Project Management: The Possible and the Practical

It is possible, at least in theory, for project management in the foundation world to be a model of communication and cooperation. In this scenario, you would be in frequent touch with the project director, not necessarily on a weekly basis, but probably monthly. That communication would not be limited to the written word but would include occasional telephone discussions and at least one site visit during the life of the project. During the visit, you would meet not only with the leaders of the project but also with the top leadership of the institution of which the project is a part. If the project has an advisory board, you might sit on it, and could even help its members raise money in support of the project's activities. It is possible that you would be so engaged that you would not merely react to crises but rather anticipate problems and proactively move to resolve them before they became significant. You would strive to be helpful without being overbearing or dictatorial, and would seek to be engaged, alert, and accessible.

So much for what is theoretically possible. What is practical is usually a different matter. As any grantee who has ever directed a project will testify, program officers rarely, if ever, achieve—or sustain—this level of engagement in managing projects. There are a number of reasons for this, not all of which are under a grantmaker's control. In fact, blame for the leading cause of program officer inattention to management can be laid at the doorstep of America's favorite scapegoat: the U.S. Congress. It was not that Congress, in passing the Tax Reform Act of 1969, meant to crimp program officers' ability to manage funded projects, but the law of unintended consequences took over. As previously mentioned, the Act mandated a minimum payout requirement for private foundations, which has been adjusted a number of times and stands as of this writing at 5 percent of the foundation's net asset value. Failure to meet this yearly target triggers a penalty tax of 100 percent of the shortfall. Although some wiggle room is built into the regulations, the fact remains that the law imposes a “use it or lose it” imperative on private foundations. This is good in that it requires private foundations to fulfill their charitable purposes by making a substantial number of grants. The downside, however, is that a great deal of work is required to ensure that these funds are paid out responsibly. There is always pressure to “get the money out of the door” in a timely and effective way; there is no comparable pressure to provide proactive management for projects that are already funded. Harried program officers, therefore, are often tempted to defer the important but less urgent demands of grants management. One long-time applicant and grantee summed up the situation well in noting wryly, “We would all have been better off if Congress had mandated a 3 percent payout rule, along with a 2 percent grants management rule.”

Congress is deserving of a brickbat for this unintended outcome, but there is truly enough blame to go around. Some program officers are very much like entrepreneurs in the business sector. They enjoy the developmental aspect of their job far more than the managerial aspect. If given a choice between developing a promising new project or managing an existing project, they will follow their hearts and pay attention to the new opportunity. A business entrepreneur can use this approach at will, for he or she can sell off interest in an established concern and concentrate on new ventures. Grantmakers do not have that luxury; they are responsible for funded projects even as they are developing new ones. There is a happy balance to be struck between developing and managing, but the combination of the pressure to get money out of the door and the natural entrepreneurial tendencies of some program officers ensures that project management in foundations sometimes fails to achieve that balance.

Although many grantees bemoan this situation, it is fair to note that some find it very much to their liking. Far from missing the coaching, technical assistance, and general hand-holding that a program officer can provide to a project, these folks enjoy operating without close foundation oversight. There is nothing necessarily nefarious about this (although it is possible for bad eggs to exploit such a situation), for the vast majority of such grantees simply prefer to operate with several degrees of freedom. Sometimes, in fact, they deliver far more than promised in their proposal. Nonetheless, by studiously refusing to request program officer assistance, they tend to “aid and abet” any grantmaker who is not naturally inclined to practice attentive management.