Some grantmakers are no longer waiting for ideas from the field, but are initiating their own projects, identifying strategies, and soliciting organizations to pursue those strategies. In an extreme application of this approach, the funder does away with giving grants to others altogether and becomes an operating foundation: a charitable foundation that uses the money generated by its endowment to develop and manage its own programs.
One foundation that has adopted this approach is the Henry J. Kaiser Family Foundation. In the early 1990s, the foundation recognized that adding another $30 to $40 million a year in conventional grants to the vast healthcare system would not create the impact the foundation hoped to achieve. So it reorganized as an operating foundation and focused on conducting research and disseminating information on major health policy issues facing the nation, rather than giving grants.
Another funder that has made a similar choice is The Pew Charitable Trusts, one of the largest foundations in the U.S., which became a public charity in 2004. The change in legal status allowed it to bring a number of programs it funded under the direct control of the foundation, as well as to raise money and operate with greater flexibility than traditional independent foundations enjoy.
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