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In its recently released report, Foundations Respond to Crisis: Lasting Change?, the Center for Effective Philanthropy (CEP) shared new research in which foundations reported working differently now than in early 2020 — and indicated plans to sustain most of these changes. The report reveals numerous areas of change in foundation practice and in leaders’ plans for the future, as well as some disconnects, barriers, and additional opportunities for further change. This is the fifth in a series of blog posts in which members of CEP’s research team share further data and insights that the research revealed, beyond what was included in the report. Find other posts in this series here.
A popular saying goes “Before you judge a person, walk a mile in their shoes.” We would like to offer a modified version of this saying: “Before you help a nonprofit organization, walk a mile in their shoes.”
CEP’s recent report, Foundations Respond to Crisis: Lasting Change?, found that many foundation leaders say they have changed their practices since 2020. While we don’t see differences by funder type, geography, or size (which is pretty typical), we did find some factors that play a role in the extent to which funders are making change. One such factor, a key finding in the report, is board racial diversity: Foundations that have boards with more racial diversity tend to adopt more practices to support grantees and the communities they serve.
Additionally, our analysis surfaced another characteristic that relates to the extent to which foundations are changing their practices: whether or not foundation leaders have prior experience working at a grant-seeking nonprofit.
Just over three-quarters of the 284 participants in our study said that they have worked at a grant-seeking nonprofit.
Our analysis surfaced a consistent pattern of statistically significant differences — across a number of dimensions of funder practices — in the way foundation CEOs who have experience working at grant-seeking nonprofits have changed their foundation’s practices since 2020, compared to CEOs without experience working at a nonprofit.
First, foundation leaders with nonprofit experience were more likely to have more substantially increased their foundations’ grantmaking budget in comparison to the last fiscal year.
Further, even as most foundation leaders told us that they streamlined processes and provided more unrestricted support — changes they say they plan to sustain — we found that foundation leaders with prior experience working at grant-seeking nonprofits more frequently reported streamlining their application process to reduce the burden on applicants and grantees.
Finally, while most foundation leaders in our study said that their foundation does not currently collect demographic data from grantees, leaders who had worked previously at a grant-seeking nonprofit more frequently indicated that they do collect grantee demographic information.
Read the full article about foundation leaders by Maria Lopez and Naomi Orensten at The Center for Effective Philanthropy.