Philanthropy Framework Profile: Lumina FoundationDecember 14, 2018
Founding Date: August 2000
Location: Indianapolis, Indiana
Net Assets: $1.2 billion (2016)
Total Grantmaking: mission-related expenses $58 million (2016)
Number of staff: 56
Lumina Foundation (Lumina), founded in 2000 and based in Indianapolis, works nationally on increasing access and success for students who need education beyond high school. Lumina is an independent foundation formed from proceeds of the sale of a nonprofit student loan guarantor to a publicly traded student loan company. The Foundation is particularly noteworthy in the context of the Theory of the Foundation for setting out a single, ambitious goal that drives its work: that is, 60 percent of working-age Americans should have a college degree, workforce certificate, industry certification, or other high-quality postsecondary credential by 2025.
Lumina’s core framework is defined by its identity as a stewarded foundation, which sees its social compact defined by its accountability to its board and the general public to achieve an audacious goal of preparing millions more people than are on track to complete post-high school education for informed citizenship and for success in a global economy. In terms of its operating capabilities, it is most influenced by taking a proactive role and centralized decision making around focused efforts to achieve the 60 percent goal by 2025.
Lumina was created when USA Group, Inc., a private nonprofit loan guarantor and administrator of education loans, sold most of its operating assets in 2000 to Sallie Mae, a publicly traded student loan company. Proceeds from the sale established a full-scale private foundation. While the Foundation has maintained a vision consistent with the predecessor organization’s work to help students earn postsecondary credentials, it had latitude in choosing its specific focus within the education field. Martha Lamkin, the first president and CEO of Lumina, said, “While we are respectful of our roots, we are now independent of them.”
The founding board established the vision for Lumina as a “leading force for the improvement of higher education.” The Foundation’s mission statement was more focused—outlining three areas of interest within the broader vision, namely research, grants, and sponsorships—yet still allowed for flexibility. Together, the vision and mission laid the groundwork for Lumina’s charge, a hallmark of which from the beginning was its singular and passionate focus:
“In a way, we have always been focused. In fact, the founding members of our board made a conscious and courageous decision to keep Lumina’s mission tightly focused on one issue: increasing college access and success, especially for low-income, first-generation and other underserved populations. For an organization as large as Lumina—a private foundation that has an endowment well in excess of a billion dollars—that decision was almost unprecedented. Blessed with significant resources, very few large foundations tend to apply those resources in just one area, and many choose to address several areas simultaneously. Our board’s initial decision to devote Lumina’s mission entirely to increasing postsecondary attainment—that early example of focus—has imprinted all we do. It set the stage for similar, subsequent examples, including the 2008 decision to formally adopt Goal 2025.”
– Jamie Merisotis, President and CEO, Lumina Foundation
The charge has served as the lodestar for the foundation’s efforts over the years, even as the specific strategies guiding the foundation have evolved. The charter is expressed internally and externally primarily through Lumina’s strategic plans. Through its succession of strategic plans, Lumina has articulated a continued adherence to its original guiding vision, as well as a gradual move toward a defined agenda, culminating with the 2025 goal.
Lumina has made a conscious decision to be publicly accountable for the goal it has set out. By being very public about its efforts, Lumina aims to create a sense of national sense of urgency around this work, while also recognizing the need to effectively communicate its message and bring in the right partners to help achieve the Foundation’s desired change.
“Our board very much believes in the goal, not just sort of an organizing principle or public framing document, but as a statement of accountability. Lumina cannot reach this goal by itself. The goal is not about what Lumina accomplishes or does. It’s a goal about the nation and what it accomplishes,” said Dewayne Matthews, a fellow with Lumina Foundation and the Foundation’s former vice president for strategy Development.
Lumina’s leadership believes that its decision to be so public about the 2025 goal compels transparency. Lumina has developed internal evaluation systems and defined clear metrics to benchmark its progress, and every year, Lumina holds itself accountable in a public annual report, A Stronger Nation. As Merisotis explains, “Clearly, in committing to a quantifiable goal, we must hold ourselves accountable—to ourselves, to our board and to the public—for progress toward that goal. And being accountable, quite literally, means counting. It’s an exercise we take very seriously. Lumina has devised a series of metrics — quantifiable points of progress, each tied to the strategies we have chosen to pursue and each contributing to some aspect of the goal.”
Lumina believes it has a responsibility to take on a leadership role. Beyond being a funder and grant maker, Lumina sees itself as a thought leader in the education field and beyond. For example, in publicly declaring the 2025 goal, Lumina asked others to join in its commitment. Similarly, Lumina seeks to find connections that cut across interests, groups, and even fields and sectors. The Foundation seeks to serve as a bridge between key stakeholders, and often between the public and private sectors. To this end, Lumina acts as a convener, encouraging and facilitating dialogue among all of the stakeholders who must be moved to embrace the goal. Lumina has recognized the importance of engaging the public policy sphere – primarily at the federal and state levels – and has on many occasions convened policymakers from different states in Indianapolis and elsewhere to meet in a manner that couldn’t happen in their home states. In another example of its leadership, Lumina has convened groups working on college access with groups that work on higher education effectiveness to create a bridge from access to postsecondary education to success through postsecondary education.
Dewayne Matthews said, “Many areas of our work end up being about networks. It’s about how you create and sustain the communities and the networks of actors who are brought together by this common cause.” The goal has indeed brought together groups that were not previously connected toward a shared agenda.
Lumina’s core capabilities are grounded in an approach that values a proactive viewpoint, centralized strategy setting, a disciplined style of strategy development and communications, strong relationships with partners in the field that are both flexible and nimble, and networked style of internal peer relationships. Each capability is described in more detail below.
With its singular focus, Lumina has demonstrated its proactive position. Over time, the Foundation’s work has evolved. Today, it focuses on traditional college students, adults with college experience who left without finishing, and, more recently, adults with no recognized post-high school learning. Courtney Brown, Lumina’s vice president of strategic impact, sees this proactive position as the foundation “taking a stand.” As she explains, “We are putting these ideas out that nobody else is really touching … (for example) by working with the adult population with no recognized training and no credentials. It’s not the easy path; the easy path would stay with what we know.” Brown also pointed out that setting a quantitative, time-limited goal was a “game changer” for Lumina, as it is rare for a foundation to proactively do so.
With a tightly focused goal, Lumina mainly operates within a centralized strategy-setting framework. Lumina’s strategic plan, the big-picture roadmap for how it will work toward Goal 2025, is centrally developed by the executive team. For example, Lumina has three levels of metrics. The first level is then 2025 goal of 60 percent educational attainment, the highest-level metric. The second is a set of national-level indicators toward attainment that all staff track against. The executive team establishes these first two levels. The third set of metrics is strategy-level measurement that is co-developed with staff input. Final decisions tend to be made by the executive team, and strategy directors and strategy officers have a high degree of flexibility to shape work and propose, design, and execute projects within parameters of the strategic plan. The strategic plan doesn’t dictate a comprehensive plan of action for how things must be done, giving strategy staff the freedom and independence to determine the specific strategic approaches and tactics that will enable them to accomplish desired outcomes. Strategy staff use evidence and lessons arising from their work to inform their approaches. In doing so, they also leverage the board. As Merisotis noted, “Because we consistently measure progress toward that  goal, we often reassess our strategies and tactics. This means we regularly, and hopefully intelligently, work with our outcomes-focused board to refine our approach and redirect our work based on the evidence.” While the foundation is very disciplined in its focus on reaching the 2025 goal, it allows for creativity and flexibility in the path toward that goal.
One area in which the foundation has evolved is in how it chooses to make the greatest impact with its investments. By nature of having such an audacious national goal, Lumina has recognized that it can’t fund smaller programs. Courtney Brown said, “We have to really look at systemic changes that have to take place. In that way, we go broad rather than deep. Sometimes the deep is good because it provides us the evidence we need to go broad. But for us, we are more about that broad social change agenda, rather than small boutique programs.” A sharp focus on stakeholder engagement through communications and convenings helps advance the foundation’s policy objectives and more direct work with the field to create conditions that can support the development of a new postsecondary ecosystem for the nation to meet the 2025 goal.
Partnership is heavily ingrained in the culture in part at least because Lumina acknowledges that it is a relatively small foundation relative to the goal and it can’t reach the goal alone. According to Brown, “We know we need partners. We know we need others in this space. And so, we partner quite a bit, but we also recognize in some places we need to lead, and in other places we need to follow.” The team at Lumina also recognizes where it can build internal capacity by investing in its staff’s internal expertise and where it needs to buy external expertise. Lumina hires researchers, public policy experts, communications firms, and other contractors to help with its work. “The reality is that we are a staff of about 60, trying to change a nation of tens of millions, and … need external expertise,” Brown said.
Theory of Foundation in Action
Lumina’s commitment to a single, ambitious goal that drives all of its work is its most defining trait, manifesting across its charge, social compact, and operating capabilities. Merisotis articulates Lumina’s unique approach as the “leadership model of philanthropy,” which has the three main attributes of flexibility, fortitude, and central to it all, focus. With respect to focus, which has been central to Lumina’s charter since its founding, Merisotis points to the 2025 goal as the primary illustration:
“Clearly, our embrace of the goal created an even tighter focus for our work, and it also ratcheted up the sense of urgency driving that work. The decision to commit ourselves to a time-limited, quantitative goal set Lumina apart from many of its peers in philanthropy. More important, it represented the first step in our transition from a good grant-making organization to a true leadership organization—one that uses not just grant dollars, but all the tools at its disposal to effect social change. By focusing our efforts, Lumina’s commitment to the goal has shaped the Foundation’s work and underscored its leadership in countless ways.”
The desire to have focus be a central part of the Foundation’s DNA came from the founding board’s consensus that there was an unmet need in addressing access and success in postsecondary education, and that this was an area where Lumina could be an agent for change. To accomplish this, the Foundation knew it would need to keep a tight focus. In Lumina’s original mission statement, this meant funding “sponsored research, provision of educational grants and sponsorship of selected educational activities.” Lumina supported a multitude of programs and research, and learned over the years where it could be most effective and make the greatest contribution. It eventually became clear that even greater focus was needed.
The 2025 goal precipitated a significant shift in the foundation’s approach. As Matthews stated, “The goal demanded that we focus on change at scale. So, we began to look much more into the sort of system that would be necessary to operate at scale to reach the goal. Defining the mission in terms of a specific quantifiable time limited goal is what really changed our entire mode of operation.” All of Lumina’s work became organized around what fit or did not fit into the way the goal was framed. This allowed for even greater focus within the Foundation’s work.
After Goal 2025 was articulated, Lumina began to narrow the areas in which it worked. For example, a third of Lumina’s work used to be committed to supporting direct-service programs that help underrepresented student groups. Once Lumina staff realized that these programs could not operate at the scale necessary for the Foundation reach its larger goal in its set timeframe, these programs, along with other bodies of work, were no longer supported. At the same time, there were other areas of work that Lumina had avoided for years that suddenly became strategic and aligned to the goal, such as Lumina’s public policy initiatives. This work became much more focused and targeted to environmental conditions that create effective public policy.
Matthews noted, “The scale of that change just demanded that we be working at a more systemic level.” The 2017-20 strategic plan spells this out: “Fundamental redesign is required. We must move from a system that is centered on institutions and organized around time to one that is centered on students, organized around high-quality learning, and focused on closing attainment gaps. In short, we must build a true system of postsecondary learning from the disconnected and fragmented pieces we have now.”
In shifting its focus, a major challenge that Lumina tackled was being able to get the right data and create the right metrics to be able to report responsibly and transparently on its progress toward its newly defined goal. Lumina worked to create an outcomes-based approach, undergirded by a robust evaluation methodology, which would enable the foundation to make a strong public case for its work. Lumina also recognized that being increasingly in the spotlight would require it to strengthen its role as an influencer. Lumina made staff hires to bring on individuals with significant higher education and policy expertise, and reshaped its physical facilities to enhance its convening role.
While Matthews admits that it was scary for Lumina to step out with such an audacious goal, he points to how Lumina has seen the fruits of its labors. “We have 40 states now that have attainment goals that meet our criteria of challenging attainment goals. There wouldn’t be 40 states with attainment goals if we hadn’t put the goal out. We see all kinds of other documents and references to 2025 goals, and others aligning their data and their policies and practices to things that we have done. I think by being a thought leader, putting these things out there, we’ve seen huge ripples of that impact and huge change in the whole ecosystem.”
From the Ground Up: An Early History of Lumina Foundation for Education
The Leadership Model of Philanthropy, by Jamie Merisotis
Lumina Foundation Strategic Plan, 2017-20
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