.” CEP also highlighted a theme that was present in many grantees’ comments: namely, how important it was that grantees felt trusted by us. Our grantees also urged us to share our grantmaking practices more broadly within philanthropy.

That feedback led us to name and frame our approach as “Trust-Based Philanthropy.” We hold the name lightly since we recognize that many other funders employ similar practices but may not use that term, but we have found it a useful way to connect with other funders interested in our approach — and/or those who also want to advocate for practices such as multiyear unrestricted funding, streamlined paperwork, and support “beyond the check.”

For some in the field, perhaps, these structural practices can seem like “old news.” But we can’t talk about them enough given that, writ-large, philanthropy remains stubbornly resistant to their implementation — despite continuing calls for change. That is why TWI remains committed to sharing what we’ve learned: that these practices help build stronger relationships; healthier, more effective organizations; and, if implemented widely, hold the potential to transform our sector.

When we provide unrestricted support, we find that we start our relationships with grantees from a place of trust, rather than implicit distrust. And when that happens, something shifts in the power dynamic. The imbalance doesn’t completely go away, but it is mitigated and a different kind of conversation begins. Multiyear support encourages people to really talk openly about what’s going on in their work without fear that they may be penalized in the form of funding not renewed.

Streamlined paperwork frees up both precious time for grantees to do their real work, and it also frees up time for foundation staff working with grantees to provide support beyond the check in ways that are genuinely helpful. This, too, helps strengthen relationships, as interactions with grantees are less about slogging through requirements and box ticking, and more about the mission-driven work and how it can best be supported.

Based on our experience, how we do our grantmaking is fundamental to building trusting relationships — relationships that not only lead to better outcomes for all, but that also embody the values that ground TWI’s work, such as equity, humility, dialogue, and critical thinking.

Prioritizing Relationships

A larger implication of CEP’s report might be for how foundation leaders think about relationships beyond just those between program officers and grantees. What if foundations were to prioritize building trusting relationships at all levels of the organization, both internally and externally? It’s a question TWI continues to explore as we approach our sunset date in 2022.

How do we best support grantees to build trusting relationships with those they serve and collaborate with? How do we build trust with other funders so that we might have more collective vetting that makes streamlined reporting the norm rather than the exception? How do we build trust between trustees and staff so that they are aligned on both the what and how of the foundation’s grantmaking? And how do we build this trust so that it’s not just between individuals, but between organizations and institutions?

The answers to these questions lie in both individual and structural responses.

CEP notes in the report that program officers don’t work in a vacuum. Neither do foundations; the questions funders wrestle with in terms of individual and structural change are the same ones going on all around us. In a time of massive distrust at all levels of our society, it’s worth exploring if there is an opportunity for philanthropy to model trust in ways that can help move the country forward collectively. I think there is, but only if we prioritize building relationships that embody the values we aspire to.

John Esterle is co-executive director of The Whitman Institute. Follow TWI on Twitter at @TWI_2022.

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Building Trust with Grantees is Essential

In our “post-truth” world, we are all are overwhelmed by information. In-person interactions struggle to compete with the ceaseless barrage of push notifications popping up on our mobile devices. Attention, trust, and full presence are now among our scarcest resources.

But to build meaningful relationships, those things are exactly what we need, in both our personal and professional lives. Attention and presence are relatively easy — they take a bit of self-awareness, alertness, and willingness. Trust is different: It is challenging to build, especially within asymmetric relationships and when money is part of the conversation — both of which are marks of the relationship between program officers and grantees.

In my (still short, I think) life as a program officer, I have heard that what grantees need from funders are transparency, clear communications, and responsiveness. Humility is often mentioned as well, and I must confess it surprises me that someone working in the philanthropic sector must be reminded of the importance of being humble.

I believe that building trust takes even more than that. It takes courage to tell the truth about our own limits and strengths. Building trust challenges us to bring our own vulnerability to the table, which means being honest about our doubts and about what we don’t know. In times like these, I have a hard time trusting people who claim certainty about too many things.

Having good relationships with grantees — and, at the end of the day, good grantmaking as a whole — demands that professionals working in the philanthropic world show genuine interest in other people’s knowledge and experience, and offer good questions (not just advice) in conversations. A successful grant should never be about a program officer’s goals or convictions in the first place. It should be about identifying and appreciating what each side of the table — funder and grantee — can do best together. 

Of course, this is not so simple when you’re closing a portfolio, making final grants, or dramatically changing a strategy. Those are the moments when it’s even more crucial to be empathic and candid, and to check, whenever possible, that your discourse is coherent with your actions and takes into consideration the grantee’s needs — even though you won’t be able to positively respond to all their expectations. Fortunately, there are methodologies and techniques that can be very helpful to support such efforts.

Being able to establish clear boundaries makes a difference for the program officer as an individual and as a professional, and for the organizations they support. In program officers’ eagerness to be successful — and even to be admired in the field — it’s easy to lose sight of the difference between being a thought partner and a mentor; between being a supporter and a friend; between a partner and a sister- or brother-in-arms.

It is a program officer’s responsibility to make sure these boundaries are clear. And it is not an easy job. Being clear about the right channels, moments, and language through which to communicate and interact with grantees demands a great deal of diplomacy, politeness, and discipline from a program officer who is working to protect the grantee, themselves, and the institution they represent. Clarity about boundaries saves a great amount of energy, financial resources, and time, all of which are needed to establish a strong, professional relationship between the program officer and the grantee. It also ensures that program officers can be comfortable saying no when it’s necessary, and doing so in a constructive, respectful way.

Many people working towards social justice, fairness, and equality are dreamers. In developing relationships with the organizations committed to those goals, it’s important for funders not to lose sight of that perspective. Being part of people’s dreams (whether we support them financially or not) is a huge responsibility — but it’s also a huge honor and presents real opportunities for promoting positive, lasting change.

Advancing social justice, democracy, and rights takes much more than donors with significant resources and great strategies on one side, and grantees with ambitious plans, a strong work ethic, and compelling narratives on the other. The work of social change also takes a great deal of compassion, common sense, and boldness — to say yes, to say no, to make a bet — no matter which side of the table you’re sitting on. 

All of this is why, whenever anyone asks me how to build meaningful relationships while serving as a grantmaker (or, for that matter, serving in any position, in any field, with any level of power), I always say: Connect — fully. Be empathic. Be yourself, unabashedly.

That’s the best you can do.

Graciela Selaimen is a program officer in Ford Foundation’s Brazil office.

She is one of 11 program officers CEP interviewed for its new report, Relationships Matter: Program Officers, Grantees, and the Keys to Success.

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Why We Might Be Undervaluing Strong Funder-Grantee Relationships

At CEP we are always thinking about the ways that strong funder-grantee relationships affect the success of foundations’ efforts.

This topic has been a major emphasis in our research agenda for more than a decade, as we have continually investigated the questions, “What are the core components of the funder-grantee relationship? And where should funders focus their efforts to maximize the strength of those relationships?” Relationships Matter: Program Officers, Grantees, and the Keys to Success — our newest research report released just a couple of weeks ago — lays out our current understanding.

Underlying this ongoing focus on strong relationships is our belief — and an evidence base — that those relationships are necessary components of a funder’s effectiveness and ultimately impact. Using data from hundreds of Grantee Perception Reports, we find that the strength of funder-grantee relationships is correlated with higher grantee ratings of a foundation’s impact on fields, local communities, and organizations.

More and more, the foundation staff I speak to agree with this instrumental argument that strong relationships are important in achieving outcomes. It’s only once in a while, now, that I hear the refrain: “If our grantees say we have great relationships, it means we’re not pushing them hard enough for outcomes.” (This, by the way, has always been a silly argument anyway, contradicted by both common sense and the many foundations that have demonstrable impact and great relationships with grantees.)

There’s no doubt about it — relationships are important in creating impact. That alone makes them indispensable in service of philanthropic success.

I want to suggest, though, that this articulation does not completely express the full value of a strong funder-grantee relationship.

As nonprofits, grantees and funders alike work to solve some of the most pernicious and discouraging problems our society faces. These problems present challenges that often touch on the inherent dignity of all people. The sheer scale of the issues, and the material and emotional resources entailed in our responses, necessitates a collective effort. As part of working to rise to that collective calling, building strong relationships — those that transcend power dynamics, differences in race and creed, and even (sometimes) ideology — is important in and of itself. These relationships represent our collective intent and demonstrate that the better society we seek is possible. They reinforce the value inherent in each of us. They are deeply moral expressions.

I think that if we value strong funder-grantee relationships (or, for that matter, strong workplace relationships and environments) only for their necessary role in creating impact, we’ve undervalued them. We’re ignoring the necessary heart and soul of our work. As a voluntary sector, we are called on to exemplify the best ideals of what can happen when groups of people come together to address common challenges. And those ideals demand that we build strong relationships.

A few years ago I was presenting grantee survey results to the board of a large foundation. The president and board members were disproportionately drawn from academia, and I had presented to them before. I was talking about the opportunities for this funder to strengthen its improving, but still only average, relationships with grantees when the CEO interrupted me and said, “Kevin, relationships are orthogonal to impact.”

I panicked a little bit. What the heck did orthogonal mean? Context clues pretty clearly suggested this was a signal to move on. But I wasn’t quite ready to give up the opportunity to emphasize to the board that the foundation’s grantees suggested it could build even stronger relationships. As I began my answer, I remembered from stats class that orthogonal means “statistically unrelated,” and so I made my case that relationships were actually quite related to the impact this foundation was deeply committed to creating.

Only later when I looked up “orthogonal” did I see that it also means “at right angles.” So, whether he meant it or not, I think that CEO was partially correct.

Strong funder-grantee relationships do have value that’s unrelated to their correlation with impact. And if we think about them only as a mechanism to create another unit of marginal impact, we’ve missed part of the point — that strong funder-grantee relationships are also a crucial demonstration of our sector’s belief in common action and the inherent dignity of every person.

Kevin Bolduc is vice president, assessment and advisory services, at CEP. Follow him on Twitter at @kmbolduc.

Download CEP’s new report, Relationships Matter: Program Officers, Grantees, and the Keys to Success, here.

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The CEP Blog is a forum for a wide range of views and perspectives on what it takes to be effective in philanthropy. Join in with a comment or submit a post for consideration by emailing ethanm@cep.org. Due to the volume of submissions, we can only publish a fraction of the posts we receive. We select submissions for publication based on relevance to our audience of foundation leaders and donors.

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What Does It Take to Build Strong Relationships?

Over the past 20 years, the Grantmakers for Effective Organizations (GEO) community has championed the idea that strong relationships with nonprofit partners matter. As we say in Is Grantmaking Getting Smarter?, “When we build trust with and tap the knowledge of nonprofits and community members, we amplify each other’s strengths and arrive at better solutions. In order to build these relationships, we need to recognize how our power can create hesitation and tension in our partners — and own the responsibility of creating authentic connections.”

GEO’s research shows that grantmakers who are more connected to their grantees are more likely to provide the type of support that nonprofits need to succeed — things like capacity-building support and multi-year, general operating support. We also recognize that it can be daunting to think about where to start when it comes to improving relationships with nonprofit partners.

That’s why CEP’s work on the critical role that program officers play in shaping the funder-grantee relationship is so helpful. So often, we think about the practices and policies of our organizations as a whole. But when it comes to relationships, it should come as no surprise that people matter! Relationships Matter: Program Officers, Grantees, and the Keys to Success shows the areas where a grantee’s experience is more strongly shaped by the program officer than the foundation.

Skills Matter

CEP’s findings align with GEO’s work on the importance of supporting foundation staff in gaining the right skills to build strong relationships with nonprofits. GEO’s upcoming publication on inclusive grantmaking highlights some of the specific skills and backgrounds that foundations are looking for when they hire new staff. Many look for grantmaking staff who have significant nonprofit experience. Others seek staff from community organizing backgrounds or who come from the communities they serve. Still others mentioned hiring or training for qualities like exceptional listening skills or the ability to build connections and networks.

These may not be the types of expertise that foundations traditionally seek in program officers, but we should value these relationship-building skills as much as other types of experience. These are the kinds of skills that are needed if program officers are to gain a greater understanding of their nonprofit partners and the context in which they work. As Relationships Matter says, “The issues nonprofits work on are complex, and their organizations are often strapped for resources. The context in which they work is also complicated, with systemic issues often at the root of the environmental and social problems that they work to address.”

Culture Matters

Relationships Matter highlights the importance of foundation transparency and openness to grantees’ ideas. In GEO’s recent work on productive organizational culture, we identified similar attributes that allow grantmakers to adopt practices that better support nonprofits. We name them as transparency and trust, and respect and humility.

If we want to build trust with others, we have to be transparent about what we’re doing and why.  Funders have to communicate better with grantee partners and find new ways to hear from nonprofits and the community. That means admitting we don’t have all the answers, and relying on the lived experiences of nonprofit staff and community members to help us better understand issues and potential solutions. Approaching relationships with transparency and humility helps us to learn from grantees, and those insights can then improve grantmaking and inform strategies.

Actions Matter

What does it mean to act in a way that demonstrates transparency and openness to nonprofit partners? Actions are the visible and tangible manifestation of culture. If we want to be seen as authentic, our actions have to match our values. Relationships Matter highlights program officers that take very real steps to live the values of transparency and openness. Jamie Allison of the S.H. Cowell Foundation talks about checking with grantees to make sure her write-ups accurately represent the nonprofit’s results. Jackie Hausman of the Kenneth Rainin Foundation talks about all of the different ways to listen to those in the field — from visiting grantees, to meeting with parents and families, to joining a membership organization for funders in the biomedical field. Nick Randell of the Peter and Elizabeth C. Tower Foundation talks about blogging about upcoming changes to provide ample information before new changes are rolled out.

The GEO community echoes the importance of these actions. For example, our members host Q&As with nonprofits and funders. They create grant programs to support emerging and grassroots organizations that don’t have 501(c)(3) status, but who are doing important work in the community. They prioritize face-to-face conversations with nonprofit partners throughout the year to talk about what’s going well and what may need to shift. Some even delegate grantmaking authority to the community and local nonprofits. These actions demonstrate their commitment to transparency and their willingness to hear new suggestions and ideas.

Where Do We Go From Here?

Relationships Matter surfaces behaviors that individual program officers can embrace to build strong relationships with nonprofits. GEO’s work on inclusive grantmaking and organizational culture highlights some of the practices that foundations can adopt to support program officers and set organizational priorities to emphasize strong nonprofit relationships. Our community tells us that stronger relationships lead to better outcomes.

So, what are we waiting for? It’s up to grantmakers to prioritize this work and hold each other accountable. Together, the philanthropic field can make strong relationships a lynchpin of our work and strategies. Together, we can build a field that values lived experience and theories of change equally. Together, we can join with our nonprofit partners to make progress on the issues that all of us care about. As GEO’s Nonprofit Advisory Council says in its Letter to Philanthropy, “We are a country of abundance. We are vested partners in this business of problem-solving and change-making. Let us move forward boldly in relationship and trust — in the name of creating better solutions and making greater progress, together.”

Amy Shields is program manager at Grantmakers for Effective Organizations (GEO).

You can download Relationships Matter: Program Officers, Grantees, and the Keys to Success here.

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Relationships Matter when Communities Need Support Most

Strong relationships between program officers and their grantees are always important. But they’re especially important when disaster strikes.

Hurricane Harvey brought Houston nearly 51 inches of rain and some of the worst flooding we’ve ever experienced. The devastation was widespread, and the storm exposed — and exacerbated — pre-existing vulnerabilities in our community.

During the storm, rising flood waters made it clear that it was safest for us all to stay close to home. But as part of a foundation that seeks to improve quality of life for the residents of greater Houston, my program officer colleagues and I wanted to know what we could do to help. This is where our strong, trusting relationships with grantees and community partners were invaluable. 

As the rain continued to come down, our team reached out to grantees who were already working on the ground. Our conversations revealed that, in spite of all of the aid coming in from around the region and the country, there remained vulnerable communities unlikely to be served by other sources or agencies. Through these frank and honest conversations with trusted partners, we were able to quickly determine where our resources were needed most.

From our homes, some of them temporary, we established a rapid-response granting mechanism that would focus on systemic approaches to assessing needs and providing support. Here, again, our relationships with grantees proved invaluable: our strong partnerships allowed us to get funds out the door quickly and meaningfully.

One recipient of our rapid-response funds was the Houston Immigration Legal Services Collaborative (HILSC). Since 2013, when Houston Endowment helped to form it, the HILSC has brought together trusted legal and immigration service providers to help the many Houstonians who qualify for expanded legal protections to begin their pathways to a protected legal status.

During Harvey, the HILSC and its affiliated network of providers helped inform Houston’s 400,000 undocumented residents of their rights to assistance. With a rapid-response grant from us, the organization was able to provide technical assistance to local relief agencies on how to effectively reach and serve undocumented families, as well as seed a fund to help the immediate needs of this population.

Similarly, our partners in the environmental community, with whom we have worked for years, identified a lack of state oversight in environmental data collection and reporting during and after Harvey. With a rapid-response grant from us, the Houston Advanced Research Center was able to deploy staff to compile, analyze, and disseminate a range of environmental data related to Harvey — including data on air quality, water quality, and the status of toxic sites — that was being collected by local public and nonprofit partners. The resulting GIS application depicts the scope of Harvey’s environmental impacts, which has proven useful to local advocates in their conversations with public officials about minimizing environmental risks during disasters.

In the weeks since Harvey, strengthening relationships with our community partners and grantees has continued to be of the utmost importance. After all, only in working with our partners can we hope to leave the region stronger than it was before, and form a new legacy that recognizes the impact of the storm — but is not defined by it.

One part of that legacy will be the newly formed Harvey Arts Recovery Fund. Harvey inflicted an estimated $56 million worth of damages on greater Houston’s arts sector, which includes individual artists, small- and mid-sized cultural groups, and large anchor institutions alike. We realized, however, that the arts community would be an unlikely recipient of disaster relief funds. So the Endowment, along with a cohort of arts service grantees, consulted with more than 70 arts groups throughout the Houston region to assess the extent of damages, seed funds to address the immediate needs of the arts community, and begin the planning stage for a long-term fund to fill an expected three-year funding gap.

The example of an arts-specific recovery fund will set a precedent for collaboration that will have far-reaching impacts well beyond Houston’s arts community.

In addition to helping our grantees respond, we also realized post-Harvey that we have an opportunity to take bold steps to re-envision the future of our region — and limit the impacts of the inevitable next flood. Days after the storm, we, along with our colleagues at the Kinder Foundation and the Cynthia and George Mitchell Foundation, convened a group of area researchers with whom we have developed deep relationships over a number of years.

The expertise of researchers in this group ranges from hydrology and engineering, to climate science and coastal resiliency, to urban planning and equitable community development. Very quickly, this diverse group determined that collaborating to provide the most scientifically rigorous information to decision makers and residents alike will serve to strengthen our public officials’ deliberations about flood mitigation — from public risk education campaigns, to policy and regulatory changes, to developing new infrastructure, both “gray” and “green.”

At its core, this group, named the Greater Houston Flood Mitigation Consortium, was born out of relationships and the desire to ensure that the best minds in the room have the opportunity to compile, analyze, and share a rich array of fact-based information to benefit the community. It serves as a model for what can happen when thought leaders are provided the space — and trust — to come together to tackle complex issues with the support of philanthropy.

All of this work in the aftermath of Harvey was possible thanks to strong relationships, both personal and professional, with our grantees and our community. Going forward, we will rely on these relationships to help us advance a more a resilient and equitable future for the people of greater Houston.

Elizabeth Love is senior program officer at Houston Endowment.

She is one of 11 program officers CEP interviewed for its new report, Relationships Matter: Program Officers, Grantees, and the Keys to Success.

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It’s All about the People

In my position at CEP, I have experienced what it is like to navigate funders’ individual guidelines and requirements. I know sometimes selection processes can feel like jumping through a series of irrelevant hoops rather than useful experiences. And I’ve been through the frustration of a funder not understanding CEP’s goals or strategies — and not being interested in doing so because they believe they know all they need to know.

Thankfully, I also know the markedly different experience of having funders who genuinely understand the mission of CEP and the research we do. I can recall times when funders have been right there beside us when we experience challenges in our work. Or others that have reached out to let us know how and when their own goals or strategies might be shifting, inviting us to provide input and be a part of the process. Their understanding and openness have made us feel that we can reach out when a problem arises in the work they are funding us to do; and they have responded with support when we have reached out to communicate about challenges.

CEP works to support foundation effectiveness, and we are a grantee of many foundations. That’s why today’s release of our newest research feels more personal than do most of our reports. In Relationships Matter: Program Officers, Grantees, and the Keys to Success, we share findings based on the experiences of almost 20,000 grantees of more than 80 foundations, with the goal of providing insights that will help funders and nonprofits develop strong working relationships.

These working relationships form the groundwork that enables grantees to feel they can get in touch with their program officer if they need information, or let their funder know when the work is not going according to plan. These relationships ultimately determine what it’s like for a grantee to work with a funder. And, most importantly, these are the experiences that either fuel or impede a nonprofit’s progress towards its goals. 

In this new report, we also hone in on the importance of the program officer. Relationships happen between people. Someone at a grantee organization is communicating with someone at a foundation. And most frequently, that someone at a foundation is the grantee’s program officer.

Based on ratings from CEP’s Grantee Perception Report (GPR), we were able to segment ratings provided by grantees about their experience working with foundations to identify program officers whose grantees report having the strongest relationships with their funders. We interviewed 11 of these program officers, and in the report share their insights about their practices and the philosophies that guide their work. We are grateful that these program officers were willing to be so open about their approaches to their work. They brought concrete stories to a topic that can often seem abstract, and provided examples of why strong relationships between funders and grantees are so crucial for creating change in the world.

I invite you to download and read the report to hear these program officers’ insightful stories and learn about what my colleagues and I at CEP found in our analyses.

I also invite you to join me for a webinar this Thursday at 2:00 pm EST to go deeper on the topic of funder-grantee relationships. I’ll be presenting our research findings and my colleague, Phil Buchanan, will moderate what promises to be a lively discussion with three of the program officers featured in the report: Irfan Hasan of the New York Community Trust, Sarah Lovan of the McKnight Foundation, and Teresa Rivero of the Bill & Melinda Gates Foundation.

Ellie Buteau is vice president, research, at CEP. Follow her on Twitter at @e_buteau.

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The Nonprofit Sector’s Board Diversity Problem

This post originally appeared on the United Philanthropy Forum website.

The nonprofit sector has a board diversity problem. A recent BoardSource report showed that nonprofit boards are no more racially and ethnically diverse than they were two decades ago and that “current recruitment priorities indicate this is unlikely to change.” The report found that people of color comprise just 16 percent of nonprofit board members, nearly identical to 1994 figures, even though they represent 39 percent of our country’s population.

United Philanthropy Forum recently took a look at the board diversity of our members, which are nonprofit regional and national philanthropy-serving organizations (PSOs) that connect funders around issues, identity, philanthropic practice and/or place. [Editor note: CEP is a United Philanthropy Forum member.] We found that 33 percent of PSO board members are people of color — more than double the percentage for all nonprofit boards in the BoardSource report but still lagging our country’s demographics. Moreover, BoardSource found that 27 percent of the nonprofit boards surveyed were 100 percent white, while only one responding PSO in the Forum survey reported having a board that identified exclusively as white. Our findings on PSO board diversity are in the newly released Forum “Key Metrics” report, which looks at PSOs’ governance, finances, membership, services and programs and operations.

The Forum’s report also revealed that most of our members are making concerted efforts to address issues of diversity, equity, and inclusion in philanthropy. Nearly three-quarters (74 percent) of PSOs report having guiding principles or a strategic plan referencing diversity, equity, and/or inclusion (DEI), while a nearly equal number (68 percent) report having at least one staff member with job duties that include a focus on DEI.

There are many strong arguments for having nonprofit boards that are racially and ethnically diverse, and let’s start with the effectiveness argument. As nonprofit executive Vu Le noted recently, “if your board is not representative of the community you claim to serve, then you are furthering the injustice you seek to fight.” He goes on to explain that “mostly-white boards and staff of nonprofits and foundations are likelier to ignore the people most affected by injustice and implement ineffective strategies based on second-hand knowledge.” To me this is also common sense — do nothing for me without me.

Even if your organization happens to serve a constituency that is not racially and ethnically diverse, there is another piece to the effectiveness argument. Numerous studies have shown that having diverse groups that include a range of perspectives enhances creative thinking, innovation, and problem solving, resulting in better decisions. People with different backgrounds and life experiences enrich board discussions and decision-making processes, leading to better outcomes than those where board members share a monolithic viewpoint or world view.

There’s also the integrity argument for nonprofit board diversity. If your organization claims to value diversity and/or if you are working on any initiatives that focus on racial equity, diversity, or inclusion, it’s pretty difficult to do that with integrity and credibility if your organization’s own board is lacking in diversity.

United Philanthropy Forum has taken that argument to heart. As we have started to expand our work to advance racial equity in philanthropy, we have also focused on our own organization’s staff and board diversity. We understand that diversity is not the same thing as equity. But as noted in a recent training for Forum staff, having racial and ethnic diversity is a necessary but insufficient step toward achieving racial equity.

When I took over as the Forum’s CEO last year, 18 percent of our board members were people of color. A year and half later that figure has more than doubled to 44 percent. We have more progress to make, but we’re pleased to be moving in the right direction.

There is nothing groundbreaking or remarkable about how our organization has worked to improve the diversity of our board. But from my perspective, here are a few important factors that contributed to our progress:

  • It’s about relationships. As soon as I started working for the Forum, in fact even before that as the organization’s board chair, I worked diligently and intently to develop relationships with a wider range of leaders in our field. As I started to widen my circle of connections, it led to an even wider circle of connections — a typical snowball effect. I did not do this with the intention of meeting more people of color, of course. But as you reach out to get to know a broader range of colleagues, you will inevitably encounter a more diverse group of people, at least that has been my experience, and that opens up opportunities to engage more people with your organization. Most of our new board members who have contributed to our board’s growing diversity are people who nominated themselves, or asked a colleague to nominate them, because they already had a good relationship with our organization and were already involved with us through a committee, working group, or in other leadership capacities.
  • It’s about authenticity. All board members need to feel that when they are asked to join an organization’s board they are being invited to bring their full selves and full range of experiences and skills to the board, in an honest and authentic way, and not to just check off a diversity box or with the expectation that they are to speak for an entire racial or ethnic group.
  • It’s about intention. With that said, if you want to improve your board’s diversity, you DO have to be intentional about it or else it’s probably not going to happen. I have made it clear from the start of my tenure that a priority for me was to improve the diversity of our staff and board, and our board leadership has been 100 percent supportive of that goal in a clear and vocal way. During our board nominations process over the past two years we have established some specific numerical targets for increasing the diversity of board. That does not mean that we are just focused on checking off a box, but we made it clear that if we did not meet our targets we would have to hold ourselves accountable and figure out how to do better next time.

The Forum intends to use our “Key Metrics” report to help hold our entire membership accountable for board diversity in the PSO field and to track progress over time. You can download two different “Key Metrics” summary reports — a one-page highlights report and three-page executive summary — from the Forum’s website. (The full report is only available to Forum members and other survey respondents.)

If you’re looking for tools and resources on board diversity, inclusion, and equity, one good place to start is the BoardSource website. I’ll close with one more quote from Vu Le, “Let’s all stop whining about the lack of board diversity and start doing stuff differently.”

Dave Biemesderfer is president and CEO of the United Philanthropy Forum. Follow him on Twitter at @dbiemesderfer.

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Investment Returns Can Pay Big Dividends for Foundations

On the 10th anniversary of his involvement with the Gates Foundation, Warren Buffet wrote a letter to Bill and Melinda Gates asking them to reflect on their progress achieving their goals at the head of world’s largest foundation. In his letter Buffett mentions that “success in philanthropy is measured differently from success in business or government.” In response, the Gateses quantified some extraordinary ways their work (and his gift) have impacted the world, from a dramatic decrease in infant mortality to the impending eradication of polio globally. The Gateses wrote that the Buffett gift was “the biggest single gift anyone has given anybody for anything,” which doubled the foundation’s resources and helped the foundation make progress in its issue areas.

While it is true that it was the biggest gift ever, another factor has had an even bigger effect on the foundation’s resources — investment performance.

Although foundations are not required to report investment returns. FoundationMark, the organization I founded and lead, uses data drawn from publicly available documents to estimate investment performance. For the Gates Foundation, FoundationMark estimates that over 10 years, investment returns have added $25.7 billion to the foundation’s assets.

The chart below summarizes the evolution of the foundation’s assets from 2005, just before Buffett announced his intention to fund Gates, through 2015, the most recent year’s tax filing. The foundation began the period with $29.1 billion in total assets; a decade later, assets had grown to $39.6 billion — a gain of over $10 billion. Over the period, the foundation received $22.4 billion in new contributions (Buffett put in $17.3 billion and the Gateses added $5.1 billion) and paid out $37.7 billion in grants and expenses (nearly $4 billion a year) to end the period with $39.6 billion in assets, implying $25.7 billion in investment gains in the decade since Mr. Buffett got involved.

Figure 1 ($ in billion)

The chart makes it easy to see the scope that investment performance can have on foundation resources — money that will lead to future grants and disbursements. The $25.7 billion gain is greater than the $22.4 billion that Buffett and Gates donated over the period and represents over 60 percent of the $39.6 billion in total assets at December 31, 2015.

How does the Gates Foundation investment compare to others and the broad market averages? Unlike philanthropic success, investment success is much more straightforward to measure. The Gates Foundation ranked in the top quartile of the FoundationMark universe for the 10-year period, and outperformed the average foundation by over two percent per year.

The chart below shows the Gates Foundation’s performance as estimated by FoundationMark over the 10-year period to December 31, 2015 (2016 data is due to be released this month) in comparison to the S&P 500 Total Return Index, the Bloomberg Barclays Aggregate Index (bond market), a mix of 60 percent equities/40 percent bonds, CPI +5% (a proxy for maintaining inflation adjusted purchasing power), and the FoundationMark Dec Index which measures the returns of private foundations. The Gates Foundation outperformed every benchmark for the 10-year period.

Figure 2

(Note: The information is from the Bill & Melinda Gates Foundation Trust, which manages the endowment assets. 2005 is shown as the base year with a value of 100.)

While long term charts like Figure 2 are useful in demonstrating comparative performance, the dollar impact of investment returns can be even more compelling; if the Gates foundation had been invested in a 60/40 mix, it would be $5.5 billion lower, and if the foundation had merely performed in line with the median foundation, it would be nearly $11 billion smaller and would have lower assets than the beginning of the period in 2005.

What factors contributed to the Gates Foundation’s outperformance? While the data in the public filings does not provide enough information for a thorough attribution analysis, it does suggest that security/manager selection played a large part. The chart below of the Gates Foundation’s asset allocation over the 10-year period shows that the foundation increased its exposure to public equities from 32.4 percent to 64.5 percent. Within the equity category, Berkshire Hathaway increased from a negligible position to nearly 25 percent of total assets, effectively placing Warren Buffett in charge of a quarter of assets, which contributed to the foundation’s outperformance. As equities rose, the amount of the portfolio allocated to “Investments – Other,” which contains private equity, hedge funds, real estate securities, futures, options, and other investment vehicles, declined from about 40 percent to 10 percent.

Figure 3

Simply put, better investment performance leads to greater resources that foundations can deploy toward their and their grantees’ shared goals. 

The Gates Foundation is far and away the largest private foundation in existence, and yet it represents less than 5 percent of total foundation assets. If the performance of the other 95 percent of total assets were to improve even slightly, it could have the effect of adding tens of billions of dollars in additional resources for nonprofit organizations working to solve our greatest societal and environmental challenges.

John Seitz is founder and CEO of FoundationMark, which estimates investment returns of more than 40,000 foundations that account for 97 percent of total foundation assets, and uses these estimates to build comprehensive indices and representative peer groups for the use of foundation trustees, officers, and the larger foundation community. If you are a foundation trustee or officer and would like a complimentary report of your foundation’s performance, please request it here.

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Q&A: Does Organizational Culture and Health Matter in Philanthropy?

This post appears as part of our Q&A series on the blog, in which readers can submit questions to be answered by CEP’s experts. We’d love to hear from you with questions related to relationship-building with grantees, grantmaking patterns, assistance beyond the grant, or any other topics related to foundation effectiveness. To submit a question, please email Ethan McCoy at ethanm@cep.org.

Q: There is research that suggests one cannot truly measure the “culture” or “health” of an organization without surveying the followers of the leaders (i.e., staff). Likewise, venture capitalists never make investment decisions without vetting the quality of the senior leadership team of investees. Given all the research in business and other fields about the importance of organizational culture and organizational performance, why does the grantmaking field not measure (through the voice of staff members in organizations) and take into consideration the health of organizational culture in making investment decisions?

– Nina Esaki, Assistant Professor, Springfield College School of Social Work

At CEP, we agree with the premise that a foundation or nonprofit’s organizational culture and leadership have a great bearing on effectiveness.

For foundations, this is why we offer the Staff Perception Report (SPR), a survey instrument for foundation staff that offers benchmarking and insights into areas such as staff’s understanding of the foundation’s goals, staff satisfaction and empowerment, and the quality and helpfulness of performance reviews, among other topics. When we analyzed data gathered contemporaneously from staff perceptions and grantee perceptions (via our Grantee Perception Report (GPR)) at 29 foundations, we found that there is indeed a relationship between the health of foundation staff climate and culture and grantee experiences (more information on that study can be found here and here).

For example, when staff feel empowered — as measured by a series of specific survey items covering issues from authority to professional development to team culture — grantees are more likely to see the foundation as clear and consistent in its communication, which is vital to grantees’ perceptions of the foundation’s impact. We see the connection on other important dimensions in the survey, too. So, contrary to the stereotype that foundations can be opaque or isolated institutions, our data shows that their cultures are emanating outwards and influencing their grantmaking relationships.

For nonprofits, there are many leadership and organizational health-focused resources available. For instance, the Leap Ambassador’s “Performance Imperative” is a helpful framework and toolkit for nonprofits to align their performance and impact with their values. It shares seven pillars of high performance for nonprofits to cultivate, the first of which, identified as the “preeminent pillar,” is “courageous, adaptive executive and board leadership.”

We also see some foundations take a high-engagement approach to grantees, which involves evaluating and understanding grantee capacity on many dimensions, including leadership. One public example I can share (because the foundation has made its GPR results public), is that of the Einhorn Family Charitable Trust (EFCT) in New York City. You can read more about them here. Another initiative you may find interesting is the formation of Blue Meridian Partners, a funder collaborative focused on investing in high-performing nonprofits specifically serving youth and children.

And in a post on the CEP blog just last week, Rusty Stahl of Fund the People pointed to several examples of evaluations that demonstrated how instances in which funders invested in staff at grantee organizations influenced those organizations’ performance and sustainability. As Stahl writes, “Funders can use their intellectual, reputational, and financial capital to recognize the inextricably symbiotic nature of nonprofit workers and their good works.”

We’d be curious to hear of other funders’ approaches to assessing both their own and their grantees’ respective leadership and organizational cultures. Please share any examples in the comments below.

Answered by Grace Nicolette, vice president, programming & external relations, at CEP.

To submit a question to CEP, please email Ethan McCoy at ethanm@cep.org. We will respond to all questions directly, and we’ll choose one question per month to answer on the blog. For the latter, we can withhold your name upon request.

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We Need to Talk about Failure

This article by Anand Sinha, country advisor for the David and Lucile Packard Foundation in India, was originally published on India Development Review. You can read the original here.

“Failure is not an option” read the bumper sticker on the rear window of the muscular SUV careening its way through dense Delhi traffic. To say that failure is an undesirable outcome for most people is an understatement. And at the same time there’s a growing body of wisdom that supports the notion that the pathway to success is often paved with failures — they are, in fact, inevitable.

As development practitioners, we are quite privileged. Although we are working on solving some of humankind’s most challenging problems, the resources we have at our disposal usually come with a low expectation on returns and therefore the ability to take big risks.

Given that we’ve been trying to solve these problems for a long time, maybe decades, and given that the resources we have enable us to take risks, we should have had far more failures than successes. And we should have learnt a lot more about what doesn’t work than what does work.

The fact is, it’s not always possible to assign a definitive point of failure. Yet, when we look at the knowledge base in our fields of work — whether it’s health, education, livelihoods, agriculture, or sanitation, we find that what gets shared and talked about are reams of success stories and best practices. One still needs to look really hard to find cases and people talking about failures and what didn’t work.

Why then are we — as a community — so hesitant to acknowledge and learn from our failures?

Failure isn’t always black and white.

First of all, it’s not always easy to know when one has failed. Not only are development initiatives complex and hard to predict, but practitioners have different perspectives on what’s going on.

Very few proposals and plans actually build in processes for failing and recasting along the way. So sometimes you may have a colossal train wreck progressing in slow motion, but the person running the show may still believe “it’ll be alright in the end.” In other cases, an intervention may be going through early formative trials and errors, but the manager believes they’ve already hit rock bottom. The fact is, it’s not always possible to assign a definitive point of failure.

Then there’s the question of what really failed, because we can fail at various levels. There’s the failure of ideas, the failure of implementation, and then there’s the human factor. Because we prefer distancing ourselves from failure, it’s perhaps easier to acknowledge a failure in design than a failure in implementation.

Our systems and incentives are designed to conceal failure.

Even when we do talk about failing we resort to language that is cushioned, using words like “lessons” and “challenges.” This is because our model of business and our incentives don’t go well with acknowledging failures.

Performance evaluations and career paths are based on achievements and successes. Even the way we write proposals and implementation plans — the core of our business in the development sector — assumes that a linear set of actions over a multiyear period will lead to our desired outcome.

Very few proposals and plans actually build in processes for failing and recasting along the way. So when things don’t work as planned — as often happens — we don’t have a backup plan or even the space to approach the task differently.

It is for leaders to signal that talking about and learning from failures is important. So while there are many people who will say that donors should have patience, take a long-term view, and commit to funding over an extended period, this thinking may need some tweaking. It may be better to have a shorter-term view, have an implementation plan for say six months to a year, and allow for course corrections. A donor could disburse funding in shorter-term tranches while still maintaining a long-term commitment to the program objectives and to working with the grantee organization. Alternatively, scenario-based proposals also allow for more flexibility with implementation.

The relationship between accepting failures and being accountable is a tenuous one.

It is for leaders to signal that talking about and learning from failures is important. However if they decide to pursue this as a value, they need to be committed to supporting their people and partners in taking risks, failing, and trying again. It’s not always that leaders walk the talk when it comes to handling and supporting those who fail. The negative slip of tongue can easily betray the noblest aspirations.

This inevitably raises the question of whether this approach of accepting failures amounts to no longer holding people accountable for results. While it can become a risky path to take, if managed well there’s a fine balance that can be struck between asking for results and keeping people and partners accountable. It’s possible to give them room to fail in ways that ultimately lead to better overall outcomes.

Failing creates a poor public image.

In reality, the notion of failure is not binary, yet that is how it is often perceived by the world. Moreover, our systems encourage success and shun failure. So failing can make nonprofits look bad, which in turn could threaten credibility and eventually choke access to future funding.

Therefore it needs to be packaged well. Larger, reputed organizations might be less open to sharing failures while lesser-known ones, many of which have little to lose because public expectations are low to begin with, might be more willing.

Self perception also plays a role — nonprofits that pride themselves on being scrappy and non-conforming might be comfortable with talking about what went wrong because it is characteristic of their identity.

Sometimes, we also run the risk of talking about failures for the sake of it. As the ideas of “fail fests,” “fail forward,” and “fail fast” set into vogue, there may be more and more instances of people looking for failures to talk about, simply to cast themselves as enlightened future thinkers (the author of this article also runs that risk).

So how do we actively learn from our failures? How do we, as a community, fail well?

Talk about failing within and across “circles of trust.”
Recognizing and discussing failures requires us to navigate different layers, or “circles of trust.” The first one is probably acknowledging it to ourselves as a failure. The next is sharing it with our teammates and close colleagues; the next could be donors, collaborators; and competitors; and, finally, broadcasting it within the field at large.

Taking our failures from one layer to the next requires increasing courage; but each journey has value. When we acknowledge failing, we’re ready to learn from the experience. If we share the failure with our colleagues we can seek help in analyzing and possibly fixing it. And if we share it broadly within our field, the lessons may improve the learning curve for others. Moreover, we might over time earn a reputation of being a learning organization.

Find the right language, spirit, and tone.
Most of the research on failures advises calling it like it is. It’s important to deal with the negative connotation but also accept that there is a positive outcome to find.

Many donors have begun holding “Fail fests,” which encourage participants to talk about what went wrong. The key to having honest and open conversations lies in maintaining a light and forgiving tone. Light enough that people feel comfortable discussing their experiences candidly, yet not so light that the discussion becomes superficial.

In reality, the notion of failure is not binary. The challenge is in preventing people from disguising their failures as eventual successes. With such discussions, we risk reaching a point of diminishing returns. The more we romanticize failure by celebrating it for the “show and tell” of how open and courageous we are, the less valuable it is as a learning moment.

Broach the topic from the lens of collective challenges among peers as opposed to individual failures. It creates a safe space for discussion.
You have a better shot at success if you convene a group of peer organizations that are facing similar challenges, and get a neutral third party to facilitate a structured conversation around experiences and solutions.

We are still a long way from talking about what doesn’t work in an honest and constructive manner. Though it will probably take a series of baby steps over time to embed the experience of failure into how we plan and talk about our work, donors can lead the way. We can make changes within our organizations and reporting requirements, and signal to our grantees that learning from what doesn’t work is just as important as focusing on what does.

Anand Sinha is the country advisor for the David and Lucile Packard Foundation in India.

* The opinions expressed in this article are the author’s own and do not reflect the views of the David and Lucile Packard Foundation or of the Public Health Institute.

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