Effective Foundation Management

14 Challenges of Philanthropic Leadership—And How to Outfox Them

Published in: GIA Reader, Vol 19, No 2 (Summer 2008)

Joel J. Orosz

2007. 162 pages. AltaMira Press, a division of Rowman & Littlefield Publishers, Inc., Lanham, MD 20706, www.altamirapress.com

Written by Joel Orosz, this book provides a provocative look at the foundation field—examining core dilemmas faced by program officers, CEOs, and trustees. Each chapter, rooted in history and practice, is a stand-alone lesson valuable to grantmakers of all types. Readers may choose challenges that resonate most with their own work or read the book cover-to-cover to grapple with topics that affect their peers across philanthropy. Orosz, distinguished professor of philanthropic studies and founding director of the Grantmaking School at the Dorothy A. Johnson Center for Philanthropy and Nonprofit Leadership of Grand Valley State University, shines a light on truths that many foundation professionals face in their daily work and that affect their ability to make a significant long-term impact.

It may surprise many to learn that the majority of foundations are small in size, bereft of paid staff, and run by amateurs. The reader learns that of paid foundation employees, more than 76 percent work for a handful of the largest foundations whose assets are $100 million or more. (p.6) Orosz's chief concerns are that foundations enjoy a high level of operational freedom and often function without appropriate training, external discipline, reliable feedback, or an accepted body of good practices. He challenges the reader to consider how the foundation world could benefit from professionalization, including standards and a common education.

Orosz asks: Who is the foundation's customer: the nonprofit grantee? the clients whom the grantee serves? the people of a city, state, or nation? He claims that confusion around who the customer is makes it difficult for a foundation to provide good service and to focus on a clear course of action. He asserts that in the absence of a clear understanding of who is being served and what field-wide standards are, good grantmaking is whatever a current foundation leader says it is.

At the same time, foundations face an opportunity to correct for market failures of the for-profit world, government failures of the public administration world, and fundraising failures of the nonprofit world. The opportunity is great, but with so many competing demands, especially combined with a tendency to shy away from the limelight for fear of being scrutinized, foundations tend to play it safe.

The fourteen challenges are effectively summarized in the afterward:

Managers inexperienced in foundation work are asked to deliver superb results from organizations that are constantly torn between the high payout made possible by low overhead and the improved effectiveness that high overhead provides; between the need to narrow choices and the need to be open to them; between the desire to do the greatest good for the greatest number and the desire to make a profound impact in a limited scope; between the urge to create new answers to old problems and the need to prudently manage existing resources; between the advice given by experts and the advice given by those who have to live with the results; between the potentially enormous benefits offered by high uncertainty and the greatly minimized risks offered by low uncertainty; between an insecure life in the limelight and a secure life in the darkened wings (137).

Orosz unpacks each dilemma, drawing upon the historical roots of the field, his own professional experience, and a vast bibliography of thoughtful and informed publications. His sobering characterization of a "typical" foundation forces a grantmaking reader to consider how he or she faces and addresses each dilemma and whether he or she is fortunate enough to work with leadership that encourages risk and innovation, supports professional development, and values the input of both experts and communities served.

Orosz suggests practical resources, such as GrantCraft and the Center for Effective Philanthropy, that support the field. He concludes that the dilemmas may never get "solved," but at least they can be managed: Doing one good thing at the expense of another is actually a good thing.

Quotations of historical significance are woven throughout the discussion of each dilemma, emphasizing that philanthropy has roots and a discipline from which foundation leaders should draw. Orosz challenges the reader to take the calling of grant making seriously by choosing effectiveness over idiosyncrasy. In the conclusion, he quotes Alan Pifer, past president of the Carnegie Corporation of New York: "The human qualities of its [foundation] staff may in the end be far more important to what a foundation accomplishes than any other consideration."

This user-friendly quick read is thought-provoking and sobering. It illuminates ways foundations can improve their practice—and appreciate the opportunity to strive for what is truly human.

Janna Schwartz, Senior Program Officer, ARTWorks for Kids,
Hunt Alternatives Fund