The Performance Imperative and the Evolution of Relational Philanthropy

As I move through my eleventh and final year as executive director at the Jim Joseph Foundation, I find it helpful to reflect on key grantmaking principles that inform how I work with Foundation Board members and professionals to help to shape the Foundation’s philanthropy.

From the Foundation’s inception, Directors asked the professional team to collaborate with grantees and evaluation experts to carefully assess grants awarded. The Board believes the Foundation’s major grants (generally, awards of one million dollars or more over multiple years) should incorporate “right-sized” evaluation that produces valuable learning for the grantee, the Foundation, and the field of Jewish education.

Many developments and changes have occurred in Jewish education, the Jewish community at-large, and in the social profit sector as a whole during the past decade. In this blog, I want to focus on progress made in the sector regarding evaluation. In fact, the approach to evaluation that the Jim Joseph Foundation adopted in 2006 now is embedded within a grantmaking framework known as the Performance Imperative (PI).

In this regard, PI “ambassador”[i] Edward Skloot envisioned nearly a decade ago that, “the Foundations’ role needs to be re-imagined. Instead of funders, they become the information resources, brokers (and givers) of money and relationships, ongoing learners and listeners, and active promoters or success” (Beyond the Money, Reflections on Philanthropy, The Nonprofit Sector and Civic Life, 1999-2006, pg. 31).

The Performance Imperative features seven principles that represent the basis on which an organization can embark on this re-imagination and “deliver – over a prolonged period of time – meaningful, measurable, and financially sustainable results for the people or causes the organization is in existence to serve” (Leap of Reason, Performance Imperative). These principles – or pillars – are:

1. Courageous, adaptive, executive and board leadership (the preeminent pillar)
2. Disciplined, people-focused management
3. Well-designed and well-implemented programs and strategies
4. Financial health and sustainability
5. A culture that values learning
6. Internal monitoring for continuous improvement
7. External evaluation for mission effectiveness

At the Jim Joseph Foundation, due diligence and other interactions with prospective grantees that have been invited to submit grant proposals involve careful consideration of PI factors. While our review is not formally tied to PI pillars per se, the document reviews we conduct; conversations we have with prospective grantees; internal team meeting discussions about the grant seekers’ organizational health, executive and volunteer leadership, history of demonstrated results in programming; and the PI principles discussed previously are integral to this review. For an outcomes-oriented foundation like the Jim Joseph Foundation, the PI presents a platform for philanthropic accountability.

At the same time, we recognize that a 501c3 requires resources to ingrain PI principles into its operations and culture. Organizations that have annual budgets of less than $3 million likely will be hard-pressed to execute on all of the seven pillars. Funders need to be aware – acutely so, I would argue – of the capacity of grantees so as not to hold beneficiaries to unrealistic performance expectations. The Foundation itself needs to develop genuine appreciation for grantees’ organizational structure and finances; its leadership, staffing, and governance; its commitment to execute on strategic priorities of the organization; its project management; and its approaches to both monitoring and assessing its performance. In the same vein, understanding what grantees’ finances actually enable them to do creates the possibility that capacity building funding could be instrumental in positioning a grantee for future success.

At the Jim Joseph Foundation, many grantees benefit from major, multi-million, multi-year investments. It behooves the Foundation to develop trusting relationships with grantees based on conversation, disclosure, transparency, and shared commitment to understanding the extent to which the grantee is achieving what the Foundation’s partnership with it is designed to accomplish.

I have consistently found that acting on the PI pillars impels Jim Joseph Foundation grantmaking professionals to work in concert with grantee project personnel. As a Foundation staff, we grow more confident in our grant recommendations made to the Foundation Board of Directors when our relationship with new grant applicants and existing grantees (for grant renewals) is based on openness, integrity and a sense of joint Foundation–grantee responsibility.

I share this blog now—during a period of transition in the Foundation’s executive leadership and governance—because I have a responsibility as the Foundation’s departing Executive Director to describe the Foundation’s established grantmaking practice within the context of trends and emerging ideas in philanthropy. Certainly, as I look back over the past ten years, this surge in sector sophistication has been amply displayed in field leadership provided by the Center for Effective Philanthropy, Fiscal Management Associates (FMA), Grantmakers for Effective Organizations, The Foundation Center’s Grantcraft, The Non-profit Finance Fund, and others. Their efforts offer the Jim Joseph Foundation and funder colleagues frameworks and tools to both measure and to demonstrate philanthropic effectiveness.

Candidly, there is a special connection between this type of accountability and the Foundation’s founder, Jim Joseph, z’’l. It is of great comfort to me that in his real estate business Mr. Joseph concentrated not only on “location, location, location” but also on “results, results, results.” Mr. Joseph would expect that the Foundation bearing his name would nurture a Performance Imperative orientation among organizations providing Jewish education—particularly those that are beneficiaries of his exceptionally generous support. In this spirit, it is both eminently reasonable for stakeholders in Jewish education to ask “how are we doing?” and for funders and grantees to have a thoughtfully constructed basis on which to respond.

[i]A community of likeminded individuals from corporate, governmental, and social profit sectors have organized as “ambassadors” for the PI. Highlighting Mario Morino’s Leap of Reason: Managing to Outcomes in an Era of Scarcity, David E.K. Hunter’s Working Hard – and Working Well, and David Grant’s The Social Profit Handbook as seminal PI resources, ambassadors strive to engage all those who are stakeholders in improving the independent sector to critically consider the application of PI pillars to their work.