Foundations: The Role of the Program Officer

The character of work in foundations is anomalous, truly a vocation like no other. When you become a foundation program officer, you discover that you have entered a truly distinctive trade. What other calling, for example, cannot agree on a name by which to refer to itself? A kiss is just a kiss, but you may be called a philanthropist, a funder, a grantmaker, a changemaker, a philanthroper (even a philanthropoid!), and, more recently, a social investor or social venture capitalist. Weighty objections can be arrayed against each term: philanthropist properly describes the foundation's donor, not its employee; funder is too generic, for it could describe any entity, human or corporate, that donates money; grantmaker is rather reductionist regarding your responsibilities, which involve more than just making grants; changemaker, is at once pompous and misleading, implying delusions of grandeur on the one hand, or the post of cashier on the other; philanthroper and philanthropoid share the disadvantage of evoking visions of aliens with which Captains Kirk or Picard might do battle in the starship Enterprise; social investor and social venture capitalist are more common terms among corporations than among foundations. For purposes of this book, its shortcomings notwithstanding, grantmaker is the term of choice. Although the word does not explain the full range of your responsibilities as a program officer, it does at least convey a sense of your core work. Moreover, it has the advantage of not sounding too jargonish or grandiose. Perfect it is not, but it will do until a better term is invented.

Another anomaly that distinguishes grantmaking is the fact that there is really no good way to prepare for a career as a program officer. Every doctor, it is safe to say, has graduated from a medical school; every program officer, it is equally safe to say, did not take pre-philanthropy courses as an undergraduate. If one were to conduct a survey of educational backgrounds at any sizable conclave of grantmakers, one would discover a range spanning astronomy to zoology. Nor is there any uniformity of prior career experience; whereas many program officers come from posts in the nonprofit sector, others come from backgrounds in the world of business or government service. Just about the only safe generalization to make about the education and experiential background of any program officer is that it prepared him or her to do something else entirely.

Whether this fact is good or bad depends largely on one's point of view. Every lawyer must pass the bar exam to demonstrate a minimal level of proficiency prior to entering practice. There being no comparable philanthropy exam, it is true that some unqualified people become program officers. A strong counterargument can be made, however, that the riotous diversity of backgrounds in philanthropy brings a strength—a sort of hybrid vigor—to grantmaking that monolithic training leeches out of the formal professions. The sheer variety of education and life experience encourages a greater breadth of ideas and approaches, and it is no doubt useful for program officers to have real-world experience in the fields in which they will be making grants. Nonetheless, in a world dominated by the credentialed professions, grantmaking stands out as one of the last bastions of the (one hopes) enlightened generalist.

Perhaps the greatest peculiarity of grantmaking lies in its distinctive relationship to the bottom line. In virtually every other type of organization, operating funds must be either earned or raised before anything else can be achieved. This is true even of community foundations, which must raise sufficient funds every year to maintain their tax status as public charities. Not so for private foundations, however, which need only cash the checks generated by their endowments to satisfy their own financial requirements.

Actually, private foundations do have a bottom line of their own, albeit an inverted one: they must spend money to make their numbers come out right. Thanks to the regulations instituted by the Tax Reform Act of 1969, foundations must spend a minimum of 5 percent of their net asset value in any given year, or suffer a 100 percent penalty tax on the shortfall. As in most law and regulation, there is some wiggle room (foundations are allowed to carry forward a certain percentage of the requirements from year to year), but the fact remains that there is a yearly minimum that foundations must pay out. As the rest of the world industriously goes about the business of amassing money, private foundations must with equal industry spend it. Small wonder, indeed, that newcomers to the field sometimes secretly wonder if they have wandered through the looking glass.

The savor of Wonderland can also be interpreted in a positive light. Foundations, without the limiting factors of the need to attend to a bottom line, raise a budget, or face an electorate, have a greater degree of freedom to act than do any other institutions in society. This freedom is hardly absolute—it is limited by regulatory bodies, the performance of financial markets, and concern about public opinion—but it is still considerable. For anyone interested in making social change to serve the common good, there can be no better platform.

Grantmaking is clearly a singular enterprise, but what is it: a calling or a profession? A calling might be defined as a job that one is inspired to do, whether by intellectual curiosity or by spiritual enthusiasm. It can be done in many different ways by many different people. Its hallmarks are openness and experimentation. A profession, in contrast, has an esoteric body of knowledge that can be practiced only by a highly trained and rigorously selected group of people. It has a defined set of accepted practices, and experimentation around these practices must be within limited boundaries. Its hallmarks are exclusivity and set standards.

Those who see grantmaking as a calling cite the virtues of flexibility to make their case. The variety of educational preparations and life experiences grantmakers bring to their calling matches the complexity of the problems with which they grapple. A rigid set of standards would never be able to cope with the variegated and ever-changing problems permeating modern society. Professions tend to rely primarily on the cognitive in their approach, leaving little room for the spirit in dealing with the problems of people. Finally, advocates of the “calling” interpretation say that grantmakers should never spend an entire career making grants. They should begin in other fields, get real-world experience, become grantmakers for a few years, then leave so as to avoid falling into complacency or, worse, arrogance and unresponsiveness.

Those who feel grantmaking should be a profession argue that grantmaking has been, in too many institutions, the “original amateur hour.” People unprepared by either education or life experience to make grants are thrown into the fray without a universally accepted set of standards by which to navigate. The result is performance that is all over the map—from exemplary to abysmal. How can grantmakers demonstrate success and be accountable unless they first develop adequate preparation, self-regulation, and agreed-on methods?

This book will take a middle view, holding that grantmaking should have more standards than a calling but more fluidity than a profession. Grantmakers must be open and experimental, to avoid rigidity, but they also need recognized standards, to avoid arbitrary and capricious behavior. Perhaps the best way to put it is that grantmaking must be a hybrid—a “calling with a canon”—in order to be most effective and socially useful.

What are we to make, then, of this distinctive field, which has no name, no single means of preparation, no entrance exam, no direct bottom line, and no mortal fear of risk? The cynic might say it is amateurish, unaccountable, and arbitrary. The booster might say it is flexible, responsible, and gutsy. Perhaps a balanced view might apply to the philanthropic realm Winston Churchill's judgment of free enterprise in the economic sphere: “It is the worst system ever devised—except for all of the others.”