Hewlett Foundation President Paul Brest is a long-time advocate of increasing the effectiveness of grantmaking through the use of strategic or outcome-focused philanthropy. It is an approach that has steadily gained currency in recent years with a growing number of organizations, publications, and research initiatives dedicated to its study and practice.
Here Brest explores some of the ideas underlying outcome-focused grantmaking and looks back at his decade at the helm of the Hewlett Foundation as it readies for transition to new leadership in the coming year.
What is outcome-focused philanthropy, and why is it important?
Philanthropy is outcome focused when donors and their grantees articulate clear objectives for what they hope to accomplish, design realistic strategies to achieve those objectives, measure their progress, and modify their strategies as needed.
Outcome-focused philanthropy benefits donors by making their dollars as effective as possible in furthering their philanthropic objectives. This is true whatever a donor’s particular concerns may be: eliminating disease, protecting the environment, providing shelter for the homeless, or supporting one’s alma mater or church.
Some people have said that outcome-focused philanthropy ignores matters of the heart. What’s your response to this?
All philanthropy begins in people’s hearts. The question is whether the mind then engages to help the heart get its desire. That’s where outcome-focused grantmaking comes in. Among other things, it requires learning whether the organizations you support are effectively achieving their intended outcomes. But due diligence takes time and effort. It is especially hard work for individual donors and small family foundations that don’t have a staff.
Because of the size of its endowment, the Hewlett Foundation is able to have staff members who can do the analytic heavy lifting. But we never forget that the Foundation’s work originated in the hearts of its founders and depends on the continued passion of our staff and the organizations we support.
What are the essential characteristics of the Foundation that you think have been central to its success?
The ethos established by the founders continues to inform our daily work life. This includes a low-key approach, respect for our grantees, and a small staff of exceptionally high quality. While the workload is sometimes heavy, our small size creates a face-to-face environment that fosters collaboration. In some ways, I think we are heir to the nonbureaucratic, open style that characterized the halcyon days of the Hewlett-Packard Company. And like the company, we’re ultimately about results.
Again, this is where an outcome orientation comes into play. The first step is for the Board to translate our founders’ broad mandate to improve humanity (as they put it forty-five years ago) into specific goals, such as protecting valuable ecosystems in the North American West. Then the staff consults with nonprofit organizations, practitioners, and experts in the field to develop strategic plans, followed by due diligence, grantmaking, and continuous monitoring to keep us and our grantees on target.
How does the Foundation determine which goals to pursue?
Determining specific goals and approving strategies to pursue them are among our Board’s most important functions. Our grantmaking to support education, the environment, global development and population, performing arts, and philanthropy can be traced back to the founders’ interests. But the world has changed a great deal since they established the Foundation in 1967, and so have our specific objectives. For example, Bill and Flora Hewlett were concerned with protecting the environment, but global warming only became well understood as a serious problem in the past several decades. The Board determined that global warming was such a threat to the environment and, indeed, to human well-being that mitigating catastrophic climate change is now a major objective of our grantmaking.
How has the Foundation changed since you arrived in 2000?
Soon after I came, the Foundation received assets from Bill Hewlett’s trust, and its endowment and grantmaking budget have increased nearly fivefold since then. The Foundation’s staff has grown and our grantmaking has become even more ambitious, and with this growth has come the need for a stronger organizational infrastructure. In 2000, the Foundation didn’t have formal human resources, communications, or facilities functions or a general counsel. Now we do, and other areas have grown as well—though we keep in mind the need to keep procedures simple, avoid bureaucracy, and maintain the Foundation’s agility. We have also developed systematic approaches to outcome-focused grantmaking.
In 2002, the Foundation completed construction of a beautiful new office building to house our expanded staff. It was the first LEED Gold building in California, and we hope that it helped inspire the other buildings constructed since then that meet even higher green standards. The building provides a wonderful workspace for our staff members as well as a welcoming environment for the many local organizations that use our conference rooms.
One of the Hewlett Foundation’s Guiding Principles is that it “focuses on the most serious problems facing society where risk capital, responsibly invested, may make a difference over time and on sustaining and improving institutions making positive contributions to society.” How is this reflected in the Foundation’s grantmaking?
Our grants aimed at reducing human-caused climate change are paradigmatic of high risk/high return grantmaking. We began by joining other foundations in support of the Energy Foundation and, together with the Packard and McKnight foundations, we created the ClimateWorks Foundation. The likelihood that we, together with many others, can avoid large-scale climate change seems increasingly slim, but the low probability of success is more than counterbalanced by the catastrophic consequences of unchecked global warming.
Actually, risk-taking and collaboration underpin many of our grants. For example, we joined four other foundations to create California Forward, a bipartisan organization dedicated to reforming the state’s fiscal and governance practices. Although success is anything but assured, California Forward has made some progress in getting the state back on track.
Our effort to preserve the Great Bear Rainforest in western Canada—the world’s largest unprotected tract of intact coastal temperate rainforest—was also a high risk, collaborative effort. Together with a number of other foundations, we helped craft an agreement among the key stakeholders—timber companies, environmental NGOs, First Nation tribes, and the British Columbia provincial government—to conserve the forest. There were many moments when the process seemed on the verge of falling apart, but the parties reached a deal that has a pretty good chance of enduring. We also collaborated with some of the same foundations to restore 15,000 acres of San Francisco Bay salt ponds to wetlands, increasing the Bay’s biodiversity.
Not all of our grantmaking involves high risks. You mentioned the Foundation’s commitment to sustaining institutions that make positive contributions to society. The risks of failure here are often lower or more contained than those, say, in a strategy to avoid catastrophic climate change. For example, the Performing Arts Program provides general operating support grants to music, theater, and dance groups in the Bay Area. While our portfolio inevitably—and appropriately—includes some groups that are likely to fail, many of our grantees have remained vibrant for decades. All of our programs fund some pretty stable core grantee organizations. As an example of sustaining institutions outside of the Foundation’s program areas, I should mention our recent $113 million matching grant to the University of California, Berkeley, to create 100 endowed chairs for professors. We hope that this will help maintain the strength of California’s leading public university.
The Hewlett Foundation prides itself on making grants to build entire fields. Can you give some examples?
Well before I came to the Foundation, it played a key role in building the field of conflict resolution and was one of the handful of stalwart supporters of the perennially controversial field of population. The Foundation’s tradition of building fields has continued.
For example, a 2001 collaborative grant to MIT to put its course materials online led to our playing a major role in developing the field of open educational resources. A decade later, one promising outcome is the increasing number of high-quality open textbooks, published under Creative Commons licenses and made available to students free or at a far lower cost than conventional textbooks.
A number of years ago, our Global Development and Population Program began grantmaking to improve the transparency of budget flows to and within developing countries, with the aims of reducing corruption and improving the delivery of services. Since then, we have played a major role not just in supporting individual organizations, but in connecting them to build transparency and accountability into a field. Our grantees have already achieved notable successes, including helping advance freedom of information laws in Mexico.
The Foundation’s effort to move international donors’ focus on education in developing countries from inputs (such as classroom seats) to outcomes (such as student achievement) aims to radically transform an existing field. The international donor community spends lots of money building schools, but often the children in them just aren’t learning. By supporting advocacy, pilot programs, and evaluation, we have had some success in focusing funding on students’ learning, not just school attendance. Domestically, our Deeper Learning initiative is working to reform the nation’s approach to education by supporting a movement to complement basic education with critical reasoning and collaborative problem solving skills.
What are your priorities for the coming year as the Board begins the search for your successor, and what legacy will you leave the next president?
Quite independent of succession, we have an ambitious agenda for the coming year. This includes firming up our processes to provide the feedback that we and our grantees need for strategic course corrections and building our capacity to help grantees face organizational challenges in strategy, communications, and governance. The Foundation has an extraordinarily strong staff, and my highest priority is to maintain this excellence for my successor.
A new president will inevitably continue the Foundation’s development in ways that differ from my own. But I believe that our ethos and our commitment to deploying the Foundation’s resources to achieve important outcomes are very precious and will transcend the tenure of any president.
What do you plan to do next?
While I’ve been president of the Foundation, I have taught a course in Problem Solving, Decision Making and Professional Judgment in Stanford’s graduate program in public policy. I hope to expand my range of teaching and writing to take advantage of what I’ve learned about philanthropy and the nonprofit sector during the past eleven years. One unknown is how it will feel to give up the challenges and rewards of translating ideas into action and whether there are ways of continuing to do this after my tenure at the Foundation.
In any event, I could not be more grateful for the privilege of leading this great institution. Whatever I do next will benefit tremendously from this experience and especially from what I have learned from my colleagues.