The Foundation has developed a set of criteria that it can refer to when deciding whether to enter new fields of grantmaking. These were set out in a paper on Creating, Changing, and Closing Areas of Grantmaking. We may find it useful, as well, to systematically assess MacArthur’s contribution to positive change in the areas of our grantmaking. Such assessments could aid in setting and revising priorities, and in allocating staff and financial resources among the range of interests represented by our grantmaking portfolio.

One way to think about such assessments would be to ask whether and how MacArthur’s financial contributions, expertise, and reputation are adding value in the fields we have chosen to enter. That is, are MacArthur funds fostering the changes in policy and practice that we set out to accomplish; or, on the other hand, have we reached diminishing programmatic returns on those grantmaking investments. The most critical question will be: When does staying the course to make further incremental change in one field cost us an opportunity to make substantial change in another or new field of activity? This can be a difficult question to answer and the following discussion is intended to help provide a framework for deliberations.

To assess MacArthur’s added value to a field, we propose five sets of questions that, taken together, form a framework for judging how much value our grantmaking adds to a field of policy, research, or practice. This framework is by no means the only way to think about the value we add to the fields that we work in, but it provides a useful heuristic device for analysis and discussion of MacArthur’s program and area activities. We recognize that making decisions about individual awards is relatively easy; it is more difficult to make a difference in a field or on a set of issues.

At the outset we acknowledge a tension, and even tradeoffs, between starting up new initiatives on the one hand, and staying the course in existing areas, on the other. In the end, our ability to make a difference may require a balance in the portfolio of grants among forward-looking, leading edge projects, and sustained support for organizations that we view as central to any long-term solutions to the problems we are addressing.

The sets of questions center on five related themes:

  1. innovation/creativity;
  2. issue visibility;
  3. timing/momentum for change;
  4. foundation leadership; and,
  5. synergy among areas of grantmaking.

1. Innovation/creativity. Is MacArthur still on the leading edge in an area? Are grant recipients breaking new conceptual ground? Is the Foundation continuing to identify and fund the most creative people and projects aligned with our goals?

Foundations can often stimulate innovation in policy, research, and practice. Their flexibility and freedom to act, without regard for financial return or political support, allows them to be more experimental than other kinds of institutions. In fact, foundations are often rewarded for moving on from successful projects and for achieving sustainable reforms in particular fields. Though we sometimes hear about the problems associated with foundation “fads,” moving from one area to another is one aspect of foundation independence that is unusual among social institutions and may well be worth preserving.

The relatively modest resources at their command also argue for an emphasis on seeking the creative leverage point in a field, rather than, for example, providing services to a broad public. Setting an agenda—by supporting those who are posing new questions and reframing issues rather than implementing a consensus—is more often a foundation’s comparative advantage. Indeed, some observe that foundations are often most useful in the formative stages of addressing social needs or in reformulating a public agenda. Because of their independence and flexibility, funding can be swiftly moved to try out new ideas and new programs. The “slack” that such independence affords can encourage and reward creative solutions, a resource not often available in public bureaucracies or in private business. Not all projects will succeed; but failures are not punished as severely as they are in other sectors, and foundations are in a position to learn from those failures. Indeed, giving more attention to the analysis of failures would increase our understanding of the drivers of policy change, and could contribute to more effective grantmaking in the long-run.

In philanthropy, especially among those private foundations that seek to foster innovation, staying in a field for a long time, while continuing to pursue unchanging priorities, may be a sign that inertia has set in. In that case, a foundation may not be taking advantage of its freedom to stimulate fresh insight and inspire new solutions. More often than we may wish, foundations may be too cautious, avoiding risk-taking and experimentation. In some cases, where they stay too long in a field, continue to fund projects in the same way on the same issues, or continue to employ the same strategy even where evidence of success is thin, foundations may have been “captured” by a constituency, lack creativity and innovation themselves, or are unable to leverage other funders to sustain activities that they had earlier initiated. Yet foundations, like other social institutions, may yield to these inertial pressures and avoid risky ventures.

If funding flexibility is compromised by remaining in a grantmaking field despite diminishing returns, then the role of foundations as innovators and contributors to creativity may be compromised as well. Given the opportunity for flexibility and creativity, the question of how long to remain in a field, or how long to pursue a given strategy in a field, is one that we want to return to often.

In some areas, however, because of the nature of the issues, or the strategies employed, it is unlikely that funding will come from government or from the private sector to help sustain programs that MacArthur initiates; in such areas, we may need to remain for the long-term. We would provide sustained support to strengthen institutions and ensure that our investments in organizations and leaders are not lost. Where this is the case, the Foundation would take care to provide adequate funding to protect those investments before taking on new issues in fields where we have little experience; we are not interested in chasing new philanthropic fads. In fields such as human rights, or international peace and security, for example, strategies rely on monitoring government and private sector actions. To accept funding from organizations and institutions that are being monitored, and sometimes criticized, might compromise the freedom of nonprofit and nongovernmental organizations to act independently. In these areas, we may determine that grantmaking should continue for the indefinite future.

This commitment to areas of grantmaking that may require long-term grantmaking from the Foundation does not exempt these program areas, however, from application of the framework outlined here. Nor does it exempt these areas from scrutiny, evaluation, and redefinition at regular intervals. In fact, we would expect such reviews to foster new thinking in areas of sustained grantmaking to ensure that the Foundation continues to add value even where it will continue funding for some years. We want to be reasonably sure that the changes the Foundation helped to initiate will continue after our departure. In some cases, other institutions—governments, international organizations, universities, other foundations, or business firms—will have incorporated the innovations we helped to bring about so that our funding may no longer be adding substantial value. On the other hand, where this is not the case, we may well decide to remain in the field, continuing to sustain organizations to carry on essential activities. Many organizations in civil society, in the independent sector, require just such funding. For example, some require philanthropic grants to continue work in communities that seem habitually neglected by both government and markets, and other organizations need to maintain their independence as they hold governments and firms accountable to commonly accepted standards of ethical action.

2. Issue Visibility. Are we continuing to bring visibility to the issues in a field through our grants, our communications strategy, and/or our convening power? A major element of setting the public agenda is funding organizations that can raise the visibility of issues in our grantmaking areas, and move them higher on the public agenda. Of course, just by announcing its intentions to make grants in an area, a foundation can have significant influence. By communicating its own priorities, based on wide consultation, it can draw attention to a neglected field or understudied area. Beyond that initial entry into a field, however, the foundation will wish to continue to keep the spotlight on issues until changes are made that solve the social problem that has been identified, or until additional significant resources have been mobilized to address the problem.

If the area we have chosen to focus on, or the strategy we are pursuing, does not engage key leaders and relevant organizations among practitioners, in policy circles, or in the media, then we may need to step back to assess the foundation’s strategy. We will want to understand the reasons for continued lack of visibility, or “traction.” For example, the number or the reputations of foundation-supported organizations may be too low to engender enthusiasm. Entrepreneurial leadership may be wanting, or there may be too many other areas crowding the policy agenda.

On the other hand, a set of problems may be very visible, and the Foundation may choose to continue funding in the area because we can add value beyond simply raising the salience of the issues in the field. Such value may be added by supporting analysis that will shape the direction of policy change or practice, or by convening parties who have different views of desirable solutions. While raising the level of attention to a field is usually a key to success, our job may not be finished even when policymakers begin to focus. For example, the issue area of nuclear weapons proliferation is now squarely on the U.S. national security policy agenda, yet the Foundation is still seeking to contribute to creative public discussion and policy solutions. We are funding technical experts and regional specialists to provide deeper understanding of the local or regional security threats that might propel nuclear weapons development, as well as to monitor efforts to secure and safeguard dangerous technologies and fissile material.

3. Timing/momentum for change. The timing of foundation-supported actions may be critical in bringing attention to societal problems and to fostering innovation. While we may not always be lucky enough to enter a field when an issue is “ripe” for change, we will look for potential for change, as we consider whether or not to enter an area of grantmaking. Depending on the particular issues in an area and the Foundation’s goals, we may want to develop strategies geared to different time horizons. Short-term (one to two years) success may be likely on a particular issue in an area, medium-term of three to five years on other problems, and on yet others, long-term investments and expectations for success in a ten-year time period may make more sense.

Other questions might include: Are there a sufficient number of policy entrepreneurs to inspire action in a desirable direction? Are policymakers open to alternative ideas and able to receive information and analysis, and can they act on policy recommendations? Is public attention high enough to provide incentives for action? Are practitioners applying new methodologies to address old problems (e.g., treating teenagers differently from adults in the justice system)?

On the other hand, is the area we are addressing well past the “tipping point” at which a foundation might hope to make the most critical contribution? Are policymakers exhausted by the debate in a field? Have constituencies moved on to other problems? Is the public “fatigued” by the intractable nature of the problems, or the lack of perceived change for the better after years of attention? Are younger people and emerging leaders focusing on other fields or areas of practice? Are nongovernmental organizations in the area losing membership and funding?

Or, we may conclude that the scale of change we are contemplating requires long-term investments. When MacArthur decided to contribute to the transition in the region of the former Soviet Union, after its break-up, we understood that we would be engaged for the long-term. Establishing an office in Moscow was a sign of MacArthur’s intentions to engender and contribute to reforms in scientific institutions and intellectual life in the region. We understood that the enormity and complexity of the transition would require at least a generation to achieve, and our contribution might well extend beyond ten years.

In yet other cases, we may find that the conditions that were in place when we entered a field—demographic, economic, social, political, for example—have changed dramatically, so much in some cases, that our intervention is swamped by current trends and forces. We may determine that continuing to make grants in such a field will have little or no effect. These are some of the questions to ask as we examine the possibility that the issue domain, or field, we are working in may no longer offer the opportunities for change that we observed initially.

4. Foundation leadership. One of the positive indications for entering a grantmaking field was our judgment that MacArthur might play a leading and distinctive role. While we wish to guard against being the only source of private funding in a field, we also believe that MacArthur’s reputation, its staff resources, and financial means equip it to provide leadership in the grantmaking areas it chooses to enter.

In assessing whether we are continuing to make a contribution, and beyond that, whether we are adding value in a field, we will want to ask whether MacArthur still maintains a leadership position in the area? Do we still enjoy the comparative advantage that we observed as we entered a field? Have other donors taken up the issue so that our funding is now only marginally useful? In some cases, we may have been able to persuade a large number of new donors to provide support, so that the marginal utility of our contribution has diminished over time. On the other hand, are we continuing to leverage substantial funds from other private donors?

A second set of questions might be: have we passed the point where private philanthropy can add greatest value? Or is the long-term implementation of a solution better taken up by government resources or private enterprise? We may see that government agencies are now providing major sources of support in the direction of change that we sought. Or private market resources are being attracted to the area as we intended, say for example, in providing affordable housing. In these cases, MacArthur funds may no longer be necessary to spur the changes needed; others have entered the area and have begun to fill the need.

When the foundation enters a field, it has decided that the issues or problems that we choose to address are at a point where relatively modest contributions can help influence the direction of change. We also are aware of our role as one among many institutions and sources of funding. To stimulate lasting change, our grantmaking efforts will usually be intended to harness resources—financial, organizational and intellectual—of other, often larger institutions. We seek to be the “hook in the elephant’s ear”—exerting pressure at a sensitive point to shift directions or accelerate desired change.

As we assess our effort relative to the change we sought to bring about, we will also wish to know whether the Foundation is still stimulating change beyond what it might be accomplishing with the single projects it is supporting? Does the sum of our investment seem to be bringing about more substantial change, through a ripple or demonstration effect, than we might have expected absent our funding? Are there positive unintended consequences that we might follow up on? On the other hand, are there unintended negative consequences that might lead us to rethink our strategy and even our presence in a field?

5. Synergy. One of the advantages of a general purpose foundation like MacArthur is that board members and officers with interests in specialized areas of grantmaking can begin to learn from one another, and out of that learning, think in new ways about the areas of grantmaking for which they are responsible. So for example, grantmaking on human rights informed the development of new ideas about human security, and a focus on population and environment led the foundation to initiate a research competition on issues at the intersection of population, consumption, and the environment.

While the discussion so far has emphasized changes outside of the Foundation—in the policy domains in which we are working—we should also consider the experiential and intellectual returns to Foundation staff and board in assessing the value added by continuing to make grants in that area. Have lessons learned from our activities in a field been integrated into the Foundation’s general knowledge? Have staff been able to take advantage of working together with others in the Foundation to develop broader perspectives about their own grantmaking responsibilities? Are there ways in which grantmaking in one area links to others? And finally, has experience and knowledge from one field of grantmaking informed other areas so as to take advantage of MacArthur as a general purpose foundation? We are also in an advantaged position when we decide to take up cross-cutting themes that draw on the existing grantmaking areas. For example, taking up migration issues can draw on knowledge from grantmaking on human rights, population, and urban economic development. In reviewing fields that the Foundation may enter, we will be interested in whether there are continuing possibilities for synergies between and among areas. And while the internal learning that takes place across programs and areas is valuable in developing innovative strategies, our larger aim, as always, is to reflect those lessons in our grantmaking in a way that encourages similar synergies among leaders and organizations that we are supporting.

In general, the Foundation seeks to achieve a balance between more venturesome program initiatives where there may be a lower probability of success, and ones that are assured to accomplish our objectives. Likewise, we seek a balance between support for innovative, ground-breaking activities, on the one hand, and sustained attention to well-established organizations in fields where MacArthur has built a reputation. In some areas, we may be the clear leaders in a field, in others we may wish to be one among many, as additional donors take up leadership in one of our chosen fields. We are interested, in the end, in a balanced portfolio approach to our giving and convening. Ongoing assessment of program areas will help to ensure that balance.

With this idea of balance in mind, it may be useful, once a year, for the Foundation to devote a session to a review and discussion of all of the program areas, including the President’s critical reflection on the value added by MacArthur in each of the Foundation’s grantmaking portfolios. Reviews would be organized around the five themes discussed here, providing assessments of MacArthur’s contribution in each area to: innovation/creativity; issue visibility; momentum for change; leadership; and, synergy within the Foundation. Taken together, such reviews would identify tensions and trade-offs between staying the course in an area, on the one hand, and initiating new activity in another. A periodic review would also provide a quick assessment of the overall balance in MacArthur’s grantmaking portfolio, afford a designated time for discussion about changes in the mix of old and new program initiatives, and provide assurance that we are adding sufficient value in our chosen fields of grantmaking.