April 17, 2014


Babcock assesses direction, strategy

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Mary Reynolds Babcock Foundation

Mary Reynolds Babcock Foundation

WINSTON-SALEM, N.C. - Five years into a decade-long push to propel poor people and places in the Southeast out of poverty, the Mary Reynolds Babcock Foundation has paused to take stock, recalibrate and forge ahead.

During 2010, the foundation's board and staff took an in-depth look at the outcomes achieved by the funder and its grantees since 2004 and logged its findings, recommendations and conclusions in a report on progress and learning.

"It's part of the way we do business," says Gayle Williams, executive director of the Winston-Salem-based funder. "It's really important to the board for us to constantly be learning, to assess what we're doing and to make adjustments."

While Williams says there will be no major directional or strategic changes based on the evaluation, the effort served to confirm the course the foundation is taking.

"Our conclusion was that we're on the path to the long-term outcomes we set and we'll make some tweaks," she says.

Those tweaks include hiring a communications director to help build the capacity of the organization and its grantees, scaling back grantmaking in North Carolina, and boosting the percentage of assets allocated annually to grantmaking.

The foundation typically budgets for grantmaking based on a 12-month rolling average of assets, paying out about 5.5 percent of that in grants.

Assets peaked in late 2007 at about $185 million, sank to a low of $110 million in the wake of recession-induced market volatility, and had rebounded to about $158 million by early 2011.

To hold steady its grantmaking dollars, the foundation's board has chosen to boost to 6 percent the percentage of rolling assets devoted to grants for the next three years.

"The board thought hard about it and looked at the balance between immediate impact versus preserving spending power and impact over the long term," says Williams.

Depending on how the markets do, that should mean about $7 million in grants each year, she says.

And continuing a strategic shift begun several years ago, the foundation will maintain its presence in North Carolina, but will focus its dollars largely on other areas of the Southeast, particularly Alabama, Georgia, South Carolina, Central Appalachia and the Mississippi Gulf Coast.

"It was a difficult decision," says Williams. "Seeing the abundance of philanthropic resources in North Carolina compared to the scarcity in other states, it seems like a necessary thing to do."

Looking back over the past five years, the foundation has invested a total of $34.8 million to move people out of poverty, with 80 percent of that going to organizations with statewide or regional impact.

Its goals through those investments, which included grants, program-related investments and a mission-related investment, were to have a direct impact on poor people, help boost community infrastructures, influence state policies, and strengthen state or regional groups or networks working on poverty issues.

Looking at the outcomes reported by a handful of grantees, the foundation has concluded its strategy is working.

"We see progress toward our long-term goals of direct impact on people now and building community infrastructure, policy and anchor organizations for the long term," the report says.

And while the mid-course evaluation does not indicate the need for a major change of course, the foundation gained valuable information from the process.

One of those lessons is that place and context are, if not everything, a lot, says Williams.

"The reality is that in any field, there is a body of practice that we know is foundational for impact," she says. "But those foundational practices are employed by people and organizations in places, and those places have their own mix of people and capacities and challenges."

So any approach that tries to impose a model on a place isn't likely to work.

Still, strategies don't have to be completely reinvented for each new place or organization, Williams says.
"It's not an either/or," she says. "It's a balancing and a blending."

She also learned that unexpected bumps in the road caused by the external environment need not derail worthy projects, particularly when the stakeholder organizations are adaptable to begin with.

"Even in a context that changed as much as the context for working on poverty from 2004 to 2010, there's always opportunity for making a difference in people's lives," she says.

That goes for funders as well.

"It is incredibly important for a foundation's board and staff to have clarity about what its purpose is and what it's holding itself accountable for, and then to have the organization's culture and structures in place to actually reflect on that and be adaptive itself," says Williams.

The foundation also learned both the importance, and difficulty, of working with outcomes, which more and more funders are emphasizing, given the need to achieve maximum impact with scarce dollars.

Measuring and evaluating outcomes is important work, and it is possible to do, says Williams, but it is difficult and requires clarity of thought by both the foundation and the grantee.

"It's very complex and very time-consuming," she says. "It takes a lot of discernment about where it's worth it to invest the time and energy. There's a point of diminishing returns here and we have to get real about that."

Williams says she expects the organization in another five years again to pause, evaluate and adjust its approach if necessary.

"Our approach is more akin to a craftsperson constantly shaping and reshaping an envisioned object based on what is emerging in real-time from the materials at hand," she says.

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