Because many foundations have their roots in the trust departments of banks, it is not surprising that they have adapted many aspects of banks’ organizational culture into their own. This legacy shows up in the common language of foundations: “program officer,” “portfolio,” “due diligence” and “docket” reflect their banking equivalents. The hushed lobbies and sumptuous boardrooms of some foundations also call to mind the serious and stately atmospheres of banks. Some aspects of this legacy have been positive for foundations. For example, at times foundations can be well served by the emphasis on fiduciary responsibility and careful assessment of risk.
Other elements of banking culture may not be as useful to foundations. Highly structured grant approval procedures driven by calendar deadlines parallel the internal processes of financial institutions, even though the time frames may not meet the needs of grantee partners. Foundation boards may measure performance by how much the organization has been able to grow the funds under management rather than by how generous or successful it has been in distributing those funds in service of their mission. And the concept of “return on investment” continues to apply narrowly to the impact of foundations’ financial outputs such as portfolio size.
Just as banks have a history of redlining and other inequitable practices that limit access to capital for all but a select few, many foundations also have a reputation for exclusivity and a lack of transparency. It can be difficult for nonprofit grantseekers to figure out exactly what a foundation wants to fund, challenging to find a real person to talk with and nearly impossible to have honest dialogue about a nascent idea. Perceptions of exclusivity have been exacerbated by foundation practices that isolate foundation staff from continual dialogue with their communities, such as invitation-only grant application processes. While these practices can be useful for some foundations or initiatives, foundation staff may miss promising ideas and opportunities to have impact in new ways.
THINK ABOUT: To what extent does the “source code” of banking show up in your organization’s language, behavior and assumptions? Which aspects of this source code are important to keep? Which aspects need to go?