Taking Care of Business (in the Business of Taking Care)

Wednesday, December 9, 2015

“Taking Care of Business (in the Business of Taking Care)”

by Chris Cardona, Program Officer for Philanthropy, Ford Foundation

When you work in a foundation, what kind of business are you in? I don't mean, what is your business, but rather, what sort of business is a foundation? And how should you run it? There's a master’s of business administration degree. But those principles only take you so far in running a foundation. Because you don't have shareholders, you don't have customers, and there's more than one bottom line in a foundation. So what kind of business are you in?

Take Stephanie Bell-Rose. She manages the TIAA-CREF Institute, which receives its funding from the company. In that situation, how do you structure your staffing so you have access to the expertise you need while remaining lean?

Or think of Elena Marks. She runs the Episcopal Health Foundation in Houston. Her board includes members of the Episcopal Diocese, and her constituency includes 80,000 church members. How do you think about community leadership?

Consider Clara Miller. Since taking the helm at the Heron Foundation, she's aligned all of their assets around mission - impact investing is the default. How do you train your staff when no philanthropy has operated like this before?

Or take Will Miller at the Wallace Foundation, whose aim is to generate knowledge that can be used to scale social programs in their focus areas. How do you align your operations so that communications and advocacy are given as much importance as grantmaking?

These four foundation leaders were panelists at a recent Philanthropy New York session, "More than Giving: Theory of the Foundation," which I had the pleasure of moderating. The occasion that brought us together was a presentation of initial findings from Rockefeller Philanthropy Advisors’ project on "Theory of the Foundation." Melissa Berman, head of RPA, explained that the intention was to apply Peter Drucker's "theory of the firm" to the foundation world. Our very different foundations tested the boundaries of the theory. 

One component is a set of operating models to describe how foundations structure themselves. These are below, along with how the five foundations (including me from Ford) scored ourselves:

  1. Talent Agency (TIAA-CREF)
  2. Think Tank (Wallace, TIAA-CREF)
  3. Tech Developer
  4. Campaign Manager
  5. Field Builder (Wallace, Ford)
  6. Discovery (Episcopal Health)
  7. Capital Provider (Heron added this category)

We had a lively discussion of how our foundations do or don't fit the model. Our takeaways included:

·         You need to be clear about your vision and purpose, and align your operating model around that. For Heron, the focus on mission investing structures how they approach everything else. They ask themselves, “What is the best use of a Heron dollar for mission?”

·         When articulating a different vision and operating model, you need to let people find their own level within the model, which may include moving on. And don’t assume new folks will automatically get it. One panelist reported about a 50/50 track record of new folks being a fit under a new model. Change management means being willing to make those decisions and have hard conversations about fit.

·         It’s important to think broadly about where you can find the skill sets you need for your team. TIAA-CREF has developed an “expanded enterprise” model, in which they source expertise as needed beyond their core staff, whose skills include effective management of consultants.

·         Use your work on the ground to learn and adapt quickly. Episcopal Health Foundation is a new philanthropy, and they used their first grant cycle to understand what worked well and not as well about their approach, and made changes accordingly.

·         Change management may require different language, and allowing people time to find a new way of thinking and operating. “People don’t know any other way to talk other than program,” one panelist observed. It takes time to adopt a more holistic and team-oriented approach, as Wallace has instituted. Being clear about expectations, and how they derive from values and vision, is essential.

Next steps for Theory of the Foundation include a series of workgroups on organizational design for cross-functional integration; defining and developing key capabilities; and operating models. Contact Melissa Berman at mberman@rockpa.org to learn more and get involved. 

For us at the Ford Foundation, we're interested in this topic because we want to promote greater uptake of open and inclusive practices among US foundations, and this is one lever, among others, that we're exploring - an analytical framework for understanding what kind of business we're in. In your foundation, what kind of business are you in?

Chris Cardona is program officer for philanthropy at the Ford Foundation. He blogs at www.cardonac.net and can be found on Twitter @chriscardona.


Interested in hearing more about what the "Theory of the Foundation" discussion leaders had to say? Check out this story on PhilTV.