Giving Thoughts

Q&A with Ellie Buteau: Foundations and Nonprofits Disconnected on Key Issues

By Alex Parkinson, Research Associate, The Conference Board, and Ellie Buteau, Vice President of Research, Center for Effective Philanthropy

“In order for nonprofits and foundations to work most effectively together, they must understand each other’s perspectives.” This is a key point that opens a report from the Center for Effective Philanthropy, entitled Transparency, Performance Assessment, and Awareness of Nonprofits’ Challenges: Are Foundations and Nonprofits Seeing Eye to Eye? The problem is these two groups misunderstand each other on some crucial issues.

According to the report, CEOs from foundations and nonprofits do not agree that funders adequately support the performance evaluation requirements of their grantees, or that they provide adequate transparency. Why the difference in perspective? I asked one of the report’s co-authors, Ellie Buteau, Vice President of Research at the Center for Effective Philanthropy.

Q: Why do you think there is a difference of perspective on two such critical areas of the foundation/nonprofit relationship?

A: Part of this may be about power differences between foundations and grantees. Foundations have access to important knowledge and incredible resources that grantees need and want. My sense is that foundations do not realize how underresourced most nonprofits are. It is quite difficult for staff at most nonprofits to find the time (or money) to stay up on the latest knowledge in the field, to talk with other nonprofits about what they are learning, or to develop skills to conduct strong performance assessments of their work.

There are some areas of agreement between foundations and grantees, though. For example, both foundation and nonprofit leaders seem to believe that assessing nonprofit work is crucial. Eighty-one percent of the nonprofit leaders we surveyed believe that nonprofits should demonstrate the effectiveness of their work by using performance measures. But we have seen in our research that foundations think nonprofits should be doing a better job of this.

The problem is that this takes time, skill, and money. And here is where we, again, see a difference in perspective: While most foundation CEOs report their foundation provides financial or other support to assist some grantees in this effort, most grantees report receiving no foundation support for their organizations’ assessment efforts.

Without support, many nonprofits simply don’t have the resources to do this work well.

Q: Data is of growing importance in nonprofit performance evaluation. In a recent Giving Thoughts blog post, Wendy Ramage Hawkins, Executive Director of the Intel Foundation, said that foundations must help their nonprofit partners to use data more effectively. How do nonprofit CEOs feel about the support they receive to collect and analyze data?

A: Well, as I mentioned, most nonprofit leaders do not feel they are getting support, or enough of it, from foundations to do this work. And when I say support, I am not only referring to money, though grant support is very important.

But nonprofit leaders also report little conversation with funders about a variety of related topics, such as what performance targets they should set, which data to collect, how to interpret the data, how to develop the skills of staff to collect and interpret data, and the results of performance assessments.

The majority of nonprofits are looking for more discussion to take place on each of these topics.

The data indicate that more time spent discussing these issues would be a good investment on the part of foundations, because when nonprofit leaders report having more discussion with their funders about issues related to performance assessment, they find their funders to be more helpful to their organizations’ ability to assess progress.

Q: What in particular do nonprofit CEOs want foundations to be more transparent about?

A: Nonprofits want foundations to be more transparent about what they are learning through their work; how they assess their own performance; the impact they are having; and their selection processes and funding decisions. What we don’t find nonprofits wanting more transparency about are the topics that commonly come up when foundation transparency gets discussed—foundations’ financial information, their board composition— nonprofits aren’t seeking this kind of information. They want more transparency about the information that truly matters to their own work and ability to be successful in carrying out their missions.

Q: How could foundations and nonprofits communicate better to help close the gap in perspectives?

A: Well, a first step might just be communicating, period.

We see again and again that communication is vital. Grantees are looking for foundations to be clear about their goals and strategies and consistent in their communications. And sometimes communication is simply not happening about things that are so central to the work both organizations are doing.

For example, we have found that only about half of grantees that are required to go through a reporting or evaluation process for a funder end up having a discussion about that report or evaluation with their funder. Those that do have such a discussion find that the reporting/evaluation process is more helpful than those that don’t have such a discussion. Discussing what nonprofits are learning through their foundation-funded work seems like something that would be beneficial for both foundations and nonprofits. But it isn’t happening enough.

On the bright side, we see foundations and individual program officers that are exemplars. So, it is certainly possible to have highly productive relationships with grantees. But, one thing I have learned through our research and experience over the years is that it is not easy to be a great program officer or an exemplary foundation. Based on what we have learned, I would say it takes dedication, humility, and a true commitment to the work to be successful.

About the guest:

Ellie Buteau, PhD, Vice President - Research, oversees the design, execution, and writing of CEP’s research and manages the organization’s research team. She is a leading authority on foundation strategy, foundation performance assessment, and foundation-grantee relationships and an expert in research design and statistical analysis. She has authored or co-authored numerous reports, articles, opinion pieces, and blog posts on issues related to foundation effectiveness, including Working Well With Grantees: A Guide for Foundation Program Staff and How Far Have We Come? Foundation CEOs on Progress and Impact. Ellie frequently speaks about CEP’s research at national and international conferences and was one of 12 nonprofit leaders selected nationally as a 2012 Independent Sector American Express NGen Fellow.

About the author:

Alex Parkinson is a Research Associate in the Corporate Leadership division of The Conference Board. He specializes in corporate philanthropy and sustainability. He is the Executive Editor of the Giving Thoughts blog and monthly publication series. Before joining The Conference Board in September 2013, Alex worked as a Senior Consultant in London and New York for corporate social responsibility (CSR) consultancy Context. He has advised some of the world’s leading multinationals on CSR communications and strategy development. Follow Alex on Twitter: @AlexParkinsonNY.