Do Feedback Loops in Philanthropy Create Stronger Accountability?

Editor’s note: This post first appeared in the Nonprofit Quarterly.

Three years ago, I accepted the challenge of implementing a program that provides “actionable feedback” for major foundations. It entailed assessing foundations, whether or not they wanted it, and then telling them and the public what the foundations were doing well and how they could improve.

When I described the idea to a close friend, she asked me, “Aren’t you worried about being able to get your next job after this one?”

Somehow, my answer was “No.” I was confident that there was a welcome mat in the sector for unsolicited, honest feedback and that many people in philanthropy would agree, perhaps secretly, that this would be good for the field. Perhaps my friend should have reminded me of the Woody Allen quote, “Confidence is what you have before you understand the problem.”

I thought I understood the problem well. I had just spent three years traveling the country and listening to dozens of community leaders talk about their victories, defeats, and obstacles for our Grantmaking for Community Impact reports on the tangible returns of foundation-funded advocacy, organizing and civic engagement. These nonprofit leaders certainly had anecdotes about great foundation partners who helped them realize their goals. But I also heard many stories of frustration: arrogant program officers; funders abandoning an issue or a region with little warning; timid grantmakers who funded social services but never the advocacy that would eliminate the need for the services.

We lifted up – and named – the philanthropic exemplars in these reports, but we never identified the ones that fell short or made things worse for the nonprofits. We didn’t even tell these grantmakers confidentially that their grantees had criticized them. Personally, this felt like a great disservice, both to the nonprofits and to the foundations they critiqued. There was no mechanism for nonprofits to hold specific foundations accountable for their actions, whether well intentioned or not.

Early in Philamplify’s development, I described the idea to dozens of people who cared about the effectiveness and impact of philanthropy in our society. Some of the reactions were gratifying and affirmed my belief that this project was needed and would fill a serious gap. A few individuals said, “I’m so glad you guys are doing this, because we would love to call out bad behavior, but we can’t. Our board won’t let us.” Others said that without foundation buy-in upfront, our recommendations would be ignored; we would “catch more flies with sugar.” One former program director of a large national foundation responded, “Foundation leaders don’t need more sugar and honey. They are fed it 24/7.”

Many observers urged us to start with a “coalition of the willing” – funders already demonstrating a commitment to learning and transparency, already committed to NCRP’s values and best practices. This made sense to me. Indeed, we piloted the Philamplify methodology with the Winthrop Rockefeller Foundation, whose CEO is our board chair. Testing our methods with a willing participant was an invaluable opportunity for us, and it provided useful learning for the foundation.

But once we moved on to those larger foundations we most wanted to hold accountable, it was surprisingly hard to find a cohort of ambassadors. After weeks of outreach and running the idea up their flagpole, invariably a well-meaning funder would have some reason why, even though they were open to the idea in theory, it just wasn’t a good time to participate, despite minimal demands on the foundation’s staff time. One foundation CEO embraced the idea, and we spent five months learning about the foundation, meeting with its leaders, and tailoring our tools to their program areas and organizational culture, only to witness them pull out abruptly because their program staff balked. Although they politely thanked us for opening their eyes to the value of stakeholder feedback, the foundation never apologized nor acknowledged the impact on our time and the thousands of dollars we already spent. These experiences strengthened my resolve that what we were proposing to do was sorely needed.

We bit the bullet and picked a handful of funders to assess; the sky didn’t fall. In fact, the response to Philamplify has been overwhelmingly positive. Many in the sector have said that the assessments strike the right tone and hit on the right issues. Grantees, philanthropic peers, and other stakeholders appreciated the opportunity to talk confidentially about a foundation’s strengths and weaknesses and their hopes for its success, whether the foundation was on board or not. Only a handful of grantees declined to participate specifically because the foundation didn’t sanction it.

Though only two of the five funders formally cooperated with us, the continuum of “cooperation” to “non-cooperation” was interesting to observe. A few of the “non-cooperators” were more forthcoming and engaged on the substance of our findings and recommendations than one “cooperator.” Based on conversations with the leaders of the first five foundations we’ve assessed, I believe they will act on at least some of our recommendations, even if they didn’t cooperate in the process. Only time will tell, but unsolicited feedback may be actionable after all!

Yet the problem of accountability is not completely solved. Feedback systems alone are not enough. During a webinar about Fund for Shared Insight, the new pooled funding collaborative that seeks to improve philanthropy by strengthening feedback loops and openness, Fay Twersky of Hewlett Foundation and Hilary Pennington of Ford Foundation were asked if the goal of the fund was to empower beneficiaries or gain information for foundations’ internal processes. Pennington said that for Ford, the goal was to shift power dynamics.

I hope the new initiative does tackle the perennial problem of unequal power that stands in the way of true accountability for foundations’ behavior. Will intended beneficiaries themselves be bolder about giving direct, public feedback to foundations than are the nonprofits that seek grants on their behalf? And will grantmakers consider that feedback more seriously?

The bottom line is that foundations are not answerable to their grantees, intended beneficiaries, peers, the media or local government. We are still learning how to generate heat in the court of public opinion, to see if that will induce foundations to respond. But the stakeholders of philanthropy fear being honest in a direct way. Although our goal is to counter this fear, we realize that unless everyone in the nonprofit and philanthropic sector works to dispel it, this dynamic may never change.

Lisa Ranghelli is director of foundation assessment at the National Committee for Responsive Philanthropy (NCRP). She also served as the primary researcher in the Philamplify assessment of the William Penn Foundation. Follow @ncrp and the #Philamplify conversation on Twitter.

NCRP will be kicking off its fall webinar series with a lively discussion about Philamplify, NCRP’s new initiative to burst the isolation bubble in philanthropy. Philamplify is all about helping grantmakers get honest feedback from the very communities and constituencies they seek to benefit – whether or not they have asked for that feedback. We do this by conducting comprehensive foundation assessments, sharing them with the public and inviting discussion and debate on Philamplify.org.

We at NCRP value honest feedback about our own work too, which is why we recently assigned a third party to carry out our organizational evaluation, and why we want to use this webinar to get outside perspectives on how we’re doing with Philamplify.

Since Philamplify’s launch in May, we’ve released two sets of reports in our first round, assessing five major foundations from across the country. As we embark on the next round, this webinar offers a great opportunity to find out from several notable opinion leaders in the field – and from YOU – what people think about Philamplify.

First, Ruth McCambridge from Nonprofit Quarterly and Pablo Eisenberg, a longtime critic of the sector, will share their unvarnished thoughts on questions such as:

• What does a project like Philamplify mean for the sector?
• Is the project on the right track to meet the goals you hope it will achieve?
• What changes, if any, should we make to Philamplify going forward?

Next, Sherece West-Scantlebury, president and CEO of the Winthrop Rockefeller Foundation (WRF) and NCRP board chair, will share reflections and lessons from her own experience with the Philamplify assessment tool. NCRP piloted our methodology on WRF, and we’ll hear what the process was like and how the foundation has used NCRP’s recommendations. I’ll also share information about the reaction of another foundation that was recently “philamplified,” The California Endowment.

This webinar is a great opportunity for you to tell us what you think! So please join us on October 2 at 2pm for Amplifying Philamplify: Sector Reactions and Visions for Impact. And in the meantime, let us know what questions you would like the panelists to answer—feel free to leave your suggestions in the comments below, or email me directly at lranghelli[at]ncrp.org.

Lisa Ranghelli is the director of foundation assessment at the National Committee for Responsive Philanthropy (NCRP). Follow @ncrp and #Philamplify on Twitter.

Last week, Nonprofit Quarterly’s Anne Eigeman told a cautionary tale of stakeholder backlash (first reported by Wally Harbert in Third Sector). In “The Risk for Nonprofits in Excluding Stakeholders in Key Decision-Making,” she highlights the story of a hospice agency in the UK that decided to close its residential facility for the elderly in favor of home-based services, only to be told by the residents and their families that they didn’t want to move. The uproar resulted in both the chief executive and chairperson resigning.

Despite tales like this one – and extensive literature on the value of engaging stakeholders when deciding strategy, policy and practice – it appears that nonprofits and foundations still have a long way to go. In her report for Grantmakers for Effective Organizations (GEO), “Do Nothing About Me Without Me,” J. Courtney Bourns observes:

“The lack of genuine stakeholder engagement by grantmakers leads to frayed relationships with grantees and communities. During nonprofit focus groups convened for GEO’s Change Agent Project, participants repeatedly noted that the “power differential” between foundations and grantees leads to counterproductive relationships and sometimes can stand in the way of grantee success.”

This observation is backed by recent analysis from NCRP. In our first five foundation assessments for Philamplify, a new initiative to improve grantmaking, our researchers found that most of the foundations did a poor job of getting input from their nonprofit partners.

Among four of the foundations, NCRP surveyed grantees from the prior three years. (NCRP decided not to do a separate grantee survey for the fifth assessed foundation, The California Endowment, as it conducted a CEP Grantee Perception Report in 2012 and plans to do another one soon.) Their answers were strikingly consistent when it came to the opportunity to offer input.

Click chart to the right to enlarge and view responses.

Some foundations profess a commitment to engaging their stakeholders, yet their grantees may still feel they are left in the dark. NCRP’s Philamplify assessment of the Daniels Fund captured this type of disconnect. During our research process, we learned that the foundation had recently decided to refocus its grantmaking priorities in New Mexico. According to CEO Linda Childears, “Our executive team spent quite a bit of time with folks in the state.” NCRP’s assessment author, Kevin Laskowski, elaborated:

“The executive team made two trips – northern and southern tours of the state – and held more than 30 meetings with state-level officials, nonprofit leaders and others, a third of whom were grantees. However, nearly all of the grantees interviewed in New Mexico were surprised by the foundation’s eventual decision. ‘I don’t get the impression that they consulted anybody,’ one grantee said.” (p. 19)

How can well-intentioned foundations do a better job of engaging their grantees, as well as their peers and other community leaders? The GEO report recommends three steps:

1. Survey grantees. None of the four foundations above has commissioned an anonymous grantee survey in recent years. (And only Lumina Foundation for Education cooperated with NCRP on our Philamplify survey of its grantees.)
2. Gather input through focus groups, listening sessions and community meetings. The William Penn Foundation did hold several focus groups before creating a new strategic plan, but was later faulted for poor communication as the plan was being implemented. When gathering input, foundation leaders should give thought to who they include in the conversation, what types of input they seek and how they communicate what they learned and what decisions resulted.
3. Share decision-making by having more representative staff and board and/or by delegating authority to foundation constituencies through grantmaking committees. The Philamplify assessments found that two place-based foundations, Robert W. Woodruff Foundation and William Penn, have all-white, elite (and mostly male) boards, yet they serve majority-minority cities. Bringing the voices and experiences of intended beneficiaries onto their boards could help them gain valuable input that is currently lacking.

In your experience, what have been some of the most effective ways for foundations to get input from nonprofits and other constituencies? Comment below and share your stories on www.philamplify.org!

Lisa Ranghelli is the director of foundation assessment at the National Committee for Responsive Philanthropy (NCRP). Follow NCRP on Twitter (@ncrp) and join the #Philamplify conversation.

Several large national foundations have been identified with the K-12 public school reform movement, such as the Bill & Melinda Gates Foundation, Walton Family Foundation and Broad Foundation. Less visible or well known may be the place-based local and regional funders who have also waded into this often controversial fray.

For our new initiative, Philamplify, NCRP recently assessed the grantmaking of the Philadelphia-based William Penn Foundation, which some stakeholders had criticized for its perceived multi-million dollar investment in alternatives to traditional public schools, including charter and private schools. A new report points to one reason why some public education advocates are leery of charters: they are often subject to fewer rules and less oversight than district schools.

The Center for Popular Democracy and Integrity in Education investigated questionable activities in 15 states with high concentrations of charter schools. Their report, Charter School Vulnerabilities to Waste, Fraud, and Abuse, observes that at least $100 million in public tax dollars (which funded the charters) have been lost to waste, fraud and abuse. A number of these cases occurred in Philadelphia. The report notes:

“For example, in 2012, the former CEO and founder of the New Media Technology Charter School in Philadelphia was sentenced to prison for stealing $522,000 in taxpayer money to prop up a restaurant, a health food store and a private school.”

During our research, the William Penn Foundation informed NCRP that the majority of its grants support evidence-based reforms in traditional public schools. Also, the foundation-funded Philadelphia School Partnership is committed to funding only high-quality schools serving low-income students, whether public, private or charter.

But what about the low-performing and poorly managed charter schools in Philadelphia and other parts of Pennsylvania? Should local foundations that genuinely care about education equity, like William Penn, actively support stronger public regulation and oversight of all charters (and district schools) in their region?

Based on the input of community leaders and education advocates, NCRP recommended that William Penn “…exercise leadership to help ensure all low-income and marginalized students have access to a good education, including by promoting strong accountability across all K–12 education providers in the city.”

What do you think the William Penn Foundation should do? Watch our video and join the conversation in the comments section!

Lisa Ranghelli is the director of foundation assessment for NCRP.

It’s great to see that so many people in the philanthropic and nonprofit sectors are checking out Philamplify, NCRP’s new initiative providing “honest feedback to improve philanthropy.” Some thoughtful questions have come up about Philamplify, raised by Janet Camarena at GlassPockets and others, which I’d like to share along with my responses.

1. How did NCRP choose the first foundations to assess and how will future funders be chosen?

For this first cohort (the three completed and some that are forthcoming so stay tuned!), we chose a geographically diverse set of independent and family foundations with a range of asset sizes ($1 billion to $5+ billion), which are funding in key areas domestically such as education, health, environment and arts. Over time, our goal is to assess many of the 100 largest foundations (by assets and giving) in the country. Within that group of 100, we plan to adapt the methodology for corporate funders, community foundations and those with significant international portfolios. The reason we are focusing on the biggest foundations is because we want to examine and offer feedback on as many grant dollars as possible. But we certainly hope that the findings and recommendations in these reports will be a source of lessons and inspiration for many other grantmakers.

2. How flexible is NCRP regarding whether to allow foundations to opt out of the assessment?

We take an individualized approach to reaching out to foundations and exploring the timing, value and appropriateness of our methodology and process. Our general position is that this assessment process will result in valuable insights for any foundation, yet we know that the capacity of a foundation’s staff to be involved at any given moment can vary. On the other hand, as we started to approach potential willing funders, we realized that every foundation will have some completely legitimate reason why, even though they support the concept in theory, “Now is not a good time for us to do this.” The reality is that it’s never a good time, with all that grantmakers have on their plates, and yet isn’t it always a good time to find out what your stakeholders think you are doing well and what you can do better? Our methodology does not require extensive hours of foundation staff time to be implemented.

In the example that Janet Camarena raised about William Penn, we understood the foundation’s concerns and constraints and weighed those against what we perceived to be the community’s benefit if the foundation got timely feedback after a period of tumult. The foundation leadership could not guarantee that delaying the process until a new leader was hired would result in agreement to cooperate with the assessment process. So had we decided to wait, there is a strong possibility the assessment would never have happened. Coincidentally, the timing worked out well – our report and its actionable recommendations were ready for the foundation’s review the week the new managing director took up his post at William Penn.

3. To what extent and how does NCRP involve foundations in the assessment process?

We are open to involving foundations in the assessment process as much as they want to and have the capacity to do so, while holding to our core assessment criteria and set of questions. We invite each foundation CEO to tell us what they most want to learn, and to incorporate additional survey and interview questions beyond those we ask in every assessment. The foundation can also give suggestions of grantees, peers and other stakeholders they think we should interview about their work, as well as which members of their own staff and board to interview. We have also considered funder input on the appropriateness of specific methods, for example, whether it still makes sense to conduct a grantee survey if the foundation had a recent Grantee Perception Report (GPR) completed. (In one case, we decided it did not make sense.)

Even if a foundation’s leadership has chosen not to cooperate, we leave the door open for input from the foundation at any time. We share a report draft with every assessed foundation and invite feedback on its accuracy, while maintaining editorial control over the final report.

4. How does NCRP take into account the fact that many foundations do their own assessments of one type or another?

We absolutely do take those into account, as I indicated in the example above. We invite the foundation to share any recent assessments or evaluations it has conducted or commissioned, and we factor that into our own decision about methods. We do not want to reinvent the wheel or duplicate knowledge or information. For a forthcoming Philamplify assessment, the funder had commissioned a number of assessments, which we extensively reviewed. We engaged in dialogue with the evaluation director about whether and how our tool and process could best add value. Ultimately we all agreed it made sense to proceed and determined how to modify our methods accordingly.

5. Is assessing foundations without their permission “scary” or “controversial?”

I understand why having your work under scrutiny may cause anxiety. And attempts at changing systems and challenging the status quo may be viewed as “threatening” or “controversial” by some. But the only information we have to fear is the information we don’t have. It might be scary to find out what your grantees and peers really think of your grantmaking strategy and practices. Yet, I believe it’s worth the apprehension knowing that coming out of it, the assessment will answer the questions: Are the foundation’s strategies and practices as effective as they can be? How is the foundation perceived by its stakeholders? What can we do better to be more impactful on the issues and communities we care about?

Assessing foundations without their “permission” may be perceived as controversial to a sector that, unlike other industries, is not routinely subject to external scrutiny, both formal and informal. For example, One World Trust, an advisor to Glasspockets, assesses the largest international intergovernmental, non-governmental and corporate organizations, focusing on transparency, accountability and responsiveness to external stakeholders’ needs and interests. Someone in philanthropy recently pointed out that when a corporation makes a major change in direction or hires a new CEO, widespread discussion and debate ensues in the media and other public spheres. Yet, the same major shift at a foundation is only reported, but not discussed or debated openly. Philamplify aims to change that.

6. How much change can NCRP effect with an unwilling subject?

NCRP designed Philamplify to combine comprehensive assessments with “crowd-sourced” feedback precisely because we believe that any organization, whether it welcomes feedback and seeks to change, or does not, benefits from having external stakeholders who can help hold that organization to account.

Additionally, going through an evaluation process voluntarily does not guarantee action. How many commissioned reports are read and then put on a shelf? How many assessments are not even shared with all of the staff in the organization, much less with external audiences?

Philamplify is different because it makes the assessments public for all to see and discuss. And it asks philanthropic stakeholders to play an active role in holding all of philanthropy, including the assessed funders, to high standards.

Based on our experience so far with these first three foundations, at least some of what we found has rung true for them. We believe that if grantmakers act on our findings and recommendations, this will enhance their impact and effectiveness.

These are great questions, and the interest that Philamplify has garnered is proof that there’s a desire not just for discussions about transparency, knowledge-sharing and accountability in philanthropy, but also in doing something to move the sector forward around these key issues.

What do you think? Do you have other questions about Philamplify? Please share them in comments!

Lisa Ranghelli is the director of foundation assessment for NCRP.

In January, I introduced the first of four short videos about the impact of the Winthrop Rockefeller Foundation’s grantmaking in Arkansas. WRF commissioned NCRP to assess the foundation’s “Moving the Needle” strategy to tackle poverty, education and economic development challenges in the state.

In the second video, our fearless nonprofit leaders – Bill Kopsky, Rich Huddleston and Renée Carr – are back to tell us more about how they used their organizations’ WRF grants to improve the lives of Arkansans. This time they are answering the question, “Can you share a story that would illustrate what has changed for individuals and families in the last five years?”

Bill speaks about the civic renewal in Gould, AR: “For the first time in the city’s history, really, they have a city government that’s truly representative of the people who live there. …The city government and the community are working hand in hand now, instead of at odds, to create a development plan to lift the community out of poverty.”

Rich talks about how winning a major change in health care policy statewide has helped families become both healthier and more financially stable.

And Renée describes a successful WRF idea to form regional networks to weave together rural communities economically.

In the next video we’ll hear Bill, Rich and Renée talk about how nonprofits are functioning differently than they were five years ago – both internally and with others – as a result of the support they received from WRF.

PS: The WRF assessment allowed NCRP to pilot an early version of the methodology that we subsequently implemented with Philamplify, our new initiative that breaks through the isolation bubble in philanthropy to provide foundation leaders with honest feedback about their strategies and practices. So thanks to Sherece West-Scantlebury and her team at WRF for being our guinea pigs!

Lisa Ranghelli is the director of foundation assessment for the National Committee for Responsive Philanthropy.