SSIR@PND

Through an agreement with the Stanford Social Innovation Review, PND is pleased to be able to offer a series of articles and profiles related to the "business" of improving society.

How Grantmaking Can Create Adaptive Organizations

How Grantmaking Can Create Adaptive Organizations

Coal mining was the economic lifeblood of eastern Kentucky for most of the twentieth century, providing families in this rural mountainous region with one of the few sources of a middle-class income. But those jobs began disappearing in the 1980s as producers switched from underground mining to surface mining and mountaintop removal. More recently, mining operations have shifted to western U.S. states as the coal seams in Central Appalachia have become depleted. In addition, stricter clean-air regulation of power plants has reduced the demand for coal in favor of cleaner and increasingly less expensive natural gas.

Because of these changes, eastern Kentucky coal mining employment declined from 12,500 in 2000 to just 7,000 in 2015, and half of the remaining jobs are expected to evaporate in the next five to seven years.1 While these losses have been disruptive and even traumatic, the region is showing clear signs of resilience. Elected officials and residents are imagining and developing new economic enterprises in agriculture, forestry, tourism, and energy efficiency.

One of the reasons for the region's improving prospects is the work of the Mountain Association for Community Economic Development (MACED). By introducing innovative approaches to economic development, creating new sources of investment capital, providing effective training and technical assistance to entrepreneurs, publishing relevant research, and advocating for policy change, MACED has emerged as a leader of what is known as the Appalachian Transition.

Becoming an effective agent of transformation has required MACED to undergo its own metamorphosis. Founded in 1976 to support the creation and expansion of local enterprises, MACED has repeatedly revised its strategy and evolved its programming to meet the critical economic and social needs of the fifty-four Appalachian counties in eastern Kentucky. From an organizational theory standpoint, MACED has become an "adaptive organization."

Adaptive organizations are those that deliberately evolve to improve their performance and remain relevant. They demonstrate the capacity to recognize and respond to changes in the environment, to evaluate and learn from their actions, and to adjust their strategy in anticipation of where the world is heading.2

Most businesses now recognize the importance of adaptive capacity. For them, thinking and acting in adaptive ways has become even more critical as technological, economic, social, and political change has become more rapid and intense. Products quickly become obsolete as the needs and tastes of consumers shift and new competitors enter the market. With increasing globalization of markets and manufacturing processes, the viability of a strategy becomes highly vulnerable to exchange rates, country-specific economies and elections, wars, terrorist attacks, and thousands of other perturbations, many of them difficult to forecast. To thrive in this complex environment, businesses need to exercise the vigilance, flexibility, critical thinking, and innovative action that go along with adaptive capacity.

The need for adaptive capacity has also begun to make its way into the social sector. Visionary writers such as Donella Meadows, Peter Senge, Margaret Wheatley, Ron Heifetz, and Henry Mintzberg have introduced concepts such as systems thinking, organizational learning, managing complexity, adaptive leadership, and emergent strategy into the nonprofit lexicon.3

Although adaptation and emergence have become prominent topics in the philanthropic literature, this has not necessarily translated into widespread adaptive behavior. In their trenchant critique of foundation strategy, Patricia Patrizi, Elizabeth Thompson, Julia Coffman, and Tanya Beer conclude that many, if not most, foundations stick with naïve and ineffective strategies despite evidence that the intended results fail to materialize.4 Nonprofit organizations likewise tend to be deficient in adaptive capacity. To correct this, Grantmakers for Effective Organizations (GEO) is actively encouraging foundations to revise their grantmaking and capacity-building strategies to help grantees "adapt to changing circumstances, learn what's working and be ready to take advantage of new opportunities as they arise."5

Although adaptation and emergence have become prominent topics in the philanthropic literature, this has not necessarily translated into widespread adaptive behavior....

Some foundations have increased their investment in capacity-building grants, technical assistance, and training.6 Some have also become more sensitive to the importance of multiyear funding for operating expenses. But many foundations continue to take a traditional approach, failing to recognize that the way in which they carry out their core business of grantmaking — including how the grants are structured and how program officers interact with grantees — has a huge impact on the adaptive capacity of the organizations they fund, either positive or negative.

This article explores the grantmaking dynamic and introduces an alternative approach that I call "evocative grantmaking." Rather than viewing a grant as an award or a payment for an agreed-upon body of work, an evocative grantmaker treats each grant as an opportunity to increase the effectiveness and impact of the funded organization. An evocative grantmaker looks for ways to cultivate critical thinking, learning, and organizational development among the groups it funds. This requires a foundation to reexamine how it holds its grantees accountable, how it structures and sequences its grants, and how it deploys its program officers.

While evocative grantmaking is designed primarily to build the adaptive capacity of nonprofit organizations, it also has the reciprocal benefit of enhancing the foundation's own adaptive capacity. To achieve this potential, however, foundations will need to change their decision-making processes, staffing, administrative procedures, and organizational culture.

Traditional Grantmaking Process

Traditional philanthropy is a transactional process in which a foundation identifies, selects, and funds nonprofit organizations that do work in line with the foundation's mission. The focal point in philanthropy is the grant proposal. Grantseeking organizations submit proposals for work that they hope will align with the funder's interests. The program officer reviews these proposals and meets with applicants to learn more about the organization and the proposed project. The program officer makes recommendations, based on this due diligence, as to which applicants should be approved and which should be rejected. Once a grant is approved, the foundation enters into a grant agreement with the funded organization. The program officer then manages that grant by reviewing progress reports and interacting periodically with grantees.

Within this general grantmaking framework, each foundation adopts its own distinct approach and personality. A foundation might issue an open request for proposals, or it might invite proposals from a small group of prescreened organizations. It might specify particular types of work that are open for funding or leave it up to applicants to propose their preferred projects. In some foundations the board of trustees decides which applicants will receive a grant; in other foundations the program officer has the authority to enter into at least some grant agreements without board approval. Some foundations fund the same organizations year after year; others limit the duration of funding. Some want to invest in innovative project ideas; others are more conservative and focus their funding on evidence-based programs. And foundations have varying rules for monitoring progress and holding grantees accountable.

These different approaches to grantmaking can have profound implications for applicants and grantees, especially with regard to whether they feel free to revise their strategies and programs based on what they learn. This effect is evident in the comments of a nonprofit leader who responded to the Center for Effective Philanthropy's Grantee Perception Survey. "Our relationship with the foundation has changed in recent years," wrote the grantee. "We used to feel like we were equal partners, attempting to solve social issues together. We felt like we could be wholly honest about whatever bumps in the road came up and could rely on the foundation to trust us to proceed as best we could to solve them. However, in the past three years, we feel that this relationship has changed. Site visits feel more like interrogations. The grant-review process feels like the foundation is attempting to find the flaws in what we are proposing, rather than to have a peer-to-peer discussion about what works, what doesn't, and how we might consider working together."7

How a foundation holds its grantees accountable is one of the critical ways that foundations can either inhibit or encourage adaptation. Some foundations have strict standards of accountability, defining a successful grant as one where the grantee delivers what was promised. Others are more flexible and accommodating, taking into account the reality of unforeseen obstacles and the propensity of applicants to propose overly ambitious projects.

A rigid approach might work in instances where the grantee is operating a well-established program with predictable outcomes in a stable environment. But many nonprofit organizations are operating in a zone of uncertainty when they write their proposals. This is particularly true of innovative organizations, which many foundations find appealing.Innovations are first approximations that require testing and adaptation, and possibly abandonment.

Adaptive organizations by definition shift their programs and their strategy in light of experience and new knowledge....

Adaptive organizations by definition shift their programs and their strategy in light of experience and new knowledge. If the funder strictly requires grantees to adhere to the plan spelled out in the proposal, these shifts will be penalized as deviations rather than rewarded as smart learning. Both the grantee organization and its constituents will suffer. From a return-on-investment standpoint, the foundation has failed to create positive value with its grant and might have actually imposed a cost to society.

Cultivating Adaption

Although some foundations discourage adaptation through their grant-management practices, others actively encourage it. The Mary Reynolds Babcock Foundation employs virtually all the practices that GEO recommends for nonprofit capacity building, including multiyear grants, funding of operating expenses, leadership development programming, consultation for organizational development, and peer networking among grantees. But the core of Babcock's strategy is the program officer's give-and-take approach to interacting with grantees, which is designed to foster critical thinking and strategic questioning on both sides of the relationship.

Nonprofit organizations funded by Babcock consistently report that their interactions are qualitatively different from what they experience with other funders. Rather than testing whether the grantee is accomplishing exactly what was promised in the proposal, Babcock program officers ask larger, deeper, and less judgmental questions that invite self-reflection and what-if thinking. As a result, the conversations are more fluid and inquisitive.

MACED is one of the organizations that have benefited from Babcock's grantmaking approach. Babcock has been a core funder of MACED for more than fifteen years. Justin Maxson, who was president of MACED from 2004 through 2014, describes his experience with the foundation this way: "Our program officer started out by acknowledging that we were tackling huge issues with no simple solutions. She didn't expect us to have it all figured out, but instead wanted to know how we were thinking about the situation and what we were trying. She was there with us as we deepened our analysis and explored different ideas for programs and strategies. And she let us know that the foundation was trying to learn about the situation as well, and that grantees are one of the foundation's most important sources of knowledge. That provided such a different starting point for our relationship. There was little of the defensiveness that we feel with so many other funders." According to Maxson, his interactions with Babcock staff members were instrumental in promoting MACED's growth and development as an organization, as well as in shaping his own personal career path. He became the executive director of the Babcock Foundation in March 2015.

As an external evaluator of Babcock's work, I have repeatedly heard from grantees that they value the program officer's sharp questioning and the back-and-forth discussion about the organization's goals and what it will take for the proposed project to achieve those goals. And they report that their organizations have become more strategic, discerning, effective, and resilient as a result. They recognize that the foundation is being at least somewhat "disruptive" but also recognize that this can be more valuable than simply handing out money.

It is useful to note that Babcock program officers don't confine their probing questions to funded organizations; the process of engagement begins during the application stage. Thomas Watson, president of Rural Support Partners,9 recounted his first meeting with a Babcock program officer shortly after establishing another nonprofit, the Center for Participatory Change, fifteen years ago. "She did something that no other funder had done: she asked hard questions," says Watson. "She quickly determined that our internal operations needed work and that we had very few connections with older and wiser organizations doing similar work in the region. Babcock declined our request for funding and instead gave us a small organizational development grant and connected us to peer organizations. That was the beginning of a true partnership."

Evocative Grantmaking

The Babcock Foundation epitomizes what I call "evocative grantmaking." The defining feature of evocative grantmaking is that the foundation takes deliberate steps to evoke critical thinking, experimentation, learning, and self-reflection among the groups it supports. This occurs not only through the program officer's give-and-take engagement with grantees, but also by structuring grants around learning and adaptation rather than holding grantees accountable to fixed objectives and work plans. Evocative grantmakers regard the grant proposal as a first approximation of the actual work that a grantee will carry out. The funder works constructively and flexibly with the grantee as the funded work plays out — maybe according to expectations, but more likely with at least some degree of surprise.10

Evocative grantmaking is grounded in a trio of core assumptions: first, that the most effective nonprofit organizations are those that continually evolve their strategies and programs to advance their mission; second, that foundations add the most value to their grantees when they actively encourage adaptation and organizational development; and third, that because foundations control access to needed resources, they are able to draw nonprofit organizations into deeper realms of learning and adaptation — in other words, territory where the organization would not otherwise venture.

Many foundations overlook or downplay their ability to influence the behavior of applicants and grantees. Evocative grantmaking explicitly acknowledges this reality and calls on foundations to use their influence to foster adaptive capacity.

Many foundations overlook or downplay their ability to influence the behavior of applicants and grantees.... 

For most foundations, evocative grantmaking requires a major shift in the thinking and behavior of board and staff, especially program officers. To become an evocative grantmaker, a foundation must develop the following four critical practices: hold grantees accountable to long-term goals and learning; link grants in a sequence that encourages continuous improvement in programming; provide grantees with resources that support strategic thinking and learning; and deploy program officers as evocateurs.

Hold grantees accountable to long-term goals and learning. Under transactional philanthropy, a grant is essentially a payment for an agreed-upon body of work. When a foundation operates from this perspective, the board and staff often concern themselves with this question: How do we ensure that our grantees will actually do what they told us they would do? They judge the success of a grant by assessing whether the grantee has adhered to the work plan and met the objectives spelled out in the proposal. Both the foundation and the grantee focus on metrics such as the number of clients served or specific outcomes observed among clients.

Evocative grantmaking takes a longer-term view of accountability, focusing on factors such as how much programming and services have improved or how much the grantee has developed as an organization. The defining accountability question for the board and staff of an evocative grantmaker is this: How do we ensure that we maximize the effectiveness of our grantees? The grantee's mission, rather than its work plan, becomes the reference point for assessing progress and success.

This long-term perspective on accountability requires the foundation to be flexible and adaptive when writing and enforcing its grant agreements. Beginning even before the grant is approved, the foundation and the grantee negotiate a set of goals that will guide the grantee's work over the long run, as well as a set of more specific objectives that are relevant for the current grant. These goals and objectives should refer not only to the intended effects of the funded project but also to the grantee's ability to develop and implement effective programs. Even if the specific objectives posed for a particular grant are not achieved, the grantee might succeed in even more important ways to move the work forward. This notion of accountability gives grantees an incentive to develop into stronger, more strategic, and more mature organizations, rather than to stay true to a plan regardless of its merits.

One of the key messages that an evocative grantmaker sends to applicants and grantees is the expectation that funded projects will inevitably change over time and that this is a good thing. Likewise, learning and adaptation are explicitly incorporated into performance metrics. This occurred within The Colorado Trust's Violence Prevention Initiative, which was framed around the concept of a "learning laboratory." The trust funded twenty-six community-based organizations and coalitions across Colorado, each of which addressed a particular form of violence (such as youth violence, domestic violence, sexual violence, and elder abuse) within local neighborhoods, schools, towns, and counties. Applicants were explicitly discouraged from specifying objectives and metrics in their proposal and instead were instructed to wait until they received the grant and had the chance to think critically about their goals and the needs of the community. The Center for the Study and Prevention of Violence at the University of Colorado Boulder brought relevant research findings to each grantee, including what was known about the predictors of the particular type of violence that the organization was addressing, as well as evidence for various programs and policy approaches that might be relevant for that issue. Grantees were actively encouraged by foundation staff, technical assistance providers, and external evaluators to reflect on and improve their projects. The trust's template for progress reports emphasized learning and adaptation rather than adhering to specific objectives.

Link grants in a sequence that encourages continuous improvement in programming. When deciding whether or not to re-fund an organization, foundations typically consider the applicant's past performance. When a funded organization meets the objectives of its program, the foundation gains confidence that the organization is a good prospect for another grant. This traditional grantmaking approach produces a stable equilibrium for both the funder and the grantee, but it does little to advance the programming or strategy of grantees.

Evocative grantmaking calls for the foundation to take the longer view when it decides to fund a nonprofit organization. Rather than asking applicants to present fresh proposals each time they apply, the program officer engages with its funded organizations in a multistage exchange. This begins with an in-depth, strategy-oriented conversation with the organization’s leadership prior to the first proposal. This conversation gets at issues such as what the organization wants to accomplish, what programming will be developed and implemented, what the organization aspires to become, what needs to be learned, and where the uncertainties and risks reside.

With each new application, the foundation asks the grantee to include data and reflections on program delivery and outcomes, successes, disappointments, surprises, shifts in the environment within which the organization operates, and current thinking on how the strategy and programming need to adapt. The intent is to stimulate critical analysis, strategic learning, and informed adaptation at regular intervals. Each proposal becomes a step upward on a developmental ladder.

This linked approach to grantmaking takes into account the reality that optimizing a program or strategy involves multiple iterations of designing, implementing, evaluating, learning, and adapting. The foundation can encourage grantees through this developmental process by titrating the expectations associated with successive grants. For early grants the major task may be to entice the grantee to think more creatively, experiment, and take more risks. As the grantee gains experience and confidence with formulating and testing new ideas, the foundation can add value by encouraging more systematic learning and more rigorous strategic thinking. In this way the organization becomes increasingly smart and effective, while at the same time the projects achieve greater impact.

This sequential approach to grantmaking is a core element of Healthy Places NC, a $100 million initiative of the Kate B. Reynolds Charitable Trust designed to improve health in up to twelve of North Carolina's most economically challenged rural counties.11 The trust invests a variety of financial and capacity-building resources in each participating county over a ten-year period.

Because these counties are rural and relatively poor, the trust began Healthy Places NC without a strong cohort of organizations capable of designing and leading major health-improvement initiatives. In most of the counties, few nonprofits had any experience with foundation funding. To allow for this, the trust adopted an evocative strategy designed to cultivate more strategic projects over time. During the early stages of a county's involvement in Healthy Places NC, the program officer casts a wide net to solicit grant proposals. At this stage the trust has relatively modest expectations for proposals. Program officers are looking for organizations that are committed to improving the health of the community, have promising ideas, and are open to learning and working in partnership with others.

When these groups apply for a subsequent grant, they are asked to show how their work is evolving and becoming more strategic, possibly with involvement by partner organizations. Additional grants raise the bar even higher, requiring applicants to propose more comprehensive, multiparty approaches that build on earlier work and focus on strategic factors that have become apparent through continued exploration.

Provide grantees with resources that support strategic thinking and learning. Linked grantmaking offers nonprofit organizations the opportunity to improve their programming through experience. Flexible grantmaking that supports thinking and learning can help grantees take full advantage of this opportunity.

One of the most valuable things a foundation can do is to fund operating expenses over and above the direct costs associated with the target program or project....

One of the most valuable things a foundation can do is to fund operating expenses over and above the direct costs associated with the target program or project. Operating support serves as a budgetary cushion that can help leaders within the organization find the time and space that it takes to think strategically about their programs and to respond appropriately to evaluation findings. Likewise, foundations can support the process of organizational learning by providing funding and access to skilled consultants who can help grantees clarify their intent and think critically about program design. The Center for the Study and Prevention of Violence played precisely this role within The Colorado Trust's Violence Prevention Initiative.

Evocative grantmakers provide grantees with resources to secure evaluators and strategic-thinking consultants. This goes beyond simply funding consultants; the foundation also vets consultants and points grantees toward consultants with relevant competencies. Feedback from grantees helps the foundation to improve how it selects consultants as well as to build the capacity of the consultants it uses.

Deploy program officers as evocateurs. Many foundations hire intermediary organizations to build the organizational capacity of grantees, but evocative grantmaking also brings the program officer directly into the organizational development process. In a traditional foundation, the program officer performs various transactional functions and maintains a significant degree of formality when interacting with applicants and grantees, akin to a loan officer in a bank.

The program officer at an evocative grantmaker has a very different type of interaction with the grantee and, indeed, a very different purpose. The overarching purpose of an evocative program officer is to support nonprofit organizations in adapting their programs and their strategy so that they become more effective in achieving their mission. To that end, the evocative program officer structures her interactions with applicants and funded organizations in ways that evoke new ways of seeing, thinking, acting, and learning. One way to think about this type of program officer is as an evocateur and, on occasion, even a bit of a provocateur.

Once a grant has been made, the evocative program officer interacts with grantees regularly to delve into details such as how the project is going, what is working according to plan and what is not, what is being learned about the work, and the concerns of the people doing the work. The program officer's role is to listen, to ask probing questions, to offer perspective and occasionally advice, to promote critical analysis, and to encourage the organization to act upon what it learns.

As an outsider with field-wide experience, the program officer may bring issues and opportunities that those inside the grantee organization don't see because they are overly grounded in their own unique experience. The program officer can also focus attention on critical questions that the grantee organization is deferring or ignoring because they are too big or too uncomfortable to confront.

While evocative program officers regularly ask challenging questions and offer information and alternatives for consideration, they do not impose on grantees their own view of how grantees should shape their programs, strategies, or organizations. That said, evocative program officers gain more latitude to express more of their thoughts as their relationships with grantees become stronger and more open.

One other important function that evocative program officers play is to connect grantees with others who can be of assistance. This might include trainers, technical assistance providers, and coaches who have expertise in topics that are particularly relevant to the grantee. It might also include convening grantees that have shared interests to facilitate peer learning, or introducing grantees to people and organizations that are doing complementary work.

Implications for the Funder-Grantee Relationship

As foundations rethink the fundamentals of grantmaking — the purpose of a grant, how to hold grantees accountable, how grants fit together, and the job of the program officer — they will come to view grantees in a different light. The basic dynamics of philanthropy may remain the same — the grantmaker is a benefactor and the grantee is a beneficiary — but the nature of the funder-grantee relationship changes in ways that cause the benefits to flow in both directions.

A defining feature of evocative grantmaking is that the interactions between funder and grantee are open, direct, and honest. The program officer challenges the grantee to think more critically and expansively about its programs and strategy. Assumptions are brought to the surface and tested to see which are accurate, which are flawed, and which are limiting. These conversations are designed to stimulate more powerful work, not to find fault or pass judgment.

For grantees to be willing to share their uncertainties, challenges, and failures, they need to believe that this is a safe conversation to have....

For grantees to be willing to share their uncertainties, challenges, and failures, they need to believe that this is a safe conversation to have. Evocative grantmaking has two features that promote this sense of safety. First, the grantee is rewarded for learning as opposed to being penalized for failing to meet the specific expectations contained in its grant proposal. Second, the program officer brings the foundation's own questions and uncertainties into the conversation. This creates a balance that rarely occurs in philanthropy: vulnerability on both sides of the relationship.

The second feature is rare in philanthropy but not impossible. The Babcock Foundation's program officers invite grantees to provide their perspective on how well the foundation's strategy is working, what needs to change, and how various groups (including grantees) can be brought in as effective partners. It typically takes at least a couple of grant cycles before grantees are willing to be candid with their feedback on the foundation’s strategy and performance. However, once a trusting relationship has been established, the conversation becomes free-flowing in each direction. In the process, the foundation gains knowledge and perspective that is crucial to building its own adaptive capacity and strengthening its own strategy.

This process of reciprocal challenging and learning defines the relationship between funder and grantee under evocative grantmaking. Rather than treating the grantee as a beneficiary of the foundation's largesse, the evocative grantmaker travels alongside the grantee on a shared journey. Each organization has its own distinct mission, goals, path, and learning curve, but they also have a symbiotic relationship.12

The Sober Reality of Evocative Grantmaking

Evocative grantmaking offers foundations an opportunity both to multiply the impact of their grants and to build their own adaptive capacity. But this approach requires a radical shift in philosophy, strategy, operations, and staffing on the part of the foundation. It's not an easy task. The board will need to accept that a grantee's accountability is defined in terms of organizational learning and improved programming, rather than hitting predefined targets. The format and language of grant agreements will need to change accordingly. The board and staff will need to become comfortable with at least some unpredictability in what grantees do with their funding. The foundation will need to stick with the same grantees for multiple cycles and be patient with the pace of organizational development. It will need to be prepared to hear critical feedback from grantees. And it will need to be prepared for the foundation's image and reputation to evolve into something very different from how the foundation has been viewed.

The most challenging aspect of becoming an evocative grantmaker, however, resides with the program officer. Evocative grantmaking requires program officers to function in ways that go well beyond what foundations have traditionally expected and to develop a whole new set of competencies. Both the Babcock Foundation and the Kate B. Reynolds Charitable Trust have found that evocative program officers need to be skilled in active listening, critical thinking (especially real-time, on-the-ground critical thinking), strategic analysis, and building authentic relationships. Kate B. Reynolds program officers have been encouraged to develop four competencies that the Kansas Leadership Center delineated for its model of adaptive leadership: the ability to diagnose the situation, to manage self, to intervene skillfully, and to energize others.13 These competencies are spelled out in a "practice profile" that the National Implementation Research Network (NIRN) developed in collaboration with the trust's program officers.14

NIRN provides the program officers with coaching, training, and experiential learning to build their skills and to develop competent practices. Even with this support, not all program officers have succeeded at becoming evocative program officers. There has been some turnover among program officers who assumed their position when the foundation was operating under a more traditional grantmaking approach.

Evocative grantmaking offers foundations an opportunity both to multiply the impact of their grants and to build their own adaptive capacity. But this approach requires a radical shift in philosophy, strategy, operations, and staffing on the part of the foundation. It's not an easy task. The board will need to accept that a grantee's accountability is defined in terms of organizational learning and improved programming, rather than hitting predefined targets. The format and language of grant agreements will need to change accordingly. The board and staff will need to become comfortable with at least some unpredictability in what grantees do with their funding. The foundation will need to stick with the same grantees for multiple cycles and be patient with the pace of organizational development. It will need to be prepared to hear critical feedback from grantees. And it will need to be prepared for the foundation's image and reputation to evolve into something very different from how the foundation has been viewed.

The most challenging aspect of becoming an evocative grantmaker, however, resides with the program officer. Evocative grantmaking requires program officers to function in ways that go well beyond what foundations have traditionally expected and to develop a whole new set of competencies. Both the Babcock Foundation and the Kate B. Reynolds Charitable Trust have found that evocative program officers need to be skilled in active listening, critical thinking (especially real-time, on-the-ground critical thinking), strategic analysis, and building authentic relationships. Kate B. Reynolds program officers have been encouraged to develop four competencies that the Kansas Leadership Center delineated for its model of adaptive leadership: the ability to diagnose the situation, to manage self, to intervene skillfully, and to energize others.13 These competencies are spelled out in a practice profile that the National Implementation Research Network (NIRN) developed in collaboration with the trust's program officers.14

NIRN provides the program officers with coaching, training, and experiential learning to build their skills and to develop competent practices. Even with this support, not all program officers have succeeded at becoming evocative program officers. There has been some turnover among program officers who assumed their position when the foundation was operating under a more traditional grantmaking approach.

Staff throughout the foundation may resent the new demands associated with evocative grantmaking, believing that the old way of doing business worked just fine. Because of this potential resistance, the foundation's CEO and senior leaders will need to make a firm commitment to the principles and practices of evocative grantmaking, as well as providing staff with the required financial resources, training, and time for learning.

Becoming an evocative grantmaker depends on even more than developing the competencies and commitment of individual staff and board members. The field of implementation science tells us that any innovation in programming or strategy requires a "hospitable" organizational infrastructure.15 This term takes into account the various systems, procedures, competencies, beliefs, and attitudes that allow an organization to effectively implement a new strategy or a new way of doing business.

For a foundation to implement evocative grantmaking, it has to have a culture that is compatible with a flexible, open-ended, learning-oriented approach to working with grantees....

One of the most critical elements of a hospitable infrastructure is a culture that supports the organization's strategy. For a foundation to implement evocative grantmaking, it has to have a culture that is compatible with a flexible, open-ended, learning-oriented approach to working with grantees. But many foundations have cultures that emphasize control, predictability, and hierarchy. This is reflected by highly prescribed grantmaking guidelines, carefully orchestrated board meetings, scripted public presentations, tightly managed communications strategies, and protocol-driven interactions with applicants and grantees. They hire staff who are committed to minimizing the risk of failure, surprise, and embarrassment. Nora Ferrell, director of communications at Kate B. Reynolds, describes one such foundation: "When you go to their office, you feel like you're visiting a museum. Very quiet, very formal, very intimidating." Transactional grantmaking is a natural fit for foundations with this sort of culture, but evocative grantmaking is not.

Is Philanthropy Ready for Evocative Grantmaking?

Evocative grantmaking can significantly enhance the organizational effectiveness of nonprofits and foundations, but I am under no illusion that foundations will flock to this new approach. While most foundations value the idea of helping their grantees become more effective, the costs and complications associated with switching to evocative grantmaking are profound. Moreover, the benefits that evocative grantmaking confers on the foundation — becoming smarter and more adaptive — aren't uniformly valued. Not all foundations strive to be adaptive. Many are content to maintain their historical funding interests and to continue their long-standing grantmaking practices.

In the same vein, some nonprofits prefer traditional philanthropy. As the Babcock Foundation has learned, not all nonprofit leaders welcome highly engaged interaction, questioning, and challenging from their program officers. For many nonprofits, the most important qualities in a funder are fairness and transparency. According to Allen Smart, the vice president of programs at Kate B. Reynolds, the old-school program officers who are no longer at the trust were "beloved" by grantees because they were efficient, polite, and gracious. Likewise, many nonprofit leaders may prefer to stick with clearly defined objectives and metrics rather than worrying about how to adapt their programs.

Whether or not evocative grantmaking becomes widely adopted depends not only on the willingness of foundations to make a radical change in their approach but also on their ability to do so. The foundation needs to have program officers with the required competencies as well as a hospitable organizational infrastructure, including a culture that supports learning and adaptation.

A recent GEO report, The Source Codes of Foundation Culture, by Tom David and Kathleen Enright, casts doubt on the ability of foundations to change their culture.16 The authors argue that a foundation's organizational culture is determined at its inception. They also make a strong case that a foundation's culture is often inherited from the organization or family that established the foundation. For example, foundations that were set up by the trust department of a bank are apt to end up with a culture quite different from one established by an entrepreneur.

The GEO report suggests that there are limits to the number of existing foundations that will be able to successfully implement evocative grantmaking. Most foundations have a stable organizational culture that is inhospitable to evocative grantmaking. If the foundation's board and leaders are firmly committed to implementing evocative grantmaking, they may be able to bring along the culture, but this process is likely to be difficult and may not succeed. This leaves us looking to new foundations as the ones that are most likely to embrace evocative grantmaking.

Fortunately for evocative grantmaking, lots of foundations are being formed. According to the Foundation Center, the number of U.S. foundations increased by more than 4,200 between 2011 and 2012.17 Many of the people who are responsible for establishing these foundations made their wealth by starting or working at adaptive organizations, such as technology firms. To the extent that the creators of new foundations bring their adaptive leadership skills and inquisitive mind-set with them, evocative grantmaking will find receptive homes and philanthropy will come closer to reaching its potential.

Douglas Easterling is a professor in the Department of Social Sciences and Health Policy at Wake Forest School of Medicine, where he served as department chair from 2005 to 2015. He was previously director of research and evaluation at The Colorado Trust.

_____

Notes

1 Kentucky Energy and Environment Cabinet, Kentucky Coal Facts, 15th Edition, 2015.
2 This definition draws from research that Carl Sussman and the TCC Group have done on adaptive capacity. Carl Sussman, "Building Adaptive Capacity: The Quest for Improved Organizational Performance," 2004. Anne Sherman, "Everyday Leaders: Building the Adaptive Capacity of Nonprofit Organizations," TCC Perspectives, Winter 2005, p. 2.
3 Each of these organizational and systems theorists has published highly influential books, including Donella H. Meadows and Diana Wright, Thinking in Systems: A Primer, White River Junction, Vt.: Chelsea Green Publishing, 2008; Peter M. Senge, The Fifth Discipline: The Art and Practice of the Learning Organization, New York: Currency/Doubleday, 2006; Margaret J. Wheatley, Leadership and the New Science: Discovering Order in a Chaotic World, San Francisco: Berrett-Koehler Publishers, 2006); Ronald A. Heifetz and Marty Linsky, Leadership on the Line: Staying Alive Through the Dangers of Leading, Cambridge, Mass.: Harvard Business Press, 2002; and Henry Mintzberg, Tracking Strategies: Toward a General Theory, New York: Oxford University Press, 2007.
4 Patricia Patrizi, Elizabeth Heid Thompson, Julia Coffman, and Tanya Beer, "Eyes Wide Open: Learning as Strategy Under Conditions of Complexity and Uncertainty," The Foundation Review, vol. 5, no. 3, 2013, pp. 50-65.
5 J. McCray, Is Grantmaking Getting Smarter?, Grantmakers for Effective Organizations (GEO), 2014, p. 3.
6 In GEO's 2014 survey of staffed foundations, 77 percent of the respondents reported that their foundation is investing resources in building the capacity of their grantees in areas such as leadership development, fundraising, communications, technology, and evaluation. Of those foundations that provide this support, 27 percent reported that their investment had increased over the past three years while only 6 percent reported that it had declined. Grantmakers for Effective Organizations, Strengthening Nonprofit Capacity, 2015.
7 Ellie Buteau and Phil Buchanan, Working Well With Grantees: A Guide for Foundation Program Staff, 2013, Center for Effective Philanthropy, p. 7.
8 Christian Seelos and Johnanna Mair argue that foundations are overly enamored with the idea of investing in innovative projects while also failing to fully appreciate the value of adaptation. "The prevailing innovation discourse may push organizations toward adopting innovative practices, when actually more incremental developmental practices would produce more value over time" (p. 47). Christian Seelos and Johanna Mair, "Innovation Is the Not the Holy Grail," Stanford Social Innovation Review, Fall 2012, pp. 44-49.
9 Rural Support Partners provides capacity-building and community development assistance to organizations in Central Appalachia, while also serving as the backbone organization for the Appalachia Funders Network and the Central Appalachian Network.
10 Evocative grantmaking has an intent similar to that of venture philanthropy, but the models differ in terms of who is providing support to the grantees and the nature of that support. Evocative grantmaking stresses the role of foundation staff, especially the program officer, while venture philanthropy focuses on ways in which donors can help nonprofits improve their effectiveness. In addition, the evocative grantmaker maintains an outsider role rather than becoming directly engaged in the business of the grantee as venture philanthropists sometimes do.
11 See http://kbr.org/news/healthy-places-nc-cultivating-community-health-andwellness for a description of the initiative.
12 I have purposely refrained from using the term "partnership" to describe the relationship between funder and grantee under evocative grantmaking. A partnership suggests that there is parity in power between the two parties. With any form of grantmaking, including evocative grantmaking, the funder clearly retains the power to begin and end the relationship, so it cannot be a true partnership.
13 These competencies are described by Ed O'Malley, CEO of the Kansas Leadership Center, in the inaugural issue of the center's journal, "The Competencies for Civic Leadership," Journal of Kansas Civic Leadership Development, vol. 1, no. 11, 2009, pp. 7-15. O'Malley was joined by Marty Linsky and David Chrislip in the development of the competencies. Not surprisingly, the competencies are based directly on the concept of adaptive leadership articulated by Ron Heifetz and Marty Linsky.
14 Allison Metz and Douglas Easterling, "Using Implementation Science to Translate Strategy into Practice at the Kate B. Reynolds Charitable Trust," The Foundation Review, vol. 8, no. 2, 2016.
15 Allison Metz and Bianca Albers, "What Does It Take? How Federal Initiatives Can Support the Implementation of Evidence-Based Programs to Improve Outcomes for Adolescents," Journal of Adolescent Health, vol. 54, no. 3, 2014, pp. 92-96.
16 Tom David and Kathleen Enright, The Source Codes of Foundation Culture, Grantmakers for Effective Organizations, 2015.
17 http://foundationcenter.org/gainknowledge/research/nationaltrends.html.