The biggest foundation you’ve never heard of

Jane Wei-Skillern

Despite the best intentions, funders often inadvertently sabotage their own efforts to support collaboration. When it comes to getting grants, non-profit leaders are often rewarded for organizational achievements and building their own brand rather than for contributions to a wider field. With such a focus on organizational outcomes, it should come as no surprise that funders’ collaborative efforts often bring disappointment rather than success.

After more than a decade studying successful networks, I have identified four operating principles that are critical to collaboration success. These are exemplified by the work of the Energy Foundation (EF) and that of its founders.

Mission before organization
In 1991, the MacArthur, Pew and Rockefeller Foundations jointly established the Energy Foundation as an independent philanthropic foundation to help solve America’s energy problems. The three foundations collectively committed a total of $100 million over 10 years to EF. EF would support grantees that could influence policy to spur the growth of new clean technology markets. Although the three foundations committed different amounts to EF, all agreed to work as equals and to allow EF to be governed by an independent expert board. By committing substantial, unrestricted patient capital, they enabled EF to help catalyse the growth of energy philanthropy worldwide, which now attracts billions.

Trust not control
EF’s business plan was founded on the views of over 100 of the world’s leading energy experts. Foundation staff regularly seek out experts whose comments help EF to adapt its strategy to the field. It deliberately does not define its funding strategy too explicitly because it does not want to discourage potential innovations by current and future grantees.

High-impact networks comprise organizations that see the work of others in the network as integral to achievement of their aims. EF makes grants to regional groups that carry out energy policy work, then helps them coordinate so they can learn and adapt. Sometimes EF makes grants to coalitions of non-profits which then regrant the funding according to how they think it can best be used across the coalition. As EF president Eric Heitz observes: ‘We believe that people who are closer to the challenges are often in a better position to make the strategic call.’ This is the ultimate in unrestricted funding – allowing the grantee flexibility to make best use of the funds not only internally but also through its peers. Trust-based relationships among network partners allow more holistic, coordinated and realistic solutions to emerge but they require a fundamental rethinking of prevailing approaches in which hierarchy and top-down controls are the norm.

Humility not brand
Despite its work, EF is likely the biggest foundation you’ve never heard of because it seeks to give credit to grantees instead of trying to take the credit for itself. Its success was instrumental in attracting hundreds of millions of dollars in commitments to catalyse a network of similar foundations globally (see http://www.ClimateWorks.org). To get work done effectively through a network, participants need to build a reputation for making others look good rather than building a brand and institution for their own sake.

Node not hub

Although EF has no endowment and has to raise its own operating funds annually, it routinely suggests that donors give directly to others in the field if it is not able to add value. It also invests in field building without an expectation of direct benefit. For example, EF has lent its executive staff for months at a time to help launch peer organizations such as the European Climate Foundation. In addition, Eric Heitz often gives presentations to educate other donors to give to the energy field, even if funding for EF is not forthcoming. The goal is to grow the ‘market’ rather than to be the market leader. Thus, EF is comfortable playing a behind-the-scenes role and making its own organization less necessary. Heitz has even told his staff that their job is to ‘lose’.  Once they have supported initiatives or organizations to succeed, their job is to let them go and apply EF’s resources to the next big challenge.

While there are many funders who encourage collaboration, the number who live by these principles is rather small. These four principles run counter to conventional wisdom in the non-profit sector, and are particularly challenging to funders who are used to being in control. Yet, if funders really want to see more collaboration, they might start with themselves – and be the change that they want to see in the world.

Jane Wei-Skillern
serves on the faculty at UC Berkeley’s Haas School of Business and Stanford University’s Graduate School of Business. Email jwei.skillern@gmail.com


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