Foundation Strategy Group, LLC 20 Park Plaza, Suite 1127 Boston, MA 02116 Tel: 617-357-4000 Fax: 617-357-4007 www.

Harnessing the Power of Strategic Communications: A Framework to Create Value Through Communications The Communications Network2002 Annual Conference Foundation Strategy Group, LLC 20 Park Plaza, Suite 1127 Boston, MA 02116 Tel: 617-357-4000 Fax: 617-357-4007 www.foundationstrategy.com

Agenda • Introduction • Where to Focus Communications • How to Invest in Communications • Next Steps: Toward More Strategic Communications

Foundations Are Recognizing Communications as a Potentially Powerful Tool to Create Value • Growing interest in communications • Communications is a recurrent theme at foundation conferences • Change since 1995 when a Commonwealth Fund study found that among the 95 largest foundations, grantmakers saw communications as “detracting from their role as funders, too expensive and too politically risky” • Exploitation of new technologies • Growing use of websites: California Wellness Foundation’s website has grown to become its most important communications channel • Declining relevancy of annual reports: foundations issuing annual reports have grown only half as much as the growth in foundations • Trend of some foundations successfully using communications to create value • Robert Wood Johnson Foundation considers communications an alternative to grantmaking, dedicating 20 % of budget to communications • Kaiser Family Foundation and others use “social marketing” tactics to change behavior of target groups

However, Communications Has Yet to Become a Truly Strategic Component of Foundation Operations • Communications can focus on wasteful dissemination rather than longer-term campaigns that bring about attitudinal or behavior change • Foundations are often deliberately oblique – to prevent grantees from anticipating and parroting back their objectives • Some foundations invest considerable resources in “feel good” communications that absorb substantial funding but create minimal value – while other foundations eschew communications altogether, considering it a form of inappropriate self-aggrandizement • Communications is often tacked on to programmatic activities • Communications activities and results are rarely evaluated In considering communications activities, some foundations question whether their dollars would be better spent on additional grantmaking

When Employed Strategically, Communications Offers Significant Benefits to Foundations • Applicants who are more likely to fit with the foundation’s goals and approach because they have a deeper understanding of the foundation • An improved ability to leverage other funding partners who are well-informed of the foundation’s activities and performance • Grantees that understand the foundation’s strategy beyond their specific program area and are able to promote it to others in the community • An increased return on grant investments, due to effective communications of evaluation and best practice findings • A more hospitable environment to influence policy or practice changes • Opportunities to influence the actions of those the foundation is trying to impact, through targeted communications campaigns Communications benefits can accrue regardless of foundation size or communications budget

A New Framework is Required to Help Foundations Employ Communications Investments Strategically Where to Focus Communications How to Invest in Communications • Enhance foundation and programs’ ability to create value: • Select the best grantees • Signal other funders • Improve grantee performance • Advance knowledge and practice • Build “reputational capital” to magnify value creation efforts • Focus on • Prioritizing investments • Segmenting constituents • Customizing activities • Conducting communications evaluations • Integrating communications and program staff The field lacks a simple framework to illustrate that communications investments, when employed in strategic areas and ways, can create immense value

FSG’s Framework is the Result of a Qualitative Best Practice Study, Other Research and Client Engagements Key Questions that Have Helped Inform FSG’s Framework • Where do foundations spend their communications dollars, at both the foundation and program levels? • How do foundations think about communications to articulate their mission versus communications to reach their social goals? • What strategies are employed to increase the value of communications? • What frameworks exist to help foundations decide where communications can provide the greatest benefits? • What communications tactics create the biggest bang for the buck? • What are the greatest communications challenges and how are foundations addressing them? • How are foundations involving staff in communications initiatives to generate impact? Where to Focus Communications How to Invest in Communications While foundations use communications in different ways, there is surprising unanimityamong foundations on key issues

Foundations Can Create Value in Four Ways 1. Selecting the best grantee • Directing resources to their most productive uses 2. Signaling other funders • Educating and attracting other sources of funds, such as other foundations, government, and individuals 3. Improving the performance of grant recipients • Increasing the return on all the money distributed 4. Advancing the state of knowledge and practice about social problems • Funding research and a systematic progression of projects that produce more effective ways to address social problems These ideas are distilled from Porter & Kramer, Philanthropy’s New Agenda: Creating Value, Harvard Business Review, November-December 1999

Each Successive Approach Creates More Value Than the Preceding One Selection Signaling Improving grantee performance Advancing knowledge and practice Where foundations should focus communications investments Dollar value of resources affected by foundation activity

Communications Can Be Used to Increase Each of the Four Forms Of Value Creation Selection Signaling Improving grantee performance Advancing knowledge and practice Where foundations should focus communications investments Dollar value of resources affected by foundation activity The implicit need to communicate in order to create value suggests a vastly different role for communications

Enhancing Value Creation Communications Plays a Key Role in Enhancing All Four Forms of Value Creation Forms of Value Creation Role of Strategic Communications • Building a pool of the best grantees requires a clear message of foundation strategy and broad reach to communicate with potential grantees Selecting the best grantee • Foundations have an opportunity to multiply the value of their grants through intentional communication to other funders through targeted sharing of lessons learned, best practices, case studies and success stories Signaling other funders • Thoughtful use of communications resources and training can magnify the impact of grantees’ accomplishments Improving grantee performance • Communications is the vehicle that allows foundations to change the state of knowledge and practice by: • Informing and advancing the dialogue • Impacting policy through dissemination of compelling research and evaluation findings • Influencing behavior through communications campaigns Advancing the state of knowledge and practice Foundations must use communications more intentionally to enhance value creation activities

Enhancing Value Creation: Selection The California Wellness Foundation’s Improved Selection Communications Resulted in More Successful Grantee Applications Overhaul of Selection Communications Results • “We did a communications audit which helped us learn how to improve grant guideline communications.” • “We started to become very clear about details -- timeline, what we won’t fund, examples of what we fund, process details.” • “We work with program directors and try to figure out in plain English what they are really funding.” • “We tested guideline messages with potential grantees.” • “And we created new grantmaking documents with consistent design and style.” California Wellness Foundation • “The response has been amazing. We’ve doubled our Letters of Inquiry (LOIs) but we have also increased the number of successful LOIs.” Grantees • “California Wellness is considered to be different because of its "better communication in announcing new initiatives, providing workshops, [and] telling clients about funding." • “They are much more clear and focused about what they want." California Wellness reevaluates selection communications on a yearly basis through the foundation’s yearly Grants Survey

Enhancing Value Creation: Signaling The Gates Foundation Signals Both Public and Private Funders through Media Coverage and Well-Researched Calls to Action “The Global HIV Prevention Working Group, convened by the Bill and Melinda Gates Foundation and the Henry J. Kaiser Family Foundation, seeks to generate a greatly expanded commitment to preventing HIV transmission.” – Gates Foundation, Global Mobilization for HIV Prevention: A Blueprint for Action The Gates Foundation has seeded new health projects that have attracted even greater sources of funding Source: Bill and Melinda Gates Foundation Website

Enhancing Value Creation: Improving Grantee Performance The Benton Foundation Provides Support to the Nonprofit Community and Policymakers through its Website The Benton Foundation catalogues best practices and links to communications tools and communications research for nonprofits Source: The Benton Foundation website

Enhancing Value Creation: Advancing Knowledge and Practice Inform and Advance the Dialogue Creating communications products and opportunities that make constituents aware of issues important to the foundation – ranging from conferences and convenings to published research Influence Policy Publicizing grantee or foundation findings and conducting activities to change policy – including meetings with policymakers or working in conjunction with special interest groups Communications Is Most Powerful in Advancing Knowledge and Practice – There Are Three Distinct Roles Foundations Can Play Influence Behavior Initiating targeted communications campaigns to influence the action of practitioners or ultimate beneficiaries Program goals will ultimately determine the communications role(s) that the foundation adopts

Enhancing Value Creation: Advancing Knowledge and Practice William T. Grant Takes a Multi-Role Approach to Advance Knowledge and Practice about Youth Issues • Inform and Advance the Dialogue • Use program evaluations, research syntheses, and communications research to put youth issues on the national agenda • Research is translated to make sense to varied audiences • Influence Policy • Map lawmaker networks to identify most critical decision-makers • Influence Behavior • Develop communications to influence adults’ attitudes and behavior toward youth, e.g. public radio programs Enabling Youth to Reach their Potential “There is generally a small set of publications on policymakers ‘high trust’ list. We want to be part of this list.” – Lawrence Gianinno, William T. Grant Foundation Source: FSG Interviews

Using Communications to Build Credibility or “Reputational Capital”Enables a Foundation to Magnify its Value Creation Efforts Selection Signaling Improving grantee performance Advancing knowledge and practice Reputational Capital – An Enabler for Value Creation Where foundations should focus communications investments Dollar value of resources affected by foundation activity Reputational capital is a means to reduce the costs and increase the effectiveness of value creation activities

Reputational Capital • Reputational Capital Is Not “Name Recognition” – It Requires a • Rich Understanding of Foundation Intent to Magnify Value Creation Name Recognition Reputational Capital Vs. Name association, in general or with an issue • Credibility • Leverage Assets Earned Products The foundation The foundation’s intent and record Sense that foundation is “out there doing something” Trustees feel better Improved selection Grantees leverage the foundation’s funding New social practices are adopted Outcomes Reputational capital activities are not ends in themselves – rather, they are strategic investments to help the foundation create more value

Clarify Foundation Strategy Reputational Capital Increases as the Foundation’s Intent and Impact are Understood Increasing Level of Reputational Capital Created Communication of Goals Communication of Approach Communication of Performance • Articulates how goals will be achieved • Communicates foundation activities • Communicates progress on meeting goals • Demonstrates ability to maintain consistency with strategy and approach • Sets clear objectives and expectations • Establishes the foundation’s focus areas • Links foundation to constituent groups • Characterizes relationships with grantees Demonstrates foundation’s ability to maintain constructive relationships with constituents New foundations and those that have shifted their goals or approach will find it particularly important to build reputational capital

Clarify Foundation Strategy: Goals The Gates Foundation’s Explicitly Communicated Goals Increase Its Relevance to the Global Health Community Goal for the Global Health Program Increase global health equity by accelerating the development, deployment and sustainability of tools and technologies that will save lives and dramatically reduce the disease burden in the developing world Strategies R&D for innovative tools and technologies Demonstration programs Catalytic financing mechanisms Leadership and Advocacy* As a relatively new foundation, Gates finds it critical to communicate clearly what it is trying to accomplish Source: Bill and Melinda Gates Foundation

Clarify Foundation Strategy: Approach California Wellness and Robert Wood Johnson Use Candid and Compelling Messaging to Explain their Value Added Approach California Wellness • “The first generation of our grantmaking focused on five multiyear strategic initiatives. . . While we continue to believe that there are benefits to this approach, we are seeking to balance our commitment to a proactive style with even more responsive grantmaking..” Published three to four times a year, Reflections features a candid sharing of thoughts and internal dialogue around issues – capacity building, strategic grantmaking, etc. -- which are most difficult but most important for key constituents to understand Robert Wood Johnson • “Why would a foundation such as Robert Wood Johnson, with more than $8 billion in assets, make a loan as opposed to an outright grant to a struggling nonprofit trying to develop an initiative? Past volumes of the Anthology have examined the Foundation's research and communications strategies, its core values, and the thinking that led it to address substance abuse California Wellness’ change in grantmaking approach required frank communication with its key constituents Source: California Wellness Foundation and Robert Wood Johnson Foundation Websites

Clarify Foundation Strategy: Performance Opportunities to Communicate Foundation Performance Exist at Three Different Levels For many foundations, communicating foundation-wide performance is the most difficult aspect of building reputational capital Source: Center for Effective Philanthropy, Indicators of Effectiveness

Clarify Foundation Strategy: Performance The James Irvine Foundation Communicates Foundation Performance on its Website, Boosting its Reputational Capital The Irvine Foundation uses these results to stimulate discussion with both staff and grantees to improve how it operates Source: James Irvine Foundation website

Clarify Foundation Strategy Clarifying Strategy Begins by Communicating to Internal Constituents MELMAC Foundation Internal audiences need to have a uniform understanding of the foundation’s strategy and chosen focus in order to successfully communicate it to others

Leading Foundations Recognize that Strategic Communications Requires Highly Disciplined Implementation • Communications to create social change requires persuading others to • Become aware of new ideas • Change attitudes • Alter behavior • Influencing awareness, attitudes and behaviors requires • A deep understanding of constituent motivations and barriers to change • Practical communications objectives • Focusing on those constituents who matter most • A commitment to follow-through a campaign-like process until impact is achieved • Aligning communications and program staff to increase the effectiveness of communications activities • Evaluating to ensure return on communications investments When using communications to create value, foundations often confront implementation challenges

Strategic Communications Makes the Most Efficient Use of Investments to Bring about Impact Passive Communications Dissemination Communications Strategic Communications Goals None Implicit Explicit Constituents Unspecified Appeal to all Prioritized Inconsistent Uniform Customized Messages, Tools and Channels Separate Complementary Operational Alignment Integrated Evaluation Rare Difficult Actionable Research plays an important role in implementation of communications efforts

Communications Challenges: Goal Definition In this Value Creation Example, Researching Constituents’ Existing Attitudes Can Help Pinpoint Communications Goals Nellie Mae Education Foundation: Minority High Achievement Program Area Goal Qualitative Research Illustrative Communications Goals • “We need to expose with data that higher education has failed concerning achievement.” -- Special Interest Group • “In addition to the data about what works, we need to have ideas and training to understand how to apply these successes in regular school settings. – Education Practitioner • “The Foundation can act as a sponsor of research and then use its visibility to advocate for the work both publicly and privately.” – Education Administrator Inform and Advance the Dialogue • Create awareness about the Minority High Achievement gap • Demonstrate real change by telling grantee stories The Foundation’s Minority High Achievement initiative attempts to increase the number of students of color in New England who achieve at the highest levels Influence Policy • Leverage other funding and improve intervention effectiveness Building communications goals based on program area goals and qualitative research increases the likelihood of communications impact at lower costs Source: Nellie Mae Education Foundation

Communications Challenges: Goal Sequencing Applying a “Lifecycle” Approach to Highly Specific Communications Goals Increases the Chances of Value Creation Nellie Mae Education Foundation • Communications Life Cycle Create Awareness about the Minority High Achievement Gap Demonstrate Real Change by Telling Grantee Stories Leverage Other Funding and Improve Intervention Effectiveness Awareness Attitude Action Time Source: Nellie Mae Education Foundation

Not All Constituents Require the Same Level of Intensity or Depth of Communications Activity Communications Challenges: Prioritizing Constituents Nellie Mae Education Foundation Understanding of the program’s goals to enable the Board and staff to more effectively guide Foundation strategy Influencers Understanding of the program’s goals as context for community issues Inner Circle Learning Community Understanding of the program’s goals to enable constituents to assess compatibility with their own interests - and identify the intersection of program goals with their work Partners Understanding of the program’s goals so that constituents are able to effectively communicate about the program to other audiences Source: FSG Interviews, Nellie Mae Education Foundation

Communications Challenges: Customizing Messages, Tools and Channels Prioritizing Goals, Constituents and Communications Activities Results in a Communications Plan Nellie Mae Education Foundation To enhance value creation, each program area will have its own communications plan Source: FSG Analysis, Nellie Mae Education Foundation interviews

Communications Challenges: Operational Alignment Staff Alignment and Integration Are Critical Components of Communications Success “Effectively merging the work of communications staff with program staff is a major bugaboo for our field…Teaming is necessary to bring about confidence and trust between program officers and communications officers.” - Karen Menichelli, Benton Foundation The lack of involvement of program staff and admin in communications activities and the isolation of communications staff diminishes the return of communications investments Source: FSG Interview

Communications Challenges: Operational Alignment When Communications Is Viewed as a Strategic Tool, Program and Communications Staff Together Create More Value for the Foundation Poor Alignment Effective Alignment Communicate only on behalf of program goals Articulate program goals in isolation View leveraging funding as a programmatic function Act as spokespeople for the foundation View communications as a justifiable alternative to grants Recognize the importance of communications in assisting grantees Program Staff Experience confusion about role – promote foundation or help program staff/grantees? Respond to program staff requests Define a separate operating plan Act as key participants in design of foundation, program and RFP goals Use budget to make communications grants or assist grantees Are highly involved in evaluation strategy Communications Staff Taking the time to align staff can increase the efficiency of both communications and program investments

Communications Challenges: Operational Alignment RWJ Integrates Strategic Communications Activities Into Larger Programmatic Plans Bring Concept toTrustees Assign Cross Functional Teams Translate a Concept into Program Goals Create an Initiative Proposal Pursue Plan and Activities “Our teams are intended to be cross-functional from the beginning – including staff representing research, program, financial, and communications skills.” “We work to build communications elements into specific program ideas. Often the intervention is communications-based.” “The team brings the concept to the Program Staff Group at the foundation for feedback.” “A communications strategy is included as an integral component of the proposal to the foundation.” “Often we have a market research agenda to inform the more detailed communications plan.” “VP makes the case for communications components in the budget.” “Communications issues an RFP and the whole team begins to work with national program offices to create a strategic communications plan.” • “Team takes overall strategy as a concept to the Trustees for feedback.” • “Team develops specific proposals, including budgets for communications.” “The product of the organization is the change in behavior, policy or practice. The communications department comes in at the outset of grants development and contributes and drives to the end goals.” - David Morse, Robert Wood Johnson Source: FSG Interviews

Communications Challenges: Evaluation For Most Foundations, Evaluation of Communications Efforts is Difficult and Rarely Conducted “This is murky territory. . . We have moved from simply publishing and mailing reports to more systematically asking: who would benefit from the knowledge, how might we reach them, in what form, and what would it take for the report to matter? But since any report may only become part of a larger dialogue, and that dialogue is one step removed from action, it's a real challenge to evaluate the impact we have made.” - Lucas Held, Wallace-Reader’s Digest Funds Source: FSG Interview

Communications Challenges: Evaluation Evaluating the Results of Communications to Create Value is Difficult as these Efforts Involve Awareness, Attitude and Behavior Change Difficulty in Evaluating the Results of Communications Reputational Capital Enhancing Value Creation “We do a scorecard for the Board every July assessing the perspectives of grantees, those who apply for funds, and staff . Through written and phone surveys, we find out how we are perceived as an organization in the health care policy arena and among the media and influential stakeholders. We do this every year so we are able to evaluate our reputation year-on-year.” – Robert Wood Johnson “We are working toward surveying representative audience members… We’re interested in the policymakers’ use of evidence in their decision-making. Yes, we want to understand the extent to which they are aware of us… But we’re primarily interested in the extent to which they make use of the information we provide.” – William T. Grant Foundation Foundations must consider the costs versus benefits of evaluating value creation activities

Communications Challenges: Evaluation While Difficult, Evaluating Communications Efforts Is Critical to Improving Operational Effectiveness

The Next Steps: Toward More Strategic Communications • Communications Professionals Can Move Their Foundations Toward More Strategic Communications by Asking a Number of Questions • How should our foundation seek to enhance value creation? • How can we use communications to improve selection, signaling, assisting grantees and advancing knowledge and practice? • How do we build our reputational capital as a means to create more value? • Based on the investments determined above, what do we need to do differently now? • Do we need to reformulate our communications objectives? • Do we need to redefine our primary constituents? • Do we need to do a better job of integrating communications and program staff? • Do we need to better understand whether our communications efforts are yielding results? The above questions may be helpful to keep in mind throughout the conference workshops and discussions

Foundation Strategy Group, LLC 20 Park Plaza, Suite 1127 Boston, MA 02116 Tel: 617-357-4000 Fax: 617-357-4007 www.