National Endowment for the Arts - Lessons Learned: Essays - Plans and Planning: Perspectives From Grantmakers

Plans and Planning: Perspectives From Grantmakers
by Anne Focke

(The following article is reprinted from the National Endowment for the Arts Advancement 94/95 Bulletin, June 1995.)

Who is the audience for your planning? Are grantmakers on your mind as you work on your planning document? Advancement consultants often find organizations obsessed with how plans will be viewed by people in foundations. So, we decided to talk directly with a few grantmakers to gain insight into their thinking about plans.

Following are excerpts from interviews with five people who are on the program staff at various foundations. Program officers, or associates, are the foundation people who tend to be most responsible for evaluating proposals and who are most likely to be in regular communication with applicants. The people interviewed represent a small sample of all the foundations that might work with one or more of you. Included are two regional grantmakers, two community foundations, and a large national foundation. They are located in San Francisco, the Twin Cities (Minnesota), Cleveland, and New York City. Although none of the people interviewed would have minded being named, I've chosen not to identify them to keep the comments from seeming like a guide for applying to the foundations they represent.

The people I interviewed discussed plans and planning in general, and also responded to specific questions. I asked whether they request plans in their grant application process, what they look for in a plan, what their expectations of a plan are, what common mistakes they see, whether length and format matter, and whether they see any trends worth noting.

It is important to keep in mind that foundations are different, one from another. Each has a distinct mission and its own values and procedures. In the text below, the comments at each bullet were made by one person. The responses reflect some of the differences among the people interviewed and also reveal differences among the foundations that employ them. You would probably see even more variation if more foundations had been included in the sample. Grantmakers do not speak with a single voice. I have let their comments remain distinct rather than attempting to craft a unifying body of advice. The purpose of this article is to let you hear from a few grantmakers themselves about plans and planning.

General observations

Planning is overwhelmingly about organizational change and development and getting better. This foundation is in the business of strengthening the local/regional community, and most of our work in the arts is directed to supporting change that will increase organizational capabilities. Even though we do not specifically ask for a plan, we do need evidence that the organization has a solid understanding of where it's going. It can be heading in several directions -- that is, ambiguities are OK -- but the directions need to be understood. The foundation is interested in funding changes at the margin that will make the organization better. Our focus is the long term.
We ask for plans, both program plans and organizational plans, depending on the request. Planning is at the core of our assessment. Plans reveal an organization's thinking, though sometimes it might not be written down. Good thinking and a good group process is most important, but doesn't always get captured in writing. Often the planning is apparent most readily when I meet with the organization in person. This foundation makes site visits to every applicant -- there's just no substitute for getting together with them in person. It's good when the organization can describe its thinking and plans in writing, but this is rare. Actually, good plans of any kind are rare. These days, many people are just scrambling.
We believe in planning and fund it when we can. We don't often get the opportunity, though, because organizations seldom see planning as a priority. We don't specifically ask for a plan. Sometimes we will introduce the idea of planning if, for example, an organization comes t us with big dreams that we realize are not achievable. On occasion, we have supported planning with the understanding that we will probably support the result. We walk a careful line between being a responsive funder, and pushing groups to think about things they're not thinking about.
We don't ask for plans, though, of course, I read them when they come in. Most of the organizations we fund are close by, so we don't need plans to know who they are. I spend a lot of time with them in person, talking with many people in each organization: artistic directors, managers, board members. I would never suggest to an organization that they develop a plan -- funders already make too many demands. An organization may not be ready, and I'd rather see the desire for a plan come from themselves. Small and mid-sized organizations often don't have the time and resources to spend on planning -- they're just hanging on. Planning can be very demanding for a small organization; it imposes yet another really stressful activity on a group that is often very vulnerable already. Typically, groups that do well with planning, or with the NEA's Advancement program, are functioning well already. In these instances, the planning can be helpful as a way to focus attention on changing a few ways they do business.
We have found that an investment in planning at the beginning of projects really pays off in the long run. Our grants require groups to pull many strings in the organization at once; good planning is the only way they'll manage.

What do you look for in a plan?

We look for good reporting -- observations about what's happening right now. An organization must understand its mission, and have a firm grasp on where it is at the moment and what its own realities are. It must know what's going on with its art, audiences, staff, and board. This is information the foundation needs to know.
We're interested in changes that make the organization better -- small changes are fine. We want to see a difference between how the organization operates now and how they'll operate in the future with support from us.
Characteristics of good plans include reasonable financial and program plans. I look for thoughtfulness, reasonableness, and good research. I look for the basis on which plans are made and for the core thinking that guides the organization.
Research is essential. Resources are scarce enough now that we can't afford re-invention. If a new program is proposed, I expect to see investigation of other similar programs. I also want to know how a new program fits into the organization's overall operation and goals. Support is unlikely if the new program doesn't fit into the long range thinking of the organization; it has to be part of the core. Similarly, if a start-up activity is proposed, the plan needs to show how it will continue after the period of Foundation help.
In organizational plans, I look for evidence of very specific thinking. I want to see how self-aware the group is. I want to see if they understand where they are now, and what the next specific increments of their work will be. I look closely at the financial plans, at governance, staffing, and program. In plans that accompany requests for operating support, I look closely at and analyze every budget line item. I look for the underlying assumptions of each line, and the judgments that were made to arrive at each one. These business plans receive intensive scrutiny.
My expectations are different for different groups. If a group has a physical plant, an endowment, and a big staff, it has more responsibility for its impact on the community. "Premier" organizations have no excuse not to be in perfect order. Among "mid-tier" organizations, I often find a lack of self-awareness; they don't often enough look outside for expertise. Staffing in mid-tier organizations often lack experience; an unfortunate reality of economics today is that there's a great difference in the expertise one can buy for $20,000 and for $85,000. You seldom find people with exceptional expertise and experience willing to work for low fees.
In a good plan, I expect to see a solid core of the board deeply engaged in the process. I also look for independent evaluators, consultants from outside the community with a level of expertise appropriate to the organization. I look for recommendations that are reasonable and responsible.
I expect all aspects of an organization to be considered in a three-year strategic plan. The plan should entail a certain level of detail and analysis of past, current, and future; it should provide a solid basis for projections.
Increasingly we look for and encourage organizations to plan for their ongoing capitalization, to incorporate some carry-over and cash reserve in their plans. We like to see a contingency fund or plan as part of a long range plan, rather than just a balanced bottom line at the end of each year. Even $5,000 or $10,000 can be important.
A good plan is not a one-shot deal, and the board must be involved. Groups that take planning seriously don't just put a plan together once. They're involved in continual planning -- they write, continuously assess, re-think, change. A particularly strong organization that we support has a five-year plan, but the group isn't locked into it. The people in the organization have a clear underlying idea of what they want to accomplish, but every year they look at the plan and make major changes if necessary. The plan is a real working document.
It doesn't necessarily follow that big organizations do good plans and small ones don't.
Before supporting planning, we look for organizations with a clear sense of themselves -- who the organization is, what its mission is, what its resources are -- in very specific terms. We look for clarity and for ideas that are immediately graspable. I find that heavily philosophical definitions make it difficult to tell what the group is really about. We first consider whether a group really understands itself, and only then do e look for whether there is alignment with the foundation's mission.
Purpose has to be the touchstone for strategies. Expected outcomes and measures of success have to be clear. The organization has to have thought through the strategies and resources that will be necessary. It's best if the group has pinned things down in their written document, but we understand that this isn't always possible. All the actions don't need to be detailed in the plan if the process for deciding and moving forward is clear.
Planning takes different forms to reflect organizations' different lifestyles. Entrepreneurial, founder-focused organizations, for example, have to go through quite a process to understand how to broaden their organizational mechanisms so they can move forward.
Among the hallmarks of good planning are: clear mission; clear and identified outcomes; a process that is informed by multiple sources and multiple points of view; evidence that planning is ongoing; and timeliness, that is, planning based on current information. The plan also must communicate effectively -- specifically, it must be understandable to the people who use it. Responsibility for planning should be shared within the organization -- planning that seems extraneous raises concerns.

Mistakes and weaknesses in plans and planning

The place where most plans are the weakest is the art -- the description or understanding of where the art is now and what they want it to be. We need more vocabulary about the artistic side, and we need ideas for how to make the art better. How can an organization work to make its art better? The steps probably won't simply be administrative, like adding staff. It's relatively uncommon to see clear thinking about how to make the art better, and most boards don't have a clue.
The most improvement I've seen has been in organizations' ability to look internally -- many have learned and improved their internal planning. The chief deficiency I see is that they are not looking at the surrounding environment very well, and this is true of large and small groups, and across the spectrum of the private sector.
Too many people think that planning means growth, adding staff and so on. In strong plans, I'm increasingly seeing projections of 1% growth, or no growth. It's important to have a big idea of what you think your capacity is, but solid research and realistic projections are critical for any projections of growth.
Mid-tier groups are often great artistically, but most have pathetic boards. The boards are simply not bringing community resources to bear on the needs and circumstances of the organization. When facing an organizational problem or crisis, a board should not ask "Who's to blame?" (which happens too often), but instead should ask, "What can we do to help, what resources can we bring to solving the problem?" Too often boards don't assume real financial responsibility. Raising money and being financially responsible have little to do with being rich.
If a group has little experience managing growth, planning can lead to projections of faster growth than is prudent or possible. Often, too much growth is projected too quickly. Common examples include projections for a dramatic increase in audience which are not supported by sufficient analysis, or a projection for large increases in local foundation giving which is not supported by a realistic understanding of the foundation community. In too many instances, the homework just hasn't been done.
A common weakness is the assumption that hiring a development director will automatically result in a dramatic increase in income. This is especially true when an organization is hiring a development director for the first time. Typically, the executive director has had the development responsibility in the past -- has written the grants and developed the relationships with the funders. Too often, no thought is given to the transition that will be needed to assure the effectiveness of the person in the new position. Also, the real costs of running a development office are frequently missing.
Plans often present organizations as they would like to be, rather than as they are, based on hard, cruel facts. I remember one plan that looked wonderful on paper. It clearly reflected much time and thought. Then, the artistic director left. The organization went into a crisis, and is now essentially dormant. Clearly, something was missing from the plan. It didn't reflect the degree to which the whole organization depended on that one person. The planning was far too institutionalized, and didn't tell the real story.
A common mistake is in thinking that planning (or Advancement) will be the great key to unlocking everything needed to get financial and organizational functions working well. Neither planning nor Advancement is a way to get, miraculously, from one point to the next.
A kind of schizophrenia of the day is thinking that any representative of any funding source might have the answer that an organization needs. It is a mistake to think that any suggestion made should be incorporated. Groups can also be too willing to get the "great solution" from an outside consultant. They have the perception that they aren't capable themselves. Instead, they must do the preliminary hard thinking themselves.
A common mistake is to think you can plan without changing anything you're doing. Planning is about making changes in the way you do business. If planning hasn't changed anything, it hasn't worked.

Formats, style, length

When pressed, I offer a simple format: 80-90% of the plan or proposal should be spent with description: what is your mission, where are you now, and where are you going? Then, tell us where some money from the foundation would make the most difference.
We have a wide tolerance for the form a plan takes. For some organizations, planning is a conceptual activity, for others it is mechanical. We appreciate that different plans and planning processes are appropriate for different organizations an different managers. The degree of formality, for instance, may vary depending on the size of the organization.
Plans can take just about any form. Specific formats and length don't matter to me, but the form can certainly reveal the organization's thinking.
While the number of pages or the number of pounds are not a specific consideration, I do expect a substantial document.
Length and format don't matter to me; content and clarity do.

Trends

I have seen improvement in many organizations' ability to think about where they are and where they are going. Certain organizations in our region have not only been good at planning, but are generous about sharing their experience and methodology.
Increasingly, grantmakers are interested in the relationship between a group and its constituency, in the marriage of service and product, or recipient and audience.
Because of current problems, I find more organizations to be receptive to the idea of planning than in the past. Groups are looking for answers. There is more talk of collaborative activities, consolidated activities, mergers (though these are not apt to be effective in the arts), joint marketing programs, sampler season subscription plans, and so on.
One of the biggest shifts is a move away from an assumption that resources will continue to expand, away from the notion of limitless possibility. Realistic assumptions about resources, realistic expectations for the results, and the ability to actually accomplish the plans are increasingly important criteria today , in addition to criteria we've always used -- artistic excellence, capacity, and so on. More and more, planning is a requirement. In the past, organizations were not necessarily rewarded for planning, but now it is an increasingly important distinguisher of what is supported.

Overall advice

Mid-tier and small organizations should turn to experienced organizations more often. The expertise in big organizations is tremendous, but they are seldom if ever called on for advice and mentoring.
The organization's primary relationship must be with the community. Foundations should not be the primary audience for your organization or your planning. You must make decisions in your own best interest. And you must also be willing to make changes in the plan when needed. The worst situation is when a group is fearful of making changes in a plan because it has been sent to a funder. You can't be afraid of the plans once they're in place.
The involvement of the board is crucial, and there needs to be continuity to board members' commitment. Creating a plan should not be the last act of a departing board chair.
Positive results of planning include helping an organization learn to avoid placing all responsibility in one person. Through planning, people in an organization can understand the organization better -- its task structure and its finances. They can learn to hold themselves to rigorous inspection. A willingness to open the organization to inspection is a sign of maturity; when a group can acknowledge both its strengths and its weaknesses, it does better. Planning can offer a real sense of accomplishment.
To be effective, everyone must be committed to the process and understand the time and thought required. The plan can't be etched in stone, but must be changeable. And, it must be for themselves, not for funders.

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