posted on: Wednesday, March 30, 2011

by Aaron Dorfman

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I’m either a philanthropy and social change geek who really likes reading good publications, or I’m a bit of a workaholic. Perhaps it’s a little of both!

In any case, I spent some time on my back deck this past weekend reading a new report from the Mary Reynolds Babcock Foundation titled Helping People and Places Move Out of Poverty: Progress and Learning 2010. What a refreshing and thoughtful document!

For those who are not familiar with them, the Mary Reynolds Babcock Foundation (MRBF) is based in North Carolina, has about $150 million in assets, makes about $7 million in grants annually and focuses its efforts on creating pathways out of poverty for people in the Southeastern United States.

I was really impressed with the foundation’s commitment to transparency in the report. With meaningful specificity, foundation leaders shared their theory of change, their assumptions, what worked and what didn’t turn out as well as they hoped. Most important, they were transparent about action steps the foundation plans to take as a result of this midterm program review. This clarity will be especially helpful for grantees that all too often are left in the dark about where a foundation is headed after it has assessed its priorities and practices.

I also was pleased by how the foundation is navigating tensions around strategy. Too many foundations these days think that having a strategy means they have to have all the answers or they have to dictate how change happens. MRBF instead chose to balance focused commitment to their mission and beliefs with openness to multiple approaches.

One of the bullets explaining what MBRF foundation leaders have chosen NOT to do is: “Run a grants initiative with specific Foundation-defined outcomes and approaches.” They also have recommitted the foundation to providing “steady, sustaining, core funding for effective anchor organizations, especially those such as policy groups that will never have income streams to reduce their reliance on grants and contributions.”

To me, these statements and the entire document show that MRBF is taking an appropriate approach to strategy that recognizes that the best philanthropy is a true partnership between grantmakers and grantees.

Many of the lessons shared in the report mirror and add clarity to what NCRP is finding in our research about effective foundation-funded advocacy. In the report, MRBF notes that changing systems and influencing policy takes time, and the foundation is deepening its commitment to investing in leaders and leadership development because strong leadership as essential to success. MRBF also states that:

Strategic partnerships across lines of difference are essential for getting policy wins and for community change. In policy work, two kinds of partnerships are critical: 1) partnerships between budget/policy analysis organizations and grassroots advocacy organizations; and 2) partnerships between social and economic justice activists and mainstream allies.

There is, refreshingly, a candid discussion in the report about payout. Like many foundations, MRBF increased its payout rate during the recession in order to maintain a relatively stable flow of grant funding in actual dollars. It has committed to maintaining a more or less steady grants budget through 2014, which means the foundation will be paying out at a higher rate than what it has historically been accustomed to. I think this is admirable and will help MRBF more effectively achieve its mission. Foundation leaders will revisit the payout question in 2014.

Finally, I was pleased to see that the foundation is interested in influencing its peers in philanthropy. MRBF specified goals around supporting and encouraging grantmaking peers to engage in mission investing, and committed the foundation to action steps designed to help Southern philanthropy evolve in its thinking about the difference between charity and actually helping people escape poverty.

I am often puzzled and frustrated by how so many foundations are reluctant to attempt to influence other funders. MRBF will be investing in its own communications capacity in order to be more effective in this element of their work.

If you haven’t had a chance to read this insightful report yet, I encourage you to do so. And if you have read it, I’d love to hear what you think.

Aaron Dorfman is executive director of the National Committee for Responsive Philanthropy (NCRP).