Competitive Grantmaking and Responsive Philanthropy: The Interpretation of the Council on Foundations
posted on: Friday, May 05, 2006
The current issue of the NonProfit Times (May 1, 2006) has a long and flattering article (http://www.nptimes.com/May06/news-050106_1.html) about former Wisconsin Republican Congressman Steve Gunderson, the new CEO of the Council on Foundations, the nation’s philanthropic trade association. Lacking any critical commentary, the article merits some contrary perspectives from at least someone, doesn't it? Like NCRP?
It’s clear that Gunderson’s charge is to boost the Council’s visibility and membership, and as a corollary, the Council’s effectiveness on Capitol Hill. The article has an odd quote from Gunderson which he must have been insistent on making, because it is quoted twice nearly verbatim, on his plan to change the Council’s membership criteria to attract more members. Here’s one version, criticizing what he refers to as the “old 50-percent rules”: “Anyone engaged in competitive grantmaking can and ought to be a member of the Council on Foundations…And that’s really the criteria.”
Let’s parse this for a second. According to the Council on Foundations website, this rule applies to the eligibility of “public foundations” for Council membership, that is, grantmakers such as community foundations and others that raise their money from the public to support their grantmaking. The exact membership criterion is this: “To be eligible for membership in the Council, a public foundation…must dedicate at least 50 percent of its organizational budget to a competitive grantmaking program” (http://www.cof.org/Content/General/Display.cfm?contentID=120#c). To qualify, public foundations, besides the 50 percent test, must have grantmaking as their “primary focus.”
By all appearances, Gunderson seems to be tossing out the Council’s focus on organizations primarily dedicated to grantmaking in favor of a lower threshold of public or private charities that engage in at least some grantmaking. Certainly the 50-percent test never disqualified private operating foundations whose grantmaking slice of their operations might not have been anywhere near 50 percent. The interesting term in the criteria, of course, is “competitive grantmaking”. What’s that?
If it means something like grants that nonprofits can actually apply to receive, whether as unrestricted or field or interest grants, there are probably lots of Council on Foundation members that don’t meet the 50-percent test, public foundations and private foundations alike. For example, some community foundations with significant proportions of donor-advised and donor-directed funds conceivably might have relatively little funding available for “competitive grantmaking”, especially after subtracting special projects, philanthropic services, and unrelated administrative and investment costs.
For private foundations, not only would a number of operating foundations fail to meet the competitive grantmaking test, but an increasing number of private foundations that do not accept unsolicited proposals and actually make grants to a pre-selected catalogue of favored recipients would not appear to be paragons of competitive grantmaking either.
Gunderson’s reduced focus on the amount of grantmaking to qualify as a grantmaker is consistent with shift in focus that COF board chair, Emmett Carson, sees in Gunderson’s leadership, an emphasis on “’what we’re doing’ and not the ‘mechanics of how we do so much.’”
What might be the nonprofit sector’s take on this? Maybe the Council might consider doing some field testing with nonprofits to gauge their reaction to the increasing numbers of foundations rejecting unsolicited grant proposals, not to mention the reactions to foundations devoting funds to foundation-directed initiatives and programs. Philanthropy can and should have a symbiotic relationship with the nonprofits that function as the delivery system for the foundation’s charitable value to society and the public. When foundations close their doors to nonprofit input in the form of unsolicited applications and implicitly dismiss the importance of the imprecisely defined practice of “competitive grantmaking”, foundations unwittingly alienate the nonprofits that should constitute institutional philanthropy’s most important constituency.
It’s a “trust us” approach, that suggests to nonprofits and the public that foundations closed to external ideas expressed through unsolicited grant proposals are as valuable to the public as foundations that openly look to front-line nonprofits for ideas, knowledge, and, yes, grant proposals. It says that foundations that largely run their own programs and engage in little “competitive grantmaking” are equivalent to foundations that put their money out to nonprofits seeking the innovations and solutions that nonprofits themselves are testing and implementing.
“Competitive grantmaking” is sometimes discussed in the literature as “responsive grantmaking”, sort of like “responsive philanthropy”. NCRP ought to keep pushing COF to live up to a notion of responsive philanthropy, else NCRP isn’t being true to its own mission. (RC, 5/4/06)
It’s clear that Gunderson’s charge is to boost the Council’s visibility and membership, and as a corollary, the Council’s effectiveness on Capitol Hill. The article has an odd quote from Gunderson which he must have been insistent on making, because it is quoted twice nearly verbatim, on his plan to change the Council’s membership criteria to attract more members. Here’s one version, criticizing what he refers to as the “old 50-percent rules”: “Anyone engaged in competitive grantmaking can and ought to be a member of the Council on Foundations…And that’s really the criteria.”
Let’s parse this for a second. According to the Council on Foundations website, this rule applies to the eligibility of “public foundations” for Council membership, that is, grantmakers such as community foundations and others that raise their money from the public to support their grantmaking. The exact membership criterion is this: “To be eligible for membership in the Council, a public foundation…must dedicate at least 50 percent of its organizational budget to a competitive grantmaking program” (http://www.cof.org/Content/General/Display.cfm?contentID=120#c). To qualify, public foundations, besides the 50 percent test, must have grantmaking as their “primary focus.”
By all appearances, Gunderson seems to be tossing out the Council’s focus on organizations primarily dedicated to grantmaking in favor of a lower threshold of public or private charities that engage in at least some grantmaking. Certainly the 50-percent test never disqualified private operating foundations whose grantmaking slice of their operations might not have been anywhere near 50 percent. The interesting term in the criteria, of course, is “competitive grantmaking”. What’s that?
If it means something like grants that nonprofits can actually apply to receive, whether as unrestricted or field or interest grants, there are probably lots of Council on Foundation members that don’t meet the 50-percent test, public foundations and private foundations alike. For example, some community foundations with significant proportions of donor-advised and donor-directed funds conceivably might have relatively little funding available for “competitive grantmaking”, especially after subtracting special projects, philanthropic services, and unrelated administrative and investment costs.
For private foundations, not only would a number of operating foundations fail to meet the competitive grantmaking test, but an increasing number of private foundations that do not accept unsolicited proposals and actually make grants to a pre-selected catalogue of favored recipients would not appear to be paragons of competitive grantmaking either.
Gunderson’s reduced focus on the amount of grantmaking to qualify as a grantmaker is consistent with shift in focus that COF board chair, Emmett Carson, sees in Gunderson’s leadership, an emphasis on “’what we’re doing’ and not the ‘mechanics of how we do so much.’”
What might be the nonprofit sector’s take on this? Maybe the Council might consider doing some field testing with nonprofits to gauge their reaction to the increasing numbers of foundations rejecting unsolicited grant proposals, not to mention the reactions to foundations devoting funds to foundation-directed initiatives and programs. Philanthropy can and should have a symbiotic relationship with the nonprofits that function as the delivery system for the foundation’s charitable value to society and the public. When foundations close their doors to nonprofit input in the form of unsolicited applications and implicitly dismiss the importance of the imprecisely defined practice of “competitive grantmaking”, foundations unwittingly alienate the nonprofits that should constitute institutional philanthropy’s most important constituency.
It’s a “trust us” approach, that suggests to nonprofits and the public that foundations closed to external ideas expressed through unsolicited grant proposals are as valuable to the public as foundations that openly look to front-line nonprofits for ideas, knowledge, and, yes, grant proposals. It says that foundations that largely run their own programs and engage in little “competitive grantmaking” are equivalent to foundations that put their money out to nonprofits seeking the innovations and solutions that nonprofits themselves are testing and implementing.
“Competitive grantmaking” is sometimes discussed in the literature as “responsive grantmaking”, sort of like “responsive philanthropy”. NCRP ought to keep pushing COF to live up to a notion of responsive philanthropy, else NCRP isn’t being true to its own mission. (RC, 5/4/06)
posted by NCRP at
9:44 AM
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