The Synergos Institute A practitioners guide based upon experience from Africa, Asia, and Latin America Foundation Building Sourcebook A. Scott DuPree and David Winder With Cristina Parnetti, Chandni Prasad and Shari Turitz Funding for the Sourcebook was provided by the Charles Stewart Mott Foundation, with additional support from Aga Khan Foundation Canada, the Asia Pacific Philanthropy Consortium, Avina, Inc., the Ford Foundation and Open Society Institute. New York, 2000 Copyright © 2000-1 The Synergos Institute 9 East 69th Street New York, NY 10021 USA tel +1 (212) 517-4900 fax +1 (212) 517-4815 email [email protected] Additional copies of this Sourcebook are available from Synergos. Material from this guide is also available in electronic form at: www.synergos.org/globalphilanthropy/. CONTENTS Introduction 1 Starting a Foundation 5 Formulating the Idea: The Founders 7 Building Commitment and Resources 21 Choosing Structure and Mission 38 Governance and Institutional Development 51 Building A Board 52 Staffing the Foundation 67 Planning for Institutional Development and Developing Budgets and Financial Management Systems 83 Program Priorities and Operations 95 Defining Strategies and Roles 97 Establishing Strategic Grantmaking Priorities 110 Designing Grant Programs 120 Adopting Grantmaking Practices 131 Establishing Grants Administration Procedures 141 Strengthening Grantee/Partner Capacity 157 Supporting Income Generation Programs 163 Building Bridges Across Sectors 170 Mobilizing Resources and Support 183 Formulating Strategies to Mobilize Resources 187 Building Endowments 196 Raising Resources from International Foundations 215 Fundraising from Individuals and the Public 227 Creating a Financial Bridge to the Private Sector 242 Working with Official Development Assistance Agencies 259 Generating Earned Income 273 Communications and Outreach 285 Appendices 307 1: Recommended Print Resources 307 2: Resource Organizations 316 3: Training Programs 325 4: Internet Resources 329 Introduction Each time a grantmaking foundation has been established, the challenge has been a creative one, including considerable re-inventing of the wheel and an investment of time and resources from committed individuals and organizations. Wherever staff, board and/or founders have had access to information about the practices and strategies that have worked for other organizations, they have often been able to take advantage of this experience to increase their own chances to succeed. Toward this end, this sourcebook seeks to be a tool in sharing information and experience between organizations in a way that will help practitioners to strengthen their own organizations. The book presents actual experience and materials from foundations around the world, drawing from two primary sources: • First-hand material from southern grantmaking foundations, such as mission statements, strategic plans, job descriptions, board materials and case statements • Pertinent supplementary research and studies on foundations, including Synergos’ series of case studies on foundations in Africa, Asia and Latin America. The organizations that are the focus of this book share common characteristics. Responding to very different conditions in which they operate, they play a central and strategic role in strengthening civil society in their countries. Their comparative advantage as resource mobilizers, compared to many other civil society actors, enables them to have a large effect both in stimulating new financing and connecting financial resources to the community-level where they can have the greatest impact. In particular, they have excelled at: • Providing resources for civil society activities—in a variety of areas ranging from the arts, environment, poverty alleviation, agriculture and education—in their countries through grants but sometimes through other financial mechanisms such as loans • Leveraging diverse sources of financing for the projects and programs of civil society organizations • Assisting northern foreign aid agencies to channel resources to civil society in more sustainable and effective ways • Acting as an interface for public policy dialogue between civil society and the government and business sectors The sourcebook uses the term “grantmaking foundation” largely because it is readily understood to most people working in this field. It should be noted, however, that there is no universal consensus on the use of the term. It is used here 2 for the sake of consistency but could as well be replaced with other terms including “grantmaking trusts,” “grantmaking NGOs,” or even “civil society resource organizations.” Even the meaning of the word “foundation” differs between regions of the world because legal, philanthropic, cultural and historical contexts vary significantly between countries. The sourcebook seeks to be of particular use to foundation practitioners—senior staff, board and founders. It draws heavily from the experience of grantmaking foundations but it is hoped that the information and experiences will also prove useful to other types of grantmakers, including company foundations, family trusts and quasi-governmental, autonomous development funds. Although every organization is unique, the experience presented in this book reveals parallels in the process of institutional development. Among these, practitioners face specific tasks at various times in their organization’s development: • Bringing together an active constituency • Raising and developing a sustainable source of income • Developing a skilled professional staff • Putting in place systems of accountability • Planning for strategic growth • Recruiting and developing a governing unit (such as a Board) How the Book is Organized The book is arranged in five sections corresponding to key areas in building and strenthening foundations: Chapter 1: Formation brings together the experience of different constituencies that have successfully raised support for the idea and established foundations in their countries. Chapter 2: Governance and Institutional Development focuses on how foundations have built and made use of their boards; also, how they have made central decisions about the plans and financial management of the organiza- tion. Chapter 3: Program Priorities looks at the roles that foundations play within their countries and how they design and operate programs to meet their objective. One central focus of this section is developing grantmaking programs. Chapter 4: Resource Mobilization explores how foundations have raised funding and other resources in support of civil society activities, both resources that they manage and those that go directly to the organizations that foundations, seek to support. Chapter 5: Communications looks at how foundations have produced communications material that has been effective in publicizing their programs and increasing public awareness. 3 Within each section, specific chapters present from two to four cases that look at how foundations were able to respond to a specific challenge or create a desired impact. Each case aims to provide the reader with a brief contextual outline highlighting what the organization sought to accomplish and the environment within which it operated. To the greatest extent possible, the solutions and practices that enabled a foundation to reach its desired end are presented through their own materials, evaluation and analyses: for example, case and mission statements, job descriptions, annual report formats, eligibility requirements for grant programs and strategic plans. At the beginning of each chapter a brief two-to-four page introduction is meant to assist the reader to extract important questions and issues from the examples. Summary points arising from the chapter are given to help those who are seeking to draw lessons and reflect further on the topic of the chapter. An index at the end of the book is provided to help in locating specific information quickly. Appendices include a bibliography of references, useful addresses and other relevant supplementary data. How to Use this Book The sourcebook is not a step-by-step guide. Nevertheless, the experience of similar organizations can provide practical guidance to pressing real world issues. In this way the book can be used as a manual. It is designed to guide practitioners in the daily questions they confront while running or working with a foundation. When confronting a particular task, the practitioner can refer to the relevant chapter to find a few references with approaches that may be adaptable or contain useful lessons. At the very least, having access to the experience of other foundations will provide some guideposts as to what questions to ask and how to proceed. If a case is particularly relevant, practitioners may want to find out more information or go deeper into the experience. The supplementary information in the appendices will direct the reader to additional sources. Sourcebook Advisory Committee In order to ensure that the sourcebook both responds to the needs and interests of southern foundations and accurately reflects their experience and perspectives, an international advisory committee was formed to provide Synergos with guidance on the preparation of the sourcebook. The advisory committee was comprised of eight institutions engaged in foundation work in southern countries. Boris Cornejo Esquel Ecuador Foundation Carlos Fumo Foundation for Community Development (Mozambique) Gisela T. Velasco Philippine Business for Social Progress