Doug Easterling, Ph.D., is a Professor in the Department of Social Sciences and Health Policy at Wake Forest School of Medicine, and served as department chair from 2005-2015. He has served as an evaluator, strategic advisor, learning coach and facilitator for more than 20 national, state, and local foundations. From 1992-1999 he served as the Director of Research and Evaluation at The Colorado Trust, where he oversaw the foundation’s evaluation of a series of community-based initiatives. He is currently conducting a study for the Robert Wood Johnson Foundation which explores how health conversion foundations have innovated and adapted their strategies to address the social determinants of health.
Interview by Tom Peterson
Stakeholder: What are foundations looking for when they choose their grants?
Easterling: You might think that foundations are just looking for the strongest applications. In fact, foundations always have a particular lens they apply when making grants. First off, they have defined areas of interest that limit what will fund. For example, more foundation dollars are now going toward health-related programming than any other area.
Once a foundation receives a batch of applications in its funding area, let’s say health, what does it look for? Foundations each have their own perspective and intelligence on the community and its health needs, what’s out there, and what works. So even the most responsive grant makers – the ones that wait for proposals to come to them – have a lot of perspective that comes from funding many different groups. This allows them to say, “Well, this portfolio of projects is the most potentially powerful thing we could do to improve health.”
This is different from a bank that makes loans, where all they want is a balanced portfolio in terms of funding risk. Foundations are somewhat interested in the risk exposure but they are more interested in putting put together a coherent strategy of different projects that when combined will make a difference.
Stakeholder: So how do foundations create a community health strategy?
Easterling: The term strategy has become a hot topic in philanthropy, with plenty of confusion and difference in opinion in what constitutes a strategy. Many foundations think they have a strategy when all they have is a kind of compilation of grants. Strategy presumes that you actually are after a particular set of outcomes that is based on an informed assessment of what the community needs, what the resources are, what’s been done to-date, who else is doing stuff in this space, etc. Then the strategy involves then either funding the organizations that do the work that’s needed or else stimulating that work.
If a foundation has a strategy that means it’s being proactive in improving health. It means being out there – part of community partnerships, working with institutions, with health care systems, with public health, with elected officials, with senior services. Strategic foundations are part of the conversations where the rest of the community is talking about their own strategies for improving health. And then the foundation finds its own role as part of the overall strategy.
Stakeholder: You said that the most funded issue is health, which may surprise some people.
Easterling: That stems from the fact that we now have over 300 health conversion foundations, created since the late 1970s. They came from the sale of a nonprofit hospital, health care system or insurance plan, ranging from small county hospitals to statewide Blue Cross Blue Shield plans. Their sale or conversion creates a new foundation. Some of these are $20-$30 million foundations. At the other end of the spectrum, the California Endowment, the Colorado Health Foundation and the Health Foundation of Greater Kansas City each have more than $2 billion in assets.
So you’re talking about huge resources, new resources coming into communities where there is no long history of having funded a favorite set of organizations. It’s new money, free money to go to the highest needs.
Stakeholder: Do their bylaws require them to do health and, more specifically, health in a certain geographic area?
Easterling: Typically, in creating a conversion foundation you essentially maintain, not the actual non-profit organization, but the assets doing the same mission. The new foundation created out of the sale of a hospital or something has to have a mission at least somewhat consistent with the organization that was sold. It has to be about improving or maintaining population health. In some states the Attorney General gets deeply involved to make sure that happens, even to the point of overseeing the appointment of the board. In others it’s just a kind of check-off step.
Stakeholder: Since this is only a few decades old, how these foundations see themselves and operate is probably still evolving. Are they still in flux or is it settled down?
Easterling: There have been waves. The first wave formed in the 1980s and 1990s have generally stabilized and found their niche. But then successive waves come in, and they all go through a learning process. The field as a whole is still dynamic and going through a lot of change.
Meanwhile, you’ve got this chaotic health care environment. New work needs to be done. Many conversion foundations have been actively trying to figure out what they need to do with the passage of the Affordable Care Act. And what they do depends on whether they are in a state that either did or did not expand Medicaid coverage. Likewise, the major shifts we’re seeing with electronic medical records, accountable care organizations and the restructuring of public health departments all present major challenges and dilemmas that are essentially opportunities for foundations to add value.
Stakeholder: Besides this newer group – you have some older foundations that have focused on community health for many years. What are some trends in how they are engaging?
Easterling: One trend you see in all foundations over time is moving from being responsive and reactive to designing their own initiatives. They are taking the prerogative to move at least some of their grantmaking decisions and strategizing in-house. That could mean simply deciding on a process for convening local actors. It doesn’t mean you tell the community what needs funding, but you may introduce a process that allows for a strategy to emerge.
In addition, many foundations have moved into the advocacy space.
Stakeholder: For example?
Easterling: Even before the Affordable Care Act was passed, there was a lot of work in Colorado, which I know best, to build public will around universal health care. Then once things began to shake out, Colorado was ripe for Medicaid expansion because people recognized the need for increased access to health care and bought into it. In states where a foundation wasn’t taking that lead, that space was vacant. We lost an opportunity by not having foundations play a leadership role in the advocacy realm.
Easterling: They see them as partners, but they also see them as nuisance grantees. Meaning that a lot of these healthcare systems have their own fundraising needs around facilities, setting up new units, doing research. Especially academic health centers have viewed health foundations as the “golden cow” where they go for pet projects. They sometimes propose huge multi-million dollar projects that directly compete for the money that could be going to community health promotion work or to grants.
Most foundations recognize that they’ve got limited resources – their greatest value is working in ways that improve the operations of organizations that provide health support services to the community. Introducing ideas, promoting innovation, things like that. It doesn’t take a lot of money to make good stuff happen on that scale. But if you sink $5 million into one isolated project at a hospital, you may have lost half of your funding capacity.
That said, foundations do recognize health care institutions as partners. In some ways, both institutions have improving population health as their ultimate goal. There are many ways beyond the grantee-grant maker relationship for foundations to work collaboratively and collectively with health care institutions to improve community health.
Stakeholder: Where you have seen the philanthropic sector work well with health systems to improve health?
Easterling: It happens in different ways. Sometimes it’s having a long enough working relationship with the hospital that the hospital knows what the foundation is looking for. They come up with programs that support the foundation’s strategy around overall community health improvement. You see that with the Health Care Foundation of Greater Kansas City. They’ve been working with local hospitals for years to improve quality of care and to coordinate electronic medical records between different providers. And they have brought hospitals into multi-sectoral conversations that explore how the region can address issues such as behavioral health and childhood obesity.
Stakeholder: Shifting gears, what is “evocative grantmaking” and why does it matter?
Easterling: Think of what needs to happen to improve community health. Stakeholder Health shows the importance of promoting innovation, both within individual health care systems and across the board among community-based organizations. All of us have to be smart, thinking more holistically about all the different assets in a community and how they can come together. So if that’s the way forward for improving community health, what can foundations do to promote smart innovation? I would say ongoing innovation because whatever ideas people come up with at the beginning are just first approximations to whatever is ultimately going to work.
Foundations have money, which gives them influence to change behavior. How do they use that influence? Traditional grantmaking is overly bound by the specifications that are spelled out in the grant proposal: the work plan, the blueprint. Some foundations will take that proposal as written in stone, believing that this is what the organization has to do over the next year or two or three. This approach obviously undermines innovation and creativity.
Evocative grantmaking, at least as I’m framing it, , is an approach where the foundation recognizes its ability to promote innovation and uses that to reinforce the learning process, and in some ways, underemphasizes accountability to tightly held metrics. That requires a different way of interacting with grantees, one that’s more open-ended, back and forth, interactive. So the foundation is inquisitive about what’s happening and maybe provides some advice and probing questions, can identify particular forms of assistance or coaching or expertise that could help the grantee and brings them in at key points in time. It does peer networking across multiple grantees. It uses a successive or sequential approach to grantmaking where a short grant gets the project going, and you expect the organization to come back and apply for a second one that’s going to be the next iteration. The foundation sticks with the same organization through multiple iterations.
Stakeholder: Is there an example of this that you’ve been involved with?
Easterling: At Colorado Trust with the Violence Prevention Initiative, we funded 26 organizations across the state, all trying to be more effective at preventing some sort of violence, whether its child abuse, elder abuse, youth violence, gun violence. Some were start-ups, some were grassroots, and some had come up with their own programs. Our grantmaking approach was to take them through a multi-year process where they could benefit from the expertise of the University of Colorado to develop their programs to the next level. We framed this as a kind of learning laboratory. When they got the grant they told us what they were doing, but we didn’t even ask them for a proposal to tell us what they would be doing in a year. We said, “We know you’re going to be learning, so we’ll figure out as we go forward what your program should look like.”
Stakeholder: How did that work out?
Easterling: In the end, it was received really well. In the beginning, the grantees were incredulous that we would actually provide that kind of flexibility.
Stakeholder: And did organizations adjust during the process to things that would work better?
Easterling: Yes, or at least they recognized that what they had in mind was not even half-baked. It was not going to reach the population. So this idea of abandoning an initial idea quickly, to me, was one of the greatest successes of the whole thing.
Stakeholder: What else should we know about health conversion foundations?
Easterling: Um… how foundations can be obnoxious.
Stakeholder: I would have never thought of that question. So, if you were to design the worst-case scenario in this area, what would it look like?
Easterling: The worst actually starts out sounding like the best – that a foundation takes time to figure out its strategy as opposed to just going out and just doing a shotgun approach. But instead of doing this kind of deep-dive into the community, working with partners and doing this interactive, participatory grantmaking, they hole-up and bring in a bunch of experts, especially out of state experts, and based on their own internal analysis, they decide how community health needs to be improved. Then, based on that assumption, they design an initiative that prescribes what the funding will support, what kinds of organizations they want to participate. They take that RFP onto the street and get proposals back because everybody wants to play the game. Nobody is going to tell them that this is stupid so they submit a proposal.
But the whole initiative plays out without any chance for learning, without any intelligence growing up from the grassroots. It reinforces the foundation as this elitist leader, which is exactly the same complaint that communities level against health care systems – that they are back in their ivory towers and don’t understand how health is really created and what the needs of the community are. Foundations can be just as guilty of that.
Easterling: That’s a great question, and the other side is what is it they can’t contribute? So what they can contribute is that, first and foremost, they’ve got resources to invest in innovative stuff. Unlike government agencies, you don’t have predefined funding streams from legislation limiting your selection, so you’ve got that discretionary funding available.
More important, because they’re funding different types of organizations trying to improve health from different angles, health foundations have that larger community perspective that sees multiple bodies of work and how they relate to one another. So if they do critical thinking and learning inside their organization, they’ll begin to develop their own internal map of how the work is currently being conducted and how it might be conducted. They’ve got that 30,000- or 50,000-foot vantage point of seeing, not only the different players but also how they connect or could connect to one another.
Also, their mission is about the common good. So unlike any of these other funded grantees – nonprofits that are focused on a particular segment of the population – foundations focus on the whole community. Unlike a hospital, especially a for-profit hospital, it’s not about revenue streams, it’s not about bringing patients into their own institution. It’s just about impact. They can bring this consciousness to keep people focused on the right bottom line.
And here’s what foundations can’t contribute: they don’t actually do any real on-the-ground work. They orchestrate the funding, but they’re essentially setting the table. They’re making things happen. They’re incentivizing behavior. They’re encouraging stuff and providing educational frameworks, but they need other people to be the actors.
Painting: Paul Klee, Der L-Platz im Bau, 1923, CreativeCommons.