Foundations Should Turn the Evaluation Spotlight on Themselves

In recent years, foundations have been falling all over themselves trying to measure the work and effectiveness of their grant recipients. Yet, by and large, those same foundations have ignored the need to evaluate their own performance using the same standards they set for the charities they support. What’s good for the goose is apparently not so good for the gander.

That not only is unfair, but it also shows a contempt for the efforts of a wide variety of people and institutions to improve the effectiveness and accountability of philanthropy in this country.

Because foundations play such an important role in sustaining and strengthening civil society, they have a duty to monitor and improve their performance. The nation needs foundations that can learn from their failures as well as from their successes, that can more effectively meet the needs of charities, and that can reinforce democratic processes and institutions. By refusing to assess their own performance on a regular, systematic, and unbiased basis, foundations are failing to meet the urgent needs of grant recipients — and, by extension, the public at large.

Not surprisingly, foundations are gung-ho for evaluating the performance of their grant recipients and the specific projects they carry out. They appear obsessed with the search for objective measurements and quantitative analyses, despite the skepticism about such an approach by leading evaluation researchers over the past 30 years. As the philanthropy historian Peter Dobkin Hall, of Harvard University, has observed, “evaluation as used in foundations today generally appears to have more to do with managing legitimacy than with any genuine concern with efficiency.” In other words, if grantees can justify their programs and document their progress, foundations believe, then who can cast stones at the grant makers themselves?

At the root of grant makers’ search for legitimacy is their growing fear that the foundation world may not be producing maximum results and that its control over grant recipients may not be adequate to ensure desired objectives. This anxiety seems to stem from several factors: the wish to avoid risks, the pressure of trustees seeking verifiable results from nonprofit programs, growing foundation mistrust of charities and their ability to carry out their missions, and a longing for the warm comfort of objective measurements.

It also reflects foundations’ loss of confidence in their own intuitions and judgments. That loss of confidence is one reason many foundations are increasingly insisting on negotiating goals and objectives with charities, calling the approach strategic philanthropy. It is why some are embracing a more hands-on relationship with charities — a practice often termed high-engagement philanthropy. Nevermind whether such approaches help nonprofit groups maintain the independence they need to fulfill their missions.

To be fair, a handful of foundations have commissioned evaluations of their own activities. With few exceptions, however, those have been narrow in focus or conducted by friendly consultants, often as concerned with securing future contracts as with the stringency of their examinations.

What is needed is a commitment by the foundation world — starting with the Council on Foundations, Independent Sector, Philanthropy Roundtable, regional associations of grant makers, and other umbrella groups — to a new system for evaluating the performance of grant makers.

Such a system would mean assessing how well foundations individually and collectively are meeting the needs of charities and, ultimately, the people the nonprofit organizations seek to help. Are the foundations organized internally so that they can quickly recognize and deal with emerging social-service and public-policy needs? How willing are the foundations’ boards and staff members to hear the voices of grantees, policy makers, and others? Are grant makers spending their resources wisely, and in ways that justify the preferential tax treatment they receive?

To insulate such an evaluation system from foundation pressures, it could be financed by a new organization supported by foundations themselves, as well as by other private sources. This organization could be governed by a broadly representative independent board that includes not only foundation officials but also grant recipients. To carry out the evaluations, the organization should finance nonprofit consulting groups, some established especially for this purpose, that could recruit teams composed of foundation representatives, grantees, scholars, community leaders, and independent writers and researchers who can conduct tough and fair assessments of philanthropic institutions.

In recent years many foundations have been criticized — often legitimately — for such faults as excessive executive compensation, high administrative costs, poor relationships with grantees, and neglect of major public needs. It is time foundations take a closer look at such failings, as well as at some of the best practices that have enriched the nonprofit world. A good start would be for several foundations, both large and small, to set an example and commission evaluations of their own operations.

But that would be just a start. The time has come for foundations and the umbrella groups that represent their interests to play by the same evaluation rules they have set for the nonprofit groups they support. To do less would be simply to prove the grant-making world’s insecurity and fear of accountability.

Pablo Eisenberg is senior fellow at the Georgetown University Public Policy Institute and a member of the executive committee of the National Committee for Responsive Philanthropy. He is a regular contributor to these pages. His e-mail address is pseisenberg@erols.com.