The O’Neill Foundation:
Embracing the Investor Model
Learn how one family applied methods and practices used in the business
world to its foundation and work. This case study on the O'Neill
Foundation
examines the importance of grant evaluation and personal family
involvement in their grantmaking program.
About the Author:
Susan Crites Price is a
Washington, D.C.-based freelance writer. Her
articles have appeared in numerous newspapers and magazines. She is
the coauthor, with her husband Tom, of
The Working Parents Help
Book (Peterson’s, 1996), winner of a Parents Choice Award.
Executive Summary
The O’Neill Foundation: Embracing the Investor Model is
part of the
Voices from the Field series, which describes family foundation
challenges and experiences so that others may learn from example. This
monograph illustrates the transformation of the William J. and Dorothy
K. O’Neill Foundation from a passive foundation to an engaged, active
grantmaker. It details the O’Neill family’s belief in and use of the
investor model of philanthropy, and how the family applied methods
and practices it used in the business world to its foundation work.
As you will see, grant evaluation and personal involvement of
family
members are issues of great importance to the O’Neill Foundation’s
grantmaking program. Involving the next generation—how to maintain,
or expand, family participation—in the work of the foundation is of
equal importance to the O’Neill family. Here, the O’Neills share their
experiences on how they selected a funding focus and how they now
face the foundation’s future using their investor model of philanthropy.
We are very grateful to the O’Neill
family members for graciously and
openly sharing their experiences and investor approach to philanthropy.
We hope, as does the O’Neill family, that their example may offer
assistance to other family foundations that are interested in being
venture capitalists in philanthropy.
Dorothy
S. Ridings
President
and CEO
Council
on Foundations
April
1999
From the Introduction
Reporting on a new breed of
philanthropists, the New York Times
(November 18, 1998) described a "get-in-the-trenches approach"
to
grantmaking modeled on the methods of venture capitalists. Although
this investor model already was known in the foundation community,
articles like the one in the Times have called widespread attention to
the
notion that effective grantmaking today involves much more than writing
a check.
Among the foundations cited
by the Times as striving to advance the
investor model was the William J. and Dorothy K. O’Neill Foundation
of Cleveland. Established just over a decade ago, this family foundation
has borrowed and adapted management and investment methods of the
business world in an attempt to maximize its impact.
Central to the family’s
approach is forming partnerships with its
grantees, sharing its time and talents as well as providing funding. Its
focus is on start-up projects, helping them build organizational
capacity
and providing multiyear support until the programs are established
enough to attract funding from
other donors. The O’Neill foundation
also emphasizes accountability and measurement of outcomes.
The foundation’s unusually
high level of involvement with a recipient
agency led Harvard University’s Kennedy School of Government to
prepare a case study about the project in 1998. Students learning about
nonprofit organizations are examining the ramifications of the O’Neill
model in their coursework.
The case was designed in part to prompt
students to question whether the foundation should have such intense
hands-on involvement with its grantees. The O’Neills believe such
relationships can work well when based
on mutual trust.
The family members also
believe personal involvement allows them to
leverage what they view as their foundation’s relatively modest
endowment. The foundation employs one full-time staff person, had
assets of approximately $6.6 million in 1998 and made grants totaling
about $625,870 to approximately 80 organizations in 1998. Although
the foundation’s grants span a wide range of program areas such as
education, employment, arts, health, religion and human services, one
area—families—has received a special focus.
A strong grantor-grantee
relationship meets two of the foundation’s
central goals: helping to solve societal problems and enabling the
members of the large O’Neill clan to work together in public service.
By
necessity, they’re investigating innovative techniques for keeping all
family members enthusiastic and involved.
In doing so, they are
confronting a challenge that faces many family
foundations: how to keep third-generation family members engaged as
they scatter across the country, busy with the time-consuming demands
of family, educational pursuits and careers. For the O’Neills, meeting
the challenge is crucial because a high level of family involvement is
at
the core of their foundation’s
strategy.
In striving to apply the
venture capitalist model to philanthropy, the
O’Neills have learned important lessons about what works, what
doesn’t and what adjustments may be required in the foundation’s
operation to ensure that the third generation will preserve the model.
The willingness of the
O’Neill family members to candidly share their
explorations, setbacks and successes will assist other family
foundations
interested in pursuing an investor approach to philanthropy.
Council on Foundations
1828 L Street, NW
Washington, DC 20036
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