Grant Makers Must Serve Charities Well

To the Editor:

We agree with Vartan Gregorian’s statement that foundations “must demand that adherence to the highest ethical standards be an integral part of the day-to-day operation of all our institutions” (“Philanthropy Should Have Glass Pockets,” My View, April 1). However, to take it a step further, the same high level of importance must be applied to a foundation’s accountability to its grantees and grant seekers, and to ensuring that our funding serves as a catalyst for meaningful change.

Last year, like many of our peers, the California Endowment’s staff and board committed to achieving a “Sarbanes-Oxley standard” for foundation governance and operations. Like some other foundations, we implemented an “internal controls” audit, in addition to our annual external financial accounting audit, to examine how closely organizational staff were abiding by established policies, processes, and procedures in grant making and the management of contracts.

We are also developing a code of ethics for adoption by the board and staff to ensure that the highest standards of ethical behavior are an everyday part of our organization’s culture, and we are putting enforcement mechanisms in place to support this process.

Both compensation and performance policies and criteria were reviewed and strengthened, as were our conflict-of-interest policies. We established an external, independent review process to examine those situations when a board member — or one of their family members — is employed by a grant applicant. While board members have always been required to recuse themselves from discussing or voting on those types of grants, we felt it important to add an extra layer of scrutiny.

In order to better serve our current and prospective grantee community, the endowment conducted a grantee and applicant satisfaction survey in 2001, which was followed up in 2003 to determine what progress had been made. An independent firm conducted the surveys, and both grantees and unsuccessful applicants were queried about the quality and timeliness of our grant-making process.

Based upon grantee and applicant feedback, we have begun to streamline procedures to achieve an average grant processing and approval period of less than 120 days for our largest community-driven grant-making program.

While we are extremely proud of the work of our grantees that serve and advocate for the health and health-care needs of the underserved in our state, the current state fiscal crisis offers a grim reminder of how easily progress is threatened or swept aside.

States across the nation are feeling the same impact. While we will continue to fund services and the capacity-building support of community-based organizations, there is now a greater “intentionality” in our grant making to increase funding for policy and advocacy activities, and linking grass-roots, community-level advocacy programs to broader statewide and even national health-policy change. These effective partnerships are essential if our limited resources are to achieve real reforms to improve the health and well-being of the communities we serve, and they are another important step toward accountability for philanthropic organizations.

Taken alone, accountability and transparency by foundations are important and essential goals. Combine them with a greater level of responsiveness and increased intentionality, and philanthropic institutions move beyond the traditional — and, as it is sometimes perceived, “stodgy” — model to become more flexible and effective change agents.

Robert K. Ross
President and Chief Executive Officer

Laura S. Wiltz
Board Chair
The California Endowment
Woodland Hills