Foundation Building Best Practice
Defining Strategies and Roles
September 2000

This is an excerpt from the Foundation Building Sourcebook: A Practitioners Guide Based on Experience in Africa, Asia and Latin America.   Download printable PDF copy (93k) of this document, including source material on the foundations mentioned.   Order a complete 336 page Sourcebook The Sourcebook was written by A. Scott DuPree and David Winder with Cristina Parnetti, Chandni Prasad and Shari Turitz.

This section examines how three foundations selected strategies and roles to exercise leadership in overcoming challenges to development in their societies. It explores the complimentary nature of these strategies.

• Example 1: Strengthening Civil Society
  Foundation for Community Development (Mozambique)
• Example 2: Empowering Individuals and Institutions to Overcome Poverty.
  Esquel Ecuador Foundation
• Example 3: Searching for New Approaches to Sustainable Economic Development
  Foundation for a Sustainable Society, Inc. (The Philippines)

What Critical Choices Need to be Made in Selecting Strategies and Roles?

Summary Points Foundations can take advantage of their independence to adopt creative and innovative strategies to achieve their goals. One challenge is to ensure the strategies are mutually reinforcing. Below are some of the main strategic options discussed in the chapter. Foundations seeking to make a difference in their own societies have developed a range of strategies for strengthening civil society and creating vibrant local economies. These strategies include the provision of grants, loans, equity investment and loan guarantees to community- based organizations, NGOs, individuals and research institutions. The challenge is to ensure that in addition to solving specific problems the grants generate new solutions that have the potential for broader impact. In the Philippines case, the selected strategy has been to provide loans and loan guarantees to innovative community-based enterprises that can serve as models for widespread replication. In the case of FEE, the grants to community-level organizations are provided as co-financing and the foundation builds a network amongst "partners" to facilitate learning from experience. A focus on capacity building can be an important complement to grant support to CBOs and NGOs. All the cases we examine pursue the strategy of providing training, technical assistance and information to NGOs and other civil society organizations as a way of enhancing their role. FDC took the initiative of convening indigenous NGOs on a regional and national level and providing assistance in the creation of a National NGO Forum to promote the interests of the sector. FSSI directly provides business support services to its partner community enterprises or puts them in touch with sources of information and advice. The convening of civil society organizations with other sectors can be a useful strategy for introducing changes in public policy. As independent actors, foundations can often play an important leadership role in convening civil society organizations to discuss and propose solutions to major issues facing the society. The FDC has brought together nonprofit organizations with representatives of business, government and academia to propose new policy initiatives on a range of issues facing Mozambique in the post-war reconstruction period. These include the role of NGOs and policies towards girl's education. In Ecuador, the FEE took the risk of convening different sectors to explore ways of combating corruption in public life. Foundations can play an important role in encouraging the growth of local philanthropy. Foundations are able to use creative approaches to mobilizing more philanthropic resources from individuals and corporations in their own societies for social and economic development programs. This involves support for research and dissemination on philanthropic practices and the provision of technical support to the staff and Boards of corporate foundations wishing to increase the effectiveness of their programs.

Once a foundation has defined its mission, vision and broad program priorities it chooses a set of strategies to achieve its desired impact. The review of foundation experience reveals a rich array of strategies that have been developed to achieve that objective. The granting or loaning of resources to enable other civil society organizations to respond to challenges and opportunities is a primary strategy employed by those foundations selected for examination in this section. However, these foundations also adopt other complementary strategies in order to achieve their objectives. These strategies involve the foundation in playing roles other than that of grantmaker.

All foundations face critical choices about the strategies they will use and, by extension, the roles they will play within their own societies. Here are some examples:

• Do existing civil society organizations -- community-based organizations (CBOs) and non-governmental organizations (NGOs) have the capacity to implement programs? If not, what strategies could the foundation adopt in order to increase the effectiveness of those organizations? (e.g. through support for coordination mechanisms, better sharing of information or new programs)
• Does the foundation need to play a role in creating new organizations to address specific needs?
• What role should the foundation play in leveraging additional resources to solve current problems in society, and/or prevent future problems?
• Could the foundation take the lead in convening relevant actors to design solutions to specific needs?
• Could the foundation build partnerships between different sectors to implement effective programs that address specific needs?
• Does the foundation want to play a role in making the public sector more effective? If so how can this best be accomplished?

How Are These Choices Made?

The range of possible strategies and roles available to a foundation will be influenced by the needs and opportunities identified, the state of the nonprofit sector and the broader political, social and economic context. Usually the choice of strategies and roles will be made over time as a result of an ongoing process of broad consultation involving the Board, staff and potential partners.

To illustrate how choices of strategies and roles are made we refer to the experience of three foundations. They are drawn from countries with varying social, political and economic contexts that influence the choices made -- for example, different levels of development of civil society.

The experiences indicate that in countries such as Mozambique and Ecuador, where few foundations exist, the demands on those foundations to play diverse roles in response to many needs are likely to be great. In situations where support mechanisms for civil society organizations are weak, the foundation is likely also to play a leading role in strengthening the capacity of the sector as a whole. The cases show that in that context both Mozambique's Foundation for Community Development (FDC) and the Esquel Ecuador Foundation (FEE) have responded by developing a range of strategies to address unmet needs in their societies and multiple roles in implementing those strategies.

In contrast, the foundation sector in the Philippines is large and diverse, reflecting the state of broader civil society. This has meant that foundations such as the Foundation for a Sustainable Society, Inc. (FSSI) have been able to focus their missions more narrowly than their counterparts in Ecuador and Mozambique. They still face many choices regarding the strategies to be adopted to achieve their mission and objectives.

What Types of Strategies Do Foundations Select?

The three foundations, FEE, FDC and FSSI, have adopted a number of strategies in common in furthering their respective missions. Providing financial resources (through grants and other mechanisms) to nonprofit organizations, individuals and community-based organizations to enable them to carry out specific projects is one strategy they share. Other roles one or more of them play involve exercising leadership by:

• Convening civil society and other sectors to design solutions for specific social and economic problems
• Forming inter-sector partnerships to implement action programs or influence government policy
• Promoting individual and corporate philanthropy
• Developing the capacity of organizations seeking to increase economic self- reliance at the community level.

FEE provides an example of how a foundation can play a leadership role at the national level using a variety of mutually reinforcing strategies and roles. For example, it has a goal to support public dialogue on economic and social development issues with a view to building a consensus on what needs to be done. One strategy to achieve this is to convene a Citizen's Forum that brings together civil society leaders with representatives of government and the private sector to discuss policy needs and options. A proposal to create an Anti-Corruption Commission comprising representatives of all sectors of society emerged from this group and was acted upon by the government. Esquel provides the leadership and all the administrative services for the Forum, commissioning research, disseminating the decisions and recommendations of the group to relevant parties and following up on recommendations.

Another goal of the Esquel Foundation is to develop youth leaders capable of influencing national policy. Towards this goal, Esquel convened Youth Fora throughout the country to discuss the needs of youth. This series concluded with a national meeting at which the participants presented recommendations on youth -- related policies to presidential candidates. These discussions also helped Esquel identify issues to be addressed in its grantmaking programs. This has resulted in the award of grants to organizations working with young community development volunteers, the creation of a program of credit, technical assistance and venture capital for young entrepreneurs and a focus on the development of income generation programs for youth in the poorest regions of Southern Ecuador. As a complementary strategy, the Foundation also created an internal Youth Advisory Committee to advise its Board.

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