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Making Sense of the Grantmaking Universe

All grantmaking is done in a context-in fact, in many contexts simultaneously. There is the financial context (How large is the asset base?), the social context (Is society kindly disposed toward foundations and the types of social change they promote?), and the historical context (What has the foundation accomplished in the past?). The most influential of them all, however, is the institutional context of the foundation itself. All foundations have a dominant ideology, and given the large number of foundations in the United States, these ideologies span the spectrum from the loony left to the rabid right. The ideology, in turn, does much to shape the foundation's "theory of change": its beliefs about what type and intensity of intervention will best facilitate social movement toward the common good. The wide scope given to people to create private foundations in the United States virtually mandates that there will be nearly as many theories of change as there are foundations themselves.

Within this ideological welter, we can nonetheless discern that theories of change cluster around four main types. These types can be plotted as points along a single continuum. Because all the types begin with the letter P, this will hereafter be referred to as the 4-P continuum. As illustrated in Figure 1.1, the types are the passive, proactive, prescriptive, and peremptory. A brief description of each type will highlight the very real differences among them.

driven. It chooses its grantees, sometimes by means of an RFP but often simply by selecting them without public notice or competition. Peremptory foundations often operate their own programs and rarely if ever accept unsolicited proposals. Some peremptory foundations create reports on their grantmaking, but others do minimal reporting or none at all so as to avoid creating a demand they have no intention of fulfilling. The motto of the peremptory foundation might be "We fund the best we can imagine, and no others need apply."

Choosing a Grantmaking Style

A foundation's theory of change has a direct effect on its style of grantmaking. The passive foundation is highly likely to make a series of isolated, unconnected grants based solely on the proposals it receives during a given time period. The proactive foundation is likely to make clusters of individual grants tied together by a subject or a theme, while remaining very receptive to requests from outside. The prescriptive foundation is apt to carve out well-defined and strategically conceived initiatives, leaving relatively little receptivity to requests from outside. The peremptory foundation chooses grantees according to its own specific and strongly held visions, and it is not at all receptive to unsolicited requests.

Choosing a Mode of Operation

In addition to embracing a theory of change and a grantmaking style, the foundation must choose a mode of operation. There are essentially two ways that a foundation may conduct its business: as a grantmaking or an operating organization. The vast majority of U.S. foundations are grantmaking; that is, they make awards to mainly nonprofit organizations for charitable purposes. In order to do this, the foundation (if it is of a significant size) usually needs employees of its own, but because the foundation does not itself manage the projects that it supports financially, it need not employ a large staff. An operating foundation, in contrast, makes few or no awards to other organizations. Instead, it manages institutions, such as museums; or oversees activities, such as fellowship programs; or conducts research. Two of the largest operating foundations are the Howard Hughes Medical Research Institute and the

J. Paul Getty Foundation. Because they actually manage programs, operating foundations tend to have a relatively larger number of employees than their grantmaking counterparts.

fertilization, for the lessons learned from grantmaking should sharpen the foundation's management of its operated programs; the lessons learned from running programs should inform and improve the foundation's grantmaking. The great majority of U.S. foundations are nonetheless exclusively grantmaking entities, so this book will focus on the grantmaking mode of operation.

Choosing a Public Profile

It is essential that each foundation decide on the type of public profile that it wishes to present. This profile ranges from the spotlight-seeking to the camera-shy. Historically, for the most part foundations have been very little in the news. The work they do is complex and takes a long time to show results, and, in any case, much of their work is done through others. For example, the research supported by the Rockefeller Foundation to increase global crop yields-the "Green Revolution"-was extremely technical, took literally decades to fully mature, and was carried out largely by universities doing research, not by the foundation itself. It would be an enormous challenge to capture and hold the attention of the media on such arcane subjects for such a long span.

Whatever a foundation's theory of change, style of grantmaking, mode of operation, and level of public profile, as a program officer you must thoroughly understand them and be able to operate comfortably within them. On the one hand, if you are working at a foundation that is proactive and low profile and that engages in cluster grantmaking, it will not do to be a highly prescriptive, micromanaging, and personally flamboyant program officer. On the other hand, these qualities might be highly valued in an operating foundation that is peremptory and high profile.

Setting Grantmaking Priorities

"No people," observed Mandell Creighton, "do so much harm as those who go about doing good." While Mr. Creighton was undoubtedly exaggerating in order to make a point (Joe Stalin, for example, probably did more harm than even the most avid do-gooder), there is more than a little truth to this remark. Foundations that have not bothered to set goals for their funding-or those that have, but have decided not to share them with the grantseeking public-comprise an excellent example of Mr. Creighton's point. Foundations can waste buckets of their own money-and hours of grantseeker time-if they have not firmly set their priorities for social change and clearly communicated these priorities to the public.

justification that they are not usually asked their opinions before programs are crafted to help them. Scholars point out, with considerable justification, that priorities and programs devised by foundations without outside input invariably disappoint and nearly always fail. Effective grantmaking depends on foundations constructing their agenda in consultation with others. Fortunately, there are many ways to do so.

The Five Steps in Setting Priorities

Conclusion

Foundations are notoriously difficult to pigeonhole by means of generalizations. They are liberal and conservative, sluggish and hyperkinetic, grantmaking and operating, reclusive and brash. In this variegated diversity, they very much resemble the American people whence they sprang.