Foundation Effectiveness: Definition and Challenges

All too often, foundations have failed to institutionalize a process to establish standards of effectiveness and regularly assess themselves in relation to these standards. The Urban Institute draws this conclusion from a series of interviews with 61 foundation leaders (CEOs and board heads) of 42 staffed, grantmaking foundations. These interviews probed foundation leaders' understanding of effectiveness, the methods they use to judge it, and how they say their foundations have changed or need to change in order to be more effective. The interviews discussed in this report are part of the larger Attitudes and Practices Concerning Effective Philanthropy study, conducted by the Urban Institute and funded by the David and Lucile Packard Foundation in partnership with Grantmakers for Effective Organizations. Earlier study publications reported on findings from a mail survey of 1,192 staffed foundations. A sobering conclusion from that survey was that many grantmakers are not engaging in practices that, according to their own standards, are important for effectiveness. The interviews analyzed here further document that important practices are not being undertaken and reveal that all too often foundations have not made an institutional commitment to scrutinizing whether or not their practices match their stated beliefs. The Attitudes and Practices study did not start out with a predetermined definition of effectiveness, but sought to understand what effectiveness means to foundations themselves. Likewise, the research made no assumption that there is any single way to define effectiveness that is suitable for all foundations and have elsewhere detailed the often dramatic differences in approach taken by foundations of different sizes and types. It also became clear that there are major effectiveness issues in the field that are common to foundations of varied types and sizes, and that is illustrated in this paper