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Foundations need to judge themselves on more than what they fund

A new report suggest looking inward to determine true success.

Foundations need to judge themselves on more than what they fund
[Source Image: Andrey_A/iStock]
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Money talks–but can it listen?

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A new report called “The Philanthropy Framework,” reported on by the The Chronicle of Philanthropy, is trying to spur some self-evaluation by encouraging big foundations to not just consider the success of their grantees, but to also audit themselves, to see what effect they are having more broadly than simply giving money. The report suggests focusing on three key areas: charter (“the organization’s scope, form of governance, and decision-making protocol”), social compact (“its implicit or explicit agreement with society about the value it will create”) and operating model (“the approach to the resources, structures and systems needed to implement strategy”).

The effort comes from Rockefeller Philanthropy Advisors, a nonprofit that advises and manages over $200 million in contributions by private givers, corporations, and foundations. Rather than dictate how groups could better operate, the organization spent about five years talking with the leaders of roughly 75 groups about how their structure affected operations.

By the numbers, the top 50 foundations in the United States gave more than $20 billion to charitable causes in 2015, according to research from Foundation Center. Overall, more than 86,000 foundations contributed nearly $63 billion at that time, a number that’s increased by several billion more in recent years.

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While many foundations publicly disclose their funding and justify the thinking behind that in annual reports, Rockefeller CEO Melissa Berman told The Chronicle that doesn’t really go far enough, likening these groups to “a black box emitting cash: “What happens to that cash is incredibly important, but there’s a whole bunch of other stuff that that doesn’t cover,” she says.

After all, the world is changing–and quickly. Organizations that act habitually without truly understanding what they stand for and where they’re lacking might not be as helpful as they think.

About the author

Ben Paynter is a senior writer at Fast Company covering social impact, the future of philanthropy, and innovative food companies. His work has appeared in Wired, Bloomberg Businessweek, and the New York Times, among other places.

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