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Foundation management can be effective

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Joel J. Orosz

Joel J. Orosz

Joel J. Orosz

Is the phrase “effective foundation management” an oxymoron?

It needn’t be, but there seven major challenges and seven dilemmas distinctive to foundations that hinder their effective management:

The challenges:

* Everyone working in foundations was trained to do other work, making it a challenge to promote professionalism.

* Foundation employees were recruited from various professional backgrounds, making it difficult to establish a common culture.

* Foundations have no external discipline, such as the market or the electorate, to improve their performance.

* No one is foolish enough to criticize people who can turn down grant requests, so program officers don’t get honest feedback.

* The foundation field lacks standards of practice, so excellence is difficult to define, much less achieve.

* Board members and staffers of foundation come from different worlds, leading to mutual unease.

* The staff breaks into camps of program, finance and administration, making cooperation difficult.

The dilemmas:

* Low overhead, which maximizes the grantmaking budget, vs. high overhead, which maximizes services provided to grantees.

* Strategic planning, which focuses resources for maximum impact, vs. flexibility, which frees resources to respond to opportunities and crises.

* Broad focus, which allows foundations to make considerable impacts over a wide range of issues, vs. deep focus, which allows foundations to make enormous impacts upon a much narrower range.

* Innovators, which concentrate on new and promising idea, vs. implementers, which concentrate on supporting programs that have already demonstrated significant value.

* Experts, for it is sensible to design programs based on the advice of those who have studied the problems, vs. community, for it is equally sensible to design programs based on the advice of people who have lived through the problems.

* High uncertainty, causing foundation leaders to dream of taking big risks to gain big impacts, vs. low uncertainty, causing foundation leaders also to dream of keeping their jobs by avoiding big risks.

* High profile, with every foundation CEO wanting favorable press, vs. low profile, with foundation CEOs also living in fear of negative publicity.

None of these challenges and dilemmas has easy solutions, but none are insurmountable.

During the past 14 decades, foundation leaders and scholars of their work have developed techniques to manage these problems.

There are now places where such techniques can be learned.  Foundations have the resources — and now just need the leadership — to make “effective foundation management” sound less like an oxymoron.


Joel J. Orosz, distinguished professor of philanthropic studies at the Dorothy A. Johnson Center for Philanthropy and Nonprofit Leadership of Grand Valley State University, where he founded The Grantmaking School. His latest book, Effective Foundation Management: 14 Challenges of Philanthropic Leadership — And How to Outfox Them, will be published in October by Altamira Press.

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