February 28th, 2013
The author is the new president of Grantmakers In Health, an organization of health funders. It is based in Washington, D.C.
In the past thirty years, health philanthropy has undergone major changes, and the field continues to evolve. In its role of advising and informing health funders, Grantmakers In Health (GIH) has been an active part of this evolution. We are interested now in a variety of developments that will change the landscape of health philanthropy in coming years.
When GIH began in 1978, the community of health funders consisted primarily of private and community foundations and corporate-giving programs. Health grant making consisted mostly of support for charitable organizations and causes; there were few of the major initiatives that are now commonplace. Then—as now—many funders had small staffs who found it difficult to keep abreast of the information they needed to make informed decisions. To help funders connect and share ideas, GIH was formally incorporated in 1982, with support from the Robert Wood Johnson Foundation and other foundations. Having an organizational frame of reference helped the field evolve into the complex entity we know today as health philanthropy.
The early ‘80s is also when conversion, or legacy, foundations began to emerge. These new foundations were created when nonprofit health care organizations were converted to for-profit status. In such cases, federal law requires that proceeds from the sale of tax-exempt entities’ assets be directed toward charitable purposes. Conversion foundations quickly caught on, and in the fifteen-year period beginning around 1985, more than 130 were established.
These “new health foundations” doubled the dollars available for health-related grant making and made more than $15 billion in assets available to local communities. Staffing them brought new people into the field to serve as foundation presidents and board members, some of whom had a limited health background or limited familiarity with philanthropy. An additional challenge was that some of the new health foundations were required to institute community advisory processes that were a sharp departure from traditional foundations’ operating styles. As a provider of technical assistance, GIH played a vital role during this period by providing information about best practices to new funders and creating opportunities for funders of all types to learn from each other.
Several recent developments signal new directions in health philanthropy. One is the strong and growing interest in what is variously known as impact, mission-related, or social investing. These terms refer to financial investments by foundations or other entities that, like grants, advance mission, but, unlike grants, also recover the foundation’s or other investors’ principal or earn a financial return. Impact investments often enable foundations to achieve a type or scale of social impact that grant making alone would not. Many foundations use impact investments to deploy a greater-than-usual share of their resources to advance their mission and to ensure that those resources are not working at cross-purposes with their overall mission and grant strategy. Read the rest of this entry »