Not the Cavalry

Foundations and corporations can be terrific partners for governments, but there are limits. For one thing, writes Feather O'Connor Houstoun, they can't fill budget gaps.
May 7, 2008
By Peter Hutchinson  |  Contributor
Leader of management consulting strategy for Accenture’s U.S. state and local government practice

Earlier this year, I became the president of an independent, private foundation. Two decades ago, I had a similar job running one of the largest corporate foundations in the same region. As the recession and housing crisis sweeps through state and local governments, and budgets get cut, there is going to be an almost irresistible temptation by governments or the nonprofits they fund to call corporations or foundations for help. Before you do, you should know. ...

We don't fill gaps. Don't cut a budget based on the assumption that we will be there to fill the gap. We probably won't. If something is not a priority for you, why should it be a priority for us? Plus, we're just not big enough to step in if you walk out. If you add up all the money that corporations and foundations give away each year, it's a pittance compared to what government spends. Moreover, we don't have the money. Our income and assets are down, too. Recessions hit us all. So don't come to us to fill the holes left behind by your cuts, and please don't send the nonprofits you are cutting our way either.

We don't fund government. Many of us don't make grants to governments. Some of us figure you already have enough money or can always get more. Others just don't want to deal with government and politics -- figuring that they will only get burned or taken advantage of. More often, though, it's because they just don't see government as trustworthy or effective. They don't want to waste their limited resources with organizations that can't or won't get the job done. From decades of working with and for governments, I know that this is an unfair stereotype. Nevertheless, it persists. Before you call, you need to be ready to demonstrate that your government is not a prisoner of "the way we've always done it." You need to show that you are willing to use tough times to move forward rather than to hunker down.

We can help. Having said all of the above, some foundations could be terrific partners with government. We have some advantages that could be useful, especially now. Most important, we are independent. This means we can say and do things that others cannot. When it comes to cutting budgets, we can call a sacred cow ... a cow. We can help create a budget process that puts citizens back in the game so that their voices help shape and support the tough decisions to be made. We can support efforts to redesign service systems to make them both more effective and cheaper. And we can support the training and development of leaders and staff to build their capacities in order to deliver the services that citizens want -- at the price they are willing to pay. Our independence gives us flexibility that too often is absent in tough fiscal times.

We can also be demanding. There is still no such thing as a free lunch -- even from us. Most foundations, like most governments, are committed to improving outcomes for the people we serve. That means we care a lot about what government does, how it gets things done, and how well. Because government is so much bigger then we are, finding points of leverage is always a top concern of ours. We are always on the lookout for opportunities to use our limited resources to get much bigger things done. If you want to partner with us, help us find those points of leverage. Furthermore, either commit yourselves to using that leverage, or help us use our independence to force you to do so. Either way, we will be very demanding. We won't trade our independence and money for a promise -- we want results. Governments and foundations that figure out how to make these kinds of tough love partnerships work will be able to move forward even as their resources shrink.

Times are tough, and getting tougher. Before you call, I just thought you should know what to expect on the other end of the line.