How can funders best support nonprofits in becoming high-performing organizations? That’s a question that preoccupies Jennifer Wei, the Hewlett Foundation’s Organizational Effectiveness (OE) Officer. She helps our programs build and support sustainable, high-performing grantees that are successful in achieving their goals. Through the OE program, she advises all of the foundation’s program staff and helps make supplemental grants dedicated to capacity-building, from strategic planning to leadership transition.
What excited you about joining the Hewlett Foundation as Organizational Effectiveness Officer?
I came from the nonprofit sector where I experienced first-hand the challenges of growing an organization and building the needed capacity to help it become successful. As chief operating officer at a youth-serving nonprofit, it was challenging to see how most of our donors wanted us to increase the number of youth served and outcomes achieved, yet few were providing the funding we needed to build out our infrastructure and talent. As a result, our operational infrastructure lagged behind and we weren’t able to properly invest in developing our staff and leadership. Not only did this undermine our operations and growth, but our staff were constantly overwhelmed and feeling burned out. Having been in the nonprofit trenches, I’m excited to be in this role at the Hewlett Foundation to help address this challenge and build the effectiveness of nonprofit organizations across our programs. Standalone organizational effectiveness (OE) programs like ours are rare in the philanthropic sector, and I’m proud that the foundation recognizes the vital importance of building strong, healthy organizations.
What challenges do nonprofits face and what can funders do?
It’s been interesting to have a bird’s eye view across the foundation. I see challenges that show up repeatedly, regardless of an organization’s budget size, geography or field. It could be dealing with unexpected staff or leadership turnover, a loss of funding, or a change in strategy necessitated by our ever-changing context. All organizations go through ups and downs – whether it’s internal or external – and nonprofits need to have the strength and resilience to survive and overcome the tough times that inevitably come. To do it right, “organizational effectiveness” takes planning and resources upfront and should be approached in a thoughtful, proactive way. Being reactive in the face of a crisis is often too late.
Unfortunately, there is a serious shortage of investment in organizational capacity that we in philanthropy need to take more responsibility for. Many funders prioritize project support over general operating support and cap funding for indirect expenses well below the true cost of running an organization, thereby squeezing nonprofits of the funds needed to invest in capacity. Nonprofits need significantly more flexible funding to do their work effectively, and funders need to recognize and pay for the full cost of a nonprofit organization’s work. This problem cannot be solved by a handful of foundations who give general operating support; we need a critical mass of funders offering flexible funding to ensure the longevity and sustainability of the organizations we depend on to solve the problems we care the most about.
Why are organizational effectiveness grants so highly valued by grantees and program officers?
The foundation is committed to giving grantees the flexibility they need, and whenever possible, we will provide multi-year general operating support. However, we recognize the reality that general operating support grants often go directly to pay for much-needed operating expenses such as staff salaries and rent. Our OE grants are designed to offer grantees additional funding as a one-time “booster shot” that builds organizational capacity in a specific way. This enables grantees to prioritize a specific organizational capacity project, often with the help of a consultant who has expertise in that particular area. We have heard from both program officers and grantees how much they value OE grants – not only for the additional funding and support, but for the opportunity to have open, candid conversations about organizational health. It also helps our program officers better understand their grantees’ needs and how they can help support them better.
What are future opportunities for the Hewlett Foundation and the field?
Considering how to address diversity, equity and inclusion has been a top priority for the foundation, both internally and externally. A couple of years ago, our Education team began making grants to develop grantees’ capacity on that front in its work around K-12 education. This year, we have a $2 million foundation-wide fund that will support this type of capacity-building for a subset of current grantees. Examples of possible projects include conducting an audit to examine existing practices and culture, revising recruitment and retention plans, and incorporating beneficiary voice into internal strategy. I’m excited to see what we will learn from this pilot fund and how it will help inform our future grantmaking.
Earlier this year, I had the extraordinary opportunity to travel to Beijing, China with the Stanford Center on Philanthropy and Civil Society and lead a workshop on the importance of funding organizational capacity and leadership. With new emerging wealth from tech entrepreneurs and other businesses, many Chinese philanthropists are eager to learn how to fund and support a new and growing social sector. They have a unique opportunity to start from the ground up and build upon what we have learned in the United States, particularly the importance of investing in nonprofit capacity early on. I also met with several environmental organizations in China and was so impressed by their work: The use of technology to increase transparency and advance the environmental movement in China has been transformative. It was inspiring to see the energy, passion and steely persistence of those making significant strides, yet these organizations struggle with building capacity to support their growth, and need stronger infrastructure to support the work they do.
I believe there is tremendous opportunity for philanthropists to learn from one another across borders and to innovate our practices. Collectively, we can better equip organizations with the resources they need to effectively tackle the problems we face in our communities and globally.
