Giving Gates C Minus

By providing much needed transparency to the giving marketplace, the Center for Effective Philanthropy has become one of the leading intermediaries in philanthrocapitalism. In particular, its “grantee perception reports”, which get those receiving money from a foundation to disclose (confidentially at the individual level) what they think of a donor and its processes, has helped improve the quality of the grant-making process since CEP was founded in 2001. It recently produced a quite critical grantee perception report on the Bill & Melinda Gates Foundation, which many grantees will hope results in significant change at the world’s most prominent foundation.

Interestingly, news of the findings were released by the foundation just before Bill Gates and Warren Buffett announced their new giving pledge – which sceptics might regard as an extremely effective damage limitation exercise by the Gates Foundation PR team, releasing bad news whilst diverting the attention of journalists (us included) elsewhere. Still, even the usually hostile Gates Keepers website (sort of) applauded the foundation for owning up to the bad news, which it didn’t have to.

The report, the results of which the Gates Foundation has published on its website (along with recordings of two calls between Jeff Raikes, its CEO, and some grantees), found that grantees think the foundation has a “positive impact on knowledge, policy, and practice” in the areas in which it works. However, Mr Raikes acknowledged, it also found that “Many of our grantee partners said we are not clear about our goals and strategies, and they think we don’t understand their goals and strategies. They are confused by our decision-making and grantmaking processes. Because of staff turnovers, many of our grantee partners have had to manage multiple Program Officer transitions during the course of their grant, which creates more work. Finally, they say we are inconsistent in our communications, and often unresponsive.”

This damning verdict certainly tallies wth many negative comments we have heard about the way the Gates Foundation operates in its dealings with outsiders, where admiration for the generosity of the founders and for their thoughtful attempts to solve some of the world’s thorniest problems are often tinged with complaints about its classically bureaucratic behaviour in how it works with them. So thank goodness the message has now been given in no uncertain terms to those in charge.

Mr Raikes has announced a five point plan to improve relations between the foundation and grantees by 2013, when another grantee perception report will be commissioned. “Specifically, our commitments to our grantee partners in the short-term are: To better explain how our proposal and approval process works. To clearly communicate the point of contact for grants. To orient all new grantees, set expectations, and answer their questions and hear their concerns at the outset. To provide timely and substantive responses to all the progress reports they submit. To open up new channels of communication, including more frequent check-in calls with program managers and conference calls that give all our grantee partners the chance to ask questions of our executives.”

This is exactly the sort of response that the Center for Effective Philanthropy was created to bring about. Its grantee perception reports should be much more widely used – by more foundations, but why not also by governments and multilateral agencies. That said, the reports need to be read carefully. After all, having unhappy grantees is not always bad news. Some senior executives at the Gates Foundation think that some (but certainly not all) of the negative feedback reflects the fact that they are more results-oriented than other foundations and so quicker to cut off the money supply when an initiative is clearly not succeeding. For obvious reasons, this could be upsetting to those grantees affected – but their unhappiness could be a sign not of problems but of progress.