High-Engagement Funders & Strong Funder-Grantee Relationships: Are They Mutually Exclusive? (Hint: No.)

At CEP, we help all types of funders get feedback from grantees. As we’ve highlighted in previous posts, there is no one “right” approach to building strong relationships with grantees.

One of the many approaches funders choose is one identified as “high-touch” or “high-engagement.” This can entail closer and more active relationships with grantees, iterative and time-consuming grant processes, highly detailed plans for the funded work, capacity assessments, intensive evaluation requirements, and more. It’s an approach often associated with venture philanthropists, but really it’s used by a wide variety of self-identified strategic funders, or simply in the context of funders providing large, multi-year grants.

Sometimes funders with these approaches perceive that challenged relationships with grantees are the necessary collateral damage of a high-engagement approach that ensures a funder’s goals are being met.

But CEP’s data is clear that this need not be the case. Intensive, time-consuming application processes, frequent engagement with grantees, and demanding reporting and evaluation requirements don’t have to be a negative experience for a grantee — and in fact can be the opposite. For some high-touch funders, intense engagement creates the conditions for strong funder-grantee relationships; facilitates opportunities for funders to develop and demonstrate knowledge of their grantees’ goals, context, and fields; and allows for them to help grantees address their challenges and increase the sustainability of the grant-funded work. In fact, in CEP’s dataset, strong funder-grantee relationships are predictive of greater impact on grantees’ fields, communities, and organizations, just to name a few examples. In other words, strong relationships are in service of greater impact.

We saw just this dynamic at work when the Einhorn Family Charitable Trust (EFCT) in New York City surveyed its grantees using CEP’s Grantee Perception Report (GPR) last fall.

What is it about EFCT’s approach that facilitates such strong relationships with grantees? Taking a closer look at how EFCT approaches its mission — and walks the talk on its approach, according to feedback from its grantees — shows that it’s possible for a funder to be very engaged with its grantees and still be perceived positively on important impact measures.

Engaged Relationships

Relationships are at the heart of everything EFCT does. In fact, the first point on the grantmaking strategy page on the Trust’s website discusses a relationship-based approach to grantmaking in which EFCT works “in close collaboration with each partner grantee to identify and maximize opportunities for success and ways to mitigate and address challenges.”

EFCT sees its grantees as partners, and this emphasis on fostering effective and involved relationships strikes at the core of its approach to grantmaking. “We don’t just call it partnership because we think it’s nice,” EFCT’s Executive Director Jennifer Rothberg told CEP in a conversation earlier this year. “It’s the essence of every single thing we do.” Grantees feel the same way, according to their feedback in the GPR: “partnership” was the most frequently mentioned word grantees used to describe EFCT.

To some nonprofit leaders, the thought of being in regular contact with a funder might be the stuff of nightmares. But EFCT’s partners see it as anything but, the GPR data shows. Among EFCT’s “high engagement” grantees (organizations that EFCT is interacting with at least monthly), EFCT scored at the very top of CEP’s dataset on several important measures, including quality of relationships, impact on grantee organizations, helpfulness of the selection and reporting/evaluation process, comfort approaching the foundation if a problem arises, and the extent to which the Trust takes advantage of its various resources to help grantees address their challenges.

“I have found the effort EFCT staff makes to get to know our organization, our goals, our challenges and the nuances of our work to be so incredibly helpful,” one grantee said. “They have gained our trust and offered theirs, and have created such a positive partnership that I’m happy when they ask hard questions designed to help us improve.”

“They deliberately make everything as easy as possible for us, and everything is clearly rooted in trust,” said another. “It’s hugely refreshing and meaningful to us.”

One key aspect to building an effective relationship, Rothberg said, is working to mitigate the inherent funder-grantee power dynamic. Rothberg stressed how important it is for EFCT to be vulnerable and approach interactions with partner organizations with humility and humanity.

“Our partners know way more than we do about what it’s going to take to accomplish the change we’re both after. They’re the experts,” she said. “We’re generalists. It’s our job to learn as much as we can so that we can be knowledgeable and supportive.” Listening and learning first enables EFCT and a grantee to explore how their shared visions can combine to make the world a better place, Rothberg explained.

And this certainly comes through in the grantee experience. EFCT is rated very positively for its overall transparency and its openness to ideas from grantees about its strategy. One grantee writes, “Their candor, approachability, and willingness to understand that the issues we are working on are complex and at times messy, also lead to superior performance relative to the goals of the grant itself. We feel accountable to our vision, rather than to painting a rosy picture to a funder.

Small Portfolio, Big Grants

EFCT is a family foundation with a staff of seven established in 2002 by David and Cheryl Einhorn that works toward the mission of helping people get along better.

“We invest in organizations that are helping people further develop their prosocial skills and behaviors such as empathy, kindness, and cooperation.” said Rothberg. “These are innate human traits, as we are all social animals. And yet, as our world becomes increasingly interconnected, it will become that much more important for us to be able to empathize and work well with others. Everywhere, from the boardroom to the bedroom.”

Some might be quick to write this work off as “soft,” but Rothberg was quick to clarify that it’s anything but. “Everything we invest in is research-backed and evidence based — nothing is anecdotal,” she said.

As one grantee said, “The EFCT team has been respectful and supportive of our expertise and mission. At the same time, they have made it clear that designing our work for measurable impact is a requirement for funding. We share with this powerful trust, a deep commitment to showing real and lasting change resulting from our work in the communities served by our work.”

EFCT works with a small portfolio of grantees, including organizations like City Year, StoryCorps, Playworks, and the Interfaith Youth Core, to name a few, offering large, multi-year grants to achieve long-term change through building high-performing organizations. EFCT funds organizations that are already making the type of change in the world that aligns with the Trust’s mission, and seeks to provide them with the resources needed to do things they might otherwise not have been able to do. To that end, EFCT had 32 active grants in 2014 (which fell in the 3rd percentile of CEP’s dataset) with a median grant size of $1.7 million (larger than 99% of funders in CEP’s dataset), and a greater percentage of grantees report receiving multi-year grants and general operating support than typical. (While EFCT’s grants are large, that doesn’t explain the high rating on the GPR; across CEP’s dataset, grant size is not a predictor of grantee ratings.)

Intensive yet Helpful Selection and Reporting Processes

EFCT’s high-touch approach begins with the selection process. According to Rothberg, the selection process is not about asking organizations to prepare a proposal for the Trust (“we’re not telling people what to do”), but rather as an opportunity for a potential grantee to develop their plan for organizational growth for the ensuing three to five years.

“We say to potential partners, ‘let’s start from a place in which you have the resources — what do you want to accomplish in the world?’” Rothberg said. “We want to give potential partners the opportunity to speak about what they want to see in the world in their own terms, not just fitting it into the foundation’s terms.”

With this mindset, the Trust’s staff works in partnership with organizations already assessed for mission alignment to deeply understand — through guided, thoughtful introspection — the ins-and-outs of what it will take to achieve an organization’s mission.

This involved approach is time-intensive for grantees, but the goal of the process is to help potential partners strengthen their plans so they are well-positioned to become higher-performing, higher-impact organizations through the investment — rather than get a proposal “right” for EFCT.

The typical EFCT grantee spends around 150 hours on proposal, selection, and reporting processes, five times that of the typical funder. At the same time, though, grantees experience EFCT’s time-intensive processes as a value-add exercise that strengthens their organizations beyond the grant alone. In fact, EFCT’s selection and reporting processes are rated in the 98th and 92nd percentile respectively for their helpfulness in strengthening the organization beyond the grant itself.

“Our application process involved the development of a strategic plan, which was very time-consuming but was also an important exercise for us to go through as an organization,” one grantee said. “As a result, we spent much more time on it than we would have on a typical ‘grant application,’ but it was also significantly more helpful to us as organization.”

In the words of another: “Ultimately, the EFCT staff helped us craft a strategy that was not only smart and transformational for the organization but also well-framed and articulated in a way that has since been helpful for us in securing new partners and supporters.”

Valuable Non-Monetary Support

The high-touch, involved nature of EFCT’s interactions with its grantees continues after an applicant is selected to receive funding. Non-monetary support — funder support for grantees beyond the grant check — is at the heart of how EFCT thinks about and carries out its partnerships with grantee organizations. EFCT is currently the second largest provider of non-monetary support in CEP’s dataset, and provides a larger than typical proportion of its grantees with intensive forms of this assistance. The provision of non-monetary support is embedded in the Trust’s approach to the point where it is not even seen as a distinct form of assistance to grantees, but rather as an ingrained facet of the grantmaking process.

Nothing can be transactional when striving for shared outcomes,” Rothberg said.

EFCT grantees find this non-financial part of the Trust’s support to be incredibly valuable, the GPR data shows, especially when it comes to EFCT making introductions and connections to leaders in grantees’ fields, encouraging and facilitating collaboration among grantee organizations, and assisting grantees with the development of performance metrics.

“EFCT has been invaluable throughout our relationship — making introductions, helping us think through big problems,” one grantee said. “The relationship has always been about so much more than the financial resources.

………………………………………

For Rothberg, what EFCT learned from listening to confidential, candid feedback from the partners with whom it works so closely is affirming. “The data shows that the way we do our work actually matters,” she said.

The coming years will be telling for EFCT, as it is an organization very much still at the beginning of its journey. Its trustees are young, and they and the Trust’s staff alike consider learning and growing a cornerstone of their identity as a grantmaker.

For other funders, looking at an exemplar like EFCT can be insightful. The Trust’s approach is not, of course, the only effective approach — there isn’t any single one — but it is an instructive case that shows that a high-touch, high-engagement approach to grantmaking doesn’t have to come at the cost of strong relationships with grantees. Instead, it can actually foster strong relationships that lead to increased impact.

Ethan McCoy is senior writer – development and communications at CEP.

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