Foundation Governance and Grantmaking
A good deal of my dissertation interests and current research surrounds understanding the connection between foundation governance and grantmaking. Like Sondra, this has led me to a number of organizational or governance theories that would lead us to hypothesize about the connection between the board members of a foundation (or any funder) and their eventual grant making decisions. Principal agent theory, institutionalism, and network theory (amongst others) would lead us to different conclusions about this particular relationship, but would lead us to hypothesize that their IS a relationship.
This has led me to several questions (particularly as I think back to my former life as a fundraiser in the nonprofit sector). If (as network theory and a good deal of anctedotal evidence would suggest, ) getting grants from foundations is truly about “who you know” and what “social circles” you’re a part of – how does that impact nonprofits who are likely “outsiders”, like social justice or advocacy organizations?
There’s almost a chicken and egg question that results from this train of thinking. Many scholars and funders are trying to understand what a ‘better performing’ nonprofit looks like. But the subsuequent question this leads me to ask are if nonprofits thought of as ‘better performing’ are really just those organizations with better reputations.
In the economist tradition of studying nonprofits, performance would be a measure of the”efficient production” of goods/services. So how does reputation impact a nonprofits production? Are funders associating reputation with high performance or are they truly using some of their own measures to construct their image of a ‘better performing’ nonprofit.
In my own work I hope to “answer” some of these questions by conducting a survey or an experiment with foundation board members (at least these are my hopes!) to better understand how and why funders make their decisions.
I also hope to advance our understanding of terms in the sector that are constantly used, but always misunderstand. Supposedly financial health, collaboration, and organizational performance are the ways that funders make grant decisions but empirically we really don’t know a good deal about these decisions. In fact, we don’t really understand how funders view these concepts. Again thinking back to my work experience there is likely a gap that exists between the way funders view collaboration and the way nonprofit managers and staff view these terms.
I hope this provides everyone some food for thought and would love to hear feedback from anyone who has any thoughts on this!
Jasmine, great post with good questions. In terms of the “who you know” regarding grantmaking, I wonder if there will be any noticeable difference in this in light of the current financial crisis. It would seem that the stakes for competition are higher…so what or whose needs are the greatest?
John – You ask some FANTASTIC questions and I think it gets back to one of my earlier points.
How do donors define “better performing/higher performing nonprofits”? Is it a matter of reputation/name brand recognition? Does this definition change during times of a crisis or not?
I think it’s an interesting conversation since SO many of the conversations in local media are concerning “making sure” you’re donations are going to a “responsible” charity. . . .but yes, understanding how donors view these terms we throw around would be beneficial I think – in my mind it would help us develop some supply side theories of giving =)