Foundations use intermediary organizations (IOs) to pursue their objectives more effectively—often when the foundations do not have the internal expertise or capacity, or do not wish to develop expertise or capacity internally, to perform functions such as selecting grantees in a specialized field, providing grantees technical assistance, and evaluating grantee performance. In the world of philanthropy, IOs can be "regranters," receiving foundation monies to identify, assess, and provide grants to organizations with similar purposes. IOs can be capacity-builders, dedicated to helping grantees that are selected by foundations achieve their organizational or grant-specific goals. IOs can be created collaboratively by two or more foundations to establish a project or program of common interest. IOs can be evaluators focused on advancing knowledge about what works in an area of program interventions. Or IOs can serve as intelligence gatherers and grantmaking advisors on a particular issue or field without having any operational responsibilities. Many IOs play more than one of these roles. Regranters, for example, are frequently capacity-builders as well.
Whatever their purposes in employing IOs, foundations have generally been learning from experience rather than from research about best practices in this area. Since the creation of the Local Initiatives Support Corporation (LISC) by the Ford Foundation in 1979, the use of intermediaries by foundations appears to have increased greatly; however, there is a paucity of data and analyses to suggest when and how foundations might best employ intermediaries. The study conducted to produce this paper, although limited compared to the magnitude of the subject, offers some good news about learning: While there is great variation in IOs—in their functions, sources of funding, autonomy, specialization, and organizational forms—the lessons drawn from foundations' experiences of using them are quite similar.