Our ‘Conspicuous Miss’

Last month, many of you wrote to extend nice words about our post “Five Habits of Highly Effective Funders.” You also sent constructive pushback. Our friends Chip Edelsberg and David Bonbright separately offered a similar criticism: In Edelsberg’s words, “What’s conspicuously missing for me in this formulation is reference to the means by which trusting relationships [between funders and grantees] are realized.”

So this month we’re going to share some of the key lessons we’ve learned about how highly effective funders have successfully built trust with their grantees. We’ve drawn them from Edelsberg, Bonbright, and other experts in the Leap Ambassadors Community; the foundations profiled in the Leap Ambassadors’ “Funding Performance” series; Center for Effective Philanthropy (CEP) data; the Raikes Foundation’s Impact-Driven Philanthropy Initiative; and our own steps—and missteps—in philanthropy.

1. To build trust, you need relevant expertise. In the words of Raikes Foundation Executive Director Erin Kahn, “You have to demonstrate value to grantees, or they just see you as an accountability enforcer…. The biggest value add is knowing their work, fields, and ecosystems well enough to be a strategic partner.” CEP research backs this up: The biggest determinant of a strong funder-grantee relationship is the extent to which funders understand grantee organizations and the context in which they work. You’ll see much more on this point not only in the forthcoming profile of the Raikes Foundation but also in the profiles of Venture Philanthropy Partners, Impetus-PEF, and Mulago Foundation, all of which hire executive-level talent to help grantee partners navigate complex organizational and systems challenges.

2. To build trust, you need high emotional intelligence. The best trust-builders exemplify empathy, integrity, humility, and a willingness to make oneself vulnerable. Bonbright shared a lovely quotation by the aboriginal activist Lilly Watson which frames this point in spiritual terms: “If you have come to help me, you are wasting your time. But if you have come because your liberation is bound up with mine, then let us work together.” For case studies that emphasize high-EQ work with grantees, take a look at the Leap Ambassadors’ profiles of the Einhorn Family Charitable Trust, Weingart Foundation, and Blagrave Trust.

3. To build trust, you need relevant life experiences. In the profiles of Weingart Foundation, philanthropist Duncan Campbell, and Venture Philanthropy Partners, you’ll meet team members whose diverse racial and socioeconomic backgrounds often mirror those of the people the foundation aims to serve. The profiles of Einhorn, Weingart, and Blagrave illustrate another type of relevant life experience: having sat on the grantee side of equation. Funders who have walked in the shoes of their grantees often have a different level of respect for grantee expertise and a different level of understanding of the ways funder behaviors (positive and negative) affect grantees.

4. To build trust, you need to give your staff the right tools and structure. It means rewarding relational values. (When Edelsberg ran the Jim Joseph Foundation, he asked grantees to share, in one-on-one meetings and anonymous surveys, how their point person was doing on trust-building—and then made this feedback an important component of performance reviews.) This means creating a staffing model that provides time for relationship building rather than simply engaging with grantees in “discrete transactions made in a linear fashion,” in the words of former Surdna Foundation CEO Ed Skloot. And it often means allowing program staff to provide flexible, multiyear support, which grantees consistently say they need to be effective but rarely receive.

5. To build trust, you need to communicate well. Grantees consistently tell CEP that trust depends on good, two-way communication, and of course this makes intuitive sense. Grantees want funders to be clear and transparent about goals, strategies, and processes; good listeners rather than just good talkers; and responsive rather than prone to ghosting.

But even if you have all of the above hard and soft skills, funders still need to put in the painstaking work to gain trust bit by bit—that is, to overcome grantees’ inherent skepticism of funders who say, “I’m here to help.” In our experience, this process takes a lot of time—more than we imagined when we were starting out. It takes meeting grantees on their turf, with an open heart and mind. Sometimes it even requires surviving a major disruption; as with all relationships, when you run into a serious conflict and then find your way through it, that’s the kind of real-life test that can give both partners more confidence that the relationship is real and reliable.

If you’re truly committed to this path, then you, like Einhorn, will have grantees say glowing things like, “We have an honest, authentic relationship with each other. I trust that they care about my success as much as I do. We have had challenges, but I have not felt judged because of that. I’ve experienced empathy.” You, too, will build the kind of trust that is a gateway to effective philanthropy.

Keep the faith (and reason),

Mario and Lowell

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Mario Morino is chairman of the Morino Institute, co-founder and founding chair of Venture Philanthropy Partners, and author of the lead essay in Leap of Reason. Lowell Weiss is president of Cascade Philanthropy Advisors, co-editor of Leap of Reason, and advisor to the Leap of Reason initiative.

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Updates From Around the Leap Community

Speaking of CEP, please preorder a copy of CEO Phil Buchanan‘s new book Giving Done Right: Effective Philanthropy and Making Every Dollar Count. The book, which ships on April 16, is no mealy-mouthed, milquetoast presentation of others’ ideas! Buchanan’s strong, passionate point of view on effectiveness is built on the vast dataset his organization has collected on foundations and their grantees—as well as hundreds of revealing conversations he’s had in the course of advising foundation executives and boards. For a sneak peek, check out “Giving Is Not Like Investing,” his recent post on Giving Compass.

Management expert Jim Collins has just come out with a new monograph called Turning the Flywheel, which elaborates on the “flywheel principle” he introduced in his legendary Good to Great. Here’s what he means by “flywheel principle”: “In building a great company or social-sector enterprise, there is no … miracle moment. Rather, the process resembles relentlessly pushing a giant, heavy flywheel, turn upon turn, building momentum until a point of breakthrough, and beyond.” The new monograph will help you think about how you can get that flywheel turning in your organization, whether you’re running a huge enterprise or a community-based organization. One of Collins’s case studies is on a rural Kansas public elementary school using the flywheel to improve student learning.

Lowell caught a great piece in his hometown Seattle Times about how his county is assembling better data to help address its enormous homelessness challenge. The article, part of the newspaper’s foundation-sponsored “Project Homeless” series, explains that the county was doing a good job of tracking people moving into housing, but it was missing the other half of the equation: the inflow into homelessness. To measure inflow, it was relying on one-night counts, the equivalent of “a business measuring their inventory once a year and then basing their business strategies off that,” in the words of one leader. Another leader was more blunt: “The data was total crap.” Grants from the Gates and Raikes Foundations have enabled the county to assemble much better data and use it to understand root causes and tailor strategies to the challenges different homeless groups face.

The Leap Ambassadors Community has just published a case study of the Pittsburgh Learning Circles Program, a one-year effort sponsored by The Forbes Funds which brought together 26 nonprofit leaders eager to continuously improve their organizations. The program coalesced cohorts of leaders into interactive groups that met regularly to focus on select organizational disciplines, such as leadership, program management, and financial health. The Pittsburgh Learning Circles program was designed to help participants make effective use of the Performance Imperative and the Performance Practice. If you read the case study and think the program could be relevant for your community, please reach out to the Leap Ambassadors support team to learn more.

Weingart Foundation recently let us know about some good momentum toward improving government contracts with nonprofits: “The county of Los Angeles has recently launched a project to explore negotiating individual indirect-cost rates with nonprofit contractors…. The project will consist of training and support to county staff in walking through the process of indirect-cost negotiations in a simulated setting, identifying challenges and making recommendations to improve the process.” The effort is due to be completed by the end of the summer.

Our trusted colleague Victoria Vrana gave us a preview of the Better Giving Studio, a site she and her associates at the Gates Foundation will launch later this year. The site tees up clever opportunities, based on the latest behavioral-science research, for anyone who wants to increase the quantity and quality of philanthropic giving. The site is a gold mine for mission-focused technology entrepreneurs on the hunt for ideas that could lead to a suite of great apps for giving.

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Events/Webinars for Raising Performance

Mar 21 — Online
“Data Matters: Measuring and Understanding Your Impact” webinar; Candid

May 7-9 — Minneapolis-St. Paul
“Stronger Philanthropy” conference; Center for Effective Philanthropy

May 29-30 — Seattle
“The Learning Conference 2019“; GEO, Philanthropy Northwest

Oct 2-4 — St. Louis
“2019 Connect” conference; Exponent Philanthropy