Organizational Identity and Philanthropic Institutions

• Author: Shelley C. Scherer
• Published date: 01 September 2017
• DOI: http://doi.org/10.1002/nml.21266
• Date: 01 September 2017

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N M  L, vol. 28, no. 1, Fall 2017 © 2017 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/nml.21266

Journal sponsored by the Jack, Joseph and Morton Mandel School of Applied Social Sciences, Case Western Reserve University.

Organizational Identity and

Philanthropic Institutions

PATTERNS OF STRATEGY, STRUCTURE,

AND GRANTMAKING PRACTICES

Shelley C. Scherer

 e Pittsburgh Promise

This article proposes a framework for viewing the behavior of philanthropic institutions

through the lens of organizational identity via semi-structured interviews with twenty-

seven grantmakers representing seventeen foundations, along with content analyses of these

foundations’ public documents. This empirical investigation revealed three identity pro-

files: agenda setter, supporter, and community builder, which capture distinct patterns in

foundation strategy, operational structure, and grantmaking practices. For theory, these

findings provide an alternative to the conventional view of foundation behavior along

an active to passive continuum to one that suggests a role for organizational identity. For

practitioners (grantmakers and grantseekers), this perspective demonstrates that there are

multiple pathways through which foundations create social value, not just one definition of

“best practices.” Understanding these different perspectives on social value creation can help

grantmakers identify internal inconsistencies in their strategies and operations and can help

grantseekers identify foundations most likely to fund their work. The article concludes with

suggestions for further research to explore the extent to which this framework can advance

understanding of institutional philanthropy as the field moves to challenge traditional

boundaries between nonprofit foundations and private social change initiatives.

Keywords: accountability , evaluation , foundations , nongovernmental , organizational

behavior

PHILANTHROPIC INSTITUTIONS HAVE long played important roles in American society,

from supporting cultural arts to informing foreign and social policy initiatives (Hammack

and Anheier 2013 ; Lagemann 1999 ), and the impact that foundations have on grantee

behavior has been a frequent focus for researchers (Carman 2009 ; Defl in and Tang 2008 ;

Ebrahim 2002 ; Lynch-Cerullo and Cooney 2011 ; Shaw and Allen 2009 ;  omson 2010 ).

However, there has been little empirical research on philanthropic institutions themselves,

Correspondence to: Shelley Scherer, 1901 Centre Avenue, Suite 204, Pittsburgh, PA 15219.

Email: shelley@pittsburghpromise.org.

Research Article

Nonprofi t Management & Leadership DOI: 10.1002/nml

106 SCHERER

which makes it diffi cult to construct theory on their behavior. One reason for this is that

foundations rarely invite or allow in-depth outside observation by independent researchers

(Diaz 2001 ; Fleishman 2007 ). Although a few case studies have provided important insights

(Cornforth and Mordaunt 2011 ; Diaz 1996 ; Millesen, Carman, and Bies 2010 ), most of

what is currently known about foundation behavior has been self-reported via surveys (Ash-

ley 2007 ; McCray 2011 ; Ostrower 2004a ), foundation leaders’ own publications (Brest and

Harvey 2008 ; Isaacs and Colby 2010 ; W. K. Kellogg Foundation 2004 ), or other resources

featuring case studies (Braverman, Constantine, and Slater 2004 ; Council on Foundations

1993 ).  rough individual interviews and extensive content analyses of foundations’ public

documents, this study provides a diff erent perspective into the behavior of these institutions.

Time-tested theories of organizational behavior (Cyert and March 1963 ; Mintzberg 1978 ;

Quinn and Cameron 1983 ) have indicated that an organization ’ s values drive its strategy.

Consistent with this view, scholars have suggested that philanthropic institutions with similar

values are also likely to share similar behaviors, strategies, and structures (Ostrower 2006 ;

Young 2001 ). However, the relationship between a foundation ’ s values and its behavior has

not been empirically examined. In this article I seek to fill this gap by sharing findings about

this relationship viewed through the lens of organizational identity (Camillus 2008 ; Ravasi

and Canato 2013 ). I highlight the relevant literature and conceptual framework, describe the

research methodology and outline its findings, including its implications for and contribu-

tions to the field of institutional philanthropy.

Literature Review

Though there is not a large body of literature on foundation behavior, there are transferrable

theories from other disciplines that inform institutional philanthropy research. Organizational

identity literature is particularly compelling because it explores the influence of organizational

values, culture, and structure on organizational behavior. Originally conceived by Albert and

Whetten, organizational identity is that which is “core, distinctive, and enduring” about an

organization ’ s character (1985, 292). In a growing body of research, organizational identity and

identification are conceptualized as root constructs that inform a plethora of organizational

behaviors, ranging from the formation of organizational strategy to perceptions of organiza-

tional culture (Albert, Ashforth, and Dutton 2000 ; Ashforth, Rogers, and Corley 2011 ; Gioia,

Corley, and Hamilton 2013 ; Hatch and Schultz 1997 ) and has been operationalized as an

organization ’ s values, competencies, and aspirations (Camillus 2008 ).

Organizational identity holds strong appeal for exploring patterns of foundation behavior

because values and mission determine structure, strategy, and management practices in the

nonprofit sector (Young 2001 ). At its core, the founder ’ s values drive the creation and mis-

sion of the foundation and provide a legal mandate that foundation trustees must fulfill

(Anheier and Hammack 2010 ; Frumkin 2006 ; Karl and Katz 1987 ; Katz 2005 ). However,

the existing literature has relied on observed behavior alone, rather than both behavior and

values, to differentiate and categorize foundations. For example, scholars have informally

developed labels along a continuum of “active” to “passive” to explain observed differences

in foundation strategy and practices (McIlnay 1998 ; Orosz 2000 ; Ostrower 2006 ; Pat-

ton 2010 ). In this view, “active” foundations are those that lead strategic initiatives, design

program interventions, and award grants to nonprofits to engage in the efforts the founda-

tion designs. In contrast, “passive” foundations are those that defer intervention strategies