Foundation Profiles; Government adopts foundation mode

Private foundations operate with a freedom and imaginativeness usully denied to federal grantmaking agencies. But there's one Washington agency that operates with the same kind of enterprise as the best nongovernmental philanthropies. It's the Fund for the Improvement of Post-secondary Education, which as an evitable record of finding the best ideas and the best people, and then getting out of their way.

"The fund supports -- it does not dominate," asserts George Bonham, editor at large of Change magazine and a respected observer of higher education. "It's carved out for itself a remarkable practical problem-solving mode that could serve as a model for other governmental agencies, in and out of education." Academe's trade paper, The Chronicle of Higher Education, headlined a story on the fund: "The Innovative Federal Agency That Gets Widespread Acclaim Instead of Criticism."

The fund is a small agency by federal fiscal standards. Its $11.5 million budget is barely visible in the Department of Education's total budget of $15 billin. A staff of 20 is led by Sven Groennings, the fund's fifth director in its 10-year history. An advisory board appointed by the secretary of education assists in setting the fund's policy directions, but decisions about how to spend the money are made by the staff and a host of ''peer reviewers'' brought in from around the country to evaluate proposals.

The fund's basic activity is a yearly competition for the best proposals to improve post-secondary education. Right here the fund's approach diverges from that of most federal aid to education programs. The usual pattern is for the Washington bureaucrats, with advice from a few experts, to decide what the educators should be doing, then to issue ''RFPs'' - requests for proposals - to carry out the prescribed activities. Another familiar pattern is simply to disburse the allotted funds according to formulas prescribed by Congress in its legislation: e.g., ''X-many dollars for each average day of attendance by pupils below a certain income level.''

''Our style here,'' explains director Groennings, ''is to announce the problems which seem most compelling to us, and challenge educators in the field to come up with promising new approaches. We like to be astonished. There's wonderful creativity out there, and we want our program to spur and stimulate it.''

After soliciting the best ideas from the field, the fund exercises rigorous selectivity. Last year it received 2,246 ''pre-proposals'' (five-page submissions describing the basic idea for a proposal), invited only 1 in 7 of those applicants to prepare full proposals, then funded only 1 in 4 of those.There is no typical grant, but among last year's grantees were the following, which suggest the fund's concerns:

* The College Board in New York will create a handbook on how colleges can find financial aid from local private sources for adult students.

* Pacific Lutheran University, with five others in the Northwest, will improve the preparation of business students by training them to cope with international aspects of commerce.

* St. Louis Community College and the University of Michigan, separate grants , will assist unemployed workers to gain basic skills and qualify for new jobs.

* The University of Iowa will create computer-based courses in chemistry, biology, psychology, and physics - which other institutions around the country can use in their programs.

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