Finally, and perhaps most obviously, foundation culture is often an offshoot of the culture of for-profit corporations. Since the money to create foundations often comes from successful businesspeople, it is logical that many core cultural attributes should come from that world. That influence can be clearly seen in the governance structures of most foundations, specifically the power wielded by the investment committee of the board. When it comes to budgeting, foundations often invoke corporate discipline as evidence of good stewardship, limiting the size of the staff and keeping a lid on expenses.
In larger foundations, especially, a business-minded emphasis on growing the assets of the foundation can become an overriding goal. Boards often devote substantial time to financial matters and may allocate a large proportion of institutional resources to investment staff and external advisers. For foundations that intend to exist for perpetuity, this practice helps ensure the foundation’s continued growth and existence, although it may not contribute to effectiveness.
Because many foundation trustees also sit on the boards of for-profit corporations, they may find the metrics and ratios involved in tracking investments to be more familiar territory than the more open-ended challenge of assessing programmatic impact. At times, trustees’ interest in metrics manifests as a call from the board for a set of metrics to neatly summarize the impact of a foundation’s grantmaking. The resulting dashboards and data points can be very useful for showing trustees a snapshot of grantmaking data, but they also tend to oversimplify complex areas of work in a way that may not support efforts to make better decisions over time.
Corporate CEOs — responsible for making large amounts of money for shareholders — are treated as celebrities. Foundation CEOs, especially CEOs of large, national foundations, are also sometimes granted extraordinary autonomy and deference. They are expected to provide dynamic leadership within their organizations. The leader’s style can inadvertently become a primary shaper of foundation culture, and when that happens, its influence can persist long after the leader has moved on.
A new generation of tech entrepreneurs has recently started to influence the culture of foundations. They come from a highly competitive world of real-time data, constant learning and adaptation, and measurable short-term results and bring a different corporate point of view to the board table. More often than not, their preferred mode is to act decisively and to “fix” things in the short term rather than to engage in long-term efforts to address root causes or to try to reform systems. New donors sometimes favor “disruptive” startups led by social entrepreneurs (of which charter schools are a prime, if controversial, example). This preference can also translate into an indifference to building the capacity of existing organizations and strengthening other community assets.
Additionally, some new donors are also far less interested in perpetuity, committing to spending down their foundation’s assets within a specified time period. The spend-down deadline can create a dose of urgency that can be a useful tonic for foundation culture, enabling foundations to make bigger bets and use their assets in new and different ways (such as program and mission-based investments) and requiring them to reconsider time-intensive or cumbersome processes.
THINK ABOUT: To what extent does the “source code” of corporate culture 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?