What makes a foundation great? Six steps to brilliance and impact


John Harvey

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Recently, a colleague who works closely with foundations in emerging markets put a question to some of her peers: What makes a foundation great?’ My own response to this question, simply worded but rather knotty, is that ‘greatness’ requires a number of elements, six of which I believe are essential.

1  Taking on major challenges
Great foundations have a mission that seeks to address a major challenge or challenges. A foundation can take on whatever issues it chooses, but to be considered great, a foundation’s mission must focus on issues of great importance. This often requires a foundation to be bold and take risks: timid foundations are seldom great, while bold foundations have the potential to achieve greatness.

2  Working for systemic change
Great foundations take a programmatic approach that seeks to bring about the foundation’s mission through systemic change and through addressing the root causes of the challenge at hand. Again, there is nothing wrong with programmatic work that is more charity-oriented than systemic change-oriented. In fact, charity – feeding programmes, orphanages, etc – is often very important. But great foundations seek long-term change rather than short-term alleviation. This demands patience and a willingness to invest for the long term.

3  Flexible financial strategies
Great foundations demonstrate thoughtful flexibility in applying a range of financial strategies based on their suitability to achieving goals. Most often, goals are best met through making grants to NGOs, CBOS and other independent organizations. Sometimes goals are best met through making loans (sometimes referred to as impact investing). Sometimes venture philanthropy (financial as well as technical and capacity-building support) is the most effective approach. On rare occasions, goals are best met when a foundation sets up its own operating programme.

Great foundations start with an analysis of how a challenge can most effectively be met. They then choose a financial strategy or strategies based on that analysis: grants where grants will be the most effective strategy, loans where loans will be the most effective, etc.

4  Deploying all the foundation’s assets
Related to the above, great foundations deploy their resources to the fullest extent possible to achieve their mission. Different national laws govern how a foundation’s financial assets may be used, but where they allow programme-related investment, mission-related investment and other such tools, these should be used to the fullest extent possible. In the US, for example, this means going well beyond the mandatory 5 per cent payout to tap into, as much as possible, the other 95 per cent of a private foundation’s financial assets.

5  Accountability to their constituents
Great foundations are fully accountable to the constituencies they serve. A foundation’s activities have the potential to change the lives of other people, for better or for worse. Accountability to those people is absolutely fundamental, and great foundations understand this, placing grantees and beneficiary communities at the top of their list of priority stakeholders. Great foundations also understand that accountability to beneficiary communities is essential to effectiveness: where there is no community support, projects will most certainly fail.

6  High levels of professionalism
Great foundations put in place strong business and talent management practices. Great foundations are working to address some of the world’s most difficult problems: it is highly unlikely that informally run, unprofessionally staffed foundations could ever rise to the challenge. Rather, taking on such massive challenges demands a high level of professionalism: the attraction and retention of highest quality staff, working within a culture and utilizing strong business practices that allow them to excel in their work.

Admittedly, these are high standards. Alas, I know of no foundation that rises to the challenges of all six. Some manage at least a few well enough but pay short shrift to others. Additionally, so much of a foundation’s identity depends upon its leadership, and foundations that one year are ‘great’ may cease to be so when a new, less effective leader steps in, and vice versa. In my own career in philanthropy, I’ve witnessed and worked with some ‘very good’ foundations – if not, by these high standards, truly ‘great’ ones. I’m convinced, though, that foundations have all the tools they need to build truly great institutions. How much greater would philanthropy’s impact be if more foundations strove for greatness.

John Harvey is an independent global philanthropy professional.

Comments (7)

John Harvey

Jason, I appreciate your comment and agree with you in part. I think it might be possible for unstaffed foundations to achieve greatness as I structure it here, provided trustees devote the kind of time and resources demanded by the other criteria. That is often a very tall order, though, for people for whom a foundation is a part-time affair. However, where family members are able to devote significant time to the foundation, and really that would mean a full-time approach by at least a couple of family members, greatness as laid out here is indeed possible. Such foundations would still need strong talent management practice, even if the talent is unpaid, and professional business practice more broadly would also be key.

Jason Franlin

Hi John - Great post and I agree with 5.5 of the 6.. The one I take issue with is your final step because it implies that only staffed foundations can be great. I think your urging towards professionalism fits for larger or staffed foundations, however I think small or unstaffed foundations can also aspire and even achieve greatness with thoughtful and intentional practices around grantmaking, communication, investment and coordination. While easier, these efforts don't have to necessarily be carried out by professional staff. But I also acknowledge that's a nit-picky response to an article I otherwise was nodding all the way through ;-)

John Harvey

Aaron and Neville, thank you for your comments, all of which I agree with. In my own experience, #1, taking on major challenges, would seem to be the most readily adopted of the six criteria: I know of ample foundations on all continents that are taking on tough issues like climate change, economic injustice, women’s rights and equality, and other wicked problems. For the remainder of the six criteria, the record would seem to be less impressive. On #2, there may be a great deal more rhetoric around tackling root causes than actual, transformation-focused foundation practice. Part of it, as Aaron points out, has to do with flawed, technocratic approaches. Part of it too stems from weak theories of change and/or too rigid logic models. Excellence in this criterion also requires long-term investment and patient capital, and too few foundations are willing to make multi-year grants and to fund for the long term. There are foundations that I believe excel in this criterion, however: the Joseph Rowntree Charitable Trust (UK) and the Open Society Foundations (global) come to mind. On #3, flexible financial strategies, I fear that too many foundations, especially in today’s emerging markets, are not basing their financial strategies on solid analysis of the challenges at hand. Many are leap-frogging over grantmaking and focusing exclusively on impact investment. A more balanced portfolio of philanthropic investments—some grants, some loans, for example—would likely be more effective in the long-term. Among foundations I admire for their diverse financial strategies, the David and Lucille Packard Foundation (USA) and the W. K. Kellogg Foundation (USA) come to mind. On #4, my sense is that the global foundation community has a very long way to go on learning how to deploy all of its assets—financial, technical, as conveners, as leaders… On #5, accountability to constituents, the record across the global is quite mixed. There are foundations doing remarkable work on constituency engagement: The Dalia Association (Palestine) and many of the international women’s funds (including TEWA in Nepal, ELAS in Brazil, and FRIDA in Canada) are a few worth noting. In Africa, the African Grantmakers Network has a strong commitment to constituency engagement among its members. In the USA, a focus on constituency voice and grantee perception is trending positively (though admittedly there remains a long way to go). WINGS has recently launched a toolkit on transparency and accountability, demonstrating its commitment to this issue. On the other hand, colleagues working in the Gulf, China, Russia and elsewhere report far less appreciation for the value of constituency voice and very little appetite for authentically engaging grantees in their work. On #6, the sector globally has quite a long way to go. North American and European foundations as a rule fare best on this criterion, but there remain enormous gaps, especially with regard to talent management practice. Elsewhere, there is far less appreciation for enabling strong business and talent management practice; families who operate their businesses with high degrees of professionalism deny the same attention to their philanthropic concerns. Foundations whose reputation is strong on this criterion include Fondazione Cariplo in Italy (thanks in large part to the enlightened leadership of the late Pier Mario Vello), the William and Flora Hewlett Foundation (USA), and the Robert Wood Johnson Foundation (USA). Allow me to go out on a limb and name one foundation that I believe has the most potential to excel in all six of these criteria: The Ford Foundation (USA). Ford has historically been strong on criteria #1 and #2. More recently, Darren Walker and the leadership team he is assembling have launched efforts that advance the remaining criteria, including Ford’s multi-faceted work in Detroit (criteria #3 and #4), its participation in the Fund for Shared Insight (criterion #5), and the assembling of a highly respected talent management team to advance leading edge practice (criterion #6).

Lijun He

What a thoughtful piece! Thanks for sharing. I also briefly translated the key points of your article to share with my Chinese students, foundation colleagues, and some philanthropists in my Wechat, a popular Chinese social media app ( like Chinese twitter and Facebook combined). One lady who is running Shenzhen Charity Federation already texted me and expressed her appreciation of your thoughts. She said she has done # 1,#2,#3, #6, but #4, and #5 has been challenging in her work. I really like your articles. All the points are on target and they are applied to both American foundations and Chinese foundations and other countries’ foundations. As I mentioned in my Facebook, if there is anything I could add, I would elaborate about foundations' role in community leadership, which reflects their vision, wisdom, resource mobilization ability, and inspiration to others. I saw many foundations are doing professional job, but their staff look bored and they are acting more like a manager, processing proposals and conducting site visits, and attending meetings without too much critical thinking or leadership spirit . I didn’t feel their inspirations and their vision as catalyst, convener, or social experimenter.

Neville Gabriel

Great think piece John. The question preoccupies me daily. I strongly support the excellent points #1, #2, and #6 that you make. On #3, I think the need for agile adaptability to seize opportunities as they arise and go where there is traction, letting go where there is none, is a characteristic that goes beyond flexibility only in financing for a foundation to be great at what it achieves. And on #5, my intuitive sense is that, more than formulaic accountability, a sense of real rootedness through deep links and connections into specific networks and contexts makes for greatness. I'm not sure about #4. I do believe though, that total organisational commitment to the cause through all available resources (including people) is essential.

Aaron Dorfman

Great piece, John. I'd be curious to know which foundations you see as being great on accountability to their constituents. Seems to me that there are many foundations who do well on #1, #2, and #6. Fewer do well on #3, #4 and #5. When thinking about systems change, many foundations are indeed seeking systems change, but many have a flawed, technocratic analysis that ultimately falls short -- partially because they don't perceive any accountability to constituents other than the donor. Thoughts?

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