October 14, 2015

2 Nonprofits Get Surprise $1-Million Grants

Phil Buchanan and Kathleen Enright both lead organizations with similar goals — to help foundations improve their grant making so they have more impact. They both are founding presidents of their groups, the Center for Effective Philanthropy and Grantmakers for Effective Organizations. And they started their jobs within a few months of each other in 2001.

Now they have one more thing in common, something that many of their peers will no doubt envy: Their organizations have each received a surprise $1.1-million unsolicited grant from six foundations to spend on anything they wish.

Think of it as a MacArthur "genius award" for nonprofits — courtesy of the Ford, Hewlett, Kresge, Packard, and Robert Wood Johnson foundations, and the Rockefeller Brothers Fund.

Risa Lavizzo-Mourey, chief executive of Robert Wood Johnson, says the grant makers wanted to help the two groups step up their efforts to use data and analysis to "help all of us in philanthropic fields do a better job," something that will benefit the broader nonprofit world.

But the way the grants were announced was unusual, to say the least. Mr. Buchanan and Ms. Enright both say they were somewhat perplexed when they were summoned to separate conference calls with foundation representatives in July.

Mr. Buchanan joked to the participants: "I have no idea what this is, but I don’t think you have the authority to fire me."

Ms. Enright, who was on vacation at the time, says she was "gobsmacked" when she learned the purpose of the call, which she laughingly calls a "positive ambush."

The foundations agreed to provide the money to the two organizations over three years, each providing its share at different times — with no strings attached. It will come on top of grants that they already give the groups.

Larry Kramer, president of the Hewlett Foundation, says the move grew out of a discussion among big-foundation presidents about whether their organizations had a responsibility to strengthen the nonprofit sector as a whole — in addition to awarding grants to promote their own strategic interests.

"What we all kind of settled on is we thought CEP and GEO play a particularly important function," he says, but might be worried about funding because they operate in a "niche," unlike multipurpose general membership organizations like Independent Sector and the Council on Foundations.

The surprise grants will "give them a little breathing space," he says.

Mr. Kramer seems to have enjoyed the surprise element, too: "There are so few times you really get to have the pleasure of saying to somebody, ‘Here’s a vote of confidence; go do it some more.’ "

The Center for Effective Philanthropy, with an annual budget of about $7 million and 36 staff members, conducts research into foundation practices, sponsors conferences and webinars, and offers tools to help grant makers assess their performance — for example, surveys of grantees, donors, and rejected grant applicants.

Mr. Buchanan says the center will use the new money, among other things, to expand its advisory services, which offer customized strategic advice to foundations; add new researchers; and upgrade videoconferencing and other systems.

He says the center has evidence that its work is influencing foundation practice, something the grant makers emphasized. "Contrary to everyone’s lament that foundations don’t change, they actually do improve," he says, pointing to reports from clients about changes they have made in response to surveys of grantees.

Grantmakers for Effective Organizations, with a budget of about $4.5 million and 25 staff members, unites more than 500 foundations that collaborate to improve practices in areas like strengthening relationships with grantees, evaluating what is and is not working, and building more resilient nonprofits,

It just started a new program, the Change Incubator, an intensive 18-month training program for small groups of foundation leaders.

Ms. Lavizzo-Mourey of Robert Wood Johnson says she can’t think of a previous case in which foundations coordinated to offer unsolicited grants like this but that other organizations might want to consider the approach. "There’s a sense among foundations that we should both coordinate and collaborate more to get better leverage," she says.

Ms. Enright agrees.

"This kind of collaborative investment could happen in any sphere," she says. "There are groups of like-minded funders who talk among themselves and have a point of view about which organizations are really making a difference. They could provide transformative support. It could happen in housing, HIV/AIDS, whatever. What a magnificent way to think about rewarding performance."

Send an email to Suzanne Perry.