Taking the long view

Yesterday Brent and I spent the afternoon continuing our strategic planning process for the next phase of our evolution as a foundation.  One of our discussions centred around the idea of continuing to fund one-off projects. 

When we began to formalize our foundation operations seven years ago, we went from funding general operating support with a blank cheque approach to much greater definition and rigour around project-based funding.  This was a necessary step in our learning.   We needed to introduce accountability and precision to our granting.  We wanted to measure tangible results. 

But the pitfalls of this approach force charities to remain on a tight leash.  There are strings attached, and the basic assumption at work seems to be ‘we don’t trust you to get it right, so you have to do it our way’.  But I wonder if we foundations really are the experts, or just the ones with the money?  Should we not trust those closer to the grassroots?  As well, how well can we really measure social and spiritual transformation, which is our end game?

When I came home last night, an email awaited from my friend Donnie with a link to (yet another) NY Times article, this one entitled Can Foundations Take the Long View Again?  I almost wondered if Denise Caruso, the journalist, had some sort of listening device at our meeting today.  She writes:

“In the 1980s and early 1990s, there was a huge push for private philanthropy to be more accountable and to spend more time being goal-driven,” said Kathleen Enright, the executive director of Grantmakers for Effective Organizations, a Washington-based coalition of foundations that promotes ways to improve nonprofit results.

Advisers and trustees compelled foundations to redirect their unrestricted grants to more discrete, short-term projects — for example, distributing mosquito nets in malaria regions — that would deliver a measurable bang for the buck.

“The reason the nonprofit sector exists at all is because it can fund and invest in social issues that the for-profit market can’t touch because they can’t be measured,” said Paul Shoemaker, a former Microsoft employee and entrepreneur who is now executive director of the Seattle affiliate of Social Venture Partners International, a philanthropic network. “The nonprofit ‘market’ is not designed to be efficient in that way. Yet we’re applying the same efficiency metrics to both sectors.”

As a consequence, when foundations switched to project-based accounting, they forced grantees to sacrifice long-term effectiveness for short-term efficiency, Ms. Enright said. Nonprofits could no longer afford to focus on important strategic activities like advocacy or working for social change, which require “deep resources and the ability to change tactics overnight if the situation demands it,” she said.