Abstract:
What benefits is society receiving from Raster Foundation’s activities? Has a lack of accountability created a culture of elitism and self-satisfaction at the foundation? Unaware of the opposition within the organization, Raster’s new chair plans to address these questions by evaluating every aspect of the foundation’s operation. Issues involve organizational culture, public accountability, board/staff relations, and the value of evaluation.
Charles Blair, president of the Raster Foundation, arrived at his office earlier than usual. He needed time to prepare for his meeting with Mel Cornin, the newly elected chair of the board — a meeting that could destroy Blair’s vision for the future of his foundation. In a letter written a few weeks earlier, Cornin had recommended the foundation conduct a comprehensive evaluation of every aspect of its operation.
Blair nervously sorted through the papers in his meeting file and paused to reread Cornin’s letter:
I am very disturbed by the public’s increasing distrust of institutionalized philanthropy. I believe it is imperative that foundations and other nonprofit organizations address this issue forthrightly and guarantee that society receives the greatest benefits from our activities.
I am convinced that it is our ethical and moral obligation to see that our commitment to excellence never falters. The question is, how do we measure excellence? How do we know our programs are effective and efficiently administered?
I believe I have the answer. I propose we hire a consultant to conduct a comprehensive evaluation of our programs, administration, and governance similar to the one the Graven Foundation completed last year. Such an assessment will highlight the strengths we should build on and point to weaknesses we may be blind to.
Charles Blair sighed as he continued,
I think Raster’s mission will be served best if we reinforce programs and procedures that are indisputably effective, and modify or eliminate those that perform below our standards. My experience as chair of the Task Force on Philanthropy and Public Accountability sensitized me to the pitfalls of self-satisfaction and elitism that can seriously diminish the great contributions private foundations are capable of making. The kind of evaluation I propose would eliminate any suspicion that the Raster Foundation has succumbed to this kind of moral decay. I hope we can meet in a few weeks to discuss this proposal further. I would like to bring the matter before the board in April.
A New Vision
Three years had passed since Charles Blair left the directorship of a federal agency to become president of the Raster Foundation. At the age of 53, he was a vigorous man and inspirational leader. Trained as a social scientist, he had held several positions in the private and public sectors. During his distinguished career he chaired the political science departments of two Ivy League universities and was an advisor to a U.S. president. He knew that, as the leader of an endowed foundation, he had a unique opportunity to address complex problems and to initiate and promote long-term public policy solutions. Because the foundation’s directors did not have to appease stockholders or the electorate, they could afford a long-term perspective. The foundation had the time and resources to study problems in depth and devise funding strategies for their resolution.
The Raster Foundation had been established and endowed in 1925 by Thomas Raster, a wealthy banker and self-made man. For most of its history, the foundation’s mission, “to promote the greater good of human society,” was served by granting funds to establish and strengthen institutions of higher education.
In his first two years as president, Blair enlarged the scope of Raster’s grant-making. In addition to the education program, he developed two new programs: one to advance technology in third world countries, and the other to promote world peace. The new programs addressed issues that were very different from the foundation’s traditional focus. Several program and executive staff members left the foundation during these transition years. Blair relied on his connections with the government and academia to fill vacated and newly created staff positions.
The Greatest Good
Like Thomas Raster, Mel Cornin was a self-made man. He started his first company while still an undergraduate at the state university. His entrepreneurial bent and business savvy helped him to become president and major shareholder of one of the country’s most successful financial institutions. Cornin attributed much of his success to the many hours spent as a boy in his local library. The library was built and furnished in the early 1900’s by a grant from one of the nation’s first foundations. Cornin considered his community and himself direct beneficiaries of philanthropy, and this early experience instilled in him a keen interest in the philanthropic sector.
Cornin served on numerous nonprofit boards. He also participated in several public/private commissions that examined diverse philanthropic activities. He felt strongly that organizations that enjoyed the privilege of tax exemption had an obligation to manage their resources efficiently and effectively for the greatest good.
He recently chaired the Task Force on Philanthropy and Public Accountability. The task force examined the power of private foundations to disburse large sums of money and influence at the sole discretion of trustees and staff without any meaningful accountability to the public. The task force studied one hundred of the largest private foundations. Major findings included:
- The overwhelming majority of the board members were wealthy white men.
- The majority of board members, executives, and program staff graduated from Ivy League universities.
- Think-tanks, Ivy League universities, museums, symphonies, and prep-schools were more likely to receive funds from foundations than were nonprofits that served the poor.
Cornin came away from the task force convinced that private foundations had tremendous potential but too often did not use their resources as effectively as possible for the greatest good. He suspected that elitism and the foundations’ lack of accountability served to undermine their effectiveness.
How Can Excellence be Measured?
The kind of evaluation Cornin proposed caused Blair great distress. It was Blair’s belief that such an evaluation would be costly, disruptive, and inappropriate. The foundation had only three programs, and two of them were relatively new. The staff of those programs were just beginning to establish relationships with key organizations and actors in the new areas of focus. The problems those programs addressed were complex and long-term. Blair questioned how the impact of the foundation’s work could be measured. He worried that the evaluator would look for direct impact and immediate results, while the results of grant-making policies would often not be visible for years. Blair had worked tirelessly to develop and staff the technology and peace-promoting programs. They were an integral part of his long-term vision for the foundation, and he had a strong personal stake in their success.
Blair moved to sit on the large leather couch against a wall of glass overlooking a picturesque chapel and churchyard below. He did most of his work on that couch since his desk was buried under stacks of papers, files, and books. He continued to scan Cornin’s letter and focused on the reference to the well-publicized Graven Foundation evaluation. He remembered that the Graven Foundation conducted a comprehensive self-assessment that was very costly in terms of staff time and attention.
The study lasted nearly two years. Data collected through hundreds of interviews with Graven staff, grantees, and knowledgeable persons from the field formed the basis for forty-four recommendations. The Graven board and staff were very satisfied with the results of the evaluation. They felt it aided them in setting priorities, consolidating programs, and developing new strategies. But Blair did not think the Graven experience was relevant to Raster Foundation. Not only was Graven a much smaller foundation than Raster, but Blair also assumed Graven’s staff was not as sophisticated or distinguished as Raster’s. Such an assessment seemed completely unnecessary for his foundation, given the staff’s high level of professionalism.
Support and Cooperation
Blair knew that the kind of evaluation proposed would require the support and cooperation of his staff. He shifted his attention to a memo his assistant, Ellen Niles, prepared prior to today’s meeting with Cornin. At Blair’s instructions, Niles had made a few informal inquiries to determine the staff’s receptiveness to an evaluation.
The memo outlined her discussions with several staff members. The overwhelming reaction to the proposed evaluation was negative. Blair nodded in agreement as he read:
The most frequent argument against an evaluation was that the foundation is not directly accountable to any outside authority. As long as the board was satisfied with the foundation’s activities, an evaluation would be a tremendous waste of time and money.
Nearly all staff interviewed stressed that evaluation of management, programs, and grantee performance was already being done. After all, it was their responsibility to evaluate incoming proposals, on-going grants, program directions, and administrative procedures. One administrative officer pointed to the continuing effort to update the procedures manual as a kind of evaluation. The manual’s biannual revisions encouraged executive and program staff to examine administrative procedures and update them as necessary.
One program chair emphasized that for such an evaluation to be successful, program staff’s input was essential. Presently, program staff was so overburdened by proposal review and other grant-making responsibilities, there was little time left to participate fully in an evaluation. Another chair asked who might do the evaluation.
The evaluator would need to be an unbiased expert on evaluation, philanthropy, and each of Raster’s program areas. Did such a person exist?
A program officer commented that assessment was an administrative activity. She felt that at a private foundation, grant-making and program initiatives should always take precedence. Another pointed out that the timing of the proposed assessment was all wrong. He felt that evaluations are best conducted when funds are in short supply and difficult decisions about budgets need to be made. As one of the largest foundations in the country, Raster enjoys enviable financial security.
Blair’s concentration was broken by his ringing telephone. It was Ellen Niles. She was preparing the agenda for next months’ board meeting and needed to know if she should include Cornin’s proposal under Topics for Discussion.
“I’ll get back to you,” was Blair’s curt reply.
Cornin mentioned in his letter that he wanted to discuss the evaluation at the next board meeting, but Blair hoped to dissuade him.
The pensive Blair put down the file and fixed his gaze on the snow melting in the sun atop the chapel’s graceful steeple. He considered Cornin’s reference to “self-satisfaction and elitism” and wondered if his colleagues at Raster Foundation could be guilty of such attitudes. He mused that perhaps Cornin was confusing elitism with the foundation’s need for expertise at the staff level and for powerful connections at the board level. Foundations pride themselves on hiring and funding the best and the brightest. Is that elitism or just good stewardship? Blair knew that Raster Foundation was an enlightened and well-managed institution. After all, nearly sixty percent of the executive and program staff were women. And, although it was true that of thirteen trustees, ten were successful white men, one of the thirteen was Hispanic and two were women.
Blair did not want to offend Cornin or to discourage him from continuing to serve the foundation with the same level of enthusiasm and commitment he had in the past. But Blair was convinced an evaluation would cause more problems than it would solve. Cornin was a businessman and could not possibly understand the complex nature of the philanthropic sector.
However, Blair was well aware that the trustees had authority over all staff members, including the president.
Charles Blair did not hear his assistant knock before she entered his office.
“Mel Cornin is here.” she said.
DISCUSSION QUESTIONS
1. Raster’s mission is to “promote the greater good of human society.” Define the greater good in this case. How can it be measured?
2. Raster staff agreed that the foundation is not directly accountable to any outside authority. Are they correct?
3. Staff’s reactions to the proposed evaluation was overwhelmingly negative. Do you agree with their arguments?
4. Foundations pride themselves on hiring and funding the best and the brightest. Is that elitism or just good stewardship? Based on the results of Cornin’s task force, what criteria might foundation leaders use to determine who are the “best and the brightest”?
5. Do you think the proposed comprehensive evaluation is the best way to “measure excellence”?
6. What would you do if you were Charles Blair?
TEACHING NOTES
1. Raster’s mission is to “promote the greater good of human society.” Define the greater good in this case. How can it be measured? Discuss the rationale for tax-exempt status. Just as for-profit entities have ethical obligations to their shareholders, nonprofits have ethical obligations to their stakeholders (the public, clients, donors). Ask students to define “greatest good.” Who decides what is “good”? Society consists of diverse and often opposing points of view about what is “good.” Who decides what is “good”?
2. Raster staff agreed that the foundation is not directly accountable to any outside authority. Are they correct? Again, foundations, like all nonprofits are accountable to the public. The IRS regulates tax exempt organizations to a limited extent, but it is ethically incumbent on nonprofits that they exist for the public’s benefit.
3. Staff’s reactions to the proposed evaluation was overwhelmingly negative. Do you agree with their arguments? Blair is correct, an evaluation will not be successful without staff cooperation. Several arguments support Cornin’s suspicion that the staff are smug and self-satisfied. They fail to recognize that such attitudes may limit the foundations effectiveness.
4. Foundations pride themselves on hiring and funding the best and the brightest. Is that elitism or just good stewardship? Based on the results of Cornin’s task force, what criteria might foundation leaders use to determine who are the “best and the brightest”? Based on the task force’s finding, the “best and brightest” are probably white, male graduates of Ivy League universities. Many foundations are slowly moving away from this model. Will foundations and the public benefit from redefining or eliminating the “best and brightest” model?
5. Do you think the proposed comprehensive evaluation is the best way to “measure excellence”? Discuss different approaches to evaluation such as process evaluation, outcome-based assessment, and benchmarking. Which ones might be appropriate in this case?
6. What would you do if you were Charles Blair? Discuss the arguments (for example, staff objections, the potential for low morale and decreased productivity, too soon to evaluate new programs, too costly) and alternatives (indefinitely postponing the formal evaluation, evaluating administrative functions only, assembling an internal committee to review programs and administration). Students could roleplay the meeting between Blair and Cornin.
(1997)
