This blog was originally published on June 4, 2015 by Andy Carroll on PhilanthroFiles, the blog of Exponent Philanthropy. It is reposted here with permission.
It’s common for Exponent Philanthropy members who’ve made significant impact to reflect back and say, “Money wasn’t the most important thing. It was really about being a catalyst, making things happen.”
Philanthropy is more than transferring money. It’s about using passion, knowledge, connections, advocacy, and dollars to make change on important issues. Central to success is listening, learning, leveraging, and leading.
Yet when we teach and write about grantmaking, we fixate on how best to carry out a bureaucratic, paper-based, transactional process for getting money out the door. Guidelines, applications, due diligence, dockets, decision processes, grant agreements, reports, and evaluations absorb our attention.
Buried is the passion, the people, and the daring challenge of making change in the real world.
It’s time to recapture what is powerful. The following pathways will guide you to the messy heart and soul of grantmaking, its nitty-gritty complexity, and its intensity and excitement. Once you place learning, relationship-building, and your powers beyond dollars at the center of your work, you will achieve greater impact, and find yourself on a journey that is exhilarating.
1) Choose a Process That Makes Sense for You
Resist the impulse to take a grantmaking process off the shelf. Allow your process to emerge after you’ve considered your mission, goals, capacity, culture—and the following tips.
2) Focus, Focus, Focus
Zeroing in on an important issue or community you care about helps you maximize your resources and leverage your dollars and time. Focusing also sets you on a course so you can accumulate experience, knowledge, and contacts.
See Exponent Philanthropy’s resources on planning for impact
3) Immerse Yourself In Your Issue
Funders have unique perspective across organizations. They also have unique access to people with knowledge. Make use of these powers. As Megan McTiernan, executive director of Thomson Family Foundation, observes, “The decadent thing about this field is that you can sit down and talk with anyone you want.”
Invest in learning about your chosen issue or community. A prudent entrepreneur will do a market analysis of the landscape and competition before she opens for business. Consider the model of Exponent Philanthropy member Colleen O’Keefe, who embarked on a yearlong listening tour of the foundation’s chosen issue.
Ask questions such as these:
- Who else is working on this issue?
- What is stuck? Why is it stuck?
- What has been tried? What has worked, not worked? Why?
- What are gaps and opportunities?
- What would it take to move things forward?
- What role can we play—as funders, and also as convenors, matchmakers, researchers, advocates?
Engage your family and board in the learning process. The knowledge you develop will help you pinpoint ways to make impact. And, as you learn and engage people, you will cultivate valuable relationships.
4) Catalogue All Your Assets, and Invest of Yourself
Take stock of your full array of assets and resources beyond money, and consider how you might employ them to fulfill your mission. Consider the skills, experience, knowledge, and connections that you, your family, board, and staff offer. Then find out what your grantee partners need. Many funders come to realize that the advocacy, convening, communications, and technical assistance they provide can be more valuable than their grants.
5) Consider the Time Horizon for Your Goals
Think about how long it will take for you and your grantee partners to fulfill your desired goals. For many funders, desired impact takes several years, a decade, or more. The time horizon will help you decide whether to make annual grants, multiyear grants, or invest in helping grantees be strong and self-sustaining.
6) Get to Know Your Grantees
- Carve out time to listen and learn about your grantees’ real needs, and the field they work in. Often grantees won’t put essential things they need in proposals.
- Build open, trusting relationships with grantees. You will learn much more and be able to partner, not just fund.
- Offer general operating support, capacity building support, and multiyear grants. Impact and change depend on strong, sustainable organizations. Results take time.
7) Know the Stresses on Your Grantees
Make it a practice to understand grantees’ income streams. Many funders aren’t aware that the top two revenue sources for nonprofits are earned income and government payments and grants. Dozens of states cut funding to nonprofits during the 2008 recession and continue to cut—including to essential social services. At the same time, demands for services are growing. Knowing if key grantees are facing shortfalls and asking how you can help allows you to be proactive—e.g., by offering funding for cash reserves or capacity building, or by doing advocacy on their behalf.
8) Invest in Your Capacity
Be willing to invest money in your grantmaking if your mission calls for it. Funders have a tendency to be super-economical, even when carefully chosen investments can have a big payoff in efficiency or effectiveness. Thought leader Kris Putnam-Walkerly calls this a “Poverty Mentality.” Investments that can pay off big include staffing, office space, equipment, technology, site visits, board and staff training, consultants to research an issue in-depth, communications, and the like.
9) Streamline Your Application and Reporting Processes
Many funders design overly elaborate processes, burdening nonprofits with time and labor that undermines effectiveness. You have the power to liberate nonprofits—and yourself! Know the minimum legal requirements for making grants to public charities. Survey your grantees, and use a cost–benefit approach in designing your process, asking yourself what you really need to make grants decisions. Follow the advice of Jessica Bearman aka Dr. Streamline, and right-size.
10) Save Time and Labor for You and Applicants
- Make your grant guidelines as specific and clear as possible to maximize the relevancy of proposals you receive, and minimize the number of ineligible ones.
- Use “filters” such as web-based questionnaires and letters of inquiry (LOIs) to efficiently determine whether an organization’s work is aligned with your mission, saving time for you and nonprofits.
- Consider making multiyear grants if your mission calls for building the capacity of key organizations or achieving longer-term goals.
11) Adjust and Evolve
Be open to continually evolving your grantmaking strategy and process, based on what you learn along the way. Impactful funders develop a culture and practice of learning and adapting.
Join Exponent Philanthropy for “Let It Go: Rethink Your Grantmaking Processes to Reclaim Your Edge,” a June 18 conference call to explore these topics.
Senior Program Director Andy Carroll writes resources, designs workshops, and facilitates seminars for funders. Andy also dedicates a significant portion of his time to managing our Leadership Initiative that defines, validates, nurtures, and celebrates the many ways philanthropists lead. Andy has 25 years of experience in nonprofit organizations, and he enjoys talking with funders about their questions, interests, passions, and plans for making a difference. Follow Andy on Twitter @andycarrollexpo.
