How This Foundation President Does Things Differently

The Ralph M. Parsons Foundation is a substantial funder. It gave out $17.7 million in 2012 to dozens of organizations in the Los Angeles area and ended the year with $375 million in assets—a pot of money that's likely larger after last year's bull market. It also has a small professional program staff, a state-of-the-art website, and an engaged board of directors. 

In short, Parsons is no mom-and-pop operation. (We write about a lot of those.) So you wouldn't imagine that its busy president, Wendy Garen, would take the time to screen and read every inquiry that comes in the door. I mean, what president does that at a medium-sized foundation?

Garen does, and it's just one way that she and Parsons approach grantmaking differently. 

Here's another way: While the foundation has four priority areas (higher education, health, human services, and culture), and while it hires program officers with expertise in these areas, those officers don't have permanent portfolios. Everyone is expected to be a generalist and weighs in on every proposal. Longtime grantees are rotated to different program officers over time. There are no silos. (Say what?)

Garen has her reasons for this approach, and they cut against the grain of a philanthropic sector that gets more technocratic by the year. She says of program officers: “When they’re truly experts, they are not humble enough and trust the grantees to know what they need.”

You don't hear that sort of thing everyday from philanthropoids. In fact, you rarely hear it at all, and instead, grantseekers can get the exact opposite vibe from foundation staff: We're the experts here, we have the bird's eye view of your field, and we'll be the judges of whether your little project adds any value.

Garen, who spent some time on the other side of the nonprofit fence before joining Parsons, has little patience for a funder-knows-best mindset. And so the ethos at Parsons is to bend over backwards in the other direction.

Which leads us to another signature trait of this outfit: Garen and her team are super mindful of the inherent imbalance of power between the foundation, with its "big pile of money," as she describes it, and the nonprofits that live or die based on their ability get some of that money. "Already, a priori, we have undue influence," says Garen.

She's been a supplicant, so she knows that even casual remarks by funders—"what the field really needs...." —can induce backflips on the part of grantseekers who are dying to please. And Garen knows how grantseekers can obsess so much about what they think funders are looking for, that they never bluntly tell funders what it is, exactly, that they need most. 

“Chasing after money can distort an organization’s mission," Garen says. "And that’s the last thing you want. What we really want is for organizations to be mission-driven.”

To this end, Garen says that making grantees comfortable “is an essential part of our work.” She wants organizations to be at ease enough to really describe their challenges and what would help most to meet them. “Listening is the most important skill set. If you’re really listening, you’re learning a lot.” So Garen puts a high priority on site visits. I can vouch for how that changes the dynamic right there; the conversation is just different when funders come to your turf, as opposed to the standard pilgrimage to swanky foundation offices, hat in hand.

And here's some more good news about the Ralph M. Parsons Foundation: They've already heard—and heeded—one of the nonprofit sector's top gripes about funders, which is that they're too stingy with general operating support. Garen says that at least half its grantmaking takes the form of general operating support. Often the program grants that are made come on top of that core support. 

This dovetails with Garen's idea that funders don't belong in the driver's seat, since all those highly focused (and highly annoying) programs grants are a means by which funders keep their hands on the steering wheel—in effect, treating nonprofits as subcontractors to execute their brilliant strategies. 

If nonprofit leaders could say only one thing to funders it would be this: If you believe in our work, just give us the damn money. Parsons is among the minority of foundations who'll say Amen to that. 

But if Wendy Garen and Parsons are innovative in their style, their funding strategies are very traditional. Garen will be the first to admit that. Before joining the foundation as a program officer in 1986, she got a Master's in urban planning and then worked on the front lines of children and care issues. Since then, Garen has spent nearly thirty years getting money to community groups that really need it, and she's not interested in the latest fads. “These things come and go.” Of the work they fund, she says, “As long as its really good, we don’t need it to be innovative... we are looking for excellence.” 

As for the current fixation on assessment and metrics, you won't find much mention of that on the Parsons website. Garen says: “It’s really important to track results over time. We do need measures of outcomes, but I don’t we should be obsessed by them. Common sense goes a long way.” Tell that to the Gates Foundation. 

Still, Parsons does make little concessions to the new order. Garen chuckles that the foundation's human services work, which literally helps keep poor people alive in Los Angeles, has now been dubbed "Social Impact."

Parsons also tends to steer clear of giving that has an ideological edge. While it was one of the earliest funders of charter schools in LA, and also provided seed funding for the California Charter School Association (Garen says charters "create competition"), that's about as adventuresome as they've gotten in terms of seeking to shape policy. Why? Because, Garen explains, the foundation has both Republicans and Democrats on its board, so they stick to what they've always done: putting money on the front lines of problems, as opposed to looking up river at the structural drivers of poverty, poor health, inadequate funding for the arts, and the like. It's a common story in the foundation world: ideologically mixed boards often can't agree on what levers to pull to achieve broader changes, or don't understand those levers in the first place, with the result that Band-Aid philanthropy stays front and center. 

Garen disagrees that Parsons is in the Band-Aid business. "When a poor child gets a first-rate education and is the first in her family to attend college, this seems like 'root cause' work to us," she says. Certainly so. On the other hand, why should private philanthropy have to foot the bill for so obvious a public good as boosting the life chances of kids who will otherwise end up poor or worse? Leaving a nation's human capital development to a fraying, ad hoc public-private system would never occur to elites in most other advanced countries, where college is free. Once upon a time, college was virtually free in California, too. What are funders like Parsons doing to revive that ideal?

Regardless, it's true as things now stand that somebody's got to keep the dental clinic going, the theater doors open, the substance abuse programs funded, the meals coming to home-bound seniors, and help poor college kids pay their tuition. Parsons does all that and a whole lot more. 

A few housekeeping notes about this funder: While higher ed used to make up 50 percent of its funding, it's now just 10 percent, according to Garen. The health program mainly focuses on community clinics and other providers that serve low-income populations. And the biggest slice of funding goes to human services—er— Social Impact, with grants for all sorts of organizations that are meeting the basic needs of low-income people around Los Angeles. 

Parsons makes a point of keeping the door open to new grantees, even though "it's obviously easier to just work with the same group of grantees.” The staff tracks how well it's doing in this regard. 

The first step with Parsons is an LOI with financials. And when you send that stuff in, just keep in mind who's going to be reading it. 

“I’m the screening officer," says President and CEO Wendy Garen.