Published on: May 21, 2012
Foundations adapt to altered economy
Although our research shows that foundation CEOs and program officers overwhelmingly believe that strategy is important for achieving impact, and most possess something they call a “strategy,” we have also learned that many are not using strategy as we defne it. In our research, we classify foundation leaders as “more strategic” and “less strategic” based upon the extent to which they embody two defining elements: 1) an external orientation to their decision-making and 2) a hypothesized causal connection between the use of foundation resources and goal achievement.
When we conducted our Essentials of Foundation Strategy study, we sought to identify characteristics that differentiate the more strategic leaders from those who are less strategic. We gathered data from 102 CEOs and 89 program staff at private foundations with $100 million or more in assets. One of the differences we uncovered between more strategic and less strategic leaders was their practice in publicly communicating their strategy.
Of more strategic leaders, 81 percent report publishing their strategies on the foundation’s website, compared to 53 percent of less strategic leaders. Furthermore, almost 40 percent of the less strategic leaders reported not publicly communicating their “strategies” at all.
For those who are less strategic, this may not bode well for the perceptions of their grantees. In our analyses of tens of thousands of nonprofit grantees of foundations, we find that clear communication of foundation goals and strategies is a key element of funders being able to form strong relationships with their grantees.
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What separates more strategic foundation leaders from less strategic ones? To read CEP research that explores the state of strategy at private foundations and identifies behaviors and practices common to more strategic leaders, see the report Essentials of Foundation Strategy.
Ellie Buteau is Vice President – Research at the Center for Effective Philanthropy.
by Ellie Buteau, PhD
May 1st, 2012