Chapter One

Making Sense of the Grantmaking Universe

All grantmaking is done in a context—in fact, in many contexts simultaneously. There is the financial context (How large is the asset base?), the social context (Is society kindly disposed toward foundations and the types of social change they promote?), and the historical context (What has the foundation accomplished in the past?). The most influential of them all, however, is the institutional context of the foundation itself. All foundations have a dominant ideology, and given the large number of foundations in the United States, these ideologies span the spectrum from the loony left to the rabid right. The ideology, in turn, does much to shape the foundation's “theory of change”: its beliefs about what type and intensity of intervention will best facilitate social movement toward the common good. The wide scope given to people to create private foundations in the United States virtually mandates that there will be nearly as many theories of change as there are foundations themselves.

Within this ideological welter, we can nonetheless discern that theories of change cluster around four main types. These types can be plotted as points along a single continuum. Because all the types begin with the letter P, this will hereafter be referred to as the 4-P continuum. As illustrated in Figure 1.1, the types are the passive, proactive, prescriptive, and peremptory. A brief description of each type will highlight the very real differences among them.

1.  Passive. The passive foundation essentially responds to unsolicited requests—in foundationese, requests that come in “over the transom.” The passive foundation may (but more often does not) publish an annual report listing some general guidelines for giving, but it does little or nothing more than that to generate proposals. It simply chooses for funding the best proposals in hand when the funding cycle comes to an end, and it usually does very little to share with others the lessons it is learning from programs it supports. Among those who could benefit from the lessons are applicants, other foundations, and policymakers. Among the lessons are what sorts of interventions are effective and ineffective, what are key leverage points for social change, and whether there are better ways to provide needed services. The motto of the passive foundation might be “We fund the best of those who find us.”

Figure 1.1. The 4-P Continuum.

2.  Proactive. The proactive foundation is more energetic in making its interests known, through annual reports, brochures, Web pages, and other means. It tends to have well-defined priorities, and sends its program officers out actively searching for good grantees. Still, it is quite open to considering unsolicited good ideas. Generally, proactive foundations make grants clustered around related subjects, and they sometimes actively network their grantees, thus maximizing the number of lessons that they can learn from them and also maximizing the benefits that those grantees can provide to society. Most proactive foundations also have an interest in sharing those lessons learned with others, such as fellow funders or members of Congress. The motto of the proactive foundation might be “We fund the best we can find.”

3.  Prescriptive. The prescriptive foundation clearly defines its interests. It expects its program officers to identify relatively narrow fields of activity and to concentrate their efforts in those fields. The prescriptive foundation tends to do its grantmaking in an initiative-based format—that is, through a strategically structured grants program based on applicants responding to a formal and well-defined request for proposals (RFP). The prescriptive foundation usually retains the capacity to respond to a few unsolicited requests, and it sometimes operates its own programs (that is, it manages charitable programs directly, with its own employees, rather than makes grants). No matter what its precise structure, however, the prescriptive foundation keeps its sights clearly focused on its defined interests. Its motto might be “We fund the best we can define.”

4.  Peremptory. The peremptory foundation is totally agendadriven. It chooses its grantees, sometimes by means of an RFP but often simply by selecting them without public notice or competition. Peremptory foundations often operate their own programs and rarely if ever accept unsolicited proposals. Some peremptory foundations create reports on their grantmaking, but others do minimal reporting or none at all so as to avoid creating a demand they have no intention of fulfilling. The motto of the peremptory foundation might be “We fund the best we can imagine, and no others need apply.”