Foundation News —Chip Edelsberg

Foundation News
—Chip Edelsberg, Executive Director

February 2011

The Jim Joseph Foundation (JJF) has commenced its sixth year of operation. Numerous JJF-funded major grants are now several years into implementation. In many instances, grantees have had several independent evaluations conducted. Multiple data sets evidencing both strong outputs and successful outcome measures are beginning to emerge.

The evolution of the foundation’s philanthropy in the context of its first five years of operation leads us to think critically about both our approach to grant renewals and the challenging question of how to most effectively contribute to the organizational sustainability of JJF’s highest performing grantees.

JJF Directors have had several discussions on potential grant renewals. Provisionally, the foundation is using the following guidelines to frame its consideration of providing renewed support for those grantees which have achieved targeted goals of initiatives funded by JJF:

“Renewal funding” means additional funding awarded to support an initiative (major program or project) the foundation has funded previously and for which that particular grantee seeks to continue and/or to expand the work it is doing based on the initial JJF grant it received.

JJF professionals recommend that renewal funding for a grantee beyond the period of time for which the initial grant was awarded be based on:

Mission alignment—the priorities of the grantee have not changed and coincide in a direct and explicit way with the strategic priorities of the foundation

Performance—the grantee demonstrates, with good information and credible data, that progress is being made in achieving the goal(s) of the funded initiative

Organization well being—vetting of the grantee evidences that it is financially solvent, capably lead and managed, and responsibly governed

Sustainability—the grantee has a plan for moving toward sustainability of the funded initiative

History of partnership with JJF—both large and longer term grants create the possibility that JJF has more “at stake” with grantee success and, therefore, that renewed funding will protect the foundation’s significant investment in partnering with a grantee that is integral to the foundation achieving its Vision

Learning—proposals for renewed funding must build on the shared learning (between the grantee and foundation; among the grantee, foundation, and field of Jewish education) that grew out of the initial grant.

A much more complicated matter for a foundation that, like ours, has been in business only five years is whether JJF should contemplate awarding grants for sustainability purposes—be it programmatic or organizational. JJF’s professional team and Directors had our first full-fledged discussion on this topic at the foundation’s December 2010 Board meeting. We talked about many of JJF’s grantees within a framework for sustainability funding that I described as follows for the Directors:

The sustainability of any initiative in the Independent Sector cannot be accurately assessed without examining the long-term viability of the particular organization out of which the funded initiative operates. Unfortunately, such assessments are not easy to conduct and are rarely done. The field lacks quality information (and precious few case studies) on how to effectively fund a 501c3 to help it achieve sustainability. Moreover, the entire sector does its work in a fundamentally inefficient marketplace. Great performance is not necessarily rewarded; fundraising is extremely expensive; there is not equitable access to “staged capital support,” etc.

As much as I would like to offer a formula for JJF to use when gauging the sustainability of its funded grantees, it is simply not possible to do so. There is not even a commonly accepted definition of sustainability consistently used by funders. Nor do a set of widely accepted standards exist enabling funders to assess or predict the sustainability of a program or project.

For purposes of this discussion, I would recommend we consider at least two kinds of sustainability: program and organizational.

Program sustainability refers to an organization’s capacity to allocate sufficient financial resources to support a specific program on an ongoing basis and to demonstrate the ability to adjust the targeted program based on various amounts of program funding received during any given year.

Organizational sustainability denotes the extent to which an organization has consistently stable, diverse revenue streams such that it can pursue its Board approved strategic priorities with sufficient resources without compromising the quality of its work while also maintaining the organization’s fiscal integrity.

Ultimately, it is tempting but mistaken to approach sustainability as if a formula can be superimposed on every program and organization when sustainability is the pertinent question being addressed. We do know that funding to achieve sustainability typically provides grant support to these important, interrelated areas of not-for-profit work:

Management
Administration
Programming
Evaluation
Fiscal Operations and Accountability
Fundraising
Technology
Communications and Marketing
Staff Development
Board Development
Facilities Maintenance

Funders vying to help a particular organization achieve sustainability understand that funds can be used to either “buy” programs and/or services or, more appropriately when sustainability is the concern, to build the capacity of an organization to support itself over the long run. Funders who are serious about promoting sustainability of particular programs or individual organizations typically award funding to meet the business needs as well as the operating realities of its grantees.

Many Jewish not-for-profit organizations dedicated to Jewish education are flourishing. On balance, however, even the most successful of these are financially fragile-- in a sector of the economy that Ed Skloot asserts is hampered, “system –wide,” by “massive undercapitalization…due to widespread fragmentation of effort.” Positioning grantees to sustain high impact under any scenario is an expensive proposition.

What JJF ultimately determines to do funding for sustainability is an open question. From my perspective, I suspect that unless JJF can collaborate with other like-minded funders over extended periods of time in concentrated work with laser focused grantees, effective funding for sustainability will remain as elusive as it has always proven to be.

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