A Foundation’s Attempt to Make a Difference May Produce the Opposite Result

For many years the Public Welfare Foundation has enjoyed a distinguished, well-deserved reputation as an innovative and risk-taking foundation that has supported new ideas and helped grass-roots organizations finance advocacy efforts that few other grant makers were willing to support. With its recent changes in staff leadership and priorities, that distinction may be in jeopardy.

The Washington foundation has made changes that reflect a bigger transformation in much of the grant-making world — the desire to focus on one or two things in the hopes of making a difference rather than realizing that plenty of foundations make a huge impact by supporting a lot of innovative, scrappy organizations.

At the strong initiative of Deborah Leff, who took over as head of the foundation last year, the Board of Directors in October approved a plan that will limit the foundation’s support to three priorities: improving access to health care, revamping the criminal- and juvenile-justice system, and promoting workers’ rights. It will retain its small special-opportunities grants program, which is designed to test new ideas, support disaster relief, and provide occasional grants to meet the foundation’s strategic goals.

The developments at the foundation mirror some of the transitions at the Northwest Area, Rockefeller, Irvine, and MacArthur Foundations and others, where the ascendency of a new chief executive resulted in changes that eliminated many longstanding grant-making priorities and programs.

The changes are often motivated by the chief executive’s personal preference or assumption that by narrowing the focus of grant making and significantly increasing spending in a few priority areas, the result will be a more measurable effect on the causes that the foundation cares about.

The trouble is that the world often doesn’t work that way. A few grant makers have succeeded by focusing on one or two causes, but many foundations have spent tens of millions of dollars over the years on specific causes and not made a great deal of difference. Putting an additional $3-million to $5-million a year into one topic in no way guarantees success.

Narrowly focused, well-designed approaches to grant making can produce desirable results, but so can philanthropic efforts that are more diffuse, broader in scope, reaching out to new, small, and untested organizations seeking new leadership from marginalized constituencies. This approach is vitally needed, especially at a time when the leadership of many foundations seems to be moving in the opposite direction.

At Public Welfare, what has been lost is the very approach that enabled it to make a major difference and to exert probably more influence than any other American foundation of its size.

It has been one of the founders and the major supporter of the environmental-justice movement throughout the country. It has supported important human-rights efforts overseas that few other foundations were willing to finance, not to mention significant efforts domestically. It has been a major backer of groups that conduct grass-roots community organizing, advocate for low-cost housing, and promote public policies to help people on welfare.

It has seeded numerous youth groups and many other emerging grass-roots organizations that could not get a start elsewhere. It was a place where progressive local, regional, and national advocacy groups could get a sympathetic hearing, if not always a grant, from caring program staff members and, in a number of cases, board members. And it had the courage to support unpopular issues and groups. Credit for that influence goes in large part to Larry Kressley, Public Welfare’s executive director for 15 years, who proved to be a visionary and inspiring leader until he resigned a year ago.

(In the interest of disclosure, I should note that my project at the Georgetown Public Policy Institute — to help develop the education and training of future nonprofit leaders and to provide serious analysis and critique of the nonprofit world — received six years of support from the Public Welfare Foundation.)

The process leading to the decision to shift priorities may shed some light on how Public Welfare will operate under new leadership, and that too is troubling. Ms. Leff asked the program officers to submit a paper outlining the strength and weaknesses of the programs they managed as well as their recommendations for the future, which then would be incorporated into a strategic plan she would write for the foundation’s board.

Staff members were told they could not see the final plan, because it was confidential, to be seen only by board members. When I asked Ms. Leff for a copy of the plan, she refused, saying it was privileged information. Board members also would not release a copy of the plan.

The reason for the plan’s confidentiality, according to Ms. Leff, is that it contains information, opinions, and quotes from staff members, grantees, and others that they would not like to share publicly. A close reading of the plan, a copy of which I obtained, reveals nothing that would be embarrassing to anyone. The only possible explanation might be that she did not want further staff discussion after she had already firmly fashioned the priorities for board consideration. Not a good way to build staff teamwork or morale.

Ms. Leff says she consulted with many grantees during the planning process. That does not seem to be borne out by many grantees whose names had been submitted for consultation by the staff. Nor does the president seem to take much, if any, time to listen to visiting grantees or grass-roots organizations.

The planning process also has led to changes in the governance of the foundation, which long had been known for the hands-on involvement of the board members, a trait not shared by many foundations but one that a number of Public Welfare trustees felt had had a positive impact on foundation performance. Other trustees disagreed, so they were receptive to the new president’s strong recommendation that the “activist” role of the board be tempered.

This naturally created some tensions between some board members and Ms. Leff. The result has been a reduction of board meetings to three a year, the board’s movement away from heavy grant making to more planning and strategy-setting, and the pressure for the board chair to leave halfway through his term. With a board supporting her plan and priorities, Ms. Leff has quickly exerted more control over the foundation, firing the institution’s esteemed general counsel and appointing a vice president for programs without consulting staff members.

While greater discipline in grant making and more direction from the top may have some merit, one has to wonder whether Ms. Leff’s desire to frame and tailor the programs Public Welfare supports will in the long run be best for the grantees and the causes the foundation hopes to influence.

In her strategic plan she writes: “Program officers would play a more active role. In general, the Public Welfare Foundation has played a thoughtful but somewhat passive role in grant making, evaluating letters of inquiry that were submitted, but not consistently reaching out to seek out the strongest possible group of grantees and recruiting promising new players to the field. I propose that this role change from passive to proactive, whereby the program officer plays a much larger role in shaping the program in order to best fulfill the objectives set forth by the Board of Directors.”

This approach seems to reflect a growing tendency among major foundations to adopt a form of strategic philanthropy more attuned to the needs of the foundation than to those of the grantees.

A great strength of the Public Welfare Foundation has been that it has listened to, respected, and taken its cue from the nonprofit groups that were doing the work. It did an extraordinary job of finding and recruiting promising new people and groups. A more foundation-directed approach could lose much of the richness and grantee trust that has characterized Public Welfare’s grant making.

One of the criteria by which Ms. Leff and, presumably, the board evaluated what grant-making programs to keep was the likelihood that groups losing support from Public Welfare could find money elsewhere.

In the case of its environmental-justice programs, its assessment was totally wrong.

Probably half of all the local grass-roots environmental-justice programs in the country have depended on Public Welfare money. Another quarter of foundation support came from the Beldon Fund, which has shut its doors and plans to spend all of its assets by 2009. So from where will the money for this important movement come? What other foundations are ready to step up to the plate?

As James Abernathy, founder and former executive director of the Environmental Support Center, told me, “Public Welfare has been one of the few foundations willing to provide consistent support in this country and elsewhere to small grass-roots groups in communities of color who were challenging the institutions that have caused severe health problems and other harm to their families and neighbors.”

The same holds true for some of the important work the foundation has supported in Haiti and South Africa.

But the measure of effectiveness should not be limited simply to money.

As with environmental-justice groups, the foundation’s leadership has been a significant factor. Its work to help African countries eliminate female genital mutilation and on reproductive rights has earned the foundation kudos globally, not only for the money it has granted but also for the leadership of the program officer Adisa Douglas.

So what can we expect in the future?

According to the strategic plan, the foundation will make fewer but larger grants. Far fewer awards will go to local community-organizing groups and to nascent, small nonprofit groups.

Public Welfare will become more like other liberal foundations that focus on public-policy achievements and continually undergo evaluations. It will become more formal, less flexible. Will such a transformation manage to preserve the heart and soul of the organization that has given so many grantees, low-income people, and advocates the inspiration and support that have made serious social change possible?

Much will depend on the board’s willingness to maintain that hard-earned reputation.

Pablo Eisenberg, a regular contributor to these pages, is senior fellow at the Georgetown University Public Policy Institute. His e-mail address is pseisenberg@erols.com.