In order to earn funding from foundations, nonprofits typically have to prove their strategies are working—and if not, justify why they are making changes. But many foundations don’t have the same levels of accountability inside their own organizations.
As a result, over half of foundation leaders don’t have a very good understanding of what’s not working with their own programming, according to a new report from the Center for Effective Philanthropy (CEP). In a survey of 119 CEOs from private and community funders who give out $5 million or more annually, CEP found that 57% of respondents had only little to moderate understanding of their group’s own shortcomings.
When that question was asked a different way, the answer looked equally troubling: A little more than one-third of CEOs actually don’t have a very good understanding of what is already working either, a factor that seems obviously crucial to replicating success.
Many foundation leaders now say they’ve undervalued the whole idea of setting up processes and benchmarking to make sure they’re meeting their own goals. “[M]ore than 40% say their foundation is not investing enough time and money in developing this understanding,” the report notes. As one CEO shared in an anonymous interview that CEP highlights: “We don’t yet have the infrastructure and the clarity in our own systems and ways of working that would give me the learning that I want for my role as the CEO, for making strategic decisions, and for sharing information with the board.” The majority of CEOs surveyed also admitted that their understanding of what’s happening inside their organization relates directly to how much effort is put into such internal assessments.
Why that isn’t happening in many places is something of a mystery. It could be that groups that do good are afraid of admitting failure, for fear that it might look like they wasted money. Foundation leaders often have a tendency to be more open about sharing what’s working as opposed to their own failures–42% of leaders said their groups provide none or very little info on that topic.
One way to avoid that conflict of interest is to hire third-party consultants, say CEP researchers. To help foundations think about others, CEP released a separate analysis alongside their survey that compiles lessons from four groups–Rockefeller Brothers Fund, Communities Foundation of Texas, Weingart Foundation, and Impetus-PEF–willing to share more about how they quantitatively measure success and failure, and what it really looks like.
The Rockefeller Brothers Fund, for instance, decided that having its endowment based in part on fossil fuel investments ran counter to its mission for just and sustainable social change. They’ve since divested from that industry, and now publicly share where their money is going in order to stay accountable. The other funders share more about how they’ve created cause-specific “consortiums” to pool information between various nonprofits and funders working in the same areas, and exactly what sort of internal data and format has proven useful for figuring out what’s working (or not) inside their own walls.
None of these groups claim to have perfect processes, but that’s the point. The more open the sector is willing to be about that, the faster it can work together to improve things.