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Centering Relationships During Transition

Date: October 6, 2020

Lucie Addison

Learning and Improvement Lead, Einhorn Collaborative

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This post originally appeared on the Einhorn Collaborative blog.

Philanthropic organizations need to change course all the time, but the speed and scale of the change required in 2020 is profound. In all organizational change, there are real challenges felt during the period of “liminality,” when we have one foot in the old world and one foot in the new, navigating the often painful work of letting something go while grasping the possibilities of what lies ahead. In philanthropy, that balancing act usually entails shaping your emerging future while also managing relationships and expectations with current grantees, many of whom you are about to cease funding. It can be a sticky spot, swirling with emotion on both sides.

Our team at Einhorn Collaborative recently went through such a transition as we shifted from the Einhorn Family Charitable Trust to develop the new philanthropic strategy for David Einhorn. With all humility, we thought the lessons we learned from that transition might be relevant for fellow funders navigating their own significant change right now. One overarching finding, not surprisingly, was that the work of our grantee partners over the last decade — in helping people get along better and spreading the power of relationships — was not only helpful to advance our mission in the world, but also essential in how we effectively transitioned from one strategy to the next.

Four lessons from our relationship-centered transition

Bringing our grant partnerships to a close at an unnatural and unexpected point felt…well, unnatural. Maybe this is the case for you, too. It was an adjustment for our team to switch almost overnight from being students of effective grantmaking to students of ethically exiting and managing transitions.

We asked ourselves: how do we change with integrity? How do we model our values, minimizing harm to grantee partners? How do we look out for our staff for whom transition will invoke loss and uncertainty, while requiring a cooperative and positive team culture?

We learned four lessons that were valuable for us:

  1. Channel the human, real experience of change — approach this as a conversation, not an announcement.
  2. When imposing change, allow change — come to the table with solutions and flexibility.
  3. Accept offers of help — recognize partners as a tremendous source of wisdom and advice.
  4. Recognize change as an opportunity to take a really good look at yourself — gather feedback in moments when it can be particularly unvarnished and helpful.

Lesson One: Channel the human, real experience of change

We knew the best way to share the news of our transition was to pick up the phone and connect personally with those the transition would most impact. We were filled with apprehension about bearing the bad news when we called all 57 of our active grantee partners (plus a few dozen peer funders) to explain that their current grants would be their last. We planned thoroughly for these calls, anticipating partners’ questions as well as their needs. And, let’s be real: first and foremost among their needs would be future funding, and in some cases, the question of long-term financial sustainability.

We used objective criteria to quickly determine some final transition grants, and we pledged those grants (where applicable) in the same conversation as sharing our news. Partners didn’t need to apply for those grants, we assessed based on the status of our existing funding commitment with criteria that included: proximity of their anticipated grant renewal date, the percentage of operating budget we were providing, risks to other funding contingent on ours, and risks to the successful completion of the outcomes tied to our existing investment.

Since we couldn’t provide transition funding to everyone, we asked our partners what else they needed. Based on their ideas, we responded by sponsoring portfolio-wide access to two training programs: financial contingency planning and practices for leading large-scale change. We wanted to find ways to honor our relationships and bolster organizational strengths in what would clearly be a time of increased uncertainty.

Through this process, we were deeply moved and inspired when the most common response to our phone calls was actually concern for us, coupled with gratitude for the work that we’d done together. The strong spirit of reciprocity evident in our partners’ eagerness to help us work through our next act turned a challenging day into one fueled by connection, care, gratitude, and even love. It was clear that our partners valued the candid, empathic, and personal way in which we shared the news and how we focused on planning for the future together, even if our role in that future would be different. While we often talked about the importance of our relationship-based approach to philanthropy, we were reminded that day, in a way that we could have never anticipated: the quality of our relationships mattered.

That said, if we could do it all over again, we would have followed up our phone calls with notes in writing. We now recognize that in times of change, especially when it concerns a primary funder, it’s hard for anyone to take in all of the information. We would have been well-served to communicate our own context and plans more formally, as we ended up having to repeat the information many times, playing a few games of “telephone” with our partners and correcting misunderstandings of our process and plans.

Lesson Two: When imposing change, allow change

We heard that the impact of our news was softened by the flexibility we were able to offer at the same time. Specifically, we changed grant end dates and payment schedules in any way that partners requested. We also made sections of reporting optional — which delivered some insight when we saw which areas partners chose to continue — and we ultimately eliminated reporting altogether.

We assumed going in that every partner would ask for all their remaining funding up front in the next payment — and many did — but a couple said to us, “It’s really important for my fundraising to be able to show how many gen-op funders I have, so I’d like to extend our grant term and keep you on that list for longer.” The CEO of a very large organization, which has national and regional agendas, asked us to change their grant from general operating to restricted, so that he could leverage the investment to maintain his board’s prioritization of the initiative our funding was enabling. We were surprised by the myriad requests, and yet, we found that by offering flexibility and openness, even in an exit, we were able to deepen some partnerships and continue to advance the work.

Lesson Three: Accept offers of help

We knew our grantee partners were way better at navigating dramatic change than we were. As you can imagine, most had been thrown many curveballs over the years. We also knew that outside perspectives were critical for us in making decisions about our future strategy. It was no good for us to go it alone, no matter how many brainstorming sessions we had and great diagrams we came up with.

As we imagined our vision for the future, we received generous input from over 200 grantee partners, pipeline organizations, peer funders, and other stakeholders from our twelve-year history. We also convened an advisory panel of partners and peers, bringing the whole group together every few months to help us interpret feedback and other data, and making informal ad-hoc requests to further explore specific questions and strategic details. For example, when we were stuck on a particular idea about our strategy or how to characterize our problem statement, a team member would call an advisor to pressure-test the idea, just as that advisor had often done with us as a grantee partner over the years.

We were reminded that true relationships are mutual, and the roles we play as partners can extend well beyond how the dollars are invested to include being strategic thought partners, connectors, and champions for each other.

Lesson Four: Recognize change as an opportunity to take a really good look at yourself

Major organizational change affords an opportunity unlike others to really step back and examine your practices. Of course, evaluation takes time, which is in short supply for many of us in 2020. However, there are ways to welcome feedback and examine your practices rapidly — because not everything needs to be a capital “E” evaluation.

We were grateful that our trustee gave us license to fully reimagine our work going forward. Our staff and panel of advisory partners and peers consequently approached this transition with tremendous open-mindedness. We engaged Cascade Philanthropy Advisors and the Center for Effective Philanthropy (CEP) to conduct 60 anonymous in-depth interviews alongside a survey we shared with all stakeholders from the past decade. We think the new circumstances — EFCT no longer holding the purse strings as renewal was off the table — increased partners’ candor. For example, we heard from a grantee that “we have an honest, authentic relationship with each other. I trust that they care about my success as much as I do. The money is important, but it’s not the sum total.” And, we learned that our due diligence process was a bit intense. As one grantee put it: “They’re all up in people’s business, it’s a bit of a pap smear!” It was a profound blessing to see our strengths and our areas for growth reflected so clearly in the hearts, minds, and experiences of our partners. And that candid feedback deeply informed how we shaped our future strategy.

Note that asking partners to provide feedback is not the only way to take a good look at oneself. We should always find ways to minimize the burden we place on grantee partners’ time, but most especially during a transition that impacts future funding. To that point, we also conducted thorough desktop reviews of our strategies and investments over the prior decade to identify insights for our future, including looking at past feedback data with new eyes. And, we tried to close grantee relationships with both ritual and respect, writing the stories of our partnerships with our 26 longest-standing grantees and using each story as a starting point for a conversation with each grantee where we reflected together on our partnership. There was tremendous power in this storytelling, and the conversations were filled with tears and laughter. In almost all 26 conversations, partners shared something they “wished they’d told us earlier.” It was also a good reminder of the power dynamic and to make sure we carried practices for personal and human connection into our future strategy.

Navigating the space “in between”

Looking back on the process, when it’s summed up as four neat lessons, our transition sounds simpler than it felt in real life. It was consuming, emotionally and physically, to live in that liminal state of being “in between.” Our team was challenged to balance between concentrating on strategic planning in order to return to grantmaking quickly, and continuing to support the existing work of our nonprofit partners.

It wasn’t easy; in fact, it was heartbreaking when a longstanding partner fell into financial difficulty and we weren’t able to provide the direct financial help they needed. We toggled between emotions of grief, knowing that our exit had contributed, and not wanting to portray ourselves as the powerful “hero” or “savior.” At the same time it was paradoxically gratifying to be able to shift into a different kind of role with many of our partners, sitting more on the sidelines, offering thought partnership even when we couldn’t commit more funding, and getting to watch so much of what we’d helped to build fall into place: fields “took off” and organizations continued to thrive without us. The bittersweet nature of transition was both painful and powerful.

There was benefit in having a foot in both worlds where we could, remaining engaged in our existing grants as the majority of the portfolio remained active for at least another year during our transition. We gained an avenue for learning that strengthened our next strategy, without taking as much bandwidth as launching new learning projects and new relationships. And most of all, we benefitted from the relationships, connection, and normalcy that aided us as individuals and a team during such an uncertain time.

Our initial instinct in all of this might have been to retreat and go underground, worried about the harm we were causing by suddenly not renewing investments in the ambitious long-term plans we’d helped create. And yet, our grantee partners taught us well: in times of change and uncertainty, connection is the best medicine.

Lucie Addison leads Einhorn Collaborative’s Organizational Learning and Improvement strategy. Follow Einhorn on Twitter at @einhorncollab.

Editor’s Note: CEP publishes a range of perspectives. The views expressed here are those of the authors, not necessarily those of CEP.

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