Similarities between corporations and foundations

I recently received a report from Grantmakers for Effective Organizations (GEO) about current practices of philanthropic funders, which posed the question, “is grantmaking getting smarter?”  GEO is an organization that ultimately seeks to enable nonprofits to achieve better results.  The headline: getting better, but not there yet.   Two of the biggest opportunities: better lines of communication to get real feedback from nonprofit partners, and sharing what is learned from evaluation of programmatic work.  Neither of these are new issues for philanthropy.  So I can’t help but ask – what would it take to change the behavior of funding organizations?  It seems like a question that would benefit from a systems analysis.

I found myself reflecting on my experiences in corporate environments, compared to the world of private foundations, specifically with regard to data, feedback and learning.  The big difference that comes to mind right now relates to data and organizational structure.   In many corporations, including some non-profits such as health care, the organization has data it could use for tracking results and learning somewhere inside the organization itself.  The data may not be digital, it may not be structured, but it exists within the boundaries and could be accessed.  That is usually not true for foundations – the data most desired lives outside the boundaries of the organization.  This means that in order to learn and improve based on data, a foundation has to establish feedback mechanisms that reach outside its borders.  The people making decisions about where to invest funding are separated from those who are actually doing the work.

And yet this difference may be no difference at all.  In most corporations, even relatively small companies, there is a big divide between those who decide and those who do the work.  More often than not, there are no effective feedback mechanisms that help decision makers learn from the experience at the front line.  And in many cases, what is learned is not widely shared, internally or externally.

I believe that organizations of any size can achieve better results if the people doing the work on the front line are as much a part of using data to test hypotheses and learn about their day-to-day work and decisions, as the people who are making decisions focused on cross-organization work and strategy, maybe more so.   But I don’t think I have actually seen any analysis testing that.  So if you who are reading this are aware of any research related to this, please send it my way – I would love to read it.

In the meantime, I am going to think more about applying a systems lens to the recurring issues in philanthropy to identify potential change levers.

You can find the full report from GEO on their website here.

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2 Responses to Similarities between corporations and foundations

  1. Marlan Crosier says:

    My reaction to this post led me back to the questions you posed in your introductory post: how does one establish a learning organization, what does one look like, and so forth. It seems to me that Lean offers one answer to these questions. In other words, an organization in which the practice of Lean thinking and process is deeply embedded would, I believe, be one good example of a learning organization.

    Bringing this idea back to the context of this post, Lean both emphasizes addressing and offers solutions for the challenges of bridging the disconnect between decision makers and the reality of those who do the work and engaging those people on the front lines in applying learning from data to improve processes and results.

    What do you think? To what extent does Lean fit as learning system? It would be interesting to characterize Lean from a systems dynamics perspective.

    • Eleanor Bell says:

      Marlan, thank you for sharing your reflections. I completely agree that Lean is a learning system, and offers enormous potential to bridge the gap between decision makers and people on the front line. As you know, Lean can be implemented in many ways, and for the most value I think it needs to stay true to the principle of “respect for people”, along with “continuous improvement”, as described by Bob Emiliani in Real Lean.

      While I embrace Lean thinking and leadership myself, I am open to, and curious about, other learning systems that others have used successfully.
      – Eleanor

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