LEADERSHIP SERIES

FRAMEWORKS
FOR PRIVATE
FOUNDATIONS
A New Model for Impact

by
Melissa Berman, Ph.D.
Dara Major
Jason Franklin, Ph.D.

In partnership with
 This paper was written by Melissa Berman, Rockefeller Philanthropy Advisors, and Dara Major,
independent consultant, who synthesized the research of the Theory of the Foundation
initiative and conducted additional interviews to unpack and illustrate core concepts.

This paper is based on an original series of Theory of the Foundation white papers by Melissa Berman
and informed by additional contributions from Jason Franklin, Dorothy A. Johnson Center for Philanthropy
at Grand Valley State University.

It was edited by Jen Bokoff and Erin Nylen-Wysocki, Foundation Center.

It was designed by Betty Saronson, Foundation Center.

Funding for this paper was generously provided to Foundation Center by the donors to Rockefeller
Philanthropy Advisors’ Theory of the Foundation initiative (see p. 26 for a complete list of funders).

This paper is part of the GrantCraft Leadership Series. Resources in this series are not meant to give
instructions or prescribe solutions; rather they are intended to spark ideas, stimulate discussion, and
suggest possibilities.

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To access this paper and other resources, please visit grantcraft.org. You are welcome to excerpt, copy,
or quote from this paper with attribution to GrantCraft and Rockefeller Philanthropy Advisors and inclusion
of the copyright.

For more information, e-mail GrantCraft at [email protected].

©2017 Foundation Center and Rockefeller Philanthropy Advisors, Inc.

This work is made available under the terms of the Creative Commons
Attribution-Non Commercial 4.0 Unported License creativecommons.org/licenses/by-nc/4.0/.
 Table of Contents
5 Introduction to the Theory of the
Foundation Framework
Philanthropy is changing and evolving more quickly than ever, with new societal challenges,
new players, and new strategies. In this time of change, questions of how foundations can
optimize their effectiveness are increasingly urgent. We provide a simple overview of the
Theory of the Foundation, some of its benefits, and a roadmap for funders interested in
exploring their own foundations’ frameworks.

10 Charter
What is a foundation’s form of governance, how will it make decisions—and why? In this
chapter, we discuss a foundation’s charter, which describes the foundation’s scope, form
of governance, and decision-making protocol at the highest level, based on written and
unwritten rules.

14 Social Compact
To whom is a foundation accountable, and how is it making a difference with the special
status it has been given? In this chapter we illuminate a foundation’s social compact, which
is an agreement, either implicit or explicit, with society and key stakeholders.

17 Operating Capabilities
What must a foundation not just do or obtain, but excel at in order to achieve its mission?
In this chapter, we explore a foundation’s operating capabilities, which are the dominant
approaches that guide how the foundation carries out its work and the core competencies,
resources, skills, and processes that it cultivates in order to achieve results.

22 Takeaways for Funders

In this final section, we make the case for examining foundation frameworks and offer
useful tools to help you begin to put these ideas into practice today.

25 Philanthropy Canvas Worksheet

 About This Paper
WHY THIS PAPER? WHO ARE THE AUTHORS?
Rockefeller Philanthropy Advisors (RPA) developed the GrantCraft developed this paper in partnership with RPA.
Theory of the Foundation framework to stimulate discussion Based on two reports for Theory of the Foundation initiative
of foundations as organizations at a time when philanthropy funders written by Melissa Berman, president of RPA, this
is changing and evolving more quickly than ever, with new paper updates and expands on the original research. For this
societal challenges, new players, and new strategies. The paper, we synthesized and drew substantially from initiative
inspiration was iconic management expert Peter F. Drucker, publications and tools, reviewed additional organizational
who, over 20 years ago, called on organizational leaders theory literature, and conducted 10 original interviews with
to develop a “theory of the business” by considering three a diverse set of funders in the United States and Europe.
fundamental sets of assumptions: environment, mission, and The paper also draws on extensive interviews, symposia,
core competencies. For a theory to be valid, Drucker argued, and literature reviews conducted independently by RPA in
its assumptions must be valid, congruent, widely understood, two phases, engaging foundation leaders in Europe and
and regularly assessed. RPA's key insight was that the the US. Dozens of foundations provided financial support,
absence of such a theory in philanthropy leads to blind spots ideas, and analysis that have informed all aspects of this
and underperformance at both the organizational and sector work. Additional research was conducted in partnership with
levels. To address this, over several years and the Dorothy A. Johnson Center for Philanthropy at Grand
with dozens of foundation partners, RPA developed the Valley State University and with the Marshall Institute for
Theory of the Foundation. RPA’s approach does not aim Philanthropy and Social Entrepreneurship at the London
to develop one theory for all foundations but instead to School of Economics, and by Dara Major, who conducted
create a framework that enables an individual foundation to original interviews with funders for this paper.
surface its underlying core beliefs and align its purpose and
operations in pursuit of public benefit. Melissa Berman, Ph.D., is the founding president and
CEO of Rockefeller Philanthropy Advisors, Inc., an innovative
nonprofit philanthropy service launched by the Rockefeller
HOW CAN I USE THIS AS A RESOURCE? family in 2002. RPA’s mission is to help donors create
This resource provides clear, practical guidance for funders thoughtful, effective philanthropy throughout the world.
looking to examine their organizational structures and Learn more about RPA at rockpa.org and follow
strategize about their capacities and operations through @MBermanRPA on Twitter.
discussion questions, action steps, and lessons from peers.
It is intended to provide an accessible and actionable Dara Major is an independent strategy and management
introduction of RPA’s Theory of the Foundation to a global consultant, helping clients to meaningfully align resources
funder audience. for results—at the individual, organizational, and field
levels. With over two decades of leadership experience in
philanthropy, she works with a diverse range of philanthropic
WHERE CAN I LEARN MORE?
and social sector organizations. Dara Major has written widely
To learn more about the Theory of the Foundation initiative on the philanthropic sector; for more information visit
and key foundation partners, as well as to access RPA’s full daramajor.com, contact [email protected], and follow
complement of publications and tools on this topic, please Dara on Twitter @DaraMajor.
visit TheoryoftheFoundation.org. For more information,
contact [email protected]. Jason Franklin, Ph.D., is the W.K. Kellogg Community
Philanthropy Chair at the Johnson Center for Philanthropy at
GrantCraft, a service of Foundation Center, offers resources Grand Valley State University. As the holder of the nation’s
to help funders be more strategic about their work, first endowed chair focused on community philanthropy,
and has published this paper as part of its leadership Dr. Franklin engages in research, teaching, service, and
collection to encourage a conversation about this topic. thought leadership to explore and advance the field of
Explore GrantCraft’s resources at grantcraft.org and community philanthropy, nationally and internationally.
on Twitter by following @grantcraft. Other services and
tools that Foundation Center offers can be accessed at
foundationcenter.org.
 Introduction to the Theory of
the Foundation Framework
Philanthropy is changing and evolving more quickly than ever, with new societal challenges,
new players, and new strategies. In this time of change, questions of how foundations can
optimize their effectiveness for the public good are increasingly urgent—and the ability
to self-reflect or even be introspective on an organizational level is critical.

The Theory of the Foundation offers a framework for Operating Capabilities: These are the
introspection that enables foundations to address dominant approaches that guide how a foundation
urgent questions, explore fundamental beliefs or implicit carries out its work and the core competencies,
assumptions about their work, and more effectively align resources, skills, and processes that it cultivates in order
foundation purpose, public benefit, and action. And, while to achieve results. Operating capabilities encompass
theory gives us a way to think, this paper offers pragmatic financial and non-financial assets, talent and knowledge
ways to use the framework to inform everyday practice. development, internal and external collaboration, and
organizational structure.
Fundamentally, the Theory of the Foundation framework
is composed of three core elements—charter, social Rockefeller Philanthropy Advisors (RPA) embarked on a
compact, and operating capabilities—that together inform multiyear program of collaborative research with dozens
a foundation’s structure and approach. of funders in the United States and Europe to uncover and
distill these elements into a conceptual framework—
Charter: The charter is a foundation’s scope, form of a Theory of the Foundation—to help private foundations
governance, and decision-making protocol at the highest align resources more effectively for the impact they
level, and the precursor to mission. Charter encompasses envision. In this GrantCraft paper, we’re laying out this
origin stories, board composition, where and how important research to help funders of all kinds to reflect on
decisions are made, values, issue focus, and culture. foundation theory and strengthen philanthropic practice.
It has both written and unwritten elements.

Social Compact: Social compact

is a foundation’s reciprocal agreement,
either implicit or explicit, with society
and key stakeholders about the
specific value it will create. It underpins CHARTER SOCIAL COMPACT
how the foundation defines its
legitimacy and license to operate, and
the actions considered “appropriate”
to undertake. Social compact
encompasses partner relationships,
external accountabilities, relationship to OPERATING CAPABILITIES
society and government, and transparency.

GRANTCRAFT, a service of Foundation Center FRAMEWORKS FOR PRIVATE FOUNDATIONS 5

As in any line of work, it is important to periodically built, one by one, new research institutions in resource-
pause and reflect on why and how we do what we do. scarce countries—and then, over a period of 60 years,
For example, the long-tenured chief administrator of a funded basic and applied agricultural research across
top-rated hospital might be working purposefully toward this network. Athough some of this work had unintended
a clear mission, yet make a point to routinely consider negative environmental consequences, their efforts
the hospital’s underlying theory: why it exists, how it resulted in extraordinary increases in crop yields and a
relates to its customers and partners, and what it can do global science, production, and distribution ecosystem that
organizationally to enable continual advances in medicine saved the lives of at least a billion people around the world.
and deliver the best possible care. Similarly, funders
who pause to reflect on the theories that shape their Today’s foundations face different starting points,
foundations will be better able to focus their work and challenges, and opportunities. Knowledge, capacity, and
deliver the best possible results. resources are fragmented rather than concentrated as
over 100,000 U.S. foundations and 1.5 million nonprofits
now work across a highly developed, multi-sector
constellation of institutions, fields, and networks.
“It’s an unnatural act to work
Collaboration at scale has become both possible, given this
across silos. It requires constant rich supply of external capacity, and increasingly feasible,
attention, reinforcement as our collective imagination and adaptive capacity begin to
catch up to game-changing advances in technology. At the
of behavioral norms, and
same time, inequality and a loss of trust in major societal
intentionality about the culture institutions are on the rise globally, while humanitarian
we try to build.” crises and a strained public sector raise questions about the
purpose and role of foundations.
Will Miller, The Wallace Foundation

Though many foundations remain structured according

to the operating realities of the past, foundation leaders
While other GrantCraft resources focus on a particular are increasingly questioning their future as sectoral
aspect of or approach to grantmaking, this paper addresses boundaries blur. Newer philanthropic approaches—such as
the underlying framework of organizational dynamics that community-based decision making, capital aggregation, and
shape them. It is particularly intended for use by leaders of major grantmaking through philanthropic spend-downs—
private, endowed foundations. However, it will also serve are challenging philanthropic norms and talent-sourcing,
as a useful reflection tool for leaders of community, public, investment, and centralized decision-making models. The
and corporate foundations, though different dynamics private sector is making significant “double bottom-line”
come into play for different foundation types. investments in social solutions (and exerting a growing
influence on agenda setting for the common good) while
foundations begin to imagine what investing 100 percent
NEW OPERATING CONTEXTS
of their assets for social return and impact might look like.
When the earliest foundations formed over 100 years ago, For example, as foundations respond to changing dynamics,
the external operating landscape was remarkably different.
There were few well-established nonprofit organizations to
work with, and fewer still that had the capacity to operate
or even collaborate at scale. For foundations looking to
GrantCraft Connection
have an impact in a specific area, the first step was often Check out GrantCraft’s Funding
to hire, design, and then create the capacity needed to Innovation blog series, produced in partnership with

execute—a process that could take years. Glasspockets and the Vodafone Foundation, which
explores new funding practices and philanthropic
trends at the intersection of problem solving,
For instance, to address global inequities that led to
technology, and design.
food shortages and the prospect of mass starvation, the
Rockefeller and Ford foundations and other partners first

GRANTCRAFT, a service of Foundation Center FRAMEWORKS FOR PRIVATE FOUNDATIONS 6

many are seeking to create new value by integrating A NEW FRAMEWORK FOR REFLECTION
current foundation capabilities across programs and
As foundations evolve the ways in which they reflect and
functions, including knowledge management and
make decisions, there’s a rich body of knowledge to draw
communications. Yet as Wallace Foundation president
from, grounded in other sectors and in the wider world of
Will Miller notes, “It’s an unnatural act to work across silos.
organizational theory. With over 100 years of philanthropic
It requires constant attention, reinforcement of behavioral
practice to reference, there are also critical lessons to be
norms, and intentionality about the culture we try to
learned from within philanthropy.
build.” This integration function is increasingly being
staffed, at the senior leadership team level, with talent
from other industries, such as finance, consulting, and
general management. “We’re not just responsible to
the people that gave us those
In all sectors, traditional, mechanistic organization and
management forms are beginning to shift to more resources to begin with; we
organic, network-based approaches. These shifts are must also consider the kind
prompting many foundation leaders to actively re-examine
of change we’re trying to effect,
traditional or long-held philanthropic assumptions,
frameworks, and models and cultures to ensure that today’s and how we involve the very
foundations deliver results that are greater than just the people who are going to be
sum of their grants.
affected by every move
This level of introspection requires a deep awareness and we make.”
shared understanding of the critical elements that underpin Katy Love, Wikimedia Foundation
the foundation—how it makes decisions (charter), how it
sees itself interacting with others (social compact), and how
it chooses to deploy resources (operating capabilities)—
RPA was inspired to develop the Theory of the Foundation
and ensures that people inside the foundation are
after reflecting on Peter Drucker’s seminal work on the
aligned around a common understanding. This common
“theory of the business”—which called upon business
understanding is key to a foundation’s culture and is a
leaders to regularly assess and adjust their business models
powerful motivator and enabler of essential behaviors.
and fundamental beliefs or assumptions in response to
Ford Foundation president Darren Walker notes, “The
changing conditions. These theories and models have,
Theory of the Foundation is an exciting idea and an
at different times and to varying degrees, influenced
important framework for bringing more rigor and a depth
philanthropic practice. Compelling as they are, however,
of analysis to understanding philanthropy’s role.”

Why take a fresh look at

your foundation’s theory? GrantCraft Connection
Click here to hear more from the authors on the Read and use Lucy Bernholz’s Blueprint
external landscape changes that are prompting series—an overview of the current philanthropic
many foundation leaders to actively re-examine landscape, major trends, and horizons where you can
traditional or long-held philanthropic assumptions, expect some important breakthroughs each year—
frameworks, and models—and how the Theory to open conversations about the context for your
of the Foundation can help to ensure that today’s work and expanding your strategic framework.
foundations deliver results that are greater than
just the sum of their grants.

GRANTCRAFT, a service of Foundation Center FRAMEWORKS FOR PRIVATE FOUNDATIONS 7

they don’t capture the distinct nature of a foundation, We hope the framework and tools presented here
whose mission goes beyond its own performance to encourage funders in start-up and well-established
reach a broader public. Foundations demand more than foundations alike to reflect on their work and to
just adaptation from other sectors; to fully realize their envision and implement more effective strategies for
potential, they demand distinct consideration. the 21st century.

The Theory of the Foundation framework and related

tools will be useful for funders of all kinds and at all levels
GrantCraft Connection
of leadership. They are particularly intended for use by
leaders of private, endowed foundations to strengthen What can we learn from grantmaking
practices and new operating realities in the public
decision making and resource allocation—individually,
sector? Read the Leadership Series paper,
with their boards and staff, and collaboratively, with
Innovations in Open Grantmaking, produced in
foundations and other partners.
partnership with the GovLab, which seeks to provide
inspiration and early proof of concept regarding
Leaders of community, public, and corporate foundations innovative practices at every stage of the grantmaking
can use the framework to consider their approaches, even process within various U.S. government agencies.
as different dynamics come into play for funders that are
connected to a corporation or actively raise funds.

Questions to Consider
l Reflect on a foundation that was established l To what extent, if any, is your foundation’s
before you were born. What are its notable current approach rooted in the experiences
characteristics? or operating environment of its past?
l Think next about a foundation just
starting up today. What do you think would
be different about it? Why?

GRANTCRAFT, a service of Foundation Center FRAMEWORKS FOR PRIVATE FOUNDATIONS 8

 Core Framework

Charter Operating Capabilities

GOVERNANCE
The foundation’s scope, Dominant approaches
form of governance, and DECISION MAKING that guide how a
decision-making protocol foundation carries out
its work

DECISION MAKING RESOURCING

FLEXIBILITY
VALUES

INITIATIVE
COMMITMENTS

PRINCIPLES & PROGRAMMING

CULTURE

MISSION & PURPOSE

RELATIONSHIPS

STAKEHOLDERS
COMMUNICATION

RELATIONSHIP TO SOCIETY TRANSPARENCY

SCOPE ACCOUNTABILITY EXTERNAL EXPECTATIONS

Social Compact
Implicit or explicit
agreement with society on
the value the foundation
will create

GRANTCRAFT, a service of Foundation Center FRAMEWORKS FOR PRIVATE FOUNDATIONS 9

 Charter
A foundation’s charter answers the question: What is a foundation’s form of governance,
how will it make decisions—and why?

A charter defines and describes a foundation’s scope, form Subsequent stewards may revamp a foundation’s
of governance, and decision-making protocol at the highest charter based on what they observe; others may view
level. The charter is the precursor to mission, and shapes a foundation’s formal, written charter as a mandate to
and is informed by the organization’s culture. It is a mix honor forever. For some foundations, the charter captures
of formal, written elements (such as founding documents, what the donor is committed to, which may change
statements of intent, and legacy letters) and informal, less over time. It may describe areas of activity (such as the
tangible ones (such as culture, style, and tradition), and arts, Cleveland, or children) or a set of cultural values
may encompass what is explicit from the founder as well (such as a commitment to excellence or to the Alaskan
as the commitments and choices of subsequent stewards outdoors). It may address traditional elements of mission,
(including boards, CEOs, and senior leadership). A charter communicating intention and direction, but may also go
may be fairly open and flexible, or heavily prescribed. beyond that to describe the foundation’s values and culture.

Philanthropy typically distinguishes private foundations The elements of the charter, from written founding
by whether they are family or independent, implicitly documents to unwritten culture or style, define how a
recognizing that governance and the role of the donor foundation makes fundamental decisions—and, perhaps
or their descendants play a major role in the structure more importantly what decisions it cannot make. For
of a foundation; in the Theory of the Foundation, these instance, Rasmuson Foundation’s charter and unwritten
differences are considered central. culture guide its fundamental decisions. The foundation
was started by a family with a desire to create a vibrant
Origin stories are typically the basis of a foundation’s economy to support Alaska’s families. They chose to invest
charter and act as a reference point and a source of heavily in the development of Alaska’s natural resources;
inspiration. For example, Rasmuson Foundation was for this reason, subsequent stewards may be reluctant to
founded by missionaries of the Swedish Covenant Church. invest in certain environmental advocacy that would limit
Jenny Olson and E.A. Rasmuson came to the small Tlingit economic opportunities for Alaskans.
Indian village of Yakutat, Alaska separately, met, and
married. Later, the couple took on the leadership of a At any given moment in a foundation’s life cycle, a
struggling local bank, which became a force for progress foundation’s charter will be at some point along a
as Alaska’s largest statewide financial institution. Today, continuum that reflects the relative influence and control
this family foundation, established in 1955, continues of the foundation’s founding donor(s). Some foundations
to honor its founders’ commitment to Alaska’s future may stay firmly at one point along this continuum
through programs related to quality health care, economic permanently, while others may shift positions on this
opportunity, vibrant arts, and educational opportunity. continuum over time.

Origin stories such as this one often have an enduring

power over a foundation; even when the donor’s intent
is broad and the legal obligations are few, a foundation’s GrantCraft Connection
origin continues to shape practice throughout a Read this blog post about how the
foundation’s life cycle. Weissberg Foundation used an unconventional
method to help articulate and come to a consensus
around their core values.

GRANTCRAFT, a service of Foundation Center FRAMEWORKS FOR PRIVATE FOUNDATIONS 10

 CHARTER CONTINUUM
Donor-led Stewarded Connected Open

DONOR-LED: A living donor(s) sets mission, priorities, and leaders operate within the founder’s framework, again by
allocation of resources, and forms of engagement; living law or through a powerful tradition. They see themselves as
donors are actively engaged in leading the foundation and stewards and guardians of the founder-determined
these components may change as the thinking of the donor(s) foundation. Some examples include Margaret A. Cargill
evolves. Some examples include the Bill & Melinda Gates Philanthropies, Robert Bosch Stiftung, Robert Wood Johnson
Foundation, the Gordon and Betty Moore Foundation, the Foundation, and The California Wellness Foundation, a
Simons Foundation, and the Oak Foundation. health-conversion foundation.

For donor-led foundations, the charter serves as a blueprint CONNECTED: The successors—whether family members
for successive generations to follow. Laura Arrillaga- or not—of the founder(s) are not tightly constrained by the
Andreessen, founder and president of Laura Arrillaga- founder’s vision or priorities, but to varying degrees they still
Andreessen Foundation, notes: “The more narrow, evolved, look to the founder(s) vision, preferences, and approach to
and specific the founding mission, strategy, grantmaking, and inform their decisions. This may have happened intentionally
operating principles are, the greater the chance the donor with a shift from donor-led to connected, or gradually over
intent will be honored. It’s not going to be honored if nobody time from a stewarded to a less donor-oriented connected
knows what it is.” style. Trustees of a foundation with a connected charter see
themselves as interpreters of tradition whose continuity is
The charter can also serve as an important guide for other important, but whose expression (in terms of issue area,
types of foundations. For example, community and company- approach, involvement, and other factors) can evolve. Some
sponsored foundations have their own charters—and also examples include Surdna Foundation, The Wallace Foundation,
work with a range of individual, family, and corporate donors and The Annie E. Casey Foundation.
to establish endowments or contribute funds. Jarrett Lucas,
executive director of Stonewall Community Foundation, For example, at the W.K. Kellogg Foundation, program officer
reflects on the foundation’s charter in this way: “Stonewall Arelis Diaz notes that, “Our founder, Will Keith Kellogg, is still
was founded as response to the tragedy of the AIDS epidemic a really large part of our DNA and his legacy and values are
in the late 1980s, to create a space where our donors could still embedded in our foundation’s thinking. That definitely
turn loss into legacy. Our founding ethos remains: being is something we remain very much connected to, at the staff
responsive, imagining alternatives to loss, fostering a culture of and board levels. Mr. Kellogg is quoted quite often; his insight
philanthropy among LGBTQ people. Most donors to Stonewall still drives our theory of change and our frameworks for
are of the community that we serve, which really sets us action. We focus on racial equity, community engagement,
apart.” Conversely, Newman’s Own, Inc., a food and beverage and leadership—issues that are still very much aligned to his
company, and its sole owner, Newman’s Own Foundation, carry original purpose.” Generations later, the foundation continues
on Paul Newman’s commitment to use all the money it receives to look to and interpret the founder’s vision.
from product sales for charitable purposes. Bob Forrester,
president and chief executive officer of Newman’s Own OPEN: Board members are empowered to select the
Foundation, notes, “While our charter creates an unusual kind foundation’s areas of activity and types of engagements based
of tension within the organization, it’s a constructive tension on their collective assessments of external forces and the
because we need to go out and earn our money every day like foundation’s capacity. Their decision making is not constrained
any other business in a competitive environment.” by how the founder might have reacted, nor do they to adhere
to a traditional area of work for the sake of continuity. They
STEWARDED: Though the donor(s) no longer lives or is may view that tradition as a strategic advantage that should not
no longer involved with the foundation, the donor’s decisions be readily abandoned, but that decision reflects an objective
and intentions continue to shape the foundation’s mission, assessment of a resource, not a legally required or value-based

program areas, and approach. This can happen in formal, loyalty to the past. Examples include Fondazione CRT, Ford

legally binding ways through governing documents, or Foundation, The Rockefeller Foundation, and William and Flora

informally through custom and culture. Subsequent boards Hewlett Foundation.

GRANTCRAFT, a service of Foundation Center FRAMEWORKS FOR PRIVATE FOUNDATIONS 11

 Click Here for More... practices known in Europe and around the world, and
conversely to attract new design and economic resources
from Arelis Diaz, program officer, W.K. Kellogg
from abroad. We have a courageous vision of philanthropy,
Foundation, on how the foundation’s charter
serves as its “source code” today. which adds to the traditional and more recent granting
approaches, including impact investing and venture
philanthropy, to generate virtuous streams in terms of
The distinctions above may be in the eye of the beholder
sustainability, impact, and results.”
and, in individual foundations, frequently evolve—yet there
are meaningful differences in the scope of decision making
A foundation that seeks to increase its effectiveness in
at each point in the continuum, as foundations approach
today’s changing environment is well served by taking the
and use their charters differently.
time to reflect on and discuss its charter—both among
staff and with the board—to clarify constraints on decision
For those with living donors and/or heavily prescribed
making and potential points of organizational change. A
“donor-led” charters, all key decisions must be aligned
clear and shared understanding of a foundation’s charter
with the charter; for those with flexible charters that are
can help to ground its past decisions and results, lead
only loosely connected to a founder, a check of general
to more effective and focused planning and external
principles will likely suffice. Foundations in the middle of
communication, and illuminate future directions.
this continuum will often have more flexibility to chart
their own course within a broader range of discretion,
and the charter therefore serves as a guide to orient the
foundation’s direction. GrantCraft Connection
Read how the Andrea & Charles Bronfman
At Fondazione CRT, secretary general Massimo Lapucci
Philanthropies’ decision to spend down intentionally
notes, “We have a clear charter: we are a foundation gave the next generation of family philanthropists the
of banking origin whose purpose is the growth and freedom to pursue their own visions and approaches
development of the territory, also in an international to effect positive change.
dimension. We aim to make our excellence and best

Questions to Consider
l What is the story behind your foundation’s l How was your foundation initially governed?
origin? How does that origin story come into If it has changed over time, how and why has
play today? it changed?
l What, if any, influence does the vision of your l What are your foundation’s values, cultural norms,
founding donor(s) have on the foundation today? mores, and practices?
When, how often, and why do your foundation’s l How do past and current norms influence what,
current leaders look to the founders? where, and how you fund today?
l What kind of charter does your foundation have:
clear and explicit, or vague and ambiguous?

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 Social Compact
A foundation’s social compact answers the question: To whom is a foundation accountable,
and how is it making a difference with the special legal status it has been given?

A social compact is a foundation’s reciprocal agreement, understanding and communicating meaningful results.
either implicit or explicit, with society and key There is often a symbiotic relationship between a
stakeholders about the specific value it will create. A foundation’s charter and its social compact. For example,
defining characteristic of most endowed foundations a corporate foundation may define its social compact in
is the extraordinary freedom they have to define their alignment with how its firm defines its customers, and a
own accountabilities, beyond baseline accountabilities to family foundation may define its social compact in relation
regulators and boards. The social compact articulates to its charter, prioritizing the family tree that connects
how a foundation defines its license to operate, the to its founder.
value it creates, and the relationship it has with its
stakeholders. It is the source of the foundation’s Foundations with donor-led or stewarded charters may
legitimacy in the ethical sense. be less likely to consider changes to their social compacts.
Foundations with open charters have the flexibility to
update or redefine their social compacts as needed; for
example, the Ford Foundation is currently reimagining
“One of the typical tensions
its social compact with grantees. According to program
we manage is how ‘political’ officer Chris Cardona, “We are forging a different kind of
and visible the assertion of social compact, based on systematic use of feedback loops:
listening to grantees, reflecting, learning, changing
our own advocacy for mission
resource allocations, and then sharing that back out
should be, versus quietly with the field. This has gone hand in hand with a refined
supporting the grantees. On programmatic focus.”

risk, my philosophy is that Foundations are institutions of both private action and
every foundation should try public good. Governments routinely question the legitimacy
to do one thing each year that of private foundation support to organizations and issues
that may be at odds with their policies. When normative
feels scary.” societal values and public policy objectives are debated
Robert Ross, The California Endowment in the United States and Europe, foundations are often
pressured to demonstrate value and justify their unique
legal status. A related challenge is the closing of civil society,
Social compact encompasses a foundation’s external as perceived security threats and a declining respect for civil
accountabilities, relationship to society, and conception of rights and the rule of law empower governments around
what it considers appropriate to do beyond the minimum the world to restrict basic freedoms.
required by legal and regulatory frameworks. The cultural
legacy of the foundation plays an important role in how
the foundation sees itself. The social compact influences
GrantCraft Connection
how the foundation defines beneficiaries and interacts
Does your foundation have glass pockets?
with a broad range of stakeholders, including grantees,
Take this transparency assessment and use it
communities, the media, the philanthropic sector, and/or
as a road map to discuss and implement other
the general public, and its commitment to transparency—
transparency practices at your foundation.
as well as the foundation’s overall approach to

GRANTCRAFT, a service of Foundation Center FRAMEWORKS FOR PRIVATE FOUNDATIONS 13

In the midst of these challenges, foundations have determined by the stakeholder communities’ threshold for
enormous freedom to define and defend their social risk. For endowed foundations, such as the W.K. Kellogg
compacts. Robert Ross, president and chief executive officer Foundation, risk is often considered in light of the founder’s
of The California Endowment, notes, “We are accountable vision and appetite for change. As Diaz notes, “The issues
to the communities covered by our mission, primarily. Of we focus on and our frameworks for action are still very
course, we have the IRS and attorney general to whom much aligned to our founder’s original purpose.”
we are responsible as well. We believe in spending the
reputational and political capital of the foundation in
pursuit of key objectives, but we try to do this thoughtfully, “We are forging a different
selectively, surgically.”
kind of social compact, based
Embedded in all foundation social compacts, regardless on systematic use of feedback
of how they are defined, is an approach to risk: what type loops: listening to grantees,
and level of risk is considered acceptable, or necessary?
And, how will risk be defined and managed? Examination
reflecting, learning, changing
of a foundation’s social compact can provide important resource allocations, and then
insight, particularly for foundations that struggle to define sharing that back out with
their approach to risk and articulate when and why they are
willing to take risks.
the field.”
Chris Cardona, Ford Foundation
Foundations often wrestle with whether and how to engage
in public discourse about and with the communities and
programs they support—while at the same time many wish A social compact commitment can also be defined
to project a neutral or ideology-free stance. Ross continues, according to fundamental principles of transparency
“We have conversations among our executive team and and community engagement, which for many funders
in our boardroom about the matter of risk on a pretty are entwined. A foundation’s social compact informs its
regular basis. One of the typical tensions we manage is how overall approach to transparency and the information it
‘political’ and visible the assertion of our own advocacy for chooses to share, such as goals and strategies, grantmaking
mission should be, versus quietly supporting the grantees. processes, lessons learned, and failures; it also influences
On risk, my philosophy is that every foundation should the foundation’s approach to inclusion, mutual support,
try to do one thing each year that feels scary. Most of the and collaboration. The Wikimedia Foundation’s director of
time, my team and I are pushing the board, but sometimes resources, Katy Love, notes, “All funders should consider
the board pushes us about thinking differently. It’s a good how they can involve the communities they’re attempting
healthy balance.” As this example illustrates, a clear social to serve in their grantmaking and in all of their work.
compact commitment can help to orient all aspects of a Participatory grantmaking is an important contribution
foundation’s work and frame important conversations to philanthropic practice that can significantly strengthen
about resource allocation. grantmaking results. For us, it is fundamental to everything
we do and comes right out of our charter and social
Stonewall Community Foundation, a public foundation, compact with our community of users.”
considers risk in the context of its social compact and a
sense of mutual accountability with the LGBTQ community
and its donors, notes Jarrett Lucas: “Public foundations
organize communities—of donors, stakeholders groups, GrantCraft Connection
grantees—which strengthens the work and, along the Check out this blog post from RSF Social
way, helps to mitigate risk: we don’t get out in front of our Finance and the Wikimedia Foundation on why every
donors and community members; we move together.” In funder should consider participatory grantmaking.
this instance, the threshold for risk for the foundation is

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Similarly, NoVo Foundation—a social justice-oriented A foundation that seeks to sharpen its focus or broaden
family foundation with a deep commitment to addressing its impact is well served by taking the time to understand
the structural barriers that perpetuate inequality—held a and discuss its social compact. A clear and shared
year-long listening tour to engage and invite ideas from understanding of its social compact can help a foundation
local communities on what is needed to advance the to more effectively make decisions, prioritize and align
movement for girls and young women of color in the United resources, and ensure its resources are impacting its
States. In these examples, both foundations are guided by intended beneficiaries.
their social compacts to put community voice at the center
of decision making.

GrantCraft Connection
Click Here to Hear More... Read this blog post from the David Bohnett
on foundation transparency and accountability in Foundation about how important it is for foundations
the U.S. and Europe from Rien van Gendt, board to really immerse themselves in the communities
member of Rockefeller Philanthropy Advisors (and they serve.
former CEO of the Van Leer Group Foundations).

Questions to Consider
l A defining characteristic of most endowed l To what degree does your foundation seek to
foundations is the extraordinary freedom they influence the communities it serves? To what
have to define their accountabilities, beyond degree is the foundation influenced by the
baseline accountabilities to regulators and boards. communities you serve? Why?
To whom is your foundation responsible? Who l A foundation’s social compact is the source of the
are your top three stakeholders—inside the foundation’s legitimacy in the ethical sense; this
foundation, and outside of the foundation? sense of legitimacy is often earned, or conferred
l Are there certain principles to which your by others. To what degree does your foundation
foundation feels accountable, such as derive its sense of legitimacy from the private
founder legacy? action of its donor? Government? Grantees? Public
goodwill? Populations served? Nonprofit sector
l What is your foundation’s approach to
writ large? Peer foundations?
transparency? What information does it make
publicly available, and why? What does your social l Which does your foundation value more, and
compact suggest about what should why: the freedom that foundations have to act
be shared, and with whom (such as goals, independently, or the trust that the public confers
how grant decisions are made, lessons on foundations, which may occasionally constrain
learned, failures)? independence?

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 Operating Capabilities
A foundation’s operating capabilities address the question: What must a foundation not just
do or obtain, but excel at in order to achieve its mission? How can it best deploy resources to
support its work in alignment with its charter and social compact?

Operating capabilities are the dominant approaches Wellness Foundation’s president and chief executive officer,
that guide how a foundation carries out its work and Judy Belk, notes, “Most foundations are not the size of Ford
the core competencies, resources, skills, and processes and Gates—so every ounce of human potential is critical.”
that it cultivates in order to achieve results. Culture
plays a role here in how the foundation defines and To optimize their overall performance to meet emerging
deploys its capabilities. challenges and opportunities, many foundation leaders
are taking a hard look at their organizations’ operating
capabilities—and navigating a variety of tensions. These

“All foundations already do tensions fall across six critical dimensions, all of which
are interrelated. Through the Theory of the Foundation
impact investing, but they’re initiative’s inquiry process, foundation leaders identified
not all structured in ways that the following key operating capabilities that inform how
they carry out their work: decision making, resourcing,
allow them to understand if
flexibility, initiative, programming, and relationships. How
their impact is positive, or a foundation approaches each of these capabilities may
negative. You have to be considered as a point along a spectrum, as illustrated
on p.17. The spectra illustrate the underlying dynamics
constantly push yourself to
of how work is actually done in a foundation. Although
investigate what effect you there is no “right” place to be on any of these spectra, an
are having.” individual foundation’s choices have important implications
for its operations and organizational culture. For example,
Clara Miller, Heron Foundation
a centralized approach may lead to more coordinated
investment; a broad approach may lead to more intentional
learning across fields. Shifting a foundation’s position along
Some foundations can easily group their programs into these spectra is often a matter of culture change, requiring
a handful of broad issue areas, such as the environment intensive and intentional work.
or education—but are less clear about the operating
capabilities that inform how they carry out their work within
a program or across the foundation as a whole, such as GrantCraft Connection
their approach to resourcing and building relationships. Use GrantCraft’s guide Supporting Grantee
These foundations may struggle to develop and manage Capacity to discuss your foundation’s approach to
capabilities, or end up heavily weighted in certain supporting grantees. How does your approach
capabilities and woefully under-resourced in others. reflect where your foundation sits on the spectrum
of each of the six operating capabilities identified in
Whatever their life-cycle stage or size, all foundations try this chapter?
to balance their missions and resources. The California

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 What’s Your Operating Capabilities Approach?

Decision Making
How and where decisions are made
CENTRALIZED and, as a result, how much variability DECENTRALIZED
or consistency exists within the
foundation

Resourcing
How the foundation resources its
BUILD work, including indirect time allocated BUY
to support key programmatic goals
beyond grantmaking

Flexibility
CREATIVE How the foundation implements its DISCIPLINED
work and the amount of latitude the
staff has in interpreting core strategy

Initiative
RESPONSIVE How the foundation sees its role at
PROACTIVE
the highest level

Programming
BROAD How the foundation tackles its areas DEEP
of focus

Relationships
INDEPENDENT How the foundation sees its role and NETWORKED
interacts with peer funders

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 Key Operating Capabilities
DECISION MAKING (building internal capability)? Do these patterns hold true
Centralized Decentralized across all program areas (which might place it farther at
This refers to how and where decisions are made and, as one end of the spectrum), or do they vary across programs
a result, how much variability or consistency exists within (placing it closer to the middle)?
the foundation. Do the foundation’s programs operate
independently? Or are key program strategy and design At the Heron Foundation, president Clara Miller examined
decisions made centrally, with each program taking on current operating capabilities and then took steps to evolve
an implementation role? How much latitude do individual them toward the build end of this spectrum. “We decided
program officers have? How much effort goes into that we needed to do more than just conduct financial
integration across program areas or functions? transactions,” she notes. “We also needed to leverage these
transactions by being out in the investment community, by
At the Ford Foundation, notes Cardona, where and how building and helping others to make deals. So we’ve moved
decisions are made is changing. “Research, strategy, and beyond thinking of transactional relationships with grantees
decision making at the foundation traditionally rested at as the prime influence—we now put other voices to our
the level of the individual program officer. We operated work, not as a broadcast, but as a community. ” A shift in
on a bit of an academic model; as in a university, program resourcing approach—in this case, to leverage financial
officers came in with a specific discipline, and were hired transactions by building internal capacity—can have ripple
because they had a research agenda to pursue and were effects on internal and external relationships.
then authorized to go forth and pursue it. Over the last
eight years, the foundation has been gradually moving FLEXIBILITY
away from that. We condensed the overall number of Creative Disciplined
lines of work; now, we are further refining our focus, and This refers to how the foundation implements its work,
enabling more coordination across the foundation to and to the amount of latitude staff have in interpreting
integrate regional offices and to engage directors across the core strategy. Though a strategic plan or set of issue
foundation in tackling inequality. This all requires different priorities may be developed collaboratively across an
capabilities in our program directors and officers; directors entire foundation or handed down from senior leadership,
previously had grantmaking responsibilities, but today are implementation of these plans or priorities often lies with
much more focused on strategy and management.” A shift individual program staff. What latitude does staff have for
in decision-making approach can necessitate a shift in staff interpreting the core strategy or issue priorities? Are they
competencies—in this case, from direct grantmaking to encouraged to be creative and adaptive as they develop
strategy and management. their grantmaking and other program activities, or does the
foundation tend toward a disciplined and strict adherence
RESOURCING to a central or shared plan of action?
Build Buy
This refers to how the foundation resources its work, Laura Arrillaga-Andreessen of Laura Arrillaga-Andreessen
including indirect time allocated to support key Foundation notes, “Philanthropy is a bridge between
programmatic goals beyond grantmaking. Does the personal values and passions, resources and community
foundation build out its internal operations deeply, does needs, and welfare and enhancement. It is both art and
it share back-office or other critical functions with other science. We must account for the strengths and scale
foundations, or does it buy outside expertise? To what of institutional philanthropy, as well as the personal
extent does the foundation act as grantmaker and/or motivations and desires that drive the founders, leadership,
investor (buying external expertise) compared to operating and staff.” For this foundation, striking a balance between
programs or carrying out work through its own staff creative and disciplined approaches is paramount.

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 INITIATIVE the big foundations are conglomerates with various goals.
Responsive Proactive What’s most important is the internal self-discipline of being
This refers to how the foundation sees its role as a change clear about goals, and being willing to monitor how they
maker in society. Does it take a responsive approach, are doing in achieving those goals. Most foundations, even
supporting goals and initiatives defined by leaders in their many of the big ones, don’t impose that degree of self-
field or community, or does the foundation see itself as the discipline on themselves.” A single foundation may have
creator of solutions, designing its own goals and initiatives? several programs that fall along different places on the
Does the foundation respond to efforts emerging from the programming spectrum.
field, or does it instead develop its own theory of change?
Foundations may find themselves between the two ends RELATIONSHIPS
of this spectrum. For example, some may have a generally Independent Networked
responsive grantmaking strategy, but certain initiatives This refers to how the foundation sees its role and interacts
are proactive; others may develop their theory of change with peer funders or other potential partners, including
or overall strategy in a more responsive or collaborative the public and private sectors. Does the foundation tend to
approach with nonprofit leaders but implement this work in take solitary or unilateral action, which is often described
a more proactive manner through key initiatives that they as exhibiting leadership, risk taking, accountability, and
design themselves. ownership of an issue? Or does the foundation tend to
take a networked approach with a focus on co-funding,
At The California Endowment, which develops and collaboration, and even co-creation, seeking leverage and a
deploys its own theory of change and is at the proactive larger sphere of influence and impact?
end of this spectrum, Robert Ross observes, “I don’t
understand the recent wave of aversion and critique of William and Flora Hewlett Foundation president Larry
‘strategic philanthropy’; how does one gauge progress Kramer, reflecting on the foundation’s collaborative,
towards mission without a base strategy or theory of networked approach, notes, “However much progress
change and some key measures for tracking purposes?” we can realistically expect to make, we’ll do more of it
In alignment with this approach, the foundation does not working together with other foundations than working
accept unsolicited letters of intent or proposals; funding alone. This level of collaboration does require changes at
opportunities are by invitation only, to organizations the the operational level—big changes. You cannot simply sit
foundation identifies as a potential match with its theory back, develop your own strategy, get board approval to
of change. proceed in a particular way, and then go and find someone
to collaborate with.” At Hewlett, respect, consultation, and
PROGRAMMING collaboration with others in the field have been identified
Broad Deep as essential to their outcome-focused philanthropy
This refers to how the foundation tackles its areas of focus. approach—internally, among cross-functional staff teams,
Does the foundation favor having well-defined programs and externally. A foundation that takes a networked
with clear boundaries, or does it define its role in terms of approach is likely to actively seek out opportunities to
a broad social change agenda with greater variety among co-create strategy and programming.
the groups it supports? Does it see its signal achievements
as having been in highly specific areas with these triumphs Foundations that share a networked approach often
having ripple effects that reach the systems level, or from collaborate with one another as a network. For example,
“big bet” or field-building grantmaking that has seeded an the Ford, John S. and James L. Knight, John D. and Catherine
approach, movement, or strategy for change? T. MacArthur, Mozilla, and Open Society foundations came
together to launch NetGain, a partnership that enabled
Paul Brest, faculty co-director of the Stanford Center on them to collectively identify and seed interventions and
Philanthropy and Civil Society and former president of the investment opportunities for their own foundations and to
William and Flora Hewlett Foundation, notes, “Many of share those insights with the field.

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Taken together, these operating capabilities represent operating model: we have X number of programs and X
a dynamic set of traits that interact frequently with one number of program officers, so we chop up the program
another and may, over time, shift in direction or dominance. budgets in a specific way and then land on ‘we can make
Finding the right point of balance is a significant and X number of grants.’ Instead, at Heron we began to ask
ongoing challenge for foundation leaders. Shifts along what level of investment is needed to make a difference
these spectra often require them to scout new staff, invest here? And it became clear pretty quickly that a different
in professional development for current staff, engage their set of capabilities was needed.” Conversely, a strong set
boards in dialogue to evaluate their operating models in of operating capabilities may exert an outsize influence
relation to the foundation’s charter and social compact, and on the other elements of a foundation’s theory—leading
ensure alignment. a foundation to inadvertently remain stuck in its current
capabilities or to prioritize them over its social compact or
For example, a foundation’s board of trustees may charter. As Ford Foundation president Darren Walker notes,
empower a new foundation CEO to move in a new “Foundations have to interrogate their own behaviors,
direction but may meet resistance given the foundation’s practices, and policy. This is not something that can be
dominant set of operating capabilities—requiring a taken on superficially. It needs to be taken on seriously.
major reorientation of those capabilities. As the Heron You need to do an honest self-assessment that can be
Foundation’s Clara Miller has observed, “Decision making very painful; has implications for talent, organization, and
in foundations can sometimes be a function of the priorities; and can be very disruptive.” The Theory of the
Foundation framework can help foundations to ground
their self-assessments in their distinct elements—charter,
social compact, operating capabilities—and facilitate deeper
GrantCraft Connection understanding of how they align and manifest at the
Further reflect on your foundation’s operating level.
operating capabilities with GrantCraft’s “Roles@Work,”
deck, which drills down into 29 roles funders A foundation that seeks to strengthen its work should
commonly play—such as analyst, bridge builder, take the time to understand its operating capabilities and
convener, idea mover—and offers insight on how to how they constrain or enhance the foundation’s overall
strengthen them. effectiveness, and explore opportunities to rebalance their
overall approach.

Questions to Consider
l What capabilities are distinctive at your l Do you think your grantees and other
foundation? What are your special strengths stakeholders understand your operating
and what are some areas to be developed? capabilities? How does this level of understanding
inform your interactions?
l Are your capabilities consistent across the
whole foundation, or does each program bring l Are there capabilities that are core to your work
a distinct set (for instance, reactive for arts but that aren’t addressed in this chapter? What are
proactive for community development)? they, and how might they connect with others?
l How well does your foundation “walk the l If your foundation was in start-up mode today,
talk” —are any of the foundation’s stated which capabilities do you think would be most
capabilities more aspirational than others? important to design in—and which could be spun
off or discarded?

GRANTCRAFT, a service of Foundation Center FRAMEWORKS FOR PRIVATE FOUNDATIONS 20

 Takeaways for Funders
Foundation leaders today are looking for better ways to lead their organizations
through change. As they adapt to meet emerging challenges and
new opportunities, evaluating where they’ve been will provide insight on
what they will need for the journey ahead.

The Theory of the Foundation provides a useful A foundation’s theory of itself sits at the center of its
framework—charter, social compact, and operating strategic intent: What will the foundation do, and not do—
capabilities—to help funders navigate through change and why?
and more effectively align resources within and across
foundations. It brings critical areas of practice, so often In practice, a foundation’s theory or core framework—
left in the shade, more fully into the light. Robert Rosen, its charter, social compact, and operating capabilities—
director of philanthropic partnerships at the Bill & come together to inform an overall operating model.
Melinda Gates Foundation, observes, “It’s tough enough Operating models are the organizational structures inside
to collaborate: know thyself before trying to know others.” a foundation that enable it to reliably and consistently
The framework enables foundations to do just that; to deliver the combination of capabilities needed to support
get to know themselves better and, by using a common its chosen approach or strategy. Operating models define
framework, to more effectively connect with others. where critical work happens in an organization and
therefore how resources should be deployed in order to
support that work—and ensure that people inside the
foundation are aligned around a common understanding.
“It’s tough enough to This common understanding is key to a foundation’s
collaborate: know thyself culture and is a powerful motivator and enabler of
essential behaviors.
before trying to know others.”
Robert Rosen, Bill & Melinda Gates Foundation Operating models also reveal fundamental differences in
how foundations view what’s important, where and how
they can add value, and, ultimately, how they achieve
Tapping more deeply into a foundation’s charter, social impact. Several distinct operating models that illustrate
compact, and operating capabilities will benefit not only the these differences are emerging from RPA’s research, such
foundation but its partners, stakeholders, and communities as talent agency (select, strengthen, and promote change
too. At the Tecovas Foundation, consideration of this agents closest to the issue), think tank (apply expertise
framework has helped to highlight how conceptions of this
small family foundation’s social compact evolved over time.
The foundation’s executive director and vice chair, Mary
Galeti, notes, “The origin of our family foundation is rooted Action Step
in our family business. The foundation was envisioned as a Take 15 minutes to catalog the ways you see your
mechanism by which we, as a family, could practice working foundation’s charter, social compact, and operating
together in low-risk contexts. Today, we have dramatically capabilities in action—at the program and foundation
changed our orientation. We recognize that the work of our levels. What surprises you? What inspires you? What is

foundation isn’t actually about us, and we are exploring your foundation really good at? What opportunities do
you see for strengthening your foundation’s work?
where our charter and capabilities meet our social
compact, to better define and address multiple
levels of accountability—to our family, to our grantees,
to our community stakeholders, and to the field of
philanthropy itself.”

GRANTCRAFT, a service of Foundation Center FRAMEWORKS FOR PRIVATE FOUNDATIONS 21

to design solutions, find implementers), field builder
(grow organizations and movements to a point at which
Action Step
they could have a major impact), and campaign manager
Identify colleagues in other foundations who are
(use institutional power to get a policy/solution adopted
interested in discussing your respective foundations’
broadly). Though foundations are rarely wholly and
theories and operating models. Consider how they
completely a “single model,” they do tend to lean toward constrain or support your effectiveness individually,
one model while also incorporating traits of others. When it and collectively in partnership with others. What
is well executed, the foundation’s operating model becomes points of convergence and divergence do you see?
a hallmark or defining characteristic of its approach,
translating the core framework into practical application.

For example, the New York State Health Foundation Lisa Hamilton, the foundation’s vice president, notes, “We
illustrates aspects of the campaign manager model. are committed to sharing effective solutions. So when we
President and Chief Executive Officer David Sandman notes, figure out something works, we think it’s really important
“We are a health-conversion foundation whose mission to broadly disseminate those solutions so that others can
is to improve the health of all New Yorkers. When people take action too—and together, we can move the needle in a
tell me, ‘I thought the foundation was much bigger than positive direction. To that end, we have invested in building
it is!’ it always feels like a huge compliment. We strive and strengthening the KIDS COUNT network of advocates
to be more than grantmakers—we are change makers. in each state as a platform for sharing good policy ideas.”
Access to decision makers is a key strategy for us, so our In this example, the foundation’s independent, proactive
communications and outreach are critical. I write a regular capabilities enable it to strengthen the field of child
blog, and a senator in New York recently called me and advocacy just as its charter and social compact are rooted in
said ‘I just read your blog, and thought: we need to talk!’ We the experiences of the founder’s mother—a widow whose
ended up in an hour-long meeting with her and her staff. struggle and sacrifice now serve as an enduring legacy for
That is impact: We didn’t make a grant; instead, our in- children and families.
house capabilities enabled our access to decision makers.”
The New York State Health Foundation’s charter, social The Wikimedia Foundation illustrates aspects of the field-
compact, and capabilities come together in its campaign builder model as well, as it pioneers and promulgates
manager operating model: the foundation proactively participatory grantmaking approaches at the program,
builds its own communications and convening capacity to foundation, and sector levels. To facilitate engagement and
improve health policy and spread effective programs and, foster transparency at every stage, the foundation’s entire
ultimately, improve the health of all New Yorkers. grantmaking process is conducted publicly online—from
proposal intake and feedback on strengths and weaknesses
The Annie E. Casey Foundation illustrates aspects of to funding decisions.
the field-builder model, for example, through its KIDS
COUNT Network—a group of child advocacy and research Click Here to Learn More...
organizations representing every state and using data to
from Katy Love, director of resources, Wikimedia
promote smart policies on a range of childhood issues.
Foundation, about how the foundation
operationalizes its charter, social compact, and
operating capabilities.

Action Step
Translate your foundation’s theory into an actionable As the examples above demonstrate, foundations
model. Download and complete the “philanthropy may deploy distinct operating models at the whole
canvas” worksheet at the end of this paper, to help foundation and individual program levels. At times, a
you map current operating models—at the program
foundation may have multiple operating models at work
or foundation level—or develop new models.
within a single program area, given external constraints,
opportunities, or the varying needs of the field or system

GRANTCRAFT, a service of Foundation Center FRAMEWORKS FOR PRIVATE FOUNDATIONS 22

it seeks to influence. (A fuller publication on the topic of distinctions and commonalities among foundations, and
operating models is in development and will be available at to provide a useful framework for the sector as a whole
rockpa.org/expertise/theory-of-the-foundation.) to reflect, align resources, and achieve greater impact.

The Theory of the Foundation framework is designed to With this framework as a guide, reflection can spark
help funders analyze and reflect on the critical elements insights, enable dialogue about strategic intent, and
that underpin a foundation’s operating model: charter, help to build greater alignment—so that funders of all
social compact, and operating capabilities. kinds will be better positioned to achieve the results they
seek, together.
Click Here to Learn More...
from Jarrett Lucas, executive director, Stonewall
Community Foundation, who discusses the value
Action Step
of regular institutional introspection and how the
Share this GrantCraft paper with your foundation’s
Theory of the Foundation can be adapted for use
trustees and staff, and then host a brown-bag
by a community foundation.
conversation inside your foundation about how your
foundation’s theory has shaped its development as an
Whether used individually or in concert with others, the
organization over time.
Theory of the Foundation can help funders to create a
shared vocabulary for reflection, to illuminate important

Questions to Consider
l How can you apply the Theory of the l What influence, if any, has your foundation’s
Foundation framework to your own organizational life cycle had on your foundation’s
foundation? How might a conversation about operating model?
your charter, social compact, and operating l When you look out across the field of
capabilities play out during a senior staff philanthropy, are there certain new or emerging
meeting or board retreat? operating models that strike you as intriguing?
l How would you describe your foundation’s How and why? What elements do you think might
overall operating model (whether or not one “fit” within your foundation’s operating model—
has been explicitly articulated)? and which would not?
l Does your foundation manifest more than one
operating model? Do different programs have
different models?

GRANTCRAFT, a service of Foundation Center FRAMEWORKS FOR PRIVATE FOUNDATIONS 23

 TRANSLATE YOUR FOUNDATION FRAMEWORK
INTO AN ACTIONABLE MODEL

Philanthropy Canvas
A foundation’s framework (charter, social compact, and operating capabilities) sits at the
center of its strategic intent: What will the foundation do, and not do—and why?

Once a foundation has clarified its Theory of the conditions; it brings into focus the full landscape of
Foundation, it is ready to translate that framework into relationships, constraints, and opportunities.
an actionable model.
Use the philanthropy canvas at the program or foundation-
To help with that process, RPA created a tool called the wide level, or both—to help you map current operating
“philanthropy canvas,” a variant of the business model models or develop new ones. For more guidance on
canvas created by Alexander Osterwalder and Yves how to use such a canvas tool for strategic planning and
Pigneur. This canvas invites foundation staff, trustees,
1
organizational assessment, visit: rockpa.org/expertise/
and other key stakeholders to map out the elements of a theory-of-the-foundation.
foundation’s broader strategy and activities in relationship
to both its core framework, which lies at the heart of the To begin, consider the framing question and items in each
organization, and the external environment that it seeks to box of the canvas on the following page, as well as the
influence and is in turn influenced by. most important elements of the outside world described
in the four areas surrounding the canvas. Invite members
With the philanthropy canvas, foundations can map of your foundation’s leadership to offer their suggestions
the relationships among a foundation’s core drivers for how they would fill out each box on the canvas for
and articulate the foundation’s strategic intent. The your foundation and then facilitate a conversation with
philanthropy canvas situates a foundation’s framework colleagues and/or peers in other foundations to reflect on
(charter, social compact, capabilities) at the center, and these initial suggestions to begin your reflections.
moves out to encompass partners, resources, and external

1. For more, see: Alexander Osterwalder, Yves Pigneur, Tim Clark, and Alan Smith, Business Model Generation: A Handbook for Visionaries, Game Changers,
and Challengers (Hoboken: John Wiley & Sons, 2010).

GRANTCRAFT, a service of Foundation Center FRAMEWORKS FOR PRIVATE FOUNDATIONS 24

 Philanthropy Canvas Worksheet
STATE OF THE WORLD/ISSUE
Problem environment that you are trying to change

Where is the change? Who will help you?

People, species, organizations, Co-creators, co-funders, and supporters
and/or places

How do you do it? How do you interact?

Key activities Relationships

REGULATORY ACTOR
What do you do and why?
& POLITICAL LANDSCAPE
Charter, social compact, and capabilities
ENVIRONMENT The funders,
Legal and cultural nonprofits, and
policy limitations other players
that define the working on the
range of possible issue you
actions care about

What do you need? How do you distribute

Key resources or disseminate?
Channels

What will it cost? How will you fund it?

Budget & opportunity costs Capital, income, and/or co-funders

RESOURCE CONSTRAINTS
Financial resources available, internally and across the field

GRANTCRAFT, a service of Foundation Center FRAMEWORKS FOR PRIVATE FOUNDATIONS 25

ABOUT FOUNDATION CENTER
Established in 1956, Foundation Center is the leading source of information about philanthropy worldwide. Through data,
analysis, and training, it connects people who want to change the world to the resources they need to succeed. Foundation
Center maintains the most comprehensive database on U.S. and, increasingly, global grantmakers and their grants —
a robust, accessible knowledge bank for the sector. It also operates research, education, and training programs designed
to advance knowledge of philanthropy at every level. Thousands of people visit Foundation Center’s website each day and
are served in its five regional hubs and its network of more than 400 funding information centers located in public libraries,
community foundations, and educational institutions nationwide and around the world. For more information, please visit
foundationcenter.org, call (212) 620-4230, or tweet us at @fdncenter.

ABOUT ROCKEFELLER PHILANTHROPY ADVISORS

Rockefeller Philanthropy Advisors (RPA) is a nonprofit that partners with individuals, families, and institutions to help make
philanthropy more thoughtful and effective. Since 2002, we have facilitated more than $3 billion in grantmaking worldwide,
establishing ourselves as one of the world’s largest and most trusted philanthropic service organizations. We advise
established and aspiring philanthropists, foundations, and corporations; manage innovative, early-stage nonprofits; and
share insight and learning with our clients, our community, and the sector. By continuing to build on lessons learned over
more than a century, our goal is to help define the next generation of philanthropy and to foster a worldwide culture of
giving. For more information, visit us at rockpa.org.

THEORY OF THE FOUNDATION FUNDERS

Since its launch in 2014, dozens of foundations have contributed to the development of the Theory of the Foundation
as funders of and participants in this research in the United States and Europe. We thank the following funders for their
support and participation, along with almost 40 additional foundations that have shared their insights and reflections for
specific Theory of the Foundation research efforts.

• Alfred P. Sloan Foundation • Lloyds TSB Foundation for Scotland

• The Andrea & Charles Bronfman Philanthropies • Lumina Foundation
• The Annie E. Casey Foundation • Margaret A. Cargill Philanthropies
• Arcadia Charitable Trust • Nathan Cummings Foundation
• Arcus Foundation • Newman’s Own Foundation
• Barr Foundation • Oak Foundation
• Bill & Melinda Gates Foundation • Porticus
• The California Wellness Foundation • Rasmuson Foundation
• Calouste Gulbenkian Foundation • Robert Bosch Stiftung
• Charles and Lynn Schusterman Family • Robert Wood Johnson Foundation
• Conrad N. Hilton Foundation • Rockefeller Brothers Fund
• The David & Lucile Packard Foundation • The Rockefeller Foundation
• Episcopal Health Foundation • S. D. Bechtel, Jr. Foundation
• Esmée Fairbairn Foundation • Simons Foundation
• Fondazione CRT • Stavros Niarchos Foundation
• Ford Foundation • Surdna Foundation
• Gordon and Betty Moore Foundation • TIAA Institute
• Heron Foundation • The Wallace Foundation
• Houston Endowment • Wellcome Trust
• John D. and Catherine T. MacArthur Foundation • William and Flora Hewlett Foundation
• The Kresge Foundation

In addition to leaders from many of the funders of the Theory of the Foundation initiative, we thank the following people
specifically for generously sharing their experience and insight, which informed this GrantCraft paper:

• Laura Arrillaga-Andreessen, Laura Arrillaga-Andreessen Foundation • Larry Kramer, William and Flora Hewlett Foundation
• Judy Belk, The California Wellness Foundation • Katy Love, Wikimedia Foundation
• Paul Brest, Stanford Center on Philanthropy and Civil Society • Jarrett Lucas, Stonewall Community Foundation
• Chris Cardona, Ford Foundation • Massimo Lapucci, Fondazione CRT
• Arelis Diaz, W.K. Kellogg Foundation • Clara Miller, Heron Foundation
• Bob Forrester, Newman’s Own Foundation • Will Miller, The Wallace Foundation
• Mary Galeti, Tecovas Foundation • Robert Rosen, Bill & Melinda Gates Foundation
• Rien van Gendt, Rockefeller Philanthropy Advisors (Board Member) • Robert Ross, The California Endowment
• Lisa Hamilton, The Annie E. Casey Foundation • David Sandman, New York State Health Foundation
• Diane Kaplan, Rasmuson Foundation • Darren Walker, Ford Foundation
For additional guides and other materials in the
GrantCraft series, visit grantcraft.org.