Foundations urged to boost impact

March 3, 2009

Many foundations are falling far short of their potential to make positive changes in their communities, says a study by the National Committee for Responsive Philanthropy.

The committee developed four criteria foundations can use to maximize their social impact and achieve their missions.

According to the watchdog group, foundations should:

* Promote a strong participatory democracy that engages all communities. At least half of grant dollars should go toward lower-income communities and communities of color, while at least a quarter of funding should be devoted to advocacy, equity and civic engagement.

* Invest in nonprofit health and growth. At least half of grant dollars should be funneled into general operating support, and at least half should go toward multi-year grants.

* Demonstrate accountability and transparency. Foundations should develop ethical policies, release information freely, and recruit at least five engaged and diverse board members.

* Devote a substantial part of their assets to mission. At least six percent of a foundation's assets should be paid out in grants every year, and no less than a quarter of assets should be invested in ways that support the organization's mission.

The National Committee for Responsive Philanthropy, an independent watchdog organization, aims to influence public-policy decisions to advance the common good.

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