Philanthropic practice seems to have evolved a bifurcated focus at the beginning (grant approval) and the end (outcome metrics) of a grant. My question is what about the middle, or grant implementation, where philanthropic support is most likely to help a grant succeed? Is philanthropic intervention during the implementation process just meddling, or an opening to providing more useful support because of increased requirements now imposed at the front and back end of a grant?
Donor focus at the beginning of a grant, on its approval and processing, has evolved over the decades and increased in sophistication along with institutional philanthropy. New financial rules to foster transparency account for some of the additional complications. However, many philanthropic institutions don’t simply fund a grantee’s program anymore. Instead, they create a set of gate keeping parameters which amount to developing their own program criteria grantees must satisfy to be eligible for funding. This is somewhat ironic when the grantor typically only resources the effort, while the grantees are responsible for actually satisfying demand. The latter is assumed to be in a better position to understand what is required on the ground. Nevertheless with over 1.5 million charitable organizations competing for resources in the US alone, its understandable why philanthropies have evolved their giving over the decades into developing sophisticated gate keeping criteria in order not to be overwhelmed. This is not something that will change any time soon even if it’s real effect is creating two different demands that are often not completely aligned — Donor funding criteria and the local demand a nonprofit must satisfy.
The increased focus at the end of the grant and outcome metrics is a relatively new trend over the last decade and a half. It is a result of new donors with technology and venture capital backgrounds infusing their ethos into the field of philanthropy in addition to the general societal trend over the last three decades to commoditize most things from education to health. Of course there were grant evaluations in decades past and every so often a “measurement movement”. However grant evaluations were often pretty loose and often thought of as self-serving, confirming the foundations reasoning for providing a grant in the first place. Technology and the Internet have contributed to our evolution into a networked, “dashboard-friendly” society seeking easy measurements to help us quantify success — quickly. So I think this movement in philanthropy is here to stay as well. The problem of course is that in business, we base outcome metrics on the immediate straightforward business transaction, like buying a house or a car. In philanthropy however, the actual transaction is often secondary to the long term societal benefits being sought, and they often occur long after a grant expires. For example, providing housing for the homeless in order to enable someone to have an address and to find a job; bring up a stable family in a safe environment; have children connected to a school district; etc… The result is that these short term outcome based evaluations serve some purpose in better measuring the success of the immediate philanthropic transactions during the life of the grant (e.g. a homeless person receives a home), but are often no better than the earlier evaluations in measuring long term successes that might happen years later and that the grantor is often not around to evaluate. The majority of grants given have 1-3 year life spans.
Somewhere between the traditional foundation evaluation and these new outcome-based approaches is a happy medium, but we have not found it yet. Part of the reason I think is the failure of many philanthropic institutions to get involved in the grant implementation process. One of the ironies of metric or outcome-based grant making is that it does not provide what its private sector equivalent often does, intervention during execution. Venture capitalists don’t just number crunch and measure the projects they invest in. They incubate them, provide them advice as well as resources, help them network, etc. to assist them in their success during implementation, especially in their early stages. Many foundation grants are also involved in supporting innovative pilot solutions where this help is needed, and drawing upon a foundation’s network of other more mature grantees and its expertise would be useful.
Unfortunately, the traditional approach and ethos in philanthropy has been “hands off” during the implementation process, because donor etiquette suggests that doing so is overly interfering in a grantees work. The result is a rather odd situation of the grantee having to modify its program to satisfy initial philanthropic criteria to get the grant. Once the grant is received, the grantee is often in the position of additionally satisfying donor outcome metrics with limited administrative resources because the grant often caps administrative capacity needed to do a good job at it. The net result is a different kind of interference that materially impacts a grantee’s work. So why not additionally support the grantee with advice, networking, etc. during the implementation process when a donor can actually make a difference in helping a grant stay on track while satisfying all the extra requirements it imposes on its grantees.
I fully appreciate many grantees also look at philanthropic intervention during the implementation process as an intrusion – and it is understandable in the current philanthropic environment. After all, most grantors and grantees understand that the sausage making that goes into translating a donor’s grant criteria into the actual program needs followed by the additional sausage making to translate what’s really happened on the ground into satisfying donor metric requirements is often a process that neither wishes to evaluate too closely. In the traditional relationship between program officer and grantee both parties understand the realities of what must be done to overcome underfunded capacity and criteria that doesn’t necessarily match need. However, this is precisely why intervention during implementation is so important, because often the grantee’s job is made more difficult at the outset trying to satisfy both the donor’s criteria and real demand.
To intervene in the implementation process requires a different relationship between grantor and grantee. One of trust and equality were the donor understands its role as resourcer and its dependence on the grantee as implementer, in the same way the grantee understands the donor’s important role as resourcer. If both the resourcer and implementer work in concert during the implementation process there is a far better chance of a successful grant not only in meeting its early transactional outcomes but its longer term goals as well. After all, how many venture investors pour money into projects based on specific funding requirements they have defined only to disappear — and then reemerge at the end asking if their outcome metrics have been satisfied?Read More