A foundation should measure its success by the performance of the organizations that it funds. However, because grant-making foundations can create value only through others, they must accept responsibility for the success or failure of their grantees. Strategy depends on choosing a unique positioning. A foundation must limit the number of social challenges it addresses. This requires an honest assessment of the foundation's opportunities, strengths and weaknesses.
Strategy rests on unique activities.
Every positioning requires trade-offs. To achieve excellence at what it does, a foundation must forgo opportunities in other approaches and in other fields. Deciding what not to do is the acid test of whether a foundation has a strategy. Even foundations that start out in one field find themselves drawn into many others. But if superior performance is the goal, making trade-offs is essential.