Foundation-Nonprofit “Partnerships” — Fact or Fiction?
Between foundations and nonprofits, sharing values, connections, and other support is good — but the relationship should be focused on funds.
Productive outcomes can be achieved by everyone playing the parts they can best play.
We are pleased to publish this article simultaneously with the National Committee for Responsive Philanthropy.
The question posed to me by NCRP for this article: “Is it possible for a foundation and a grantee to have an honest, real partnership?”
My answer: It’s the wrong question. The key words in the question – honest, real, and partnership – contain so much coded meaning that the only reasonable response by a grantee is a slow blink. By using these words, we trap ourselves in a framework that ignores the material, business basis for the funder–grantee relationship. This language diverts us from understanding the key dynamic.
And unless we take a clear-eyed look at that dynamic, we won’t be able to see a path towards productive, effective, and perhaps even enjoyable grantmaker-grantee relationships.
Institutional or personal relationships?
Essentially, the relationship between a funder and a grantee is one between institutions, driven by institutional interests, and fundamentally about money.
“Shared values,” warm personal interactions, and nonfinancial support to grantees all are fine. But without money changing hands, these positives are insignificant. And grantmaking can be effective without any of these minor characteristics. What’s more, although foundation language is about shared values and partnerships, foundation behavior (and grantee behavior) reflects the underlying business relationship.
At the core of anti-partnership behavior by foundations is the implicit financial reality that nonprofits aren’t really partners: we’re vendors or consulting clients. For example, the president of a large community foundation recently referred to its grantees as “our vendors” at a board meeting. Trustees called him on it, but he continues to use the term. Others advocate “sector agnosticism,” by which they mean that foundations are not about building community institutions and capacity; they are about hiring whoever can do the best job of carrying out the foundation’s business.
And despite decades of research, nonprofit advocacy, and some foundation exhortations (Paul Brest of the William and Flora Hewlett Foundation and Gary Yates of the California Wellness Foundation come to mind) for multi-year, unrestricted grants to nonprofits, foundations still overwhelmingly make single-year, project grants.
Note: single-year project grants are exactly how one hires a vendor, and the exact opposite of how one works in a partnership. Arts thinker and executive John Killacky of Vermont’s Flynn Center for the Performing Arts recently wrote about the tendency of arts funders to give small management improvement grants to community arts organizations, a reflection of the common foundation view that they must counsel nonprofits on how to manage their organizations.
The point here is not that foundations shouldn’t choose their own goals. The point is that foundation goals are seldom as simple as filling potholes; foundation goals often reflect complex, nuanced, abstract visions (just listen to the foundation taglines on NPR). Such visions require complex and nuanced actions within the ecosystems of communities, not just hiring nonprofits to be factories of specific outcomes.
Both foundations and nonprofits want to use money to change the world in some particular way. The institutional financial interests of foundations are to spend money in a way that gives them satisfaction. The institutional financial interests of nonprofits are to get as much money, with as few strings attached as possible.
Learning from other relationships
The one-to-one rapport between a foundation program officer and a nonprofit executive clearly is important, but this personal connection brokers – not incarnates – the institutional relationship. The two relationships are not synonymous.
Too many programs officers mistake praise and warmth from their grantees as evidence of their personal worth and professional expertise; the evidence for this includes the all-too-frequent experience of former program officers who find that their former grantees (and foundation colleagues) are surprisingly unresponsive once the program officers have become job-seekers or consultants. One foundation officer recently said to me, “It’s been a rude awakening, very rude. I thought I had really developed trust with our grantees, but when it comes down to it, they won’t tell the truth if it means they won’t get the money.”
This comment reflects the underlying foundation sense of what an “honest” relationship would look like: one where the grant-seeker tells its problems and failures to the foundation program officer. When a person goes to the bank for a car loan, the banker wants to know the risks. The borrower will be honest about current income, but may leave out the part about layoffs looking imminent where he or she works.
But foundation staff often think of honesty as absent only on the grantee side. In our view, we grant-seekers don’t hear the “honest” stuff from the foundation side – that, for example, a grant is declined because there’s an informal quota for grants to Asian organizations, or because your organization is too close to a foundation that this foundation disdains. Or a grant is made because a foundation wants to get close to your main funder (like the Bill and Melinda Gates Foundation) or as a reciprocal favor for a grant made by another funding entity to this foundation’s in-house initiative. New program officers often want their “own” grantees and not those with loyalty to their predecessors. Many program officers fall in love with grantees that make them feel cool and hip and smart. Harvard researcher Bill Ryan’s findings on how program officers see “more effective” and “less effective” grants are telling: program officers correlated “effective” grants with those on which they had the most influence in the proposal content and framing, and “less effective” with those on which they had the least influence.
Let’s take a different approach. Let’s not deny the financial basis for the funder–grantee relationship, or try futilely to “change the power imbalance,” or hope that individual closeness can trump institutional and financial imperatives. Instead, we can look elsewhere for effective relationships that exist among overlapping – but distinct – power-imbalanced players.
Most of us have experienced such a relationship between a supervisor and a subordinate. A supervisor can’t expect a subordinate to be “honest” on the first day of work. Over time, a relationship of mutual respect and confidence can grow. If, as an employee, I make a mistake and don’t get fired for it, I am more likely to admit to a mistake the second time. If I express anxiety that I can’t do a particular task and get assistance instead of a pink slip, I am more likely to grow in the job. By demonstrating confidence in my work (such as putting me on salary instead of as a temp), by giving me enough time to get the work done (including a few mistakes) and by legitimate praise and criticism, a supervisor and a subordinate can develop trust in one other over time. Even so, I still might not tell my supervisor that I’ve got a hangover or that her jokes are unfunny.
So here’s some advice for grantmakers and grant-seekers seeking effective, grounded relationships.
For grantmakers:
- Make multi-year, unrestricted grants. When the pink slip (also known as a decline letter) is always hanging over our heads, we can’t be as open.
- Share what you can about the internal dynamics of your own institution. Tell grantees what you need to look good to your boss and what you need to make the case to your committee that this grant should be made. Admit it when there’s been a problem – that a proposal was overlooked for months, that funding guidelines changed between when a proposal was invited and when it was considered, that your foundation has an informal quota for a certain kind of grant or that you’ve heard negative things about the grant-seeking nonprofit.
- Recognize that your personal relationship with a grantee is based on a business relationship. Don’t inadvertently send the message that you want grantees to fawn over you. Let a sense of mutual confidence build gradually over time.
For grant-seekers:
- When a funder says, “jump,” we still have to jump. We can complain to one another about especially egregious foundation behavior, but we have to do what our organizations and our constituencies need us to do.
- Find ways to sneak in a little education in your conversations with funders. If you receive a multi-year, unrestricted grant, tell the program officer, “When you show this kind of confidence in my organization I can be much more open with you.” To others perhaps you can say, “For this to become more of a partnership, it would help if I could feel that any mistake or changed analysis would not result in your foundation deciding not to renew this grant.” Remind funders that your organizations have mutual business interests, and that the degree to which you can be confident about talking with them is the degree to which they have demonstrated their confidence in you by significant, multi-year, unrestricted funding.
- Remember that foundation program officers are not the embodiments of their institutions. They have their own needs as employees striving to succeed in their own workplaces. Cultivate them as you cultivate major donors, understanding their persuasions, the pressures they face and what kind of fawning works on them.
In summary
Can you tell a program officer that a project is late because of some uncontrollable circumstance? Yes. But can you tell the same person a project is late because you completely screwed up? No. Can you tell a foundation that its “strategic initiative” is idiotic? No.
Can we talk productively about how a particular outcome can be achieved by each of us playing the parts we can best play? Yes.
Why don’t we get started, and stop wasting time asking the wrong question over and over again?
For a complete copy of the summer 2011 issue of the National Committee for Responsive Philanthropy‘s newsletter, for which this article was written, please click here.
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About the Author
Jan is a former editor of Blue Avocado, former executive director of CompassPoint Nonprofit Services, and has sat in on dozens of budget discussions as a board member of several nonprofits. With Jeanne Bell and Steve Zimmerman, she co-authored Nonprofit Sustainability: Making Strategic Decisions for Financial Viability, which looks at nonprofit business models.
Articles on Blue Avocado do not provide legal representation or legal advice and should not be used as a substitute for advice or legal counsel. Blue Avocado provides space for the nonprofit sector to express new ideas. The opinions and views expressed in this article are solely those of the authors. They do not purport to reflect or imply the opinions or views of Blue Avocado, its publisher, or affiliated organizations. Blue Avocado, its publisher, and affiliated organizations are not liable for website visitors’ use of the content on Blue Avocado nor for visitors’ decisions about using the Blue Avocado website.
12 thoughts on “Foundation-Nonprofit “Partnerships” — Fact or Fiction?”
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As a former foundation executive who is now a consultant working primarily with nonprofits, I am always amazed at how much more I learn about the nonprofits I work with now, compared to what I thought I knew as a grantmaker. It is extremely difficult for a nonprofit to openly and honestly “share” with a foundation representative, especially during the grant application and review process. Multi-year, unrestricted grants are definitely one way to build the necessary comfort and confidence in the relationship that is required. But even more important is for foundations to be more open and revealing from their end.
In my experience, when there was a very tangible reason for a grant declination, the foundation was willing to state it. If, however, it was more about informal quotas, or “things I’ve heard,” or lack of confidence in the executive director’s leadership and skills — well, we didn’t talk about that. We gave vague answers when asked “Why was our grant declined?” because we didn’t want to reveal our own biases and internal secrets.
I think the imbalance of power (foundations have the money, nonprofits want it) makes it fairly impossible for foundations and nonprofits to have an “honest, real partnership.” But it’s still something to aspire to.
As a former foundation executive who is now a consultant working primarily with nonprofits, I am always amazed at how much more I learn about the nonprofits I work with now, compared to what I thought I knew as a grantmaker. It is extremely difficult for a nonprofit to openly and honestly “share” with a foundation representative, especially during the grant application and review process. Multi-year, unrestricted grants are definitely one way to build the necessary comfort and confidence in the relationship that is required. But even more important is for foundations to be more open and revealing from their end.
In my experience, when there was a very tangible reason for a grant declination, the foundation was willing to state it. If, however, it was more about informal quotas, or “things I’ve heard,” or lack of confidence in the executive director’s leadership and skills — well, we didn’t talk about that. We gave vague answers when asked “Why was our grant declined?” because we didn’t want to reveal our own biases and internal secrets.
I think the imbalance of power (foundations have the money, nonprofits want it) makes it fairly impossible for foundations and nonprofits to have an “honest, real partnership.” But it’s still something to aspire to.
“Don’t inadvertently send the message that you want grantees to fawn over you.” Was this meant as real advice?
As a friend of mine once said, “Once you’re a grant maker, you never have to pay for lunch and you never tell a bad joke.” Enough said.
A real quote from a grant maker: ‘You’ve heard about the golden rule? He who has the gold makes the rule.’
In regard to this assertion:
“Can you tell a program officer that a project is late because of some uncontrollable circumstance? Yes. But can you tell the same person a project is late because you completely screwed up? No.”
I’m curious to hear stories from other nonprofit leaders who have both successfully and tragically been transparent with their program officers about times when they made mistakes — or just when things were going badly. What did you do and say, and how was it received? Depending on the foundation and the program officer relationship, I’m not sure I agree that you *can’t* be open with a PO to the extent that you would reveal some major organizational flaws.
Of course: it depends on the program officer, and it depends on the incident. I once attended a day-long convening by a foundation of about 70 of its grantees. All through the day everyone was grumbling about what a waste of time it was. One person (not me!) described the day as "bowing at the throne of Barbara" (Barbara was the PO). At tne end of the day Barbara asked for feedback and everyone said glowing things. One grantee (again, not me!) said he wondered if it was a good use of everyone's time and whether we could have spent the 70-person days on other work that would have been more valuable. Barbara lit into him like a mother angrily whipping a servant, in front of everyone. It was not only embarrassing for everyone, it was a lesson.
Jan thanks for once again telling it like it is!
Speaking of foundations, I would be most appreciative if there was an article and dialogue about the section on grant applications that instructs applicants to “describe in detail the plans for sustainability”. Do foundation personnel require that information just because all the others require it? Do they not realize that if it is a substantial budget, there may not be many other or any options to choose from in asking for the funding later on? Does no one understand that if a detailed plan for sustainability exists, that the applicant would already have gone to the sustaining funding source and not wasted time stopping at the foundation that wants grantees to go somewhere else to sustain the program? Why do foundations see sustainability completely the responsibility of the applicant, with no role or responsibility for the foundation to help ensure sustainability of what they have a role in creating?
It is amazing to work with foundation staff who have never applied for funding but have instead only been on the funding side of the relationship.
I've always thought about "describe in detail the plans for sustaining this program after the grant" as the Creative Writing section of the proposal. 🙂
As someone who has spent years securing grants and advising and helping others in getting them, I think the frankness of this article is great.
Much of my past coaching on securing grants was about how to build an effective relationship with the funder—and, of course, that was building an effective relationship with a program officer (you cannot be friends with an institution). The dynamic I often saw and still see in play is a sense of being “one down” in the relationship. this powerlessness gets conveyed by such things as flattery but also by being less sure, fussing too much over details and hesitating to contact funders. It also shows up in a disinclination to ask the right questions about the foundations priorities, how things might be shifting–as a professional colleague, not as a supplicant. And, it also shows up in a sensibility that is more pleading than recognizing it is a business deal and do we have a fit or not? This “mind set” of the “seeker” needs to shift. We need to hold the stance that we are professional colleagues of program officers whether they see it that way or not. Surprisingly or not, the way we act will affect how they see us. This does NOT affect the structural issue Jan talked of, but is it a sub dynamic that we have total control over. And, if we present as equals, it can make a difference.
To be fair here: If you’re talking about a general operating grant, then the foundation WILL play a role (if the grant is approved) in organizational sustainability. Even if it’s a one-year grant (which is of course less beneficial than a multi-year), unrestricted funds can be used for any capacity-building, facility, software, staff need that can better position the nonprofit for the future.
If it’s a program grant, it’s still a fair question. If the answer is “We will continue to seek funding from foundation and corporate sources,” then that’s fine. But there are lots of different possibilities to answer that question (for ex, earned income will get to the point where it will cover costs, or once it reaches a certain size/certification/whatever it will qualify for a government grant…). I totally understand the frustration about this and the very limited options that many grantees/projects have, but that question is just another way for funders to learn more about the organization’s plan for where a project is heading.
As a program officer, I would call that the “Not-so-creative writing” portion of the proposal, because it’s usually “We will continue to seek funding from foundation and corporate sources,” and if that’s the truth, then that is ok.
As someone who has spent years securing grants and advising and helping others in getting them, I think the frankness of this article is great.
Much of my past coaching on securing grants was about how to build an effective relationship with the funder—and, of course, that was building an effective relationship with a program officer (you cannot be friends with an institution). The dynamic I often saw and still see in play is a sense of being “one down” in the relationship. this powerlessness gets conveyed by such things as flattery but also by being less sure, fussing too much over details and hesitating to contact funders. It also shows up in a disinclination to ask the right questions about the foundations priorities, how things might be shifting–as a professional colleague, not as a supplicant. And, it also shows up in a sensibility that is more pleading than recognizing it is a business deal and do we have a fit or not? This “mind set” of the “seeker” needs to shift. We need to hold the stance that we are professional colleagues of program officers whether they see it that way or not. Surprisingly or not, the way we act will affect how they see us. This does NOT affect the structural issue Jan talked of, but is it a sub dynamic that we have total control over. And, if we present as equals, it can make a difference.
Of course nonprofits can and must tell foundation partners the truth! Telling the truth, including when we make mistakes is how we demonstrate our responsibility to our missions, to our values, and to our partners. It is how true partnerships are created, strengthened and grown.
You cannot blame a foundation for not being a true partner while simultaneously never giving them the opportunity to be one. Some foundations will fail miserably at the chance to be true partners. Others will soar and set the example. By giving foundations the opportunity to decide how they want to behave in response to nonprofit truths allows nonprofits the opportunity to assess and gauge what kind of partner they would make for us! If we treat them all the same, with low expectations and half-truths, then they don’t have the chance to become the partner-leaders we need them to be.
I have always believed part of my responsibility as an Executive Director is to be as explicit as possible with our program officers about the real challenges and opportunities that my organization faces. I want foundations to be better grantmakers, to be better partners, and if I hide information about the facts, then they will lose the chance to learn, grow and adapt their strategies. This approach has helped me build strong relationships with a number of foundations who I do consider full partners.
On the other hand, I have also found – through being direct and honest – that some foundations don’t make good partners. Because my organization has a commitment to only working with foundations and donors that are true partners, we no longer seek their funds. Their money isn’t worth it.
As partners and leaders in the nonprofit sector, we need strong relationships built on transparency. In fact, our sector should be serving as a role model for the other sectors – business and government – showing them how it’s done. This may mean that nonprofits have to take big risks. We may get slapped down by program officers like Barbara. We may lose funds. But, that’s going to happen anyway. Our budgets are always at risk; and our missions, if important enough, are always pretty hard to achieve. Let’s not make Barbara the example and the norm. Let’s point out the leaders who are doing it right.
Nonprofits need to take the risk of telling the truth to foundations. It’s the only way we will ever form true partnerships capable of withstanding the challenges, setbacks and opportunities inherent in innovation, learning, and growing. All things a nonprofit sector needs to thrive.