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Early Learnings on Building Foundation Openness

Friday, December 21, 2018

Originally posted by the United Philanthropy Forum

By David Biemesderfer, President & CEO, United Philanthropy Forum | @dbiemesderfer

Assessing a foundation’s performance is critical to its learning and improvement if it wants to be as effective as possible in achieving its philanthropic strategies and goals. A recent report by The Center for Effective Philanthropy, a United Philanthropy Forum member, noted that “foundations cannot expect to improve in their programmatic efforts without access to information about what’s working and what’s not.” That’s sometimes easier said than done, the CEP report makes clear.

For example, the majority of foundation CEOs interviewed for the report believe that the knowledge that other foundations have about what is and isn’t working in their programmatic work is relevant/useful to their foundation. But just 19 percent of CEOs say they have quite a bit of knowledge about what is working in the programmatic efforts of other foundations that are addressing the same or similar goals as their own. Even fewer—6 percent—say they have quite a bit of knowledge about what isn’t working in their peer foundations’ efforts.

United Philanthropy Forum has been exploring how foundations can get better at sharing what they’re learning with foundation colleagues and grantees, and how they can use these learnings to improve their work. We recently concluded a two-year effort to engage foundations in building openness and transparency, made possible with support from the Fund for Shared Insight. Our study defined openness using the Fund’s description: how foundations share about their goals and strategies; make decisions and measure progress; listen and engage in dialogue with others; act on what they hear; and share what they have learned.

During the study we worked with a group of regional philanthropy-serving organizations (PSOs) in our membership to address three key components of foundation openness: (1) learning from failure, (2) using feedback to guide strategy, and (3) engaging nonprofits to catalyze more openness. The Forum developed two tracks of engagement: one-time dialogues on openness aimed at broad-based participation among funders (as well as nonprofits for some of the programs); and cohorts of foundation leaders, or foundation and nonprofit leaders, who collectively went deeper into the openness exploration through a series of engagements over the two-year period. Eight regional PSOs engaged their foundation members in 13 regional dialogues on one or more of the three foundation openness topics, and five other regional PSOs engaged a longer-term cohort.

Given the short timeframe of the project, we did not expect that the dialogues or cohorts would result in significant changes within the PSOs’ member foundations. However, an evaluation of the effort did yield a few significant early learnings that we think are worth sharing:

1. Dialogue and cohort activities resulted in increased knowledge and awareness of the need for, and value of, foundation openness.

Grantmakers that participated in the project reported a higher frequency of sharing their successes and failures with the field and with their grantees after attending the dialogue activities. Although details about the level of sharing are unclear, this indicates that focused intentional conversations about foundation openness can provide funders with some tools and steps toward culture shift to share more information outside of their organization.

2. Culture shift has started with small steps, but next steps and sustainability are unclear. Although the dialogue and cohort activities stoked interest in foundation openness, an authentic culture shift within an organization requires extensive time and effort. Participating PSOs consistently shared the strategy of starting with minor changes that could shepherd more widespread change in the future. One small step that some funders started with included adapting the language in their grant applications and reports to support trusting relationships between grantmakers and grantees. For example, one cohort participant recognized that they were asking their grantees about sustainability on grant applications in a way that felt patronizing and unrealistic. The foundation consequently changed the wording on its application to instead capture how the grantee was thinking about the work once the funding was over. Other participants reported changing the language on their websites and updating their grant scoring rubrics as a result of the cohort activities and discussions. Cohort and dialogue participants were eager to continue but unsure about next steps and sustaining the work.

3. Foundation openness requires trust and relationship building to break down power dynamics, which takes time and courage.
Almost a third of dialogue attendees reported that staff within their foundation are afraid of negative consequences if they share their failures (this finding also surfaced in the CEP report). This fear and the inherent power differentials within foundations between leadership and staff, and within grantmaker/grantee relationships, must be addressed in order to truly move the needle on foundation openness. 

The cohort participants had the benefit of regular contact with one another, which allowed them to network and build invaluable new relationships to support their change in practice. The conversations that happened in the cohort meetings helped funders identify gaps in their network and begin to discuss how to address them. The ongoing nature of the cohorts allowed for participants to develop supportive relationships with each other and a natural community of practice around openness-building strategies in their individual organizations. Cohort PSOs recognized that in order to move the conversation forward, they needed to be courageous enough to call out the “elephants in the room” and ensure that nonprofit organizations were formally and equally invited to the table.

4. A neutral facilitator, openness champions, and leadership buy-in are crucial for moving the needle towards greater openness.
Both dialogue and cohort PSOs credited their successes to the careful planning and facilitation of their activities. Given the grantmaker/grantee power dynamics at play, PSOs indicated that having a skilled facilitator who remained neutral throughout the process was crucial for ensuring that all voices were heard.

Though there was an increase in the percentage of dialogue attendees who reported having, or identifying, at least one person in their foundation dedicated to openness efforts, the importance of having multiple people dedicated to openness was consistently reiterated by cohort participants. Participants noted that it is beneficial to have multiple people from an organization focused on openness activities because organizations need to have a certain level of buy-in to begin implementing openness practices.

Participants also stressed the importance of having leadership buy-in. Given that organizations are often juggling competing priorities, having foundation leadership who supports increased openness is instrumental for ensuring the work moves forward. Without a dedicated focus of time and resources to increasing openness, it will likely take a backseat to other more pressing tasks (again, this is consistent with findings in the CEP report).

The Forum remains committed to continuing to work with our network of 78 PSOs to advance our understanding of how to lead and support foundations in being more open about gathering and sharing what they’re learning and using feedback to improve their grantmaking practice. Although for some this may seem like “insider baseball” among funders, our study has shown that it is crucial work that can make a real and positive difference in helping nonprofits to better achieve their missions.

In Colorado, for example, the Colorado Association of Funders engaged a cohort of foundation and nonprofit leaders in our foundation openness project. One nonprofit leader in the cohort noted that “open partnerships with foundations will strengthen the nonprofits, which in turn increases the benefit to the community.” Noted another nonprofit leader in the cohort: “Magic happens when the relationships happen—when funders and nonprofits start to see eye-to-eye.”

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