There was a time when getting a grant from the Philadelphia Foundation was slow and onerous. They were awarded just twice a year, were usually small, and those applying were never quite sure they had the foundation staff’s attention.
Then there was the six-month wait for an answer.
While applicants politely seethed, the Foundation never even knew it had a problem until it commissioned the Center for Effective Philanthropy to conduct a survey of its grant recipients.
The Center, whose work is funded by the Hewlett Foundation’s Philanthropy Program, is one of the first non-profit organizations in the country dedicated to improving the effectiveness of the nation’s foundations through rigorous and objective data collection.
Based on the data the Center for Effective Philanthropy presented to the Philadelphia Foundation, the Foundation streamlined its entire grantmaking process. It instituted online, rolling applications, and now applicants can expect to hear from the Foundation within two weeks.
The Foundation also transformed its grantmaking strategy in response to grantee feedback. It began providing its organizations with greater general operating support, and its program officers now seek to build partnerships with potential grantees, providing hands-on consulting services, workshops, and seminars to help its nonprofits succeed.
“It all started with the CEP’s Grantee Perception Report, which was the main catalyst for change,” said Nancy Burd, vice president for grantmaking Services at the Philadelphia Foundation. “The survey told us that we needed to be more relevant to our constituency. It really made us think and reminded us that it was time to touch base with our audience.”
The underlying premise of the Center’s work is simple: if a foundation’s performance can be enhanced, it can be more effective in addressing pressing social problems. To this end, the Center has focused on using data to help foundations improve their grantmaking.
Today the Hewlett Foundation’s Philanthropy program, which works to improve the field of philanthropy itself, is one of the Center of Effective Philanthropy’s largest supporters.
“Philanthropy is an old practice but a young field,” says Jacob Harold, philanthropy program officer for the Hewlett Foundation. “People talked about philanthropy going back to Aristotle and before. But it’s really only in the last ten years or so that we’ve had the emergence of an entire community of organizations devoted to making it better.”
Since its establishment in 2000, the Center has grown to 24 staffers in its Cambridge, Massachusetts office and offers a total of seven assessment tools. To accommodate its rapid growth and to better serve foundations on the West Coast, it will open a second office in San Francisco this fall.
While there are other organizations that work with individual foundations to develop the practice of philanthropy, like FSG Social Impact Advisors and the Bridgespan Group, the Center for Effective Philanthropy is unique in producing data that allows foundations to compare their operations with their peers’.
“Our data provides a benchmarking capability. It allows foundations to see how their performance looks against a relevant set of peers,” says Phil Buchanan, president of the Center.
To date, the Center for Effective Philanthropy has surveyed more than 60,000 grantees of more than 200 foundations. Although best known for its Grantee Perception Report, the Center also surveys foundation staff and board members to gain a complete picture of a foundation’s operations. Eight of the nation’s ten largest foundations-representing billions of dollars of charitable decisions-have used its assessment tools. In addition to providing these tools, the Center also publishes research reports with up-to-date findings and hosts gatherings that bring together foundation leaders to learn from one another and share ideas.
Beyond the Grantee Perception Report
While conducting Grantee Perception Reports is a staple of the Center’s work, it is now forging on to more ambitious projects.
“CEP has made a strong case that clear communication and good relationships with grantees is a prerequisite for effective grantmaking,” says Jacob Harold of the Hewlett Foundation. “Now they’re taking on an even bigger challenge of trying to identify what good strategy looks like.”
Being strategic in the field of philanthropy involves setting clearly-defined goals, articulating the means of achieving those goals, and regularly monitoring progress. “Foundations need proxy measures that they believe are related to the success of their strategies, so they can judge progress along the way,” says Buchanan. “Otherwise, they’re operating on blind faith.”
The Center’s research into foundation strategy is its most ambitious effort yet. This initiative explores how foundation leaders and program officers view strategy, how strategy is employed in foundation decisionmaking, and with what result. The Center began this research in Fall 2005 and completed its first phase with the release of its first paper on the topic last October. As the Center’s report indicates, the majority of interviewed foundation staff members believe that having a clear strategy helps achieve goals.
But initial surveys indicate that most grantmakers are not actually strategic. As it launches into future phases of its research, the Center for Effective Philanthropy will continue to look deeper to see whether it can clarify the relationship between strategy and increased impact on society. To that end, it plans to develop a tool for the staffs of foundations to gauge the role strategy plays in the decisions they make about whom to fund. Ultimately, the Center hopes to create a suite of tools for foundations and individual funders to teach them how to become more strategic in their decisionmaking.
“The belief that an articulated strategy creates greater social impact is starting to grow in the philanthropic world,” says Paul Brest, president of the Hewlett Foundation and co-author of Money Well Spent: A Strategic Plan for Smart Philanthropy. “CEP’s research has the potential to dramatically change the way many grantmakers operate.”
Making the Field Better
The Center’s research is already beginning to change the practice of philanthropy as a whole. The data the Center collects is proving increasingly crucial in clarifying good practices and exposing both the successes and failures of foundations, Harold says.
With hard data come real changes. Robert Hughes, Chief Learning Officer at the Robert Wood Johnson Foundation, is convinced that the Center for Effective Philanthropy is making a difference. “I think the CEP is very unusual, if not unique, in giving a comparative perspective to foundations,” Hughes says. “Although their work can help individual foundations, in the long run it will help all of us-it will help the field in general.”