Going to Bat for Grantees

One of Lowell’s foundation clients is in the midst of a generational succession and looking with new eyes at some long-established practices. Two practices under review are the foundation’s default to one-year grants and shying away from long-term commitments, even when grantees are doing a great job. For all the reasons we discussed in our post last month, Lowell’s pushing hard for change. In fact, he’s pushing not just for sticking with high-performing grantees; he’s advocating for the fifth and final element in our ongoing series on the Five Habits of Highly Effective Funders: “Effective foundations go to bat for their grantees with other funders.”

Even the world’s largest funders realize that they can’t accomplish very much with their dollars alone. Melinda Gates, for example, once noted that the annual budget for California’s public K-12 schools is significantly larger than the entire endowment of the Gates Foundation. In other words, even the combined philanthropic resources of Gates and Buffett couldn’t fund one state’s school system for a single year, much less have any hope of improving educational outcomes for students around the country or fighting disease around the world.

Fortunately, the Gates Foundation doesn’t go it alone—and neither do effective foundations with much-more-modest resources. These funders are finding good ways to leverage their own networks for the benefit of grantees.

Sometimes they do so in relatively simple but meaningful forms. For example, a foundation officer might strategize with a grantee about other funders who might be relevant and then make introductions. It could mean a program officer calling another prospective funder and sharing due-diligence materials. It could mean giving a grantee a featured speaking slot at an event, so the grantee can “march in front of the grandstand.” All of these are standard operating procedure at the Einhorn Family Charitable Trust—and its grantees are deeply grateful. “They have had our back any time we have asked them,” one Einhorn grantee told Lowell. “They help us figure out how to open doors with other foundations…. They’ve done everything they could to elevate our profile. They want to make our organization successful.”

Leveraging one’s network can also take more sophisticated forms. Some foundations, like Gates, have invested time and money to help grantees understand what public funding streams might be available and then advocate for resources with various government entities. Others, like Mulago Foundation, have built a funding consortium of like-minded funders. In the words of Mulago Managing Director Kevin Starr, “We always felt that funders have a unique platform to reach out to other funders…. We came to see that we had an obligation to do it.”

Mulago’s consortium, called Big Bang Philanthropy, is a lightweight structure (just one part-time staffer), funders don’t pool their money, and each funder makes its own decisions. Other models are more formal and robust. Venture Philanthropy Partners makes large, multiyear investments in a small number of DC-area nonprofits by raising capital from dozens of wealthy individuals and foundations and engaging them in a community of investors who care about improving the lives of children and families. These investors have, at times, made donations to these nonprofits above and beyond their contributions through VPP and opened doors to other affluent funders.

The Edna McConnell Clark Foundation (EMCF) is the ultimate example of going to bat for its grantees. To ensure success for the high-performance organizations it funds, EMCF is now sunsetting so that it can build Blue Meridian Partners, a funding consortium capable of making truly transformative investments of up to $200 million per nonprofit. “These days I’m spending about half my time working as a fundraiser, talking to wealthy donors about joining forces to supercharge the highest-performing nonprofits,” Blue Meridian Partners CEO Nancy Roob told Lowell. “Personally, I have found fundraising hard, frustrating, and sometimes humiliating. But if we’re going to solve these huge social challenges, we felt we had to do it.”

Today, money trickles to what works. We have to make it flow if we’re serious about solving our social problems at scale. And that means funders need to work together whenever possible, rather than going it alone.

With gratitude for those working together rather than going it alone,

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

Another foundation leader who believes that going to bat for grantees is part of his job description is Ford Foundation President Darren Walker, the subject of a recent, glowing profile in The New York Times. The profile offered several examples of the way Walker uses his status as one of New York’s ultimate connectors to benefit grantees, for example introducing NAACP Legal Defense Fund President Sherrilyn Ifill to the philanthropist Agnes Gund. “That’s my job,” Mr. Walker said of connecting Ms. Ifill. “Why wouldn’t I introduce her? I want her to succeed. It’s in the interest of moving justice forward in this country that Sherrilyn Ifill succeed, and I can help her to do that.” We’re excited to read Walker’s book version of his powerful essay “Toward a new gospel of wealth” and then his memoir, scheduled to come out in 2019 and 2020.

If you’re intrigued by the funding collaboratives we mentioned above, read “How Philanthropic Collaborations Succeed, And Why They Fail,” by Alison Powell, Susan Wolf Ditkoff, and Fay Twersky. The article, based on qualitative research on 10 relatively successful collaboratives and 15 that struggled, makes a clear case that funding consortia can add a lot of value for funders, grantees, and constituents. But to realize this value, the participants must be very clear from the outset on what they’re trying to accomplish (“investment thesis”); how they will work together (expectations, commitments, governance); how they will learn and improve over time; and how they will authentically engage those they seek to help in all aspects of the work (setting priorities, assessing progress, course-correcting).

Our sector has a great new acronym, MYGOD, courtesy of Seattle nonprofit leader and provocateur Vu Le and his witty blog Nonprofit AF. MYGOD stands for “multiyear general operating dollars.” Le argues that “if funders actually want to help organizations strengthen their infrastructure, it’s simple: stop providing restricted capacity building grants and just give MYGOD … and get out of the way.” Le offers the following reasons why MYGOD helps build capacity: It pays for talent, the most important driver of performance. It provides financial stability, which is crucial for growth. It allows leaders to adapt to emerging challenges and opportunities. And it encourages smart risk taking.

Congratulations to Alnoor Ebrahim, a professor of management at Tufts, on his new book, Measuring Social Change: Performance and Accountability in a Complex World (Stanford University Press). Ebrahim identifies four different types of organizational strategies that leaders must consider—niche, integrated, emergent, and ecosystem—and then lays out the types of measurement and accountability systems best suited to each. The book draws on the Performance Imperative‘s definition of high performance and the pathbreaking work of many members of the Leap Ambassadors Community, including ambassadors at Keystone Accountability, Feedback Labs, and the Center for Effective Philanthropy.

Speaking of the Leap Ambassadors, Salesforce.org, the philanthropic arm of the software powerhouse Salesforce, recently featured essays by five Leap Ambassadors—Brad Dudding, Dennis Whittle, Andrew Means, Tris Lumley, and Jeff Edmondson. Dudding outlined key areas of focus for organizations that want to produce real and sustainable benefits, including a link to the Performance Imperative (thanks!). Whittle shared his personal journey to the realization that collecting and acting on feedback from people served is the right, smart, and feasible thing to do. Means explored how nonprofits and funders can refocus on what matters by aligning reporting around producing results. Lumley addressed the need to shift power over data to the people served. And Edmondson wrote about how effective collaboration can produce outcomes for children that no single organization can on its own.

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Events/Webinars for Raising Performance

Aug 14 — Online
“Taking Action on Learning” webinar; GEO

Sept 10-12 — Stanford, CA
“Nonprofit Management Institute: Transforming Anxiety into Active Leadership” conference; SSIR

Sept 23-27 — Philadelphia, PA
“Funder Education Program” conference; Center for High-Impact Philanthropy

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

Oct 11 — New York, NY
“Feedback+New York: The Case for Listening” summit; Feedback Labs

Oct 23-25 — St. Louis, MO
“Facing Power and Privilege in Capacity Building” conference; Alliance for Nonprofit Management

Oct 28-30 — St. Petersburg, FL
“Bringing Leaders Together: A Retreat for Nonprofit Chief Executives” conference; BoardSource

Nov 13-15 — Chicago, IL
“Upswell Chicago” conference; Independent Sector