“Listen” by K.Y. Olsen

September 21, 2017; Devex

Over the past year, the Skoll, Draper Richards Kaplan, Ford, and Porticus Foundations, working with Rockefeller Philanthropy Advisors, have partnered to investigate how to more effectively apply their resources toward large societal problems like education, racism, poverty, healthcare, and hunger. The conclusion they came to is that their grantmaking practices may have been all wrong.

Adva Saldinger, reporting for Devex, described the impetus behind their effort. “Foundations talk about wanting to help catalyze systems change and scale solutions, but too often their structures, the way they fund, and their relationship with grantees make those goals a challenge.”

This group of foundations recognized that while among their grantees there are “many organizations today…helping to solve seemingly intractable problems, and demonstrating the possibility of moving beyond incremental change to real transformation,” their efforts seem hard to replicate and grow. They have come to recognize that a large portion of the problem comes from how foundations do their work, and not from failures of the organizations they fund. After interviewing both nonprofit and philanthropic leaders, the result is a five-pronged agenda for change they now want additional foundations to embrace.

A year of study has underscored that knowledge, skill, and wisdom do not lie solely in the hands of foundation staff. The organizations they fund know their business well and are invested in finding ways to do their work more effectively:

Many funders have their own objectives, theories of change, and goals. But rather than selecting grantees that help them achieve those goals, then allowing them to do their work in ways grantees believe will be most effective, funders often pressure grantees to change their programs and activities to align with their own priorities and needs. Interviewees were clear about how much more effective they are when the alignment happens at the strategic goal level, and the more detailed planning is left with the grantee.

For nonprofits to share their knowledge assertively, they need a degree of fiscal stability that current funding practices do not provide. According to Edwin Ou, the director of funder alliances at the Skoll Foundation, being “caught in short-term cycles does not allow [nonprofits] to think, plan, or execute for the long term.” That’s necessary for expansion or systemic change to occur. Foundations would be smarter to provide multiyear, unrestricted funding so their grantees can take risks and speak their minds.

Many of the conclusions reflect the ongoing challenges for boards and staff of keeping nonprofits afloat. Funders often believe they have a depth of business and technical skill and expertise that those they fund lack but desperately need. From the perspective of busy, stressed nonprofit organizations, much of the non-monetary organizational help that’s offered (or imposed) by funders becomes a burden they feel unable to refuse. It is not shocking that, after a year of listening, what they heard from those with whom they spoke was that this “wisdom” is often more harmful than helpful.

Funders…look to leverage their networks, connections, and expertise to further benefit their grantees…As one interviewee described, “Funders push advice and opportunities rather than pull advice and opportunities.” Changing the dynamic about how funding is provided needs to be supported by changing the working relationship.

The report recommends more open dialogue and discussion before a funder imposes a set of practices on its grantees.

The large, societal issues where foundations most wish to have an impact require changes that move from situational to systemic. Foundations can affect those with power and influence in ways unavailable to the organizations they support.

Powerful and influential system actors typically regard funders differently than grantees. Funders often have more access to influential actors through events, organizational processes, and peer networks. Funders can take advantage of their proximity to them to support the work of grantees.

Finding ways to provide “greater support for organizations enabling systems change who may be doing less direct service work, and therefore aiming for longer-term, less metric-friendly outcomes and impact” may become necessary.

The report sees a need to cut the overhead of seeking funding so nonprofits can focus more on their work and less on fundraising: “To scale and shift systems, organizations have no choice but to put more effort into building relationships, mobilizing, and facilitating change—and less into feeding funders information.” It recommends that funders collaborate more effectively so there’s less need for nonprofits to produce the same information separately for each funder. It also recommends individual foundations reduce the burden of how one asks for funds and then, if granted, how an organization reports back.

NPQ has noticed this shift in thinking occurring around us, and would pose a consideration on the other side: Under these rules, what happens to access for smaller, less well known groups?

The publication of this report is like a tree falling in the forest. How loud its sound depends on if there is anyone who is there to hear it or discuss it: “The real work starts now, as we delve more deeply into how we can reach a wider circle of funders who are committed to both adapting their own behavior, and serving as examples for the broader community in the months and years to come.” It will be interesting to see which foundations will come to table to expand this effort.—Martin Levine