Foundations Should Fund What Nonprofits Really Need

Anthony Richardson

A few days ago, a colleague and I had an amazing site visit at a regional organization where staffers — among other things — oozed excitement about their recently implemented case management system. While we were there, the staff also lamented about being uncomfortable asking funders to support expanding their information technology capacity, as some funders are only interested in funding what they think is important for organizations.

While en route to our next site visit, I asked my colleague: from a purely organizational standpoint, why do people tend to hold nonprofit organizations to a lower standard than for-profit organizations? For example, if the CEO of a car manufacturer or hotel company asked their board of directors and shareholders to consider an investment in information technology to better inform their product, improve service delivery, and gather consumer feedback in real time, they would totally do it!

For-profit and nonprofit organizations obviously measure success and impact differently. A company’s board would invest in information technology because all the benefits could lead to an improved product and thus more money. While it is easy for a company’s board to measure how successful their investment is by looking at the bottom line, it is not as easy for funders to do that with nonprofits. As such, funders should give deference to the nonprofit leaders who often have a better understanding of their organizational needs and direction. And while some nonprofits are uncomfortable asking for what they need, and thus apply for what they think funders want to support, the proverbial “funder-knows-best” style of grantmaking is not conducive to forming or sustaining relationships with a servant leadership ethos. 

A foundation’s effectiveness is inextricably linked to its ability to remain nimble and responsive amid ever-changing socio-economic-political realities and technological advances. And while it is of course important to fund programs that reduce social ills and disparities, foundations need to be more open to grant requests that aim to improve organizational health and capacity building at nonprofits, too.

Funders need to embrace such grant requests with the same — or even greater — level of interest and appreciation as requests for programmatic support. Funders must dare to transcend orthodox grantmaking, as we tend to obsess over programmatic outputs while completely ignoring grant proposals that strike at improving aspects of an organization’s core functioning such as governance, talent recruitment and retention, professional development for staff, information technology capacity, and healthy workplace culture and behaviors.

During my short time in philanthropy, I have been privileged to conduct site visits all across the country. And while no program is the same, through my travels and meetings with various nonprofit organizations, I can confidently say this: show me a strong program, and I’ll show you a strong organization. Without the latter, the former does not exist. 

In order to assist our grantee partners in reaching their greatest potential, we as funders must obliterate power dynamics and embrace our funder privilege from a genuine place of humility. If not, we will never fully understand our grantee partners’ work and/or needs.

In that spirit, here are a few practices or strategies to consider:

  1. Build trust and listen effectively to your grantee partners.
  2. Embrace the notion of servant leadership. Ask your grantee partners, “How can we help?” rather than telling them, “This is how we want/are going to help!”
  3. Seek to understand what your grantee partners truly need. Don’t assume you know what they need.
  4. Think of evaluation and grant reviews as shared learning experiences, not punitive exercises or “gotcha” moments.
  5. Always keep in mind: you work for a foundation, but the money is NOT yours!

If a grantee partner is uncomfortable submitting a proposal to your foundation to support a diversity, equity, and inclusion training or tablet computers to better track data or leverage video conferencing, such an occurrence says more about your foundation’s disconnect and lack of approachability than it does about your grantee partners’ fear or reluctance to ask for what they really need.

Anthony Richardson, J.D., is associate director at the Nord Family Foundation in Amherst, Ohio.

capacity building, foundation effectiveness, funder/grantee relationships
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