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Step Up to Help Your Grantees Survive

Date: September 22, 2020

Lowell Weiss

President, Cascade Philanthropy Advisors

Mario Morino

Founder, Leap Ambassadors Community

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America has never needed more from civil society. Our country is being rocked by a health pandemic, an age-old racism pandemic, economic upheaval, sweeping cuts in safety net programs, and an increasing political vitriol that’s killing efforts to address these daunting challenges. We sometimes feel like we’re in the midst of the 1918 flu pandemic, the burning of Black Wall Street in Tulsa, the Civil Rights/Vietnam War era, and the Great Recession all at the same time!

From our perch working with the Leap Ambassadors Community, we’ve been encouraged to see many funders step up to the challenges of this time, including through pledge commitments, unprecedented measures to expand payout, reckoning with inequity, and advancing COVID-19 treatments and vaccines. But let’s face it, funders: if the virus continues to surge and the restart of the economy sputters into the winter, some of your key grantees will not survive.

To offer some help at this inflection moment, we (with the help of many colleagues) assembled a new resource called “The Big Reset,” which contains three parts: suggestions for funders, suggestions for nonprofits, and a triage tool to help nonprofits prioritize action items for navigating this time. You’ll find no high-minded theory in there. It’s all about practical, actionable advice for what funders need to do right now.

Here’s a sneak peek at our suggestions for funders:

1. Give more. The generosity many are showing simply isn’t enough to cope with the enormity of the challenges our communities are facing — not even close. So dig deeper. We know most foundations are normally reluctant to pay out more than the legally required five percent of their endowments, but now is the time to increase your grant payout. Perhaps even take out a loan or float a bond the way the Ford, Duke, MacArthur, Kellogg, and Mellon Foundations are doing.

2. Explore impact investing. One good way for funders to punch above their weight at this time of severe need is to go beyond traditional grantmaking. Innovators like the Nathan Cummings and Heron Foundations are investing all assets from their endowments to make loans and equity investments that advance the mission of their foundations.

3. Go to bat for your grantees. Pull out all the stops to support grantees with the greatest potential to deliver meaningful, financially sustainable results in vital areas of need right now. Some grantees need your support to sustain their value, while others are poised to materially scale their impact. Provide multiyear, flexible dollars that give your grantee the best chance to succeed and, if you can, be a lead investor. In this role, think like the visionary investors of Blue Meridian Partners, who are aggregating their capital for maximum impact.

4. Adopt an equity lens. It’s great to see more funders talking about equity. But we fear that some new efforts may actually be counterproductive if they’re more about workshops and checklists than deep introspection and genuine culture change. If you’re open to the latter, then you’ll find PolicyLink, FSG, and Just Capital’s A CEO Blueprint for Racial Equity and Bridgespan and ABFE’s “Guiding a Giving Response to Anti-Black Injustice” resources to be excellent starting points.

5. Move out of your comfort zone. Give your grant pipeline a good, hard look. If you’re a typical funder, you’ll find that most of these organizations came to your attention through an influential person in your personal or professional network. But this dynamic hurts leaders of color. Sam Cobbs, an outstanding nonprofit leader who now sits on the funder side of the table as CEO of Tipping Point Community, reports that he frequently finds funders — including some of the biggest names in technology — investing huge sums in white-run nonprofits that look great in PowerPoint presentations but don’t deliver results nearly as well as Black-run, neighborhood-based organizations do.

6. Lend expertise when needed. In these tumultuous times, nonprofits are facing a host of externalities they can’t control. For instance, the financial markets’ failure in the Great Recession nearly bankrupted a school for children who learn differently. When the markets crashed, the school’s multi-million-dollar loan, collateralized by a swap agreement, blew up. A funder stepped in to help the school marshal leaders with great “work-out” experience and staved off foreclosure. What skills and relationships can you share with your grantees to navigate challenges out of their control?

7. Help grantees engage in skillful triage. Given the many challenges your grantees may be facing all at once, encourage them to prioritize effectively with some form of triage assessment. But don’t make it a big to-do project. They just need to bring together six to nine of the best thinkers and truth-tellers from their team, board, and stakeholder groups to spend a half day on a brisk, focused review of critical elements. We’ve developed a basic triage tool you might consider sharing with relevant grantees.

8. Fund nonprofit advocacy. All the crises we face involve public policies. Support your grantees to advocate for policies that can help (e.g., expanding charitable giving incentives) and fight those that can hurt (e.g., cuts to unemployment benefits, which will lead to even more people in need of nonprofits’ services). In addition to providing more funding, review your grant-award letters to ensure they don’t prohibit grantees from engaging in advocacy. For every business or philanthropic leader who, despite CEP President Phil Buchanan’s admonitions, has uttered the phrase “nonprofits should be run like businesses,” please remember that private-sector firms invest heavily in using their voice to influence public policy.

9. Encourage and support collaboration/consolidation. This is an especially sensitive topic in our sector, especially when you start talking about possible mergers and acquisitions. But in some cases, mergers should be on the table. To help grantees navigate these waters, it may make sense to add an “executive in residence” with strong, practical experience in consolidation. You can also provide funds to help grantees that want to engage in exploratory planning, create courtships to gauge chemistry, pilot partnership projects to confirm meaningful value, and even test the waters of mergers or acquisitions. You can also set up stipends to help leaders envision and find a future life, if a consolidation means they lose their jobs. And you can provide funding to cover the planning, transaction, and integration costs inherent in significant collaborations and mergers.

Across the country, we’re seeing nonprofit leaders working day and night to cope with the challenges of the present — and reinvent their future. These courageous, adaptive leaders need funders to step up as well. Signaling our virtue is great. But taking actions like the ones above are what grantees really need to survive the current whirlwind of crises.

Mario Morino, a former software entrepreneur, is chairman of the Morino Institute, co-founder of Venture Philanthropy Partners, and founder of the Leap Ambassadors Community.

Lowell Weiss is president of Cascade Philanthropy Advisors and a former deputy director at the Bill & Melinda Gates Foundation.

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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