October 31, 2011 | Read Time: 2 minutes
Forget just telling success stories: Admitting mistakes has grown just as important in managing a foundation, said speakers at the Philanthropy Roundtable’s annual conference, in Scottsdale, Ariz., which concluded on Saturday.
Part of the new expectation of openness, said speakers, comes from tighter economic times and from the influence of corporate executives moving into foundation jobs, bringing with them a penchant for innovation and candor about what does and doesn’t work.
To get results, it’s important, “to go beyond the happy talk” between philanthropists and grantees, said Thomas Tierney, chairman of the Bridgespan Group, a consultancy that advises donors and nonprofits. In a presentation at the conference, he advised donors to ask grant recipients not only about their successes but also about their least effective programs—then work with organizations to set measurable improvements in motion.
The Bill & Melinda Gates Foundation is hoping set the tone for more openness among grantees in a way that “will encourage others to do likewise,” says Jeff Raikes, the foundation’s chief executive. He says it’s important to be careful about the words used to describe what didn’t work.
“When people think of it as failure, that is not helpful,” he said. “Most people fear if it gets projected in the wrong way then it will cause negative consequences, and so they won’t be willing to take the risks.”
Mr. Raikes says he often puts it this way: “Even if we don’t fully succeed, we only fail when we don’t learn.”
During another session, philanthropists and foundation leaders talked about the difficulties of getting nonprofits to open up about what’s not working.
“It requires a change in the relationship between the philanthropist and the grantee and requires a certain degree of humility,” said Henry Beukema, executive director of the McCune Foundation, in Pittsburgh. “You need to gain the trust of grantees.”
This year he has tried meeting every two months with three CEO’s of community-development organizations his foundation supports. He started asking them questions about how they operate, eventually taking the conversation to both what is working and what isn’t. Those three executives are now meeting more often themselves and helping one another come up with solutions.
Mr. Beukema plans to expand that conversation to other groups next year.
He also noted that donors seemed to be talking more now about something they hadn’t previously: “about learning from the people we do business with.”
“We don’t have all the answers,” he says.
Russ Hall, managing director of Legacy Venture, a Palo Alto, Calif. company that advises donors, said demand to become more efficient, prompted by the bad economy, may lead to a heightened focus on results.
In an ironic way, Mr. Hall said, “the poor economy may help us be better grant makers and be more effective. But it is still a hard thing to do.”
