Wrap-up: SOM Philanthropy Conference (Part I)

On November 16, 2007, I had the pleasure of attending the 3rd Annual Yale School of Management Philanthropy Conference, an ambitious event that included a total of seven panels, three guest speakers, and multiple receptions. The all-volunteer student organizing team did a great job, and I was glad to be involved as the coordinator of one of the panels. The event kicked off with a presentation from Courtney Bourns, director of programs at Grantmakers for Effective Organizations. Courtney’s talk was excellent, and I was surprised and pleased that much of it resonated with opinions I’ve expressed on this blog and elsewhere. Her main theme was that foundations are most effective when they listen to the organizations they are funding–that is, when they allow the organizations on the ground to be the experts. I see foundations–especially those funding the arts–as being fundamentally in an enabling role, not a controlling one. Overwhelmingly, nonprofits have been clamoring for more general operating support (GOS), more multiyear support, and less restriction on how the money can be used. The first and third of these go hand in hand–general operating, for the non-insiders reading this, basically means the same thing as unrestricted. In practice, most “general operating” grants go to pay for boring things like utility bills and salaries for the development staff, since a nonprofit’s programs are usually paid for by grants that have been awarded for those projects specifically. However, it doesn’t have to be this way–if more foundations were willing to provide GOS, then some of that money could be used to support programs. This would be a wonderful thing for nonprofits because it would allow them to allocate program budgets more flexibly, accommodating actual present-day realities instead of being constrained by projections that may have been made years earlier or under different leadership. The multiyear support is important for the following reason: if you fund an organization year in and year out, but you make them reapply each time, what do you think that does to their development costs? That’s right, they go up. The more time that organization has to spend cultivating, applying for, and reporting on your grant, the more your investment is getting sucked up by overhead. As much as I love them, I’m pretty sure that the mission of most nonprofits is not to provide job opportunities for fundraising professionals. So, the more unnecessary steps the funders can remove from the process, the more efficient their grantmaking will be.

Next up was the panel that I organized, entitled “Funder/Grantee Relationships.” We were joined by five panelists: Kim Healey from the NewAlliance Bank Foundation, Barbara Strauss from Clifford Beers Clinic, Sarah Fabish and Lillian Cruz from the Community Foundation of Greater New Haven, and Deb Stewart from the Consultation Center. Beth Daponte, who teaches the Program Evaluation class at SOM, served admirably as moderator. The conversation built upon the themes of Courtney Bourns’s talk, exploring the balance between grantmakers’ and grantseekers’ needs in program evaluation. One issue Healey mentioned was that, as a corporate funder, multiyear grants did not make sense for NewAlliance because the foundation could not necessarily predict its budget from year to year. Nevertheless, the representatives from both funding organizations acknowledged the difficulties an overly complicated evaluation system could produce, for funder as well as grantee (it does no one any good to have stacks of unread reports taking up space in the office). For her part, Barbara Strauss of Clifford Beers said that the evaluation process had improved discipline enormously at her organization. CFGNH adopted a new evaluation system last fall incorporating several levels and methods. Some of the innovations, as I understood them, include asking grantees to evaluate the impact of a grant two to three years afterwards, instead of directly following the period of support; commissioning formal studies evaluating groups of organizations for the purpose of knowledge sharing; and hiring an outside firm to document a grant’s impact while it’s happening. Sarah Fabish added that CFGNH’s evaluation process includes a site visit, an important component that helps identify great projects that may not have looked so good on paper.

While there are many positives to evaluation, Prof. Daponte encouraged the panelists to comment on the pitfalls as well. The main issue mentioned, as before, was capacity. Ms. Cruz allowed that funders are often not so good at determining the cost of a new requirement in their process, and often that cost is paid for by the grantee. Ms. Strauss revealed that her organization simply does not apply to grant opportunities if it knows that the organizational strain will not be worth the potential benefits. (This was also something that I encountered at my last job.) The bottom line, as Deb Stewart put it, is that funders need to decide how they want the staff at the grantee organizations to spend their time. It may not always be possible to have systems that are both appropriate to the scale of the organization and truly state-of-the-art.

Ultimately, the panelists agreed, these tensions and opportunities are best explored in the context of a close and candid funder/grantee relationship. Funders need to be clear about their goals and expectations, while grantees need to feel empowered to speak up when a requirement may be causing more harm than good. When both conditions are achieved, the potential for an optimal solution is enormously increased.

I’ll post part II of the wrap-up, covering the remainder of the conference, in a few days.

Philanthropy Conference

Wrap-up: SOM Philanthropy Conference (Part II)

Boss : Emerging Leader :: Funder : Grantee (A Bullet-Point Manifesto)

Live from GIA: Day III – Not Asking Nonprofits to Do More with Less