Chronicle of Philanthropy

Hewlett Foundation Should Be More Open About Shuttered Program

Senior Fellow Emeritus

When the William and Flora Hewlett Foundation recently canceled what The Chronicle called an “eight-year, $12-million effort to get donors to rely as much on their heads as their hearts,” I suggested that this represented a “significant setback” for the cause of effective philanthropy.

The foundation’s new president, Larry Kramer, rejected that characterization, insisting instead that the foundation was simply following the metrics-based approach.

When evaluations showed that the Nonprofit Marketplace Initiative, started in 2006, was not going to meet its goal of persuading “10 percent of individual donors to be more evidence-based in their giving,” Mr. Kramer noted, the foundation abided by its own advice about using evidence to guide grant decisions and ended the program.

In spite of the risk of being “misrepresented or misunderstood,” Mr. Kramer vowed that the foundation would continue to be “open and transparent” about results—as if it were somehow unusual and laudable for a visible and significant public institution to endure commentary not simply parroting the official press release.

But the history of the Nonprofit Marketplace Initiative suggests that scientific evaluation may have been less important in its cancellation than the foundation’s transition to a new president, who simply has interests different from his predecessor’s.

A genuinely “open and transparent” foundation would have admitted as much, rather than trying to persuade us that it was resolutely abiding by the demand for measureable outcomes.

The Nonprofit Marketplace Initiative grew out of former Hewlett president Paul Brest’s enthusiasm for strategic philanthropy, with its “theories of change” and “logic models” seeking to trace a program’s path from inputs to measureable outcomes.

Other major American foundations have been similarly enthusiastic, in theory if not consistently in practice. But it was clear that strategic philanthropy couldn’t claim success until it had begun to influence the 70 percent of giving in America done by individuals, rather than philanthropies.

As fundraisers have long understood, however, individual donors are moved more by the heart than the head. They tend not to support groups boasting measureable outcomes but rather those that have helped them personally, that their friends have recommended, that have a good reputation in their own community, or that reflect their faith.

“Money for Good,” a report published in 2010 by Hope Consulting, underlined the obstacles facing Hewlett’s effort to bring strategic philanthropy to the masses. It reported that only 3 percent of donors gave “based on relative performance” of nonprofits and that “changing this behavior will be difficult given donors’ varied motivations for giving, their loyalty to the nonprofits to which they give, and the fact that they believe that nonprofits perform well.”

None of this deterred Paul Brest, who believed “high-risk, high-reward” grant making to be essential to effective strategic philanthropy. The findings in “Money for Good” may have clarified the challenges facing the Nonprofit Marketplace Initiative, but coherent, long-term “theories of change,” backed by enough dollars, might alter even the most entrenched and foolish attitudes.

A year after Hope Consulting released its findings, for instance, Hewlett began supporting Charity Navigator’s efforts to build more outcomes reporting into its rating system for charities, which many donors consult. As recently as 2012, Charity Navigator’s president Ken Berger reports, Mr. Brest pronounced this undertaking to be “the most important work being done in the nonprofit sector.”

But suddenly, in early 2014, Hewlett announced that it was ending the Nonprofit Marketplace Initiative.

In addition to a severely redacted and ambiguous evaluation of the marketplace program from Arabella Advisors, the key piece of evidence offered for this abrupt shift was, ironically, the “Money for Good” report from 2010—the very same report that had only spurred Hewlett on to greater efforts when it had been published.

In excerpts from a video presentation explaining this decision to its board of directors, the report’s author, Hope Neighbor, maintained that it had shown the marketplace program’s assumptions to be false and that changing donor behavior would require too much time and investment—conclusions far more decisively negative than those originally offered in 2010.

Even Paul Brest himself, fresh from proclaiming this the “most important work being done in the nonprofit sector,” now confessed that it had achieved no “discernable or measureable impact.” It had been “ahead of the market,” in his view—an explanation for failure that had once seemed strategic philanthropy’s chief virtue.

The Hewlett Foundation may profess astonishment that anyone could be confused by its data-driven decision to cancel the Nonprofit Marketplace Initiative.

But the same data that in 2010 had only underlined the long-term “high-risk, high-reward” nature of the initiative—making this precisely the sort of bold, strategic grant making that is the pride of American philanthropy—had by 2014 become a compelling reason for abandoning the initiative altogether.

Effective philanthropy seems to have pointed in two diametrically opposed directions at the same institution in the space of a few short years.

Of course, there is an intervening factor, unrelated to data but in fact far more illuminating: presidential succession at Hewlett.

Strategic philanthropy enthusiast Paul Brest was replaced in 2012 by Larry Kramer, who has other interests. To be sure, a genuinely outcomes-driven foundation would maintain or adjust its course unaffected by arbitrary, idiosyncratic events like a new name on the CEO’s office door.

But every nonprofit understands that no matter how faithfully it adheres to a donor’s guidelines, no matter how dazzling the outcomes it may produce, whenever there’s a change in foundation leadership, all bets are off.

No grantee can count on further support until the foundation has completed its customary prolonged, comprehensive review of priorities. And every grantee dreads the words from the once-friendly but now strangely distant program officer: “You’ve had great impact, but we’re just taking the foundation in a different direction.”

When Hewlett attempts to use effective philanthropy as a façade to conceal this harsh, irrational, but unavoidable fact of philanthropic life, it does the movement a disservice.

To be sure, I am no fan of strategic philanthropy, and I cannot say I’m sorry to see the Nonprofit Marketplace Initiative disappear. The explanations individual donors now offer for giving to charity, no matter how petty, parochial, or emotional they may appear to the metrics-minded, are in fact linked critically to the long-term survival of the “little platoons” of American civil society.

I would even like to think that Mr. Kramer appreciates this as well. As a constitutional scholar, he sought to reclaim for everyday citizens a role in interpreting and preserving their founding document in the face of demands that this be left to legal experts.

As he put it in The People Themselves: Popular Constitutionalism and Judicial Review, it was indeed “'the people themselves’—working through and responding to their agents in the government—who were responsible for seeing that [the Constitution] was properly interpreted and implemented.”

Perhaps he saw in the Nonprofit Marketplace Initiative another democratically questionable effort to compel popular deference to expertise.

To me, the obdurate resistance of heart-driven charity against Hewlett’s efforts to replace it with mind-oriented giving can only represent a “significant setback” for the effective-philanthropy movement. I welcome the setback but wish the Hewlett Foundation had been more open and transparent with its explanation.