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Giving Less but Leading More

By Tom Watson on March 27, 2009No Comment

Now, more than ever, it’s vital to showcase foundations’ value beyond dollars and cents.  In the current climate, foundations have a chance to seize the spotlight and communicate their missions to old audiences and new ones, in traditional ways and more newfangled ones.

These questions were front-and-center during a panel discussion Edelman co-hosted with The Council on Foundations and The Bridgespan Group about the urgent need for foundations to effectively communicate their value and demonstrate leadership.

“New Agenda/Harsh Realities: Opportunities for Foundations to Step Up in 2009” featured representatives from the Annie E. Casey Foundation, The Bridgespan Group, Carnegie Corporation and the Robert Wood Johnson Foundation and was moderated by Richard Tofel, managing director of ProPublica, the independent, nonprofit newsroom.  Although community foundations have an especially important role to play in meeting local needs, the conversation focused on independent foundations which collectively contributed $31 billion in 2007, 72 percent of total institutional giving. 

Here are some recommendations that emerged for leading more even if you are giving less:

Communicate what you stand for.  “Foundations are perceived as philanthropic ATM machines,” commented David Morse of the Robert Wood Johnson Foundation.  “We need to communicate that foundations are more than their endowment,” added Ralph Smith of the Annie E. Casey Foundation and chairman of The Council on Foundations. 

Foundations need to do a better job communicating about their mission and less about their money.  Whether your mission is reform of schools, health care or the child welfare system, get your message out there and make sure it’s heard. 

The pressure may be on to give more to help plug the philanthropy hole, but foundations also achieve their missions through raising awareness of serious problems and possible solutions.  Now is a critical time to advocate more emphatically about what you stand for and the importance of the work you do. As Susan Robinson King of Carnegie Corporation stated, “We can’t fix problems with money alone.  We’re not in the needs business, we’re in the long term solutions business.”

Be transparent.  While this is a maxim we consistently advise all our clients to follow, today’s headlines about financial obfuscation make transparency about money—and goals—even more important.  As the nonprofit sector faces increased scrutiny, it’s important to be open about how funding decisions are made, where funds are going and who makes the decisions.  Susan Robinson King said that she has been direct with grant seekers, explaining that she is sticking with long-term commitments and that this is not the time to entertain new initiatives and that grant seekers have appreciated her being up front.

Join with others to amplify your voice.  A benefit of reduced budgets is that it forces you to look for resources elsewhere.  Now is the time for collaborations across the foundation world to leverage resources and draw more attention to issues of common concern.  However, we can’t talk about consolidation in the nonprofit sector when foundations themselves haven’t gotten very far in uniting for a cause.

Defend the sector.  With nonprofits suffering deep cuts from government and donors, we are also seeing major layoffs of nonprofit employees.  Alan Tuck of The Bridgespan Group asked, “There’s a huge voice to protect the government worker, but in this economy, who’s going to protect the nonprofit worker?”  “We need to speak from a soapbox,” Tuck added, urging foundations to take advantage of their place in society to advocate on behalf of the nonprofit sector.

Take risks.  On the one hand, it’s hard to take risks when times are bad.  On the other hand, what better time to try something new?  The worst thing foundations can do is hunker down and try to ride out the financial storm.  Some would argue that it is the responsibility of foundations, as tax exempt organizations not beholden to shareholders, to experiment and take risks.  Unsettling times demand creative, path-breaking responses.  Foundations are well-placed to shake up the status quo. 

Leverage the other 95 percent of your assets.  Nearly all the focus on foundations is the 5 percent spent on grants.  There is a growing movement although slow to gain traction to encourage foundations to align their investments (estimated at $670 billion) with their missions.  Socially responsible investing has grown to $2.71 trillion in the U.S. and private companies view organizations such as the Interfaith Center on Corporate Responsibility as increasingly important stakeholders.  How a foundation invests its assets and the communications around those decisions can send a powerful signal about its societal commitment.

Effective leadership depends on making sure people know what you’re doing.  What gets noticed is not necessarily how much you spend but how you spend it.  Explaining your decisions, listening carefully and incorporating feedback in how you operate are becoming more important.  Communications can be the catalyst to drive your organization forward. 

Much like grant making, communication is a strategic endeavor.  It’s time to ask hard questions about whether traditional glossy reports and policy papers are really the right way to reach audiences. Investing in a social network for grantees might eliminate excess email while providing a venue for ongoing conversation.  Releasing a new research study as part of a roundtable discussion can provide a forum for scholars and policy makers to truly interact.  Collaborating with allies or “strange bedfellows” on an op-ed may strengthen your message.

Right now the world is receptive to new ideas.  Foundations are well positioned to offer them, but that leadership requires a renewed effort to talk about your initiatives and tell your own story.

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