Funders as principals

This article examines the tensions that surfaced for three nonprofit funding intermediaries—tensions between their historic practices and the new practices required to use performance measurement to ensure greater accountability and results among their grantees—and analyzes these tensions in light of literature on philanthropic and accountability relationships. From this analysis, the article makes three points. First, philanthropic relationships are not equivalent to accountability relationships. Second, because of these differences funders that adopt performance measurement may encounter tensions as these new practices challenge the importance of other philanthropic concerns. Third, without a systematic way to attend to these concerns when adopting performance measurement, funders face an impoverished choice: reward measurable results or fall back on supporting good intentions.