Establishing Strategic Grantmaking Priorities (Foundation Building Best Practice Study Excerpt)

The following section addresses the issue of establishing strategic priorities for grantmaking programs. It looks at how foundations have selected issues and geographic focus in order to achieve impact. It also explores the issue of how foundations adjust their programs in response to new needs and opportunities.

Example 1: Leveraging New Innovative Approaches
Children and Youth Foundation of the Philippines
Example 2: Rethinking Grantmaking Priorities
Equal Opportunity Foundation (South Africa)
Example 3: Broadening Priorities in Response to New Opportunities and Resources
Foundation for Higher Education (Colombia)

Identifying Thematic and Geographic Priorities for Grantmaking Programs

Summary Points

Needs assessment can assist foundations in determining grantmaking priorities. Foundations derive valuable information to guide their grantmaking program from systematic needs assessments. These enable them to identify all the relevant organizations active in a given sector, such as women's rights, the strengths and weaknesses of their respective programs and gaps in the provision of services. They also help the foundations identify ways in which they can best support the work of those organizations.
Foundations need to establish a clear program focus by theme and/or geography. To avoid dispersing their resources and energies too widely, foundations seek a clear focus for their work. Options are to select grantees by theme/target group and/or location. In the case of CYFP in the Philippines, grantees were selected by theme and by region, with a focus on children and youth in need in the least served and poorest regions of the country. Later the thematic focus was further narrowed to concentrate on issues such as the prevention of child abuse and exploitation.
Program priorities may change in response to new opportunities and resources. The FES case describes an evolution in program scope from a narrow thematic and geographic focus (support for higher education in one city) to one that seeks to impact on selected areas of social policy at the national level. In the process of expanding the program FES identified the need to strengthen existing nonprofit organizations delivering services and so designed a specific program component to deliver financial and technical support to that sector. Program expansion was made possible by the foundation's success in generating additional resources.
Program focus may change in reaction to macro-political transformation. Where major changes occur in the national political environment such as from a non-democratic to a democratic government, the foundation may wish to re-examine its program focus. The EOF reviewed its grant program priorities following the installation of a democratic government in South Africa. This political change ushered in changes in government funding priorities and a shift in foreign donor preferences. Reacting to these changes and a review of current needs in areas addressed by current programs the EOF Board decided on new program priorities in under-funded fields such as early childhood education.

How does a foundation determine the precise nature and scope of its grantmaking program? The mission provides the overall framework for what the foundation aims to achieve. The Board, with the support of staff then determines how the foundation will fulfill its mission with the resources available or that it will raise. Sometimes this is achieved through a strategic planning process involving various combinations of Board, staff, and external consultants. In cases where the foundation is involved in convening events, these may serve as a means of identifying needs and challenges not currently being addressed.

Some Steps in Determining Strategic Priorities

The following were some steps taken by foundations in this chapter to determine their strategic priorities.

Defining the Foundation's Policy
Board and staff, make a variety of decisions that define policy and give shape to the grantmaking program. Two of the key policy decisions made by foundations in this section were:

Whether and to what extent the foundation will operate its own programs and how these will complement its grantmaking function
What is the philosophy and methodology behind the foundation's grantmaking effort

Needs Assessment
Conducting a needs assessment can help the foundation decide on its strategic priority issues. The foundations in this section have found that a strategy with a focus on tackling specific issues is more likely to have a measurable impact than one addressing too wide a range of problems. A needs assessment can help determine whether or not the grant program will target specific communities such as women, children, youth, indigenous people, ethnic minorities or victims of human rights abuse. The assessment can also help determine the geographic areas where the greatest needs and opportunities may lie. It may also examine how existing organizations (government and non-government) address these needs and what measures could be taken to increase their effectiveness. Finally it may attempt to survey future areas of need and gaps in existing service provision.

Continuous Reappraisal of Program Priorities
For most of the foundations in this section, evaluating their programs and progress is a normal and important part of their work. These evaluations can show weaknesses and strengths that will, at times, suggest new priorities for the foundation. Where major changes in the political landscape occur such as the inauguration of the democratic government in South Africa, foundations may take a fresh look at their program priorities. Such was the case of the Equal Opportunity Foundation (EOF) in South Africa that decided to change its program priorities in the light of changes in the funding situation for the nonprofit sector that followed political changes. Other foundations find that dramatic increases in their available funds present them with opportunities to expand the geographical and thematic scope of their grantmaking programs. Such is the case of the Foundation for Higher Education (FES) in Colombia.