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Trust seen as critical in philanthropy

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Julia Vail

DURHAM, N.C. — Most nonprofits agree they need to evaluate programs carefully to make sure they deliver on their promises.

But what happens when nonprofit goals are broad and not so easy to quantify, such as promoting the arts, abolishing racism or instilling a love of reading in children?

“Some of the things that matter most will not be easy to measure,” Don Randel, president of the Andrew W. Mellon Foundation, said Nov. 3 at a seminar at the Terry Sanford Institute of Public Policy at Duke University in Durham, N.C.

The foundation, which gives about $300 million in grants annually in areas such as higher education and performing arts, often has to evaluate programs based on little or no hard evidence of their success, Randel said.

But it’s possible to work around that, he said.

For one thing, measurement is not always the best method.

“Very smart people using the best tools imaginable often find problems that don’t exist,” he said.

That’s why going on trust and instinct is often the best policy when dealing with less measurable goals, he said.

“When they pass the collection plate at your church, you don’t ask where your money is going,” Randel said. “You support the organization because you think it’s inherently worth supporting.”

Many foundations and funders are wary of that approach because it takes away their ability to garner admiration by pointing to a specific accomplishment, he said.

“Philanthropists need to have room in their souls to do things that may not make good newspaper copy,” he said, “but will be deeply important to individuals.”

Much of the problem stems from what Randel called America’s “short attention span.”

“If you can’t demonstrate quarterly returns,” he said, “they take you out and shoot you.”

By pursuing immediate results, foundations make it nearly impossible to seek long-term answers to social problems.

This short-term view is part of the reason the proposal by Republican U.S. Sen. Charles Grassley of Iowa to mandate a 5 percent payout from university endowments is ill-advised, said Randel, former president of the University of Chicago.

If universities do not have the discretion to spend funds where they see fit, he said, they could be particularly hard-hit during economic downturns.

“If universities didn’t keep funds,” he said, “they would have to cut and add scholarships as the market changes.”

Even foundations could improve their effectiveness by operating more like university endowments, he said.

“Many foundations who were obliged to pay 5 percent during good times weren’t putting anything back in the piggy bank,” Randel said. “Now they’re having to reduce their budgets.”

And the same faith invested in foundations should be applied to universities, Randel said.

“You have to decide how much control institutions will have over these funds,” he said, “and then let them have it.”

Though the Mellon Foundation tends to focus on programs that don’t easily produce measurable results, Randel said he does not worry that the funder isn’t making a difference.

“I believe it’s a wonderful thing for people to hear Beethoven’s symphonies,” he said. “As long as organizations keep giving good concerts, we’ve been successful.”

Instead of demanding pie charts and bar graphs, foundations should listen carefully to nonprofit goals and support programs that resonate with their ideals.

“Stick to what you believe in,” Randel said, “and don’t apologize for it.”

In the end, grantmaking organizations and bookies should operate in much the same way, he quipped.

“You go to the track, say ‘That’s a good-looking one,’ and wait for the magic to happen,” he said.

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