Reenvisioning Nonprofit-Funder Partnership

Breaking down the inequities that have long underpinned nonprofit-funder relationships is central to PEAK’s Narrow the Power Gap Principle. However, it’s not always clear what nonprofit staff or grants management professionals can do to shape (or reshape) the dynamics of those relationships with intention, enthusiasm and respect. To explore the nonprofit and funder perspectives, PEAK President and CEO Satonya Fair joined Karen Beavor, CEO of the Georgia Center for Nonprofits (GCN), a leading state association with over 1,000 nonprofit members, for a GCN member-exclusive webinar discussion in June. Over the course of their illuminating conversation, they discussed what it means to pursue equitable and empathetic communication, the power of collaboration and convening, and the necessary steps to achieving true partnership and greater impact. Highlights from their conversation follow.

Beavor: What do innovative and transformational partnerships look like?

Fair: The most promising, healthy, and innovative foundations and nonprofits are ones that have found the right balance between staff expertise and capacity. The organizations primed for transformational partnerships are those that ensure their people have time to think outside the box. Many organizations are having thoughtful conversations on who they need to be, how they need to be staffed, and where that staff needs to be drawn from given the issue areas that they work in.

We just had a beautiful interaction with the Walter and Elise Haas Fund. They’ve recently dropped the walls between their departments, and they figured out how to work across the different competencies as a compact staff. It’s beautiful when you interact with a foundation and you see the staff not just jazzed about the fact that there’s money moving, but also that they’re a part of a healthy and vibrant community themselves. So, we are starting to see people show up with a lot more joy in their work. Joy and time to think outside the box allows them to consider and design more flexible funding processes.

Beavor: I do see some movement and examples of doing things differently, like the Betty and Davis Fitzgerald Foundation. They’re putting nonprofit representatives on their board, creating a strategic planning process at the onset of their new executive director, listening to nonprofit feedback and closely studying trends and data.

There are also some very large foundations that are using third parties to evaluate their work, and also getting that feedback directly from existing and past grantees on what they could improve on. The intentionality of listening, engaging, and focusing very clearly on what nonprofits and the communities they serve need is so important.

Fair: Many foundations are becoming more collaborative. I love when I see that 10 foundations have realized that their staff, dollars, and ideas mean more when they come together, because they’re working to improve grade-level reading or help underhoused women in the community. The question is, how do you then make it easier for that community’s universe of nonprofit organizations and partner agencies to receive the funding and drive the core work forward (as opposed to managing application and report processes)?

Nonprofits are always told to collaborate, and we do. The foundations who are focused on developing more transformational relationships with their grantees are also reconsidering different ways that they can come to the table together with us and to fund the work collaboratively while also reducing the administrative burden on nonprofits.

Beavor: We, as nonprofits, understand that many of us are operationally starved—we don’t always have all the staff we need, and we know that if we had more resources, we’d have vastly different organizational charts. I would love to hear your commentary about how restructuring capacity at foundations might support a different kind of partnership experience.

Fair: Public charities have money coming from different sources annually with a goal to move those funds back out through charitable activities pretty rapidly. Corporate foundations have leaders – based on profit margins and other priorities throughout the year – are moving money over into additional philanthropic giving, community relations activities, or cause marketing for instance. They plan and move money very differently than private foundations. I’m learning that many private foundations operate at the margins, not always with the staff capacity they need to support healthy work cultures. Folks are worried about what happens if they’re not in their seat doing the work because there are not always others who are cross trained, but rather everyone is a bit overworked. That’s an interesting thing to hear from foundation staff given the vast majority annually give only around 6 to 7 percent of their endowment. The majority of the people who are in PEAK’s ecosystem work at foundations with 10–20 staff members. Some of them might give away 500 small grants a year—and it’s wild to think about how they’re doing that in a given year!

Oftentimes, it’s almost as if the foundation is staffing itself as if it doesn’t have the grant budget size that it does. One of the oldest foundations in the US has a staff of less than 100 people despite also having one of the largest endowments. There are probably nonprofits in Georgia that have that many people. That’s not judgment, but when that foundation’s program officers are encountering nonprofits who have two or three times the staff—it’s understood that they might think that nonprofit is operating with bloat. My point is that when philanthropic staff approach nonprofits, they may be doing so with a scarcity mindset because it is the way they work and have been conditioned to expect.

PEAK often speaks about how nonprofits feel after encounters with foundations. We want philanthropic professionals to be great stewards of the relationships and reputations that get formed about our sector. Sometimes, we must be bold and—with love and respect—point out when we experience what feels like scarcity tactics while amplifying examples of healthier models. That’s why PEAK’s Principles are framed using questions. We want our members to be curious about their own processes, procedures, and practices. We could advise people on what to do, but in order to lead your own change, you must first ask, “Do we have practices in place that create power gaps or contradict our values?” In answering honestly, much is revealed and can help a foundation uncover where they can be agents for changes in their grantmaking processes. It’s all about being more responsive stewards and partners with and for grantees.

Beavor: I completely agree. We need to consider the dynamic that we’re developing with our program officers, and bring empathy when we’re approaching them for retention or a new relationship. How they show up reflects everything that is culturally embedded in that particular foundation, just as it is in partnership with another nonprofit. We have to consider the constraints that they are dealing with. In some institutions, they could be overseeing hundreds of grant requests and trying to keep up with potentially hundreds of partners. Thinking about this through the nonprofit lens, what is some advice you would give to those of us that are trying to maintain and strengthen partnerships with our foundation friends?

Fair: The key is to believe that you are partners. So much of the work that PEAK does is around shifting this perspective. We talk about grantmakers and grantseekers. There’s the giver, there’s the taker. That thinking isn’t helpful for either party. Instead, it’s important for nonprofits to walk through the door not just believing that they have solutions to offer, but also knowing that the foundation sees they have expertise and information that’s coming from the field. The onus on nonprofits is to be very good storytellers. We have to make sure that we’re clearly stating our value proposition and listening for alignment.

Foundations have dollars and ideas, and nonprofits have information, practices on the ground, and proximity to the issue. It changes your posture when you walk into a conversation and remember that you’ve been on the ground for 15, 20 or 30 years doing the work. Walk in with the knowledge of who you are, ready to tell your story, and talk about the impact that your organization has had.

I also know that as a CEO, I sometimes have to show up hat in hand because I need to do what I have to ensure my staff have the financial support to do the work. That’s uncomfortable and unfortunate. That said, there are so many people who see PEAK’s value and have welcomed me with open arms. I feel good when I walk out of those conversations. Just as I have to care about what folks think about PEAK on the other side of those conversations, foundations also have to mind how I feel when I leave that room. And what do they say when you close the door? Grantee perception reports are an amazing tool to get that feedback, but the key is being interested in receiving it and doing something about it.

It’s a two-way street. It’s how we show up and it’s how they show up. For most, the deepest relationships we have in life have been tended to over time.

Beavor: And foundations are actively taking the initiative to learn. Here in Georgia, we have something called LINK [Leadership Involvement Networking Knowledge] where community leaders, including from nonprofits and philanthropic organizations, travel around the country to experience firsthand how communities are solving tough problems. This is one example, but we can easily replicate this on a local level. About three weeks ago, I was talking to a staffer at a community foundation based outside of metro Atlanta. She had been in Columbus on a joint site visit with other grantmakers to learn how the organizations there were doing something differently than other communities, and to see it in action. We had a wonderful discussion about what she’d learned from that experience, and I was able to give her some input from the nonprofit side. There’s a hunger for that kind of data and insight, particularly coming out of the COVID-19 pandemic, where the slate was somewhat wiped clean with all the issues that were converging in that time.

Fair: I really send my kudos to foundations that are willing to put money in the budget for convening. Creating opportunities to convene is so important because what you just described requires the people at nonprofits and foundations to be able to step away from the work for a period of time to talk to each other. When you start to look at the professional development and convening budget for most philanthropic professionals, it ain’t much. So they pick one or two opportunities to convene per year and learn from each other.

It’s been really interesting to look at the amazing foundations that still are putting money aside, even with the budgets getting smaller, to bring funders together. I learned so much working at Citigroup and working at the Annie E Casey Foundation about the power of rooms—the power of nonprofits, agencies and foundations that come together. At the end of those convenings, I saw those folks leave and do something different. A lot can happen on the other side of that type of gathering.

Beavor: And convenings are where innovation happens, right? You can’t always do it in a hybrid format. For us as nonprofits, providing those opportunities is key. You’re not always going to bat a thousand on it, but we have to provide those opportunities, show up, and then spend that time learning or helping others learn.

I’m curious to hear your thoughts on how nonprofits can better understand a potential partner’s funding methodology. What should we be asking potential or existing funders to gauge their alignment with our mission as a nonprofit?

Fair: A huge component of a program officer’s role is research, looking far and wide on the issue area to try to find the right folks to work with over time. They’re scoping who’s out there doing a particular kind of work, what agencies or nonprofits are working collaboratively, what’s the word on the street . Nonprofits have to do the same thing. But scarcity is real. We often do not have the right people to be able to do that depth of research. Early in my career, when I had fundraising responsibilities, we would just send everyone a letter. We didn’t go on a GuideStar or Google or any of the other databases. We’d see an organization that funded organizations like ours, so we’d send them a letter. There was a funny quip I heard—someone said, if the shoe was on the right foot, it would be foundations that had development officers and not nonprofits. That lit us up at PEAK!

Nonprofits are looking for grantmakers who they’re excited about and feel aligned with. With that said, I think foundations have become protective because they get a lot of asks from organizations that they can’t fund. It does wear the soul down a bit. I was a program officer, and I’d get asks to fund a reading program when we funded traditional capital campaigns. But I had to open up every last one of those proposals. Now with technology, some funders keep their applications open year-round while others are unreachable unless they approach you. It’s two extremes and can be confusing for nonprofits. We’re excited about the work and we need to be in deep connection with funders to be effective. We want foundations to not shy away from being in rooms with us for fear of an ask, but nonprofits have to do their due diligence to make that limited time with a foundation productive. If we want funders to value our time, we must value theirs as well.

I love Zoom meetings because I can have a funder’s website, LinkedIn, and board page on my screen. I like to be super informed; I’ll look at their last 990 to see other funders so I can say, you funded other organizations that are very similar to us. You have to have your data ready because that makes the conversation better and easier. When folks do that really well, they get funded and they build transformative relationships.