It’s Easy to Take the First Step

Reflections on Exponent Philanthropy's "Great Funder-Nonprofit Relationships"

I spent all morning this past Wednesday (9/20) participating in a program presented by Exponent Philanthropy and the National Council on Nonprofits on “Great Funder-Nonprofit Relationships.”  An equal balance of nonprofits and funders – more than 70 people – participated in this last of four such programs held across the country.  Funded nationally by the Fund for Shared Insight, this local program was also supported by the Center for Nonprofit Advancement and the Washington Regional Association of Grantmakers.

Many nonprofits and funders approach the topic of grantee/grantmaker relationship building with fear, anxiety and trepidation.  Nonprofits are put off by the power dynamic.  Funders feel overwhelmed.  And yet we know that when organizations and grantmakers develop authentic, sustained relationships, the quality of those partnerships increases dramatically.  Both can to achieve much more when they work together and communicate on a regular basis.  But even with this knowledge, it remains hard to make such connections a reality.

Throughout the discussions on Wednesday, however, I was struck by how simple and easy it is to create and foster such relationships.  We heard presentations from several funders and nonprofits who were actively collaborating and working side-by-side to achieve great things.  And it didn’t take some policy change to make it happen. It didn’t require some rewrite of the operating documents.  All it took was someone reaching out and saying, “Let’s explore how we can help each other.”  It’s that basic.

Here are a few of things that stuck with me from the day’s discussions:

  • It’s essential to create connection opportunities outside of the actual grantmaking process.  Both nonprofits and funders agreed that communication and interaction should take place in contexts beyond the “application moment.”
  • Openness, transparency and honesty are central characteristics of any successful relationship, and it’s absolutely the case when nonprofits and funders work together. And while many of us are fearful of talking about the “messy” or the “failures,” when we get past that, it unlocks a whole new level of connection.
  • Very simple steps can get the ball rolling.  Nonprofits and funders were encouraged to list out the characteristics of an “ideal” relationship.  Such a list can be an easy way to start a conversation – “We thought about our relationships with our funders, and we’d love to share with you how well we match up.”

Exponent’s series on the nonprofit-funder relationship concludes with a webinar on November 9th.  Reflections, data and perspective from the various sessions – held on the East Coast as well as in California – will be summarized to guide discussions on the 9th.  Long term, I anticipate that resource tools and guides will emerge from this work.  I’m looking forward to the continued conversation, and to helping nonprofits and funders implement these exciting ideas.

Whether you’re the leader of a nonprofit organization, the head of a family foundation, or a program officer of a larger grantmaking foundation, the first step is easy.  Commit to relationship building and stronger communication.  Ultimately everyone is committed to similar objectives – solving the world’s problems, improving our communities, supporting people in need, etc.  Working even more closely together, think of all that we can accomplish!

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If you, your organization, or your foundation are interested in learning more about or even implementing the lessons learned from this program, contact Marshall Ginn

Are We Talking About the Weather?

Starting Real Conversations Between Funders and Grantees

Marshall H. Ginn, CFRE

July 2017

Ever been in an awkward situation?  Ever run into to a potential romantic interest at a coffee shop?  Ever been seated right across the table from a senior executive at a corporate dinner at a conference?  You probably weren’t entirely sure how to handle the conversation, were you?  What, if anything, did you talk about?  The food or the coffee?  The latest sports news? The weather?

The next day, was your mind filled with all those things that you wish you had said?  The clever conversation starters, the insightful observations, the handy language that can draw them in?  Are you worried that it was an opportunity lost, when all you could say was, “Whew, sure has been hot this week, hasn’t it!”

The conversation between grantmakers and their nonprofit partners can be just as awkward.

Increasingly, funders, as well as the nonprofits they support, are being told that they need to transform that conversation.   Philanthropy is about relationship building; it’s not merely a paper exchange.  And good relationships require personal interaction.  And that means we need to talk to each other!  But if we’re not paying attention and neglect these important conversations, we run the risk of missing opportunities to strengthen those relationships, drive impact and make a difference in our communities.

Fortunately, along with that advice to transform those conversations, leaders in the field are offering tools and tactics that can help get those conversations going in the right direction.  They are providing us ways to avoid talking about the weather and address real issues and opportunities.  

The “Grantmaking Pyramid” was described by Michael Etzel and Hilary Pennington in their June 27, 2017 Stanford Social Innovation Review article “Time to Reboot Grantmaking.”  It provides a framework through which funders and grantees can think about organizational growth in new ways.  By focusing first on “foundational capabilities” and then “organizational resilience,” funders and their nonprofit partners can more effectively talk about essential elements that must be addressed to increase impact.  It creates a space for mutual learning as organizations openly discuss what it takes to achieve their mission.

The Performance Imperative Organizational Self Assessment (PIOSA) is another tool that’s receiving a lot of attention.  Developed by the Leap of Reason Ambassadors Community, the PIOSA provides an in-depth and thought-provoking structure for organizational discernment. It enables leaders to explore how their organization can achieve high performance and make a meaningful difference in the causes and communities they serve. 

In a report from last fall prepared by Leap of Reason “Funding Performance – How Donors Can Do More Good,” we see what nonprofits committed to this practice can achieve, especially when they partner with creative funders. The PIOSA establishes a way through which nonprofits, as well as grantmakers, can exchange ideas, openly discuss the essentials of performance, and foster continuous learning.

Ask for it

If you are a nonprofit and you long to have such frank, engaging conversations with your donors and funders, ask for it.  Don’t sit back and wait for them to make the first move.  Tell them you are eager to strengthen your relationship, and you are interested in exploring how the two of you can truly move the needle and impact your cause or issue.  And keep in mind, you’re just asking for a conversation.

Funders, you understand what it’s like when nonprofits treat you like a partner, and not just an ATM.  Make sure you’re not accidently acting like an ATM with an approach that’s less personal and more transactional.  Step out of your comfort zone - perhaps out of your old procedures - and go talk to your grantees.  You’ll likely find you are equally eager to strengthen the relationship.  And keep in mind, you’re just committing to a conversation.

Don’t be shy, be strategic

To make those conversations fruitful, however, you need to be prepared.  Whether you’re the nonprofit or the funder, you should go into such encounters with a strategy, or at least an outline of how you wish to approach the discussion.    You can use the Grantmaking Pyramid or the PIOSA as a way to start, framing the conversation around common language.  You could also lay out a few big-picture ideas on how supporting each other’s objectives can lead to a better, more productive partnership.

  • Avoid complexity, keep it simple -- Go into such conversation with a clear sense of what the other can learn about you, your work or your process.  If you’re a funder, help the nonprofit to clearly understand what you essentially need to know in order to make the best giving decision possible.  In a conversation like this, don’t get mired down in complex minutia that can distract everyone from what really needs to be said.  What’s at the core of your philanthropic objectives?  What drives your decisions?

For nonprofits, are there fundamental components of your work that you want your funding partners to understand?  Have there been some important shifts in the field or the issue, and you need to share perspective on how that might necessitate a new approach?  You might feel driven to discuss the changing costs of occupancy, office supplies or credit card fees, but don’t.  Keep this conversation simple and focused on the big picture. 

  • Explore issues of timing and time frame -- The issues and causes we address in philanthropy are typically not small.  They often address topics that seem almost impossible to solve, confronting profound social wrongs and problems.   Addressing these issues is not going to happen overnight, some are going to take years.   In many cases, they require a broad, system-wide approach that targets the very conditions out of which the problems arose.  It’s no easy task.

Whether you’re the funder or the funded, take the time to explore this reality.  What you’re doing takes time, and what you’re hoping to achieve is going to take a lot of work over the long haul.  Funders have big visions, and so do nonprofits.  But those visions should be grounded in the practical reality of what has to be done and in what order. 

Discuss how timing plays into this.  If a nonprofit is taking on system-wide change, perhaps multi-year funding is a more effective response, as compared to one-year grants that must be constantly renewed.  Funders and nonprofits both have their own operating rhythms and cycles.  So even if they have the same fiscal year, their yearly calendars can be quite different, and understanding this can help to avoid confusion or frustration when waiting for a giving decision or seeing service delivery outcomes.

  • Understand and own what it takes - There is still much for funders to understand regarding what it takes to effectively operate and manage a nonprofit organization.  And nonprofits have been pressured by the public to avoid talking about the basic costs of getting the job done day after day.  As stated above, nonprofits are addressing complex and difficult issues.  And they are being forced to transform the world on a shoestring budget or by leading communities to think that their work springs out of thin air, costing nothing.

Funders and grantees need to have honest conversations about what it really takes to achieve impact today.  They need to own and be upfront that entire organizations – not just discrete programs – need sustained investment.  We need to explore how to articulate outcomes and measurements that are indicative of a successful nonprofit, not just the metrics of successful projects.  These conversations are a chance to learn and strategize in ways that will strengthen the funder/grantee relationship.  

 

Don’t make life harder, help each other out

Earlier this month, global philanthropy advisor Kris Putnam-Walkerly shared some valuable perspective in a Forbes magazine piece, “How Grantmakers Unwittingly Make Life Harder for Nonprofits.” She talks about the unintended consequences when funders don’t pay attention to how their practices and approaches might actually hinder - rather than facilitate - effective philanthropy.  (In fact her article inspired me to write this piece!) Solving social problems is challenging enough without funders and nonprofits getting in each other’s way and making it that much more difficult.

Most of the problems and issues between grantmakers and grantees can be addressed through conversation and relationship building.  Each has so much to learn from the other.  And each has valuable lessons that can be shared as well.  There’s no reason that such conversations should be awkward or painful.   Make a move and reach out to your partners.  Start from a shared goal of achieving greater impact and talk about your needs as well as your aspirations.  Talk about how by working even more closely you can make big changes.

Don’t just talk about the weather.

 

It’s been a year, have you moved your organization “Beyond Fundraising?”

It’s been nearly a year since the Evelyn & Walter Haas Jr. Fund released “Beyond Fundraising: What Does It Mean to Build a Culture of Philanthropy?” by Cynthia Gibson.  Designed specifically as one of the follow-up responses to the “Underdeveloped” research report from 2013, this excellent and comprehensive report explores in useful detail how nonprofits have been attempting to address the important issues raised in the 2013 report. 

Gibson reviews the forces that are driving the increasingly widespread shift to a culture of philanthropy (such as changes in the nonprofit ecosystem and the increased competition for resources,) and she articulates four distinct core components that comprise such a culture.  They are 1) Shared Responsibility for Development, 2) Integration and Alignment with Mission, 3) A Focus on Fundraising as Engagement, and 4) Strong Donor Relationships.  “Beyond Fundraising” is an outstanding report, and I highly recommend that if you haven’t already done so, check it out, download it, and immediately share it with as many colleagues as you can.

Gibson also provides a series of highly useful tools and guidelines for how any organization can jumpstart an effort to establish a culture of philanthropy. She poses some highly thought-provoking questions that can be used to create a framework for discussing these critical issues.  Of those, two of my favorite are “How can we get the board to become champions of a culture of philanthropy,” and “Does everyone in the organization understand philanthropy’s role in advancing the organization’s mission and values and have opportunities to participate in development activities?”

The board’s role in creating the success conditions for a solid, sustainable fund development program is essential.  They must both drive and model the values, attitude and commitment inherent in a culture of philanthropy.  They play a critical role in serving as ambassadors for the organization in the community.  In fact, I have often used the concept of “ambassador” as an easy entry-point for board members to discuss and ultimately embrace solid development practices.  It is also essential that board members are provided with opportunities to learn about why and how philanthropy works.  I feel that we do our board members a disservice when we focus fundraising training solely on the solicitation, rather than on the broader concept of resource development and donor engagement.   They must be shown exactly how philanthropy makes the organization’s work possible in ways that both enable them to effectively communicate this to the community, as well as to make sound, information-based decisions that affect the resource development program itself.

See Supporting the Fundraising Program – a tool for enabling board members – and staff – to fulfill these special roles.

“Beyond Fundraising” concludes with a discussion of the need for consistent and widely held indicators that can enable organizations to assess their progress toward establishing a true culture of philanthropy.  Gibson acknowledged that many people she interviewed in preparing this report agreed that developing such indicators should be a top priority for the future.  She helped to kick such an effort off by sharing suggestions of a wide range of potential powerful indicators.  It is an excellent list and merits thoughtful review and consideration.  I will highlight a few that are my favorites:

Selected Indicators from Cynthia Gibson’s “Beyond Fundraising:"

  • Executive Director/CEO – The executive director’s expectation of development staff isn’t solely to raise more money, but to help build a better understanding of the role philanthropy plays in the organization.
  • Staff – All staff – from the top to the bottom and regardless of position – see themselves as ambassadors for the organization and its philanthropic goals; they value the role of philanthropy, talk about its impact and are involved in fund development.
  • Organization – There are many opportunities for staff, board, donors and others to learn and talk about philanthropy and its impact on the organization’s mission.
  • Development Staff – The development director reports directly to the CEO, is a peer on the executive team, and attends and presents at board meetings.
  • Board – The board is committed to and involved in fund development; they are ambassadors, not bystanders.
  • Donors – The number of new, retained and upgraded donors improves each year.
  • Internal Systems – The organization invests money in strengthening its development/fundraising infrastructure, including professional development, training and technology.

Are any of these in place at your organization?  If so, what factors have led to their successful adoption?  If not, what barriers are impeding progress?  These issues should be discussed at the staff and board level on a routine basis.  They are essential to an organization’s long-term viability.

If you are a funder, are you looking for these and other similar indicators when you assess a potential grantee?   Are you being sufficiently engaged by the nonprofits you support?  Have you communicated to these organizations your needs and expectations in ways that facilitate a true, thriving philanthropic partnership?

The communities and constituents served by nonprofits organizations are counting on the services, programs, advocacy and initiatives they undertake every day.  Organizations – large and small – owe to them to make every effort to ensure that their work is sustained and supported.  Only then can nonprofits feel the most confident that they are doing what they can to make a lasting impact.

It is never too late to start building a culture of philanthropy.

What Will Our 2017 Top 10 List Look Like?

Over the past few days my In Box has been filled with a variety of “2016 Top 10” lists from the leading publications addressing the nonprofit sector.  I took the time to review the lists from The Chronicle of Philanthropy, Nonprofit Quarterly and the Stanford Social Innovation Review (SSIR.)

And as I considered these lists, and the issues and topics they address, I am already thinking about the future.  A year from now, when we are looking back on 2017, what will our “Top 10” list look like?  What will have been the sector’s most notable accomplishments?  What issues will have occupied the minds of business leaders, donors, foundations, fundraisers and chief executives?  Will there have been missed opportunities, or will we surprise ourselves as a sector?

The fact is that these “Top 10” lists for 2016 are already placing a daunting agenda in front of the sector.  Even without the challenges and changes anticipated to affect nonprofits and philanthropy because of the presidential election, there are numerous big issues that the sector needs to address right away.  These must be confronted head-on if we are to transform the sector in meaningful ways.  Three in particular come to mind:

Change the Conversation

Nonprofit organizations must adjust their fundraising and donor engagement tactics immediately.  Donors are tired of jargon, and they are increasingly thirsty for concrete examples of what their investments are making possible.  Both the Chronicle and SSIR’s lists prominently featured articles that focused on jargon, terminology and clarity of message.  John Hennessy, Stanford University’s outgoing president and driver of its $12 Billion campaign, says, “In the end, [donors] want to know what their gift is going to do.”  In fact, the more he shifted away from talking about the actual dollar goals, the more successful the campaign became.  He said, “Donors are smart, and they talk.”  It’s an excellent point, one that bears strong consideration.  How are we enabling donors to tell our story to their peers?

Organizations must transform the conversation they routinely have with donors, investors, government leaders and the wider public.  It places greater emphasis on the importance of good storytelling. Such an approach also means that nonprofits should adopt an even greater commitment to transparency and openness.  This new conversation must be focused on results, impact and social change, rather than budgets and data. It must connect the nonprofit, the cause and the donor in ways that are relevant, relatable and free of jargon and terms that do more to put off donors rather than draw them in.

Shift the Model

Social impact investing is here to stay. Nonprofit organizations must examine and shift their revenue structure and business models to make way for this type of capital. Paul Klein, CEO of Impakt (a B Corp that helps nonprofits and companies benefit from social change) in an SSIR article asserts that there is still work to be done before we see real results from these efforts.  Of the lessons he learned while creating a job-placement program for formerly homeless youth, was a realization that social organizations often lack the capacity to engage in this type of work.  They are limited in what they can accomplish.  Nonprofit leaders must be ready to operate in this new funding landscape.

Laura Callahan, founder of Upstart Co-lab, which targets impact investing on the “non-traditional audience” of artists and creative professionals was very clear in saying that nonprofits must be ready to embrace innovative approaches.  In the article profiling her work in the Chronicle, “A sector that cannot accept investment capital is going to really get left behind,” she says.  Grant making and investing are become increasingly blended and less distinct.   Nonprofits that cannot shift their thinking to incorporate an openness to new forms of capital will miss opportunities that could transform their work.

Challenge the Assumptions

Nonprofits and funders make a lot of assumptions, many of which are holding the sector back in significant ways.  Donors assume that high so-called overhead automatically means that an organization is being inefficient, and so much of their funding reflects that viewpoint, to the great frustration of nonprofit leaders.  The development profession still subconsciously assumes that most households are headed up by men who are the top earners, therefore everything from materials, phone scripts and databases continue to ignore the role of women as equal players in philanthropy.  Board members assume that elaborate fundraising galas are the only and best way to raise big dollars, and so they resist the seemingly risky idea of scrapping a venerable event that’s been in place for years.  Leaders across the sector assume that nonprofit staff will be satisfied with low wages for the good of the cause, and yet these same leaders look puzzled when employees burn out and abandon the sector.

These are not hypothetical situations created for an ethics quiz.  These are all actual issues that were explore in various articles in the Chronicle, SSIR and the Nonprofit Quarterly throughout 2016.  These assumptions are stumbling blocks to the nonprofit sector’s ability to truly transform both themselves as well as society at large.  What is needed now is bold leadership from funders, businesses, board members and staff.  The sector cannot be afraid of risky and challenging conversations.  It must confront these and many other conventions that shape decisions small and large.

Looking Forward to 2017’s Tough Tasks

The Chronicle of Philanthropy’s 2016 Year in Review highlighted the stories of several nonprofit leaders who were not afraid to take on some very tough tasks.  They tackled big challenges, and in doing so transformed their organizations, their causes and their communities.  When we look back at 2017, what will be the big challenges that we tackled as a sector?  So many in the sector are already mentally gearing up to confront potential changes as a new administration takes office.  We know that some big things are likely to happen in and to the nonprofit sector in 2017.  What accomplishments or achievements will make us most proud a year from now? There are so many that can be considered, but from my perspective, here are a few that I would like to see in a 2017 “Top 10” list:

Nonprofits made strides in changing the conversations with donors, partners and the public, with such efforts increasing the understanding of and appreciation for what this sector accomplishes on behalf society.  

Organizations used these revamped conversations to pave the way for new investments in their work.

Nonprofits built a true capacity to manage the funding of the future, engaging boards, staff, funders, businesses and community leaders in bold collaborative efforts that are exploring new approaches to many of society’s critical problems.

Nonprofit leaders took risks, and addressed assumptions and biases in ways that created wide ranging opportunities, facilitated creativity, included diverse participants, and expanded possibilities. 

Organizations made thoughtful, smart moves to transform funding, hiring, engagement, and planning strategies and practices that benefited the entire sector.

The list could go on, but this should get us started.  What would be on your list?

Here's to a successful and productive 2017 for the nonprofit sector!  Happy New Year.

 

The links for the various Top 10 and Best of 2016 lists:

https://ssir.org/articles/entry/the_10_most_popular_ssir_articles_of_2016

https://nonprofitquarterly.org/2016/12/29/npqs-10-big-nonprofit-philanthropic-stories-2016/

https://www.philanthropy.com/specialreport/2016-in-review-nonprofit-lead/122

https://www.philanthropy.com/specialreport/challenging-sacred-cows-and-ki/124?cid=cpfd_home