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Tuesday, January 23, 2018

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Beyond the Grant Dollars: Foundations Have Many Tools to Increase Impact
The William and Flora Hewlett Foundation

December, 2011

This is the annual report form the president of the William and Flora Hewlitt Foundation. Although this foundation is primarily a California foundation, I thought the letter was most compelling and focused.I would like to share it with you. JRB

Because grantmaking lies at the core of the Hewlett Foundation’s work, our endowment is the fundamental asset on which our activities depend. But the Foundation has two other major assets as well: its reputation and the staff members who make good use of the endowment and maintain and strengthen its reputation. The Beyond the Grant Dollars (BTG$) project focuses particularly on the role of the program staff. It describes and analyzes the activities that they perform to maximize the Foundation’s impact beyond the monetary amount of our grants. 

The BTG$ project has two primary objectives:

  • To improve the Foundation staff’s and Board’s decisions about the mix of strategies and the allocation of financial and human resources that can best achieve our goals.
  • To determine the skills, experience, and other qualities we should look for in new staff members and ways to improve the development of Foundation program staff.

This essay provides the groundwork for pursuing both objectives by documenting the activities that program staff engage in and their contributions to the Foundation’s outcomes. We also aim to communicate to new staff members, grantees, other funders, and the public at large the Hewlett Foundation’s role as a highly engaged, outcome-oriented philanthropic organization.

The Hewlett Foundation’s Role in Philanthropy

This project is premised on the Hewlett Foundation’s Guiding Principles, which open with a definition of the Foundation’s role as a “strategic philanthropic investor.” The first three principles are particularly relevant to the BTG$ project:

  1. The Foundation strives to follow the commitment to philanthropy and style of operation established by the Founders.
  2. The Foundation focuses on the most serious problems facing society where risk capital, responsibly invested, may make a difference over time, and on sustaining and improving institutions making positive contributions to society.
  3. The Foundation strives to maximize the effectiveness of its support.

Principle 2 supports two overlapping approaches to philanthropy. Each responds in a different way to the question: How can a foundation add social value beyond the dollars of its grants?

Supporting Institutions and Fields

A vibrant pluralistic society necessarily includes a diverse array of nonprofit organizations—from universities and cultural institutions to advocacy groups and community-based providers of social services. Philanthropy supports the ongoing work of these organizations and provides risk and growth capital to expand the scope, efficiency, and quality of their work. The vitality of individual institutions depends on the vitality of the fields in which they operate—whether in domains of knowledge, culture, or practice. Thus, the motivations that underlie supporting institutions entail a concern for the strength of their broader fields.

  • In its role of supporting institutions and fields, a foundation can add value beyond the grant dollar in a number of ways:
  • by identifying, through due diligence, the most effective or promising nonprofit organizations in its areas of interest;
  • by pressing organizations to articulate and improve their strategies and outcomes;
  • by strengthening organizations, either through the direct efforts of program officers or through grants to retain consultants;
  • by encouraging other funders to join in supporting particular organizations;
  • by creating new organizations to fill gaps in a field; and
  • by linking organizations, policymakers, funders, and various stakeholders.

Hewlett Foundation grants that support institutions include those to the San Francisco Symphony, Marie Stopes International, and the University of California, Berkeley, among many others. The Foundation’s previous work in conflict resolution and its current initiative in open educational resources (making high-quality educational materials freely available on the Web) are paradigmatic of field building. The Foundation also has played an important role in strengthening fields in its Western environmental work, international family planning, quality education in developing countries, deeper learning, and the nonprofit sector.

Collaborative Problem Solving

Collaborative problem solving comes into play when the Foundation focuses specifically (in the words of Principle 2) on “the most serious problems facing society.” Of course, institutions play essential roles in addressing these problems. But in their problem-solving mode, philanthropists put the problem rather than the institution at the center. Organizations, funders, and others in a field are often fragmented or competitive and may lack the coordination necessary to solve complicated problems. Philanthropists in problem-solving mode often engage with these actors to design, implement, and coordinate strategies. The Great Bear Rainforest initiative, described later, is an example of collaborative problem solving among a group of foundations, nonprofits, and government agencies.

* * *

While they have different centers of gravity, these two basic approaches often intersect. The Foundation’s problem-solving approach tends to focus on problems that the world faces right now, while our work to support institutions aims at building long-term capacity to solve problems that may not even be foreseen. (The Foundation’s separate grants of project and general operating support to the Center for Global Development reflect these two time horizons, with the former supporting the organization’s particular work in population and reproductive health, foreign aid, and universal basic education.)

There are a number of ways to achieve philanthropic goals, none of which is a priori better than any other. But like all institutions, foundations develop particular practices, cultures, and areas of expertise—and eventually particular niches in their fields. Over the years, the Hewlett Foundation has developed a set of practices that reflects Principle 2 and that gives us a particular role in philanthropy. Our core practices include:

  • Highly ambitious goals, focusing on some of the most serious problems facing society, with the understanding that achieving and sustaining these goals depend on strong institutions.
  • A presumption in favor of general operating support when an organization’s mission and activities are well aligned with the Foundation’s goals.1
  • Considered risk taking.
  • A collaborative problem-solving approach.
  • Continuous learning to improve our practices and procedures.
  • A set of grantmaking practices that we have come to call “outcome-focused grantmaking.”2
  • Term limits for program officers and directors to ensure that we periodically revisit our assumptions about strategies.

As a result of these practices, the Foundation tends to be a highly engaged philanthropist. Engagement involves continuous consultation and dialogue with grantees, other practitioners, and experts in a field. It also requires the judgment to know when to step back and allow grantees great independence in designing and implementing strategies. But we believe that the Foundation could not be a smart, responsible risk taker and cannot be successful without a high level of engagement that adds value beyond the grant dollars.

The Foundation’s Work

This section provides examples of five tactics that program staff pursue as they undertake the Foundation’s two main approaches to philanthropy—supporting institutions and fields (the first two tactics) and collaborative problem solving (the remaining three):

  • Building, supporting, and strengthening institutions
  • Building, supporting, and strengthening fields
  • Catalyzing multiparty problem solving
  • Supporting advocacy for policy change
  • Collaborating with other funders

It concludes with a review of the operational activities that program staff undertake to achieve outcomes.

Building, Supporting, and Strengthening Institutions

Much of the Hewlett Foundation’s grantmaking is designed to build and strengthen organizations concerned with research, teaching, arts and culture, and policy advocacy. Our typical form of funding for these grants is general operating support (GOS), sometimes supplemented with smaller organizational effectiveness grants—funds that allow grantees to retain expert consultants in areas of mutually agreed-upon need, such as governance, communications, and fundraising. As the examples below show, GOS grants, even to “anchor” grantees (institutions that play major roles in the fields in which we work) often require ongoing involvement. This is true not only when organizations are in trouble (e.g., because of poor governance or leadership structure, or uncertain financial sustainability), but also when they are undergoing natural, healthy developments (e.g., growing pains for a start-up, leadership transition, or dealing with changes in the external environment).

Global Development and Population Program. Because the field of global development is new and rapidly changing, we have helped build a number of new organizations such as Uwezo, which conducts annual learning assessments in Kenya, Uganda, and Tanzania; IMCO, a think tank in Mexico’s transparency and accountability portfolio; and the International Initiative for Impact Evaluation, also part of the Program’s transparency and accountability component.

With respect to the Program’s work in population, Foundation staff and consultants support a multifaceted strategic planning effort by the International Planned Parenthood Federation to increase its focus on outcomes. The INDEPTH network, the major source of demographic information throughout Africa, has benefitted from ongoing capacity-building support, as have the African universities whose demography programs we support.

Environment Program. In the American West, we provide general operating support to the Greater Yellowstone Coalition in its efforts to protect land, water, and habitat in the Yellowstone ecosystem. The organization is well run and has clear goals and strategies, a talented staff, and an engaged board. Even so, our Program staff work very closely with Coalition’s staff. For example, we are currently engaged in a long-term planning project with the Greater Yellowstone Coalition that will help it determine whether and how to amend its strategy based on the predicted effects of climate change.

In the areas of energy and climate, we recently switched our grants to the Energy Foundation from project to general operating support, reflecting the close alignment of our goals and strategies. But this change has not decreased the degree of staff engagement with the Energy Foundation: we meet regularly to discuss strategy and coordinate our respective grantmaking plans. In addition, Foundation staff have become more involved in helping the Energy Foundation develop the systems it needs to implement its strategies successfully.

Performing Arts Program. In addition to providing ongoing capacity building for many small and midsized organizations, our program staff play a significant role in strengthening organizations at critical junctures in their lifecycles. For example, working together with its leadership, we have provided Young Audiences of Northern California with two years of capacity-building support to help it meet the arts education needs of its rapidly changing constituencies.

Philanthropy Program. Our support for some relatively new infrastructure organizations, such as the Center for Effective Philanthropy and The Bridgespan Group, has required extensive staff involvement. For example, we played a leading role in helping the Center for Effective Philanthropy, which has revolutionized how foundations gather data from their stakeholders, to diversify its funding base. We helped the Stanford Social Innovation Review, the most important practitioner-oriented journal in the field, transfer from Stanford’s Graduate School of Business to its Center on Philanthropy and Civil Society.

With due regard for the subjectivity of grantee perceptions and their limitation as weak proxies for actual impact, in its 2009 Grantee Perception Report, the Center for Effective Philanthropy notes: “Hewlett receives very high ratings on measures related to its effect on individual grantee organizations. The Foundation is rated higher than 75 percent of funders for its impact on grantees’ organizations and its understanding of grantees’ goals and strategies. Grantee comments describe how specific characteristics of Hewlett Foundation’s grantmaking, such as multi-year and general operating support grants, help strengthen their organizations and their work. The Foundation also provides grants that are larger than that of the median funder and larger than typical given the amount of administrative time grantees spend fulfilling requirements for the Foundation. Surprisingly, though, the Foundation is only rated typically for its impact on helping grantees sustain the work funded by Hewlett in the future.”

The Foundation helps build and strengthen institutions in three ways:

  • Most fundamentally, the task of strengthening institutions falls to program officers in their direct work with grantees. The time that program officers spend providing capacity-building assistance to grantees, in areas ranging from strategy to governance, often greatly exceeds their time spent doing due diligence and monitoring grants.
  • During the past five years, the Foundation has supplemented the work of program staff with organizational effectiveness grants that allow grantee organizations to retain consultants to improve their performance in particular areas of need. These consultants provide an intensity of engagement beyond the capacity of the Foundation’s own staff. Even so, our staff play a significant role in assessing the needs of organizations and helping them design engagements and implement results.
  • In 2011, we instituted a $700,000 fund to provide organizational effectiveness support to a small set of anchor grantees to improve their strategic planning, monitoring, and evaluation practices. The idea was received enthusiastically, and this Outcomes Fund for Anchor Grantees has already supported a handful of engagements. For example, the Center for Reproductive Rights, a grantee in the Global Development and Population Program, is embedding monitoring and evaluation practices in its strategic planning process. Creative Commons, a grantee of the Education Program’s Open Educational Resources portfolio, is developing a strategy for a sustainable future in an increasingly international environment.

Building, Supporting, and Strengthening Fields

The Foundation has played a major role in building some new fields—both domestic and international—including conflict resolution, open educational resources, transparency and accountability, and deeper learning. This work involves large start-up costs, and there are considerable risks of failure. Nevertheless, the potential is enormously high.

Field building involves several different elements, including conducting research, testing new ideas, coordinating or drawing on organizations doing distinct work, and sometimes growing the number of those organizations in order to achieve critical mass in a field. The nature and quantity of research depend on the maturity of the field, its knowledge gaps, the identification of audiences that will benefit from the research, and the engagement of researchers who can meet the field’s needs. Here are three examples.

Transparency and Accountability. During the past two decades, core areas of the transparency and accountability field have seen extraordinary progress, including freedom of information laws, increased revenue and budget transparency, and better service delivery through citizen monitoring. Yet only recently have transparency and accountability practitioners begun to share and compare lessons across disciplines rather than pursue discrete initiatives concerned only with, say, budget transparency, natural resource governance, or international aid flows.

While we know which transparency and accountability tools and approaches have and have not succeeded in particular settings, we do not know enough about how impact was achieved to apply these models across different contexts at scale. The Foundation supports various strategies to address these knowledge gaps and also supports large-scale models of transparency and accountability at the country level in Mexico and East Africa.

The transparency and accountability work in Mexico, which is managed there by Foundation staff, has supported the development of a community of grantees to advance access to information and budget accountability in the country. Foundation staff regularly convene grantees to discuss common problems, engage in collaborative advocacy campaigns, and identify and fill knowledge gaps. For example, a collaborative effort to make agricultural subsidies for Mexican farmers transparent has led to caps on subsidies to wealthy farmers and a move to provide payments owed to over a million poor farmers.

Open Educational Resources. The field of open educational resources (OER) seeks to provide equal access to knowledge worldwide through the development and use of openly licensed digital resources for education. A 2001 Foundation grant to MIT to put course materials online eventually led to the OpenCourseWare Consortium, an international group of 200 institutions of higher education committed to OER. At the same time, the Foundation helped create an infrastructure for the new field, funded demonstration projects to illustrate OER’s potential, and funded studies on the use of and demand for OER. One very promising outcome is the increasing number of high-quality textbooks published under Creative Commons licenses and made available to students at a far lower cost than conventional textbooks. After a decade of helping create and consolidate organizations in the field, we are providing general operating support to a number of the organizations we helped create.

Quality Education in Developing Countries. In addition to developing new fields, the Foundation has helped existing fields improve strategies and shift strategic direction. This can include building new organizations and structures within a field. Our Quality Education in Developing Countries initiative is paradigmatic.

For decades, international donors supporting K-12 education in developing countries focused on school construction and student attendance but failed to assess whether students were actually learning. In 2001, the Foundation began to try to improve learning outcomes in reading, math, and problem-solving skills.

Because few existing organizations were closely aligned with this goal, the Foundation drew on many entities to put together a strategy. For example, we made grants to the Council on Foreign Relations to establish the Center for Universal Education (now at the Brookings Institution) to make learning outcomes a high priority of the global policy agenda. The Foundation made grants to the Aga Khan Foundation to develop an approach to teaching reading and math, and then to implement that approach in Kenya and Uganda. We engaged the African Population and Health Research Center to assess the effectiveness of these approaches and worked with MIT’s Poverty Action Lab to assess others. We made grants to share innovative educational ideas in many countries—for example, supporting an East African team’s visit to India to learn about the implementation of a nationwide assessment of literacy and numeracy.

Over time, the Foundation hopes to foster the development of in-country organizations to which we and others can make general operating support grants. The Uwezo initiative in East Africa shows early signs of success. But for now, the work continues to require considerable coordination and support for organizational development by Foundation program officers who travel frequently to work directly with grantees in India and Africa.

Catalyzing Multiparty Problem Solving

Many of the preceding examples illustrate the Foundation’s role in solving problems through building and strengthening organizations and fields. This section focuses on the program staff’s more direct problem-solving role, which has been critical in almost every area of the Foundation’s work. This often occurs when a field has no core organization able to address the entire problem it faces. Here, our program staff’s perspective, expertise, and objectivity enable them to link together the work of organizations whose spheres of activities do not intersect or that compete with one another.

Nuclear Security Initiative. In the Nuclear Security Initiative, which works across fragmented fields, we supplement grantmaking by bringing together groups that do not ordinarily communicate with one another. For example, we convened experts on the nuclear fuel cycle from the United States, Asia, and Europe to share their work and collectively urge governments to establish nuclear spent-fuel storage facilities. We bring together technical and security policy experts—two groups that do not normally interact—to generate ideas about verifying reductions in nuclear weapon arsenals. In conjunction with other funders in the field, Foundation staff also facilitate coordination among U.S. nuclear security organizations that have not communicated with each other in the past. Their collaboration has included field-wide strategy sessions, messaging coordination, and help for grantees adjusting to rapidly changing political environments. Though impossible to quantify, we believe that this work has multiplied many times over the value of the Initiative’s grants budget of approximately $2.5 million per year.

Renewable Energy Siting. Over the last two years, the Environment Program has helped conservation organizations and clean energy groups work together to dramatically increase the development of solar and wind energy in the West while protecting wildlands, water, and habitat. The Program supports some grantees working on conservation and others working on clean energy. Through a major investment of staff time, we have linked these organizations and helped them collaborate. The result is a common goal and strategy for renewable energy siting in the West that has broken gridlock and moved the issue forward.

Supporting Advocacy for Policy Change

By its nature, policy advocacy is dynamic, calling for the ability to shift in real time to respond to changing circumstances. Strategic planning, monitoring, and evaluation for advocacy are complex because of nonlinearities and uncertainties, the difficulties of assessing the probability that particular strategies will succeed, and the need to consider alternative routes to success if one path fails.

For example, our Global Development and Population Program staff work with grantees to adjust to rapid political changes involving domestic support for family planning and reproductive rights. Moreover, advocacy doesn’t simply end with the adoption of a policy. It requires continuous efforts to prevent regression and ensure that policies are effectively implemented. For example, staff members in our Mexico office are highly engaged with grantees to counter efforts to roll back transparency and accountability successes in that country.

With high engagement comes potentially high payoffs, as illustrated below.

California Environmental Policy. The Environment Program has made grants to a variety of organizations focused on advancing climate change and air quality policies in California. Traditional environmental groups like the Natural Resources Defense Council, Sierra Club, and Environmental Defense Fund have provided critical advocacy and analytical capacity to help develop California’s climate change policy. On the local and regional level, public health, environmental justice, and community groups like the Fresno Madera Medical Society, Coalition for Clean Air, Communities for a Better Environment, and East Yard Communities for Environmental Justice have achieved significant improvements in air quality. Program staff have devoted considerable effort to helping these diverse groups collaborate to develop and implement a shared strategy.

Great Bear Rainforest. Our work to achieve sustainable development in the Great Bear Rainforest, a large region of temperate rainforest in Canada, required coordinating experts with knowledge of the relevant industries, First Nations, government entities, NGOs and other organizations, and experts on the statistical modeling of complex strategies. In addition, Rainforest Solutions Project, a joint initiative of Greenpeace, ForestEthics, and Sierra Club BC, was created to help broker an environmental deal. More than a decade of deep engagement led to a multiparty agreement that bars logging on 5 million acres and places an additional 19 million acres under sustainable land management rules, supported by a new public/private financing mechanism.

Of course, policy advocacy that has potentially high returns also involves a significant risk of failure. In recent years, the Education Program supported a diverse group of grantees in an effort to achieve school finance reform in California. Pursuing this ambitious policy change required coordinating the efforts of grantees working in policy research and analysis, media and communications, advocacy, and grassroots mobilization, as well as providing technical assistance to policymakers. Program staff played a critical role in networking grantee organizations, sharing information, and brokering relationships among nontraditional allies. For all of this work, the results fell far short of our hopes—in large measure because of the broader fiscal and governance challenges facing the state.

It should be noted that grants to organizations that advocate for policy change typically incur greater than average legal costs to ensure that the Foundation and its grantees remain well within the lawful scope of the Internal Revenue Code and state regulatory schemes.

Collaborating with Other Funders

Achieving the Foundation’s goals frequently requires collaborating with other funders. Meaningful progress often takes more capital than we alone are able to commit, and there are other benefits to developing common strategies. Whoever takes a lead role, collaboration requires Foundation staff to actively engage in meetings with other foundations, create coalitions, serve on advisory panels, draft mutual terms of reference, and align multiple funders with somewhat different strategies toward one common goal, as the examples below show.

Great Bear Rainforest. Collaboration in conserving the Great Bear Rainforest (mentioned above) took two forms: joint funding and collaborative staffing. None of the foundations had sufficient resources alone to implement a comprehensive conservation and economic development agreement. Together, the Hewlett, Packard, Moore, and Wilburforce foundations and the Rockefeller Brothers Fund built a large enough pool of philanthropic support to attract matching public funds from the governments of Canada and British Columbia—funding that was essential to protecting the rainforest. Program officers from the participating foundations collaborated on the shuttle diplomacy necessary to bring together timber companies, environmental NGOs, First Nations, and the British Columbia provincial government in a negotiated settlement for conserving the rainforest.

ClimateWorks Foundation. In 2007, a small group of foundations concluded that global strategies for mitigating climate change required at least $300 million per year and would be ideally funded at $500 million per year. Because none of us was able to fund the entire work at this scale, together we created the ClimateWorks Foundation to provide a coordinated strategy. The Hewlett Foundation has dedicated significant staff and, indeed, Board members’ time to seeking still other funders’ investments in ClimateWorks.

California Forward. Five California foundations joined to create California Forward, a bipartisan organization dedicated to reforming the state’s fiscal and governance practices. The planning process took almost two years and involved scores of meetings among foundation staff and CEOs, consultants, and other advisors. The project involved numerous stakeholder meetings, two competitive request-for-proposal processes, and two strategic plans. At various points, the funder collaborative seemed on the verge of falling apart because of differences about both ends and means, but we finally reached agreement. Four years after its launch, California Forward is recognized by many observers of state politics as the best hope for achieving the significant fiscal and governance reforms needed to get the state back on track.

Community Leadership Project. In 2009, the Packard, Irvine, and Hewlett foundations launched the Community Leadership Project, a $10 million partnership to build the capacity of organizations serving low-income people and communities of color in the greater San Francisco Bay Area, Central Coast, and San Joaquin Valley. In the belief that those closest to their communities best understand local needs, the Project works through intermediary organizations, which provide grants to grassroots organizations, provide technical assistance through workshops and peer networking, and fund leadership development programs. An evaluation of the Project is in process.

Operational Activities of Program Staff Members

The preceding sections discussed the Foundation’s various grantmaking tactics. Here we summarize the tasks and activities performed by program staff.

Staying current with the field. Program staff members must stay current with their own and related fields and with advances in technology, communications, and evaluation in order to develop and adjust strategies, recognize gaps, and identify new opportunities. They do this through reading, participating in meetings, and maintaining relationships with other actors in their fields.

International Grantmaking

The Foundation’s international grantmaking demands considerably more time and effort than similar domestic grantmaking. This is due to cultural differences, staff travel, weaker enabling environments for philanthropy and civil society, shallower human resource pools both for the leadership of nonprofit organizations and for specialized consultants, restrictive legal requirements, and the complexities of managing expenditure responsibility grants, including substantiation of a grantee’s charitable purpose, adherence to reporting requirements, and greater oversight to ensure that grant funds are spent for charitable purposes.

Strategic planning, monitoring and evaluation, and other grant-related processes and documentation. Program staff undertake major strategic planning reviews every five to eight years, engage in ongoing monitoring and evaluation, and prepare annual memos reviewing the past year’s performance and proposing plans for the coming year. They also write initial summaries and closing reports for each awarded grant.

Complying with regulations. In cooperation with the Legal and Grants Administration departments, program staff take responsibility for compliance with applicable federal, state, and international regulations.

Capturing and disseminating knowledge. Program staff acquire substantive knowledge in their fields and expertise in grantmaking and in the various other activities described in this essay. We are working to capture this knowledge for internal use and to disseminate it externally when it has the potential to inform nonprofit organizations, foundations, and others.

Communicating with the Board. The programs’ main communications with the Board are through proposed annual plans and budgets, grant recommendations, and assessments of progress. All of these are first critiqued within the programs and through peer review by staff members from across the Foundation.

Mentoring and peer learning. New program officers and directors are assigned mentors to assist in learning grantmaking and acquiring understanding of the Foundation’s processes. Program staff also regularly engage in cross-program learning on subjects ranging from planning and evaluation to assessing and improving the capacity of grantee organizations.

Providing administrative support for grantmaking. While this essay focuses on the grants-related work of program staff, it also has implications for the Foundation’s administrative departments, who regularly collaborate with program staff to improve the effectiveness of their and their grantees’ work. For example, the Communications Department organizes an annual training workshop for grantees to improve their communications strategies. The Information Technology Department advises on an initiative to provide videoconferencing equipment to grantees with the aims of increasing their effectiveness and decreasing the environmental impact of travel.

The roles of our Investment and Finance and Grants Administration departments are as obvious as they are essential. The Foundation’s grantmaking in developing countries and support for organizations engaged in advocacy call for special expertise by our Legal department. The Foundation’s term limits for program directors and officers entail frequent searches and the training of new staff members, which demand special support from Human Resources personnel. In short, program staff would be unable to engage beyond the grant dollars they award were it not for the contributions of administrative personnel—work that is often invisible to our grantees but highly valued by everyone within the Foundation.

Becoming More Efficient and Effective

Given the Hewlett Foundation’s role in the philanthropic sector and the fields in which we work, and assuming no significant growth in the size of our staff, we have asked how we can improve the effectiveness of the Foundation’s work. The three main variables under our control involve:

  • Grantmaking strategies
  • Outsourcing
  • Hiring and training program staff

Grantmaking Strategies

The Foundation’s grantmaking practices demand high staff engagement. How can we make these practices more efficient without compromising our effectiveness in achieving the Foundation’s programmatic goals?

We start with the observation that the number of problems the Foundation might effectively address and the number of institutions we might support are nearly infinite. It is no wonder that the Board and staff are tempted to address new challenges, start new initiatives, and pursue new ideas. But we cannot do it all, and, for the most part, we have imposed the self-discipline not to try.

Within its programs and initiatives, the Foundation already pursues a mix of approaches to grantmaking that requires varied levels of staff engagement. But the decision-making process for choosing that mix has not always systematically taken into account the labor intensity demanded of our staff. We could be more intentional about this. The fundamental question that program directors, the president, and Board should consider as they consider new opportunities is: How much staff effort will it require to undertake a particular strategy or initiative, and does the program have the resources to support it? Questions that will guide the answer include:

  1. What is the expected value of the strategy’s or initiative’s social impact? How does it compare to the impact of less labor-intensive approaches?
  2. How lengthy and complex will the strategic planning process be, and what internal resources will it require?
  3. Given the maturity of the field and the organizations within it, how much time will program staff need to spend on organizational capacity building to ensure that grantees can be successful? (Given limits on staff capacity and expertise, might we need to outsource some capacity-building assistance, particularly for international grantees, and, if so, are good consultants available?)
  4. Are there any well-developed organizations in the field that can serve as anchor grantees? (The demands on staff tend to be lower when one or more high-performing organizations can play a leadership role, allowing Foundation staff to complement those organizations’ work with grants to smaller, less well-developed institutions.)
  5. Are other funders already playing a leadership role, or must we take the lead?
  6. Are there organizations outside the Foundation that can supplement and complement our own staff’s work, through regranting; strategy, monitoring, and evaluation; strengthening organizational capacity; and research? We discuss this approach in the following section.


At least two potential outsourcing mechanisms can improve the efficiency and effectiveness of the Foundation’s own staff: hiring consultants and supporting intermediary organizations that can make smaller grants to multiple organizations, a concept known as “regranting.” The fundamental question that the Foundation should consider is: When is it most effective to use external organizations and consultants rather than our own staff?

Supporting Intermediaries

The Foundation provides funds to regranting organizations for a variety of reasons. Often, such intermediaries can support smaller grantees that we cannot reach directly because of our limited staff capacity. By the same token, grantees may require extensive technical assistance that we are unable to provide. Finally, intermediary organizations may know a community better and be able to build networks more effectively than program staff can.

For these reasons, supporting intermediaries has the potential to decrease the burden on the Foundation’s staff over time. At the same time, conducting due diligence, setting up a regranting structure, and developing monitoring and evaluation plans add a layer of complexity to our grantmaking, as described below.

ClimateWorks Foundation. The birth and development of the ClimateWorks Foundation (mentioned above) demanded considerable involvement by several full-time staff members. Even as the organization has matured, it continues to require extensive staff attention. This is due in part to the ambition of our shared goals, the complexity of the ClimateWorks network, the need to coordinate the organization’s work with that of other actors, and its ongoing fund-raising needs. Our staff actively collaborate with ClimateWorks staff on a variety of strategic issues, such as how to redirect resources following the defeat of national climate policy in the United States and how to address climate policies in Latin America. In addition, we have provided advice on organizational development from information technology and human resources systems to evaluation and communications.

Think Tanks Initiative. The Global Development and Population Program supports the International Development Research Centre (IDRC) in implementing an initiative designed to strengthen policy research institutes based in the developing world. Our partnership with IDRC was launched in 2007 following an intensive six-month joint planning process. IDRC committed $10 million of its own resources to the program, and together we have now raised $67 million in additional funding. From the early days of the initiative, Foundation program staff invested significant time to recruit additional funders. With the resulting pooled fund of $107 million, four-year general operating support grants have been awarded to fifty-two think tanks in East and West Africa, Latin America, and South Asia. Although our day-to-day involvement has decreased in the past year or two, our program staff continue to serve actively on an executive committee of funders that meets four or five times a year to make grant selections, discuss strategic directions, and oversee the external evaluation of the Initiative.

California Education Policy Fund. A $3.5 million grant to Rockefeller Philanthropy Advisors (RPA) enabled that organization to establish the California Education Policy Fund to make grants to nonprofits working to improve state policies that affect underserved students. Program staff serve on an advisory committee and monitor the Fund’s activities but have delegated the grantmaking process to RPA. This arrangement enables us to maintain a significant presence in California education reform while focusing on a new national strategy.

Retaining Consultants

Consultants complement the work of our staff in many ways. For example, they may possess particular skills in strategic planning or have other knowledge not readily available to staff. Sometimes a consultant will be hired to provide independence, as when the Foundation wants to evaluate a project, grantee, program, or strategy. However, as the following examples show, using consultants requires considerable staff engagement to conduct due diligence, agree on the scope of work, and monitor progress.

Field mapping. Fractured Atlas helped the Performing Arts Program create the San Francisco Bay Area Cultural Asset Map, which helps the field better understand where and by whom art is being made, who benefits from it, and who funds it.

Technical assistance. Capitol Impact supports the Education Program’s grantees with a variety of services, including regular updates on state education policy, help in building relationships with key education stakeholders, and facilitating meetings on key education policy issues.

Communications assistance. Hired by the Global Development and Population Program, Baird’s CMC created a plan for communicating the results of a research initiative on the relationship between reproductive health, population dynamics, population policy, and economic development, with a particular emphasis on research being conducted in Africa.

Substantive expertise. A foreign aid expert advises the Global Development and Population Program on its U.S. aid reform strategy and helps monitor the work of the Program’s Washington, D.C.–based grantees.

Foundation-wide strategic planning. For a number of years, Redstone Strategy Group has assisted the Foundation’s programs and administration in developing strategic plans.

Grantee training. Spitfire Strategies offers an annual three-day communications training program and additional technical assistance for Foundation grantee organizations across all program areas.

Hiring and Training Program Staff

The work described in this essay requires program staff with expertise in their substantive fields and in grantmaking practices, as well as extraordinarily strong analytic skills, a strategic orientation, and management and leadership abilities. While the Foundation prides itself on the caliber of staff it hires, it is unrealistic to assume that all staff members will possess every skill at the same competency level when they first step into their roles. In fact, it is not necessary for every program officer to have every one of the skills critical for a program’s success, since program staff work as a team.

“If you are making multimillion-dollar investments in a small number of nonprofit service providers, the way the Edna McConnell Clark Foundation does, you had better be excellent at due diligence and supporting grantees. If you are trying to influence public will and public policy, as the Irvine Foundation is, you had best hire people with policy experience and superb communications skills. If you’re creating and disseminating knowledge, you need to make sure that your organization is designed around, and plugged into, all the networks of experts who are relevant in and for your field.”—Thomas Tierney and Joel Fleishman, Give Smart: Philanthropy that Gets Results (2011).

When making hiring decisions, program directors and human resources personnel should consider these basic questions:

  • What skills are essential for achieving success?
  • Which of these skills are important for employees to possess when they are hired, and which can be developed over time?
  • How can we best teach skills through training, apprenticeship, discussions, or learning opportunities?

Aided by the observations in the preceding pages, we have begun to systematically address these questions—especially how to provide opportunities to improve the skills of program staff members.


The last decade has seen a significant increase in the Foundation’s endowment, in our annual grants budget, and in the number of staff members necessary to effectively deploy the Foundation’s resources. The Hewlett Foundation’s impact on society has continued to grow during this period. The foregoing analysis suggests that the value of our grant dollars is multiplied—often many times over—by our staff’s work.


* This document reflects the input of almost every member of the Foundation's program staff and many other staff members over the period of almost a year. Paul Brest and Karen Lindblom are the main editors.
1 See Forms of Philanthropic Support: The Centrality of Alignment
2 See Outcome-focused Grantmaking Overview and Doing Good Today and Better Tomorrow.


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