Reporting Through Conversation: Building Trust and Relationships

Jessica Bearman and Elizabeth Myrick

This interview with John Esterle, co-director of The Whitman Institute (TWI), conducted by Jessica Bearman and Elizabeth Myrick, originally appeared in the PEAK Insight Journal.

The interview focuses on TWI’s reporting practices, which are informed by and aligned with their philosophy of trust-based grantmaking, the idea that philanthropy can be more effective when funders approach their grantee relationships from a place of trust, rather than suspicion. You can read more about this idea and its nine pillars on TWI’s website here.

How does The Whitman Institute (TWI) think about grant reporting?

Esterle: All of our funding is unrestricted (much of it multiyear) and we do not require formal written reports. Our approach to reporting is that it is primarily about learning and happens organically through conversations with those we support. These can range from one or two meetings/calls per year to more frequent contacts depending on our relationship with them and what is happening with their work. We do not require that grantees have a relationship with us but rather it’s an invitation, depending on what makes sense for them and is supportive. If grantees have written reports for other funders they are willing to share with us, we are happy to read them. And, even though we don’t require them, some of our grantees like submitting a written report to us annually to share their thoughts and learnings from the year.

This approach aligns with our trust-based approach to philanthropy. Nonprofits are drowning in paperwork and we don’t want to add to that burden for them.  Our approach is relational and dialogic and so that makes sense to us as the primary way we learn about our grantees work.

Talk a bit about how these conversations happen and how you use what you learn.

Esterle: Our grantee conversations happen either in person or on the phone with our co-executive directors — myself and/or Pia Infante. We prefer in person when possible, either at our respective offices or over coffee or lunch. Sometimes we initiate the conversations and sometimes they do. It varies from grantee to grantee.

For us, these conversations inform both our understanding about the work of our grantee partners (both their successes and their challenges) and our sense of how we can be of help to them.

Especially with our multiyear partners, our conversations give us ideas about how we can best be of support beyond the check — and they give us a better sense of how to talk about their work with our board and other funders. The benefits are that it invites a more authentic learning and dialogue process with our partners and frees up their time to concentrate on their mission. What we hear from our grantee partners is that they deeply appreciate this approach.

I don’t think many foundations really get how much frustration and anger there is on the part of nonprofits about how much time they have to spend preparing individual reports to funders. What’s particularly disheartening for many is the sense that nothing is really done with the reports other than a box being checked off.

Have you always done it this way, or has TWI’s approach evolved over time?

Esterle: A trust-based approach and a commitment to unrestricted funding was there from the start so we always felt that there was no need for a special report just for us. We were proactive and didn’t require formal proposals. When we started making grants in 2005 our grants ranged from $5,000-$25,000. To date our largest grants have been $75,000 with most in the $25,000-$50,000 range. I recognize that funders making much larger grants might have more of a need for documentation depending on the nature of the funding.

Anyway, reporting was always through conversation. We structured our inquiry around two to three core questions, so we asked things like, “What have you learned and how are you incorporating what you’ve learned into your work going forward?” The focus was on learning, rather than accountability. I’d say we still address those questions but it’s not a formal process.

In the beginning, we also invited folks to send in additional brief, informal written reflections on what they had personally learned leading their organization in the past year. It wasn’t required and some did and some didn’t take up the invitation. Over time, given the richness of the conversations we were having, we didn’t see the need to ask for that. To this day, some of our multiyear grantees like sending us a written report or they will share a report they have written for another funder (including budgets) that gives us a current snapshot of their work.

We used to ask for annual financial information from our multiyear grantees. But now, in alignment with our trust-based principles, we do the homework and generally look at 990s to understand an organization’s financial health.

If something comes up in conversation about the budget and current funding, we may ask a grantee to send us a copy of their budget and a list of current funders. This helps us to discuss different financial and program scenarios, including opening doors if possible. Usually, financial information is included in the reports grantees share with us.

To reiterate, we don’t take a “one-size-fits-all” approach to reporting. It varies according to the particular relationship we have with an individual grantee, including how long we have been supporting them, how often we are in communication (it can vary from year to year), and whether we are making a one-time grant or not. The through line is that the focus is on learning and being a supportive partner. Unless our grantees tell us otherwise, we assume our funds are used to pay staff and keep the lights on.

Has there been a time when an organization has been struggling or mismanaging funds and you’ve felt the need for something more formal? What did you do in that case?

Esterle: Yes, of course. Some organizations struggle financially — that happens — but in our experience it has been because of lack of funding support not financial mismanagement. In past instances, we knew from our conversations when an organization was struggling because they would tell us. Sometimes an organization had to downsize, restructure, or end. Sometimes what we learned informed a decision not to renew a grant. Sometimes it renewed our resolve to keep supporting them through tough times. In a few instances over the years, grantees have asked us if we could move up a scheduled grant payment by a few months to help with cash flow and we oblige. We had one instance where we did ask for more formal reporting from a fiscal sponsor, our concern not being with the grantee but with the fiscal sponsor. Other than that we have not seen the need for something more formal.

Do you have a story of when this particular approach opened a door or provided an insight or relationship that you would not have been able to achieve with a different (more formal) reporting process?

Esterle: Sure. For example, when we first started supporting one grantee they were a promising program, but struggled financially. Because we trusted each other, they could share both their big vision and their struggles. So we had a deeper sense of our own alignment with their long-term vision and a better understanding of their funding challenges. Consequently, we were able to provide not just extra financial support for a time, but also open a door to another funder. Our conversations also enabled us to provide moral support in the sense of, “No, you’re not crazy to have this vision.” Both were important and I feel we were able to embody one of our other principles — to partner in a spirit of service at a crucial time in their organizational development. They are in a much better place now and it’s exciting to see.

I think the key insight for us is that when we build trusting relationships that prioritize learning and dialogue we have a more authentic understanding of what’s happening with our grantees.

Consequently, we are able to be more responsive, supportive, and effective partners in the work.

What advice do you have for another funder seeking to adopt this approach?

Esterle: I would say to be open to your role changing. From our experience, a relational, conversational approach to reporting frees you up to more truly listen and to be more of a partner in the work in all kinds of ways (e.g. advocating, connecting, convening). I think streamlined paperwork helps not just the grantee, but the foundation itself to become a healthier learning organization with better outcomes.

My only other advice is this: if you don’t have the capacity or inclination to have conversations become the gateway for reporting, really ask yourself if you need your grantees to write special reports just for you. Instead, ask your grantee to submit a report they’ve written for someone else that best captures their successes, challenges, and questions going forward.

If you are not already doing so, I would also say to consider providing unrestricted funding, which dovetails nicely with the idea of a common report multiple foundations can learn from.

Jessica Bearman works with foundations and other mission-based organizations, focusing on organization development, facilitation, and R&D to help them become more intentional, effective, and responsive to the communities that they serve. She is also known as Dr. Streamline and blogs regularly on funder practices and values. You can find her on Twitter at @jbearwoman.

Elizabeth Myrick is an independent consultant with nearly 20 years of experience in the nonprofit and philanthropic sector. Her work focuses on leadership and organizational strategy.

funder/grantee relationships, grants management, openness, reporting
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