PART III

HOW THE FOUNDATION WORLD MAY HAVE TO CHANGE

My inquiries into the nonprofit world unexpectedly took me to the threshold of another issue: how foundations themselves conduct their business. I am modest about venturing into this territory because I have not spent much time exploring it, and I am not intimately familiar with internal grantmaking processes at foundations. Yet I have learned enough from various grantees, and from the "Philanthropy in the Digital Age" session in New York on April 9, 1996, to realize that foundations would do well to reassess their own missions and operations, particularly with respect to the networked environment.

If foundations want to have a meaningful impact, then their grantmaking must take greater account of the fluid dynamics of the current world. One grantee told me that its foundation support for policy advocacy arrived months after the issue had been disposed of by the FCC -- yet the money could not technically be used for a closely related policy goal that had unexpectedly arisen. One citizen-activist tells the story of how his work developing new media vehicles for candidate issue statements unexpectedly found valuable uses in high school classes, which were of course beyond the scope of his grant.

Based on his grantmaking for Internet-related purposes in eastern Europe, Jonathan Peizer of the Soros Foundation (Open Society Institute) argues that foundations must find new ways to foster experimentation; show flexibility with the terms of grants; expedite bureaucratic decisionmaking; and act as sources of venture capital for new nonprofit projects. I agree with his analysis, that traditional philanthropy will be far less catalytic and influential in a world marked by rapid change. Foundations must develop new ways to allow (indeed, encourage) improvisation among its grantees, so that they can seize new opportunities when they arise. If the slower, more time-bound processes of traditional grantmaking continue to govern, then nonprofits will be severely disadvantaged in achieving their missions.

The most fruitful grants may not be the most detailed and schematic. As complexity theory suggests, life evolves in unexpected, non-linear ways. Why not accept and leverage that dynamic, rather than adhering to the formalistic fictions that often govern grantmaking? A difficult question, of course, is ensuring accountability. It is not self- evident what evaluation criteria should be applied to grants when their implementation takes place in such a fast-changing milieu. Yet the up-side of acknowledging the new realities may provide more than adequate compensation. The MacArthur "genius program," indeed, is based upon the premise that supporting creative individuals, and not necessarily a specific program, can yield remarkable benefits. I think this premise could be constructively applied to telecom grantmaking.

This would entail greater risks and, perhaps, a higher rate of "failure." But this may be unavoidable. Corporations no longer try to develop and implement five-year plans because the world changes too radically within that time frame. So, too, foundations need to find new ways to accommodate its grantmaking goals and schedules to the rapidity of change. Proven players must be given greater flexibility to seize transitory strategic opportunities. Perhaps foundations would do better to fund evolutionary pathways, through which projects can organically grow and develop, rather than fixed, final projects which may be blown off-course by the vagaries of real life (or which discover promising new pathways along the way).

Another systemic need: Grantmaking must take greater account of information technologies as integral parts of grant programs. It is fallacious to see the telecommunications infrastructure as capital overhead, when organizational architecture is so influential -- in determining the range of strategic choices available to nonprofits and the kinds of internal and external interactions.

Throughout my study, I have noted the need for new "meta-structures" and "meta-strategies" that could help the public interest community achieve their goals. This lesson applies to the foundation world as well. I think foundations need to cultivate a new set of non-traditional advisors, if only because the "recognized authorities" do not necessarily reside in identifiable institutions; they are, instead, members of virtual networks. Moreover, grantees themselves are rich sources of knowledge whose expertise and experience remains seriously underleveraged (in part because they are not networked). Consider, for example, how the NTIA grant program has failed to facilitate coordination and sharing of knowledge among its grantees in similar areas (urban areas, health, etc.). Such a convergence and collaboration of groups on the front lines of experimental endeavors could yield fantastic new insights, personal connections, and a consolidation of knowledge. In computer circles, "collaborative filtering" is, in fact, now seen as a hugely promising new field.

Grantmakers, I believe, need to see themselves as facilitators of such convergence and collaboration. They should also find better ways to disseminate the knowledge gleaned by their grantees, so that any lessons can have wider impact. In short, foundations need to apply the lessons of networked intelligence to their own domains, so that they can more forcefully advance their own agendas. It was suggested at the April 9 Rockefeller meeting that foundations might consider themselves as "curators" for grantees. Perhaps this is a useful concept for thinking about new foundation roles.

Finally, I think the mainline foundations need to be more aggressive in responding to assaults upon nonprofits that would restrict their free speech, advocacy and lobbying (such as the Istook Amendment). The constructive, salutary role of nonprofits in democratic culture can no longer be taken for granted; it must be forcefully articulated and defended. But this, too, will not happen automatically. It requires a more concerted, focused response.

These scattered speculations suggest the need for new sorts of meta-institutions and processes by which traditional foundation goals can be actualized. It is beyond my capabilities here to suggest specific structures, but I think new exploratory leadership is needed, particularly by foundations, which are one of the few American institutions with the resources, stature and independence to assert such leadership at this critical juncture.


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