The never changing world of philanthropy

New approaches to solving old problems is the innovation mantra of more than one philanthropic foundation in Australia. Recently this got me thinking about the different approaches operating within the grantmaking space in Australia. With a few notable exceptions aside I think it is fair to say that most trusts and foundations operate in a pretty similar procedural manner.  So while funders ask grantseekers to innovate in their practices there is little experimentation around grantmaking practices. Can we assume this lack of innovation from funders in their grantmaking approaches is due to the fact that funders have got their processes perfected?  I wonder what grantseekers would say to that?

So what do grantseekers think of Australian funders? Officially we don’t really know but I doubt that is because applicants and grantees don’t have opinions.  The unfortunate reality is that there is little opportunity provided for grantseeker or grantee feedback about a funders approach to their grantmaking. In the United States the Centre for Effective Philanthropy has developed the The Grantee Perception Report® (GPR) which provides grantmakers with comparative and frank feedback on how grantees think they are performing.  Some funders even choose to make their reports publicly available. The GPR allows philanthropic boards to assess their performance as funders, this in turn helps them to work more effectively with grantees in the pursuit of their mission.

If it walks like a duck and talks like a duck…

So is the answer to better practices and diversity in grantmaking approach as simple as the provision of a feedback loop? While comparatively speaking there are greater levels of diversity in philanthropic practices across the United States it could be argued that ‘sameness’ is still the dominant feature of their foundation sector.

In a 2009 post on her philanthropy blog, Stanford University’s Centre on Philanthropy and Civil Society Visiting Fellow, Lucy Bernholz, questioned why, when there is so much that people outside of the foundation field would change about how philanthropy functions, has so little changed in past 100 years. She contends:

It doesn’t seem possible that these practices survive because they work well, please the customers, or even please the board and staff who choose them and re-create them. Institutional isomorphism is one of those graduate school concepts that is… true to life – organizations mimic like organizations, even when it doesn’t necessarily serve their purposes” (2009).

Isomorphism is basically the much flashier way of saying ‘sameness’.  It should also be said that not all about isomorphism is bad. If you look like a duck and talk like a duck chances are other ducks are going to accept you. These behaviors are really evident in the corporate world where organisations that look like each other (in terms of board structure, staffing structure, business philosophies) will more easily attract investors, customers and secure loans.  In short isomorphic behavior gives many organisations legitimacy.

There have been studies that suggest that isomorphism within the nonprofit sector is not as evident as it might be in the corporate world.  I’d contend however that traditional philanthropy is the exception to that nonprofit rule and there are a couple of reasons for that.  Think of the really big Australian philanthropic foundations, even most of the small ones too – they seem to operate and look pretty similar to one another in their grantmaking (e.g. application process, closing dates, reviews, board meeting, results etc). Objectives and priorities might be different, but processes and board structures are fairly similar. Part of this is driven by fiduciary responsibilities.  Trustees of foundations need to concerns themselves first and foremost with management of the assets – the upside is that if they do this well they can give away more money. So with grantmaking merely a by-product, it’s not hard to understand why diversity in grantmaking approach is not as evident as it might be.

Competition in the corporate world drives innovation and new behaviours.  In the nonprofit world, there is competition too for funds as well as the mission driven approach that dictates how NFPs work and the skills sets that they have on their boards and among their staff.  In philanthropy that competition doesn’t exist and compliance is focused almost solely on tax and law. So how do we drive diversity?  How to do celebrate those foundations that invest more in understanding that sometimes what is really important is the way you give? Perhaps a good starting point is to accept some feedback from those we work with most closely, our grantees. We also need to start listening and learning from those funders who are working a little bit outside the box. What have been their experiences, successes and failures? How did they bring their boards on that journey?

So what do people think really good models of philanthropy look like? Can we start to compile some of the features that not only lead to better practices in philanthropy but greater impact on the ground?

You can follow the musings of Caitriona Fay on Twitter via @cat_fay or the blog via @3eggphil


How to make friends and influence philanthropy

A colleague has just returned from the Centre for Effective Philanthropy’s (CEP) conference Better Philanthropy: From Data to Impact in Boston.  The CEP provides data to philanthropic funders so they can “improve their effectiveness – and, as a result, their intended impact”.  She’s buzzing with new ideas, and was inspired by the people she met.

One of the areas CEP looks at is the funder-grantee relationship, or, whether we’re “working productively with our grantees”.  My colleague raved about the report Working with Grantees:  Keys to Success and Five Program Officers Who Exemplify Them. The CEP has looked at grantee survey data since 2004, and has tweaked their survey along the way to glean new insights.  Through this process, CEP has looked at over 9,600 suggestions from grantees on how foundations can improve.  That’s a lot of feedback…

In the introduction to the report, Paul Beaudet  from the Wilburforce Foundation says “At the very basic level, solid relationships with grantees are critically important because grantees are a very good source of information for us.  They are the ones doing the on-the-ground work.  They’re likely to have a much more nuanced and deeper understanding of the context for the work that needs to be done in the particular places that we care about.  If we have high-quality, long-term, trust-based relationships with grantees, we believe that we’ll have better knowledge around which we can make smart investments in their organizational and programmatic capacity, helping them to achieve their outcomes more efficiently and effectively.”  Yep, couldn’t have said it better myself.

I’ve been thinking about Caitriona’s recent blog on transparency, and I think a lot of the ‘how’ in transparency comes down to relationships.  And I mean relationships at all levels.  From the high level – for example the philanthropic sector’s relationship with government, and the perceptions of the philanthropic sector from the point of view of the not-for-profit sector – right down the nuts and bolts end – the relationship between the giver (whether that be the philanthropist, Foundation board director or philanthrocrat) and the asker (development manager, Board member of the NFP or fundraiser).  What Paul is talking about is transparency.  And a transparency that has a real benefit for both the Foundation and for those organisations it supports.

The CEP had four key findings of factors that contribute to a good relationship between Foundation staff and grantees.   Firstly, that Foundation staff understand the organisation they’re funding, including its goals and strategies.  Secondly, that the selection process of the Foundation helps strengthen the grantee organisation’s work.  Thirdly, that Foundation staff have expertise in the area they’re funding, and finally, communication between the grantee and the foundation staff, both who initiates it, and how often.

It sort of seems obvious, but I think there are still some take home lessons for us philanthrocrats.   For me it’s about keeping the door open, saying ‘yes’ to opportunities to learn, and doing my best to be engaged in sectors of interest.  In my experience, that’s where I’ve learnt the most.  And watching my peers, I think it’s also where the best projects are born.  So cheers to transparency.  May it make our sector stronger.