The Hewlett Foundation has a long history of rigorous grant-making. In the 2004 presidents statement, the idea of an ER calculation was evident, years before the actual metric was developed. The president noted that the relatively limited resources of foundations, even very large ones like Hewlett, was an impetus to identify ways in which we can set in motion forces that will have greater and longer-lasting impact than any of our particular grants (Brest 2004). With limited resources, foundations need to optimally allocate their grants to produce the greatest social return. In 2004, the Foundation did not advocate quantifying social returns but believed that the investment metaphor embodies an attitude that presses the staff to use the Foundations resources as effectively as possible (Brest 2004, emphasis in the original).
In 2007, the Hewlett Foundation chose to make this investment attitude more explicit. The Foundation started working collaboratively with Redstone Strategy Consulting Group to increase the rigor of its grant-making by developing an overall ODG strategy and ER metric. The basis of an ODG process is a strategic plan that sets measurable goals and outcomes, defines the programs scope and establishes logic models that link programs with outcomes. It also determines how to allocate resources to achieve the target outcomes. ER analysis informs ODG by introducing a consistent, quantitative metric to evaluate potential investments. Both the global development program, a new Hewlett Foundation program still engaged in exploratory grant-making, and the Foundations population program, an established program with an existing grant-making strategy, piloted the use of the newly developed procedures to evaluate their grant-making strategies.