The Five Steps in Setting Priorities

Step one: Identify a niche. In some cases, a foundation's area or areas of interest are determined by the will of the donor, and there is no need to consider any other area of work. In the case of the donor giving the foundation wide leeway (as did Carnegie and Rockefeller), the first step the foundation must take is to identify areas that need work or possible niches where the foundation could make a difference. Are there places where a little extra effort might achieve a breakthrough? Areas of promise that have been ignored by others? Preliminary work that could lead to greater things later on?

Step two: Review the literature. Once a possible niche has been identified, the foundation will need to learn what is already known about that subject, and the best place to start is with a literature review. If the foundation wishes to support research on a cure for a certain disease, for example, what research has already been done? There can be no point in demonstrating yet again something that has already repeatedly been demonstrated and verified.

Step three: Scan the field. If the literature search suggests that valuable lessons could be learned by grantmaking within a certain niche, the next step is to discover what other foundations and corporate giving programs have been doing on this subject. Other funders are probably working on this subject, or related subjects, already. They may be willing to share the lessons they have learned. The best way to learn about what other funders are doing is to consult the Foundation Center library, which is the premier source of information about grantmaking. The data supplied by the Foundation Center will give a baseline of information about the state of opportunity within the contemplated niche.

Step four: Consult those most affected. To continue with the example of research on a disease, the foundation would wish to consult university-based researchers, practicing physicians, researchers seeking cures in pharmaceutical companies, and those working on the problem from other perspectives (that is, other medicocultural traditions, alternative medicine). Besides these professional viewpoints, the foundation should also solicit the opinions of those having the disease and their primary caregivers, families, and support groups.

These opinions can be sought rather formally, through carefully designed stakeholder studies, which seek to compare responses made to a common survey instrument. It can be done less formally, through the use of polling techniques. And it can be done in a more face-to-face mode, with focus groups, advisory panels, or community-based meetings. Each of the methods presents tradeoffs. Generally speaking, the more formal the approach, the more objective the data; the more informal the approach, the more subjective the data. The more formal the setting, however, the greater the chance that respondents will not answer with complete candor; they may even become downright intimidated. Formally gleaned data, therefore, may be consistent and replicable yet still be unsound.

This phenomenon deserves a little more explanation. Any time a foundation reaches out to others for advice on priority setting, one thing is certain: distribution of a lot of money is riding on the outcome. To ensure that the cash starts to flow, many—perhaps most—respondents are likely to feel pressure to say what he or she thinks the foundation wants to hear.

The rationalization goes something like this: “I'd like to tell the foundation the whole truth, but if they hear how bad things are, they probably will not start this work at all. So I will tell them just enough to get them interested. After all, it is better to get half a loaf than no loaf at all.” Therefore it is incumbent on any foundation engaged in consulting others to constantly reassure the people whom they are asking for advice that they want a “warts and all” picture, not just happy talk. The difference in the power dynamic will always be there. Foundations will always have the money, and people outside will always need it, but foundations can, and must, do everything in their power to reduce the gaps that impede honest communication when they are consulting with others.

At no time does this power differential loom larger than when the foundation is getting input from disenfranchised people. A phalanx of Ph.D.'s in suits is not likely to put anyone at ease, particularly not in the austerely formal settings that characterize many foundation headquarters. It thus makes sense to go to the community when asking its residents their views. Informal meetings, held on familiar turf, go a long way toward reducing the intimidation factor.

Another key ingredient is simple respect. If community residents are treated with any less dignity and credibility than university experts, the foundation can forget any hope of receiving honest input. These are not occasions to quibble with advisers or, worse yet, to lecture them on conditions in their own backyards. This is not to say that you cannot disagree with residents on legitimate issues. There must be an open dialogue for the process to work. But the dialogue should be kept strictly within the bounds of respectful and actively attentive discussion. The minute a community delegation realizes that it is being disrespected, all is lost.

Given the obvious importance of getting input from those most affected, you might wonder why this is the fourth step rather than the first. The reason is simply that any such indication of interest on the part of a foundation will raise hopes and expectations of assistance within a community. It is preferable, therefore, to wait until later in the priority-setting process, when a foundation is more certain of its interest in a prospective niche, to seek a community's input. No good can come from raising expectations frivolously.

Step five: Make some learning grants. Once the prospective niche is identified, the literature is reviewed, the field is scanned, and those most affected are consulted, the foundation may begin to finalize its priorities. Each foundation will have a different process for doing so, with varying degrees of involvement—and autonomy—for the program officer. A fully formed set of priorities can emerge from the process at this point; there is, however, one other tool in priority setting that is often overlooked: the act of grantmaking itself. It is possible, indeed desirable, to have the fifth and final step in setting priorities consist of making exploratory or learning grants. Such grants are usually modest in size, short-term, and carefully evaluated. The lessons that emerge from them provide a real-world test of the priority-setting process and allow the foundation to make needed adjustments before launching full-blown programs of grantmaking.