When Foundations Ask Too Much

moneystringsI was asked recently for advice on how nonprofits can successfully respond to a foundation’s expectation for more evaluation results than they are providing funding for. My first reaction, and what I discuss in this post, is “We shouldn’t be there in the first place!” A later post will explore what nonprofits can do if they find themselves in that situation.

What it comes down to is that foundations need to ensure that their grantees have access to the financial and non-financial resources required to achieve the agreed upon goals; and nonprofits need to be honest with funders about the true costs of accepting their funding and be ready to refuse funding opportunities that carry more costs than the organization can truly bear.

We are seeing some promising changes in the philanthropic community in this vein. Organizations such as Center for Effective Philanthropy and Grantmakers of Effective Organizations are driving conversations on how foundations can maximize effectiveness by better supporting nonprofits to achieve measurable results. William Keator, of the Arthur Vining Davis Foundations writes on G.E.O.’s blog:

Yes, we still need outcomes, however, we should always be aware of how we do our work and how we measure results. We should consciously seek a balance between process and outcomes. We should strive to more effectively form philanthropic partnerships with stakeholders…

And other foundation leaders are taking similar leadership roles in rethinking philanthropic approaches to their grantees. As some examples, see these comments from Kevin Jennings of the Arcus FoundationNancy Roob of the Edna McConnel Clark Foundation, Clara Miller of the F.B. Heron Foundation, Diana Scearce of the Packard Foundation, and results from a survey from CEP.

As promising as these are, they are far from representative of the foundations that many nonprofits receive funding from. Nonprofits are still burdened with unfunded onerous reporting and evaluation requirements that do little to actually support the outcomes that the foundations seek to achieve. And even foundations that are more evolved in their understanding of measurement and evaluation often don’t pay for the administrative capacity required to meet their more advanced evaluation requirements.

So what should nonprofits do?

  • Engage in conversations with your funders about the true costs (including evaluation costs) of those grants, and educate them on how their support of your organizational and measurement capacity will allow you to better meet the grant requirements. Be honest with yourself and with the funders about what you are actually able to deliver with the support you are receiving. It is unfair to the funder, the nonprofit, and the beneficiaries to knowingly do otherwise. While this might seem like an act of futility, these conversations may start a shift towards a more balanced partnership between funders and grantees.
  • Invest in the measurement and evaluation capacity of your organization before you are asked to by a funder, and frame it within a larger organizational development and learning model. Building this capacity will allow you to absorb more unfunded measurement or evaluation requirements, and then to leverage those funder-mandated requirements into authentic organizational development and mission advancement.
  • Don’t accept funding with too many strings. I know many nonprofits don’t feel they are in a position to refuse funding, but if you continue to accept funding that carries more costs than you can bear, you are creating a system in which your organization is always overworked, underfunded, and unable to meet its expectations. It may seem counter-intuitive, but you need to ask yourself if you can afford to accept that money.

Philanthropic funders are in a unique position to support nonprofits, and many are using that position to lead to innovation, evidence building, and measurable impact. Funders and nonprofits should work in partnership to develop evidence about what works, and ensure continued support for effective solutions.

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2 thoughts on “When Foundations Ask Too Much

  1. Pingback: NPF TIG Week: Patrick Germain on Powerful Evaluation on Limited Resources · AEA365

  2. Pingback: Powerful Evaluation on Limited Resources | The Measured Nonprofit

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