‘The Ideal Funder and Partner’

EFCT [Einhorn Family Charitable Trust] has truly been wonderful and the ideal funder and partner. One small idea, however, might be to share their experience and strengths with others in philanthropy in order to inspire other investors to adopt similarly transformational relationships.

We love the quotation above, which is just one of the glowing comments from EFCT's just-released Grantee Perception Report (GPR), produced by the Center for Effective Philanthropy (CEP). We wholeheartedly agree that positive-outlier funders should share their experiences to inspire others. So we recently asked Executive Director Jennifer Hoos Rothberg to help us understand—and share with you—what drove the foundation's GPR scores, which are the best we've ever seen. We have room to highlight three innovative practices here.

First, EFCT employs a "fewer, deeper, longer" approach to grantmaking. While EFCT's median grant size ($1.7M) is in the 99th percentile of CEP's dataset, the number of active grants (32) is in the third percentile. This enables EFCT to go deeper with their grantees in almost every way. Grantees ranked EFCT in the 97th percentile in understanding their challenges and also in taking advantage of resources to help them address challenges. It's no surprise that "partner" and "collaborative" are the most frequent words grantees use to describe EFCT.

Second, EFCT doesn't require applicants to submit a proposal—even for multimillion-dollar gifts. Instead, EFCT's small and mighty team of seven does most of the homework, using existing strategic planning documents whenever possible. EFCT's goal for the due diligence process is to help the nonprofit gain clarity on how it will achieve greater impact. Grantees rated EFCT in the 98th percentile for the helpfulness of the proposal process.

Third, while EFCT rigorously tracks outcome measures, it doesn't use that information punitively. In fact, Rothberg shared that her trustees have on several occasions decided to increase their investments when grantees faced unanticipated challenges and did not hit their outcome goals. As befits a funder focused on increasing empathy in the world, "We reward our partners for being open, honest, and making themselves vulnerable—and we do the same," Rothberg said. "It's all about relationships, which … enable us to better support our partner in good times and bad. We're confident that by helping our partners become higher-performing organizations, we're able to achieve that much more impact in the world toward our shared vision and goals."

In Leap of Reason, we sketched out a vision of what forward-thinking funders can do to help their grantees pursue high performance:

Nonprofits need creative funders willing to think big with them—not just pester them for more information on results. They need funders who understand that making the leap requires more than program funding and more than the typical "capacity-building" grant. They need funders who are willing to make multi-year investments in helping nonprofit leaders strengthen their management muscle and rigor.

EFCT was barely on our radar at the time we wrote that passage, but in the years since, we've come to see that EFCT is a living, breathing embodiment of our definition.

In future editions of this newsletter, we'll share more lessons from other creative funders thinking big with their grantees. To borrow the slogan from TED, these are "ideas worth sharing" in a world crying out for good news and great results.

And now for some brief updates from around the Leap of Reason community:

  • The aforementioned Center for Effective Philanthropy has just released Sharing What Matters: Foundation Transparency, which highlights a big opportunity for greater openness: sharing information on how foundations assess their own performance and on what's working and what's not. CEP found that both foundation and nonprofit executives agree that this type of substantive transparency would be great for everyone's learning and improvement.
  • We were delighted to learn last week that Leap Ambassador Dan Cardinali, CEO of Communities In Schools, has been named the new CEO of Independent Sector. This gives him a big platform and megaphone for spreading the gospel of high performance throughout our sector.
  • In "Why the New Education Law Is a Game-Changer," John Bridgeland and Peter Orszag explain that the Every Student Succeeds Act, the law that replaced No Child Left Behind this past December, "could shift more than $2 billion of federal funds annually over the next four years toward building evidence on what works in education." In a Brookings Institution commentary, Martin R. West adds that key evidence-based provisions in the new law "hold the potential to create and provide resources to sustain a new model for decision-making within state education agencies and school districts."
  • In his New York Times op-ed "How to Make Pre-K a Success," UC Berkeley professor David L. Kirp praises another important education development that is rooted in evidence: New York City's attempt to make preschool available for all children. The program, one of Mayor Bill de Blasio's top campaign promises, is focused not just on enrolling lots of kids but also on ensuring that the pre-K programs are effective. "New York's approach is a model for how to collect and analyze data to inform practice, to bring the system to the highest quality," says NYU professor Pamela Morris.

Events/Webinars for Raising Performance:

Happy Leap day,
Mario and Lowell