All funders, no matter their size, have big dreams and limited resources. I have yet to meet grantmakers—even the largest ones—that think they have sufficient money to tackle the myriad challenges that exist.

This is certainly true for the New York State Health Foundation (NYSHealth). With an endowment of close to $300 million, we are usually considered a mid-size foundation. Yet, these dollars pale in comparison with the health and health care needs of a large and diverse state like New York.

The state is home to more than 19 million people, including large populations of low-income and elderly people, immigrants, non-English speakers and undocumented people, homeless individuals, and people with complex and special needs. Our residents are spread over sixty-two counties, including the densest urban environments and intensely rural areas.

When you combine a burning desire to make a real impact with the realities of our large state and the relatively modest size of this foundation, the only viable path is to focus our efforts. Our board and staff agreed from our inception that we could not be all things to all people and have the kind of deep impact we sought. We agreed to be a strategic organization that would practice discipline in the pursuit of clearly defined goals, strategies, and measures of progress.

Therefore, we select a limited number of priority areas to which we make multiyear, multimillion-dollar commitments. For each area, we aspire to move the needle in a substantial and measurable way. Since our approach leaves many topics off the table, we also operate a flexible Special Projects Fund, which allows us to respond to opportunities that are timely, innovative, and can make a difference—even though they fall outside of our priority areas.

We choose priority areas in a methodical fashion. To determine where and how the foundation can have the most impact, we periodically assess a range of potential areas to see where there is a substantial and growing need, a genuine opportunity to address that need, and a clear role for NYSHealth to make a difference in light of other players and funders. We call this our “need/opportunity/niche” framework, and we have used it every few years to assess whether we are focused on the right issues with the right strategies.

When we most recently assessed our program strategies, our board and staff concluded that we had spread ourselves too thinly over time. Even with our stated goal to be focused and disciplined, the needs and opportunities were often so compelling that it was hard to say no. Officially, at that time, we had three priority areas: expanding health care coverage, improving diabetes prevention, and advancing primary care. But within those, we had what could be considered unofficial mini-programs focused on payment reform, behavioral health integration, health care delivery system changes, and oral health, to name a few. We had to return to our guiding principles and get more sharply focused.

Furthermore, the world was changing around us. Developments in the external landscape—especially the successful implementation of the Affordable Care Act (ACA) in New York State and New York State’s receipt of a federal Medicaid waiver worth approximately $8 billion— shaped our thinking.

We had difficult choices to make about potential exits and new priority areas to enter. Entering a new area is relatively easier; there are usually novel issues, partners, and opportunities galore.

Exiting is much harder. An especially tough decision was to exit our work on expanding health insurance coverage, a topic we had worked on since the foundation’s inception. Our post-ACA work in particular was successful: we jumped in immediately after the law was passed to ensure that New York State could implement health reform effectively. NYSHealth supported policy analysis and technical assistance to identify key issues and informed the state’s decisions related to the development of its health benefit exchange (Marketplace). As the first ACA open enrollment approached, we supported education, outreach, and enrollment assistance for those who were disproportionately likely to be uninsured: low-wage workers, legal immigrants, and LGBT New Yorkers.

By the end of the first enrollment period, more than 1 million New Yorkers had received coverage through the New York State of Health Marketplace. Today, that number is a whopping 2.8 million. We are so proud that New York stands as a national leader in maximizing the opportunities presented by the ACA and dramatically extending coverage statewide. Even with those gains, there was still more work that could be done: developing opportunities to expand coverage for undocumented immigrants and others who remain uninsured, helping consumers use their coverage once they have it, and tackling the issue of the affordability of health insurance.

And yet, we claimed success and exited our work in coverage. Its time as a priority area with a dedicated budget, goals, and strategies had come to a close. The extraordinary promise of expanding health insurance coverage in New York State had largely been met; we would see diminishing returns on our investment as the number of uninsured New Yorkers continued to shrink, and given our limited resources, we could have more impact in a new area.

Ultimately, we also decided to exit our work in primary care, and to evolve our diabetes prevention work to focus more broadly on building healthy communities where residents have access to affordable, nutritious foods and safe opportunities for physical activity.

In addition, we recently identified a brand-new priority area: empowering health care consumers. Going back to our need/opportunity/niche framework, we found that this area fulfilled all of our criteria. We saw a significant need: too often, patients are marginalized rather than treated as the health care system’s most important customers. We identified an opportunity: to ensure that consumers have the tools, resources, and support they need to make informed decisions about their health care. Finally, we could see a unique role for NYSHealth to work with partners and grantees to increase consumers’ choice, control, and convenience. Certain stakeholders, like providers and payers, are well organized and well financed, so putting our resources to work on behalf of consumers would help balance the scales of power.

Ultimately, we shifted from three priority areas to two priority areas (plus our Special Projects Fund). As we’ve moved from planning to implementing, I’m confident in the decisions made by the foundation. But the process wasn’t perfect, and it was not without its challenges. Three big ones come to mind:

  1. Timing. We embarked on and then completed the strategic sharpening process shortly before our founding CEO decided to step down. Preparing for and managing a change to new priority areas coincident with a CEO search and a leadership transition was not ideal. The board had made decisions after a lengthy and thorough planning process, and it didn’t make sense to discard that work and fully start over. We were eager to move forward with our new areas and to exit our old ones responsibly and respectfully.

At the same time, we didn’t want to move too quickly in setting the parameters of our two priority areas. We wanted the new CEO to have flexibility in shaping the work. Typically, a strategic planning process would commence once a new CEO is installed. In our case, it happened the other way but ended up working well.

  1. Making and Communicating Clear Decisions. It’s never easy for funders to exit an area in which they have built relationships with grantees and tried to establish themselves as a trusted partner. We wanted to be upfront with our grantees and partners, particularly those working in the two areas we were exiting, about our plans. But our communications were somewhat mixed.

Narrowing to two priority areas would free us up to do more work in our Special Projects Fund. We expected that we could occasionally fund projects related to coverage and primary care through that channel. It was hard for us to imagine shutting the door entirely on those two areas if more work was needed. But keeping the door open just a crack sent a confusing and mixed message. Grantees didn’t quite know whether we were in or out, because we had hedged a bit. Some were disappointed about our decisions, but more were simply confused. I don’t know for sure whether it was the right or the wrong decision to remain open to ideas in the areas we had exited—that is, whether a clear “no” would have been better than a “maybe, possibly, if it’s special enough.” In any case, we could have communicated our plans more clearly.

  1. Entering Uncharted Territory. Our priority area that is focused on building healthy communities reflects a natural extension of NYSHealth’s earlier work on diabetes management and prevention. We already knew who the players are in this area, and we tapped a number of them, both in New York and nationally, to help us shape our strategy.

That was not the case with our work in consumer empowerment, which is a trailblazing effort, rather than a clearly defined field with obvious experts and grantees. Even putting together a distribution list for our first request for proposals (RFP) was daunting.

One of our key tasks is to help define and shape the field. We are now trying to do just that: to bring some definition to the work with our “choice, control, and convenience” framework and a strategy focused on information access.

We are approaching the work with humility, and we know that we don’t have all the answers. Although we have identified some partners and solicited proposals for discrete projects—such as a study of hospital prices and the development of an online shopping tool for health care consumers—the bulk of our grant funding this year in the consumer empowerment area will support projects identified through an open RFP. (We expect to award those grants this fall.) Those project ideas, and the conversations we are having with applicants, are helping to shape the parameters of our work on consumer empowerment.

Foundations that want to make a difference should be living, breathing organizations that evolve with the times. The health care environment is so dynamic these days that funders must also be ready and willing to adapt. Of course, funders should stay committed to their goals and not get distracted too easily by every new idea that comes along. But excessive rigidity or neglecting to reassess those goals from time to time is also a recipe for irrelevancy or failure.

Strategy is about hard choices—what to do and what not to do. Our experience suggests that funders should be taking on-ramps and off-ramps, and doing so with caution. Don’t be afraid to change direction, but make sure the timing is right, that your turn signals are on for all to see clearly, and don’t hesitate to take a road even if the final destination isn’t yet fully clear.