At a time when Democrats and Republicans can find virtually no common ground, at least two prominent thinkers, one on the right and one on the left, emphatically agree on one subject: that many foundations are taking a disturbing approach to grantmaking that adds unnecessary and counterproductive pressure on the nonprofit sector.
In a recent speech to the Hewlett Foundation that is reprinted in Nonprofit Quarterly, William Schambra, who works for the conservative Hudson Institute, takes on “strategic philanthropy,” the hottest new trend among national foundations and corporations. Advocates for strategic philanthropy say it’s a valuable effort to focus their grantmaking and to apply metrics to nonprofit outcomes so that they can better measure what actually works. Schambra, on the other hand, thinks it’s a way for foundations not only to impose their priorities on nonprofits, but to tell nonprofits how to do their work. Schambra skewers the foundations’ notion that front-line nonprofits should spend more time evaluating their “logic model,” and he encourages foundations to focus on simply helping organizations that are doing good work. Schambra preaches the importance and effectiveness of letting nonprofits come up with ideas that work from a grassroots level, instead of having a superstructure imposed from above by major foundations. As Schambra tells foundations, a bit more directly than any nonprofit executive ever could, “Just write the damned check.”
Meanwhile, on the left, we have the persistently perspicacious Pablo Eisenberg, an old-time progressive community organizer and a long-time critic of big foundations. Eisenberg captures the problems of domineering foundations with characteristic acuity in a Chronicle of Philanthropy opinion piece, in which he supports Schambra’s critique with full voice. Eisenberg’s interpretation is that through strategic philanthropy, some major foundations are now in effect hiring nonprofits to carry out the foundations’ vision. In the process foundations are eliminating the chance for ideas to bubble up from the nonprofit practitioners, or for nonprofits to take ownership of what they are doing. “It marks a fundamental shift in control and power by donors to call all the shots and exclude nonprofits with great new ideas,” writes Eisenberg.
Eisenberg notes in this and other writings that there’s an essentially undemocratic aspect to the foundations’ influence. Foundation boards are taking the fortunes created by their founders and are dictating to the nonprofit community – and, really, to the country – what their priorities and methods should be. The foundations are a self-appointed few, who were never elected to their position, and who can never be thrown out of office, yet who wield tremendous influence.
Eisenberg compares the foundations’ strategic philanthropy approach to the top-down damage that the Gates Foundation and others have wrought on public education. He writes, “Slavishly devoted to the idea that better technology, greater student testing, improved measurements, and the spread of charter schools will improve education, the [Gates] [F]oundation does little to encourage policy makers to consider a broader range of ideas.” And who had been left out of the conversations about school reform? To a disturbing degree, the teachers, once members of a well-respected profession, and now increasingly blamed, discounted, disconnected, and disenfranchised from the very educational process they nominally lead.
I fear that a similar sense of imposition and top-down dictates from foundations are now undermining the sense of ownership that had long been a strength of the nonprofit sector. I’m all for accountability, but as someone who works with nonprofits, nearly all of which are already short-staffed and underfunded, I understand their frustration as they now have to expend time and energy to concoct measures to prove to their funders that their interventions are working. Foundations are requiring grant recipients to do more reporting, which is usually tailored and specific to meet the foundations’ latest theory of social change. More than that, foundations are expecting nonprofits to alter their ways of going about their business. The vast majority of nonprofits are resentful, but because of the fundamental power imbalance between funders and nonprofits, the grantees have little choice but to dance to the foundations’ tunes. (We are all painfully aware of the nonprofit community’s golden rule: “Those who have the gold make the rules.”)
It doesn’t have to be this way. I had a friend named Gordon who ran a small community foundation some fifteen years ago. He and his foundation did something rather dramatic. They eliminated all guidelines to their grantmaking. And, for good measure, they eliminated all deadlines. At the time, I – then a staff member at another community foundation – was shocked. This was heresy! How can a foundation not have guidelines or deadlines? That’s like playing a baseball game without umpires! It’s like running a restaurant without menus! Anarchy!
Gordon explained it to me: “We thought hard about what we were trying to accomplish. It boiled down to this: we’re trying to support good people who have good ideas that would make a difference in the community. Every time we imposed a guideline or a deadline, we were creating a barrier preventing good people from getting money to do good things. When we would say we didn’t fund a certain kind of project, we eliminated a good person trying to do a good thing. When we made applicants wait until the deadline three months away? Same thing. The more we tried to impose our will and establish order, the less effective we were, because we snuffed out innovation and ownership. We were rewarding the people and organizations that were good at jumping through hoops, instead of those that would actually make a difference. So we’re simply not doing it anymore.”
Many years later, I appreciate how wise Gordon was. Unfortunately, the tide is now moving in the opposite direction. Foundations know all. They are dictating their terms and disenfranchising the nonprofits. I don’t think this will end well, unless the big foundations suddenly and uncharacteristically begin to listen, to demonstrate humility, and to admit that perhaps they don’t in fact have a monopoly on good ideas.
Copyright Alan Cantor 2013. All rights reserved.