Are We Killing Our Grantees?

This entry to the One Post Challenge comes from Suzanne Walsh. Suzanne is a program director at the Lumina Foundation for Education. She previously worked as a program officer at The Heinz Endowments. Says Suzanne, “Before joining the world of philanthropy I was on the “other side”, working in non-profits where my job entailed writing grants and working on a large capital campaign. I have also served as the fundraising chair for boards on which I have served and have had to make those dreaded calls to prospective donors so I have seen this issue from all sides. I was even a telemarketer for an opera company!” Suzanne’s views do not necessarily represent those of the Lumina Foundation for Education.

By Suzanne Walsh

Are we killing our grantees?

Is there such a thing as too much money? Here is what has been bothering me lately: we give and we give and we give…to the same organizations. Is there ever a moment when we have given too much? Yes, you heard me, too much.

What happens when every local foundation discovers the hot new leader? We all want to invest in her and her organization for anything and everything. And then we wonder a year later why she is overextended and drowning and why she can’t do the core things she used to do. [I want to now pause to apologize for trying to kill my grantees, I didn’t mean it. It was out of admiration for your talent.]

What happens when national foundations discover hot intermediary organizations to help them make grants and run programs? The same thing, every foundation invests in those few for all their work and then those organizations become overextended and start to drown not able to do the basics well any more.

Sometimes there is an executive director who says no thanks to the money but it’s not easy to say no to millions when you aren’t sure if by saying no now, you have ruined your chances forever with that foundation.  The dating game between foundations and non-profits is awkward at best. It’s nice to be courted by the rich suitor and hard to say no when that large grant means the ability to hire new staff, pay the bills without worrying about writing more proposals for a while, becoming one of the “chosen” of an important foundation, and being able to take your work to scale.

That all sounds great but what I am still trying to figure out is can an organization maintain the same level of excellence if it is working with not just one foundation but if every foundation brings its large projects to bear on a single organization. Because now, there are the idiosyncrasies  of each foundation to contend with: funding cycles differ, reports are due at different times, the kinds of data needed by each foundation are different, the way each foundation wants to be treated is completely different…And if you thought that is only in instances where each foundation is funding a different project, think again. Even when foundations come together to fund projects, each foundation may still have its own requirements. So, yes, an organization may have more staff but it must also spend a lot of time killing itself responding to the various needs of the various foundations. When and how can any work get done?

Maybe it is time for foundations to do what we have asked of our grantees. Maybe we should start to work together so that we can give but make it OK non-profits to say no when they have reached capacity. Maybe we can work together to have common reporting requirements, at least when we jointly fund projects. Otherwise, I do think we are going to kill our grantees and we need them perhaps more than they need us.


  1. Dien S Yuen says:

    Yes, it would certainly be nice to see the funders work together and/or even make grants around the same period. It would be so much easier for accounting and investment purposes….especially when, as board members, we need to approve projected budgets.

    As for saying no to funds… I wonder if there is a way to ‘park’ the funds somewhere and give it to the organization when the time is appropriate. Individual donors use donor advised funds and other vehicles for this purpose.

  2. Suzanne, congratulations for taking the plunge as a foundation employee and publishing this with your name and your foundation’s name. And congrats to Lumina for giving you the green light. Between your post, the anonymous (but verified) post from the communications staff member of a large California foundation, the pending Packard Foundation blog and a foundation blogging experiment I’ll be announcing next month I think we’re witnessing a real shift in foundations’ willingness to engage with blogs.

    I’m sure everyone would be interested in your first hand account of why, as a foundation employee, you were interested in writing this post as well as what Lumina’s reaction was, why they gave you the go ahead and what hesitations they had.

    Regarding your post: In the venture capital world, multiple funders definitely work as groups to fund startups. It seems to me that funders would do best by at least discussing grantees with other potential funders.

    It seems to me that when large grants are made, making separate large grants to fund a more robust fundraising effort (to support the soon to be larger organization) as well as dedicating a stream of future funds to support operating expenses would be key.

    Another idea would be for foundations to fund a nonprofit consulting group that just worked on “scaling”. This group could then be brought in to help nonprofit grow in a healthy but fast way. The challenges of scaling quickly are much different from the challenges of running good programs. Since good programs are often what attract grant dollars, it would seem unlikely that most nonprofits will have both skill sets.

    The Wall Street Journal reported today about how people who are good at starting companies have different skill sets that good CEOs. I would guess most nonprofits that attract funds to take them to scale have more of the start up skills and less of the CEO skills that scaling quickly require.

  3. Suzanne Walsh says:

    Thanks for your questions and comments Sean.

    I decided to write this post because it seems to me that these issues are coming up more frequently and I have wanted to start a national conversation about them for sometime but didn’t know how where to start. The One Post Challenge seemed like the perfect place to put in writing what I have been saying out loud for a long time and see what other people think. I thought that the post would be a way to test my thinking to see if I was crazy and alone on this or to see if others had thoughts or similar experiences.

    As for the discussions at Lumina, I was pleasantly surprised by the reactions I received. Everyone was very supportive of my entering the challenge. The main discussion we had was about could I use “Lumina” in my bio. On the one hand, they recognize that as a private citizen I can blog but the foundation may not want to be identified with what I say about philanthropy. I shared my post internally and our EVP and communications director both signed off on my using Lumina with the caveat that I am not speaking on behalf of Lumina. That was not because they disagreed with the message or that they thought the message was in any way inconsistent with the values or mission of the foundation but rather they saw this post as something I was doing not on behalf of the foundation but rather something I was doing as an individual private citizen.

    I think that is really an interesting point and wonder how other foundations handle their staff’s blogs/ posts.

  4. Carol says:

    Suzanne, nice post. My initial reaction: It’s a problem I’d like to have! But you certainly raise a good point about different application and reporting requirements and deadlines and the unintended administrative expense they create.

    One opportunity for foundations is to become more change oriented and less project oriented. There is something to be learned from X-Prize and other such competitions. I’m not crazy about their winner take all approach as it relates to the world of philanthropy, but the laser-like focus on the desired end result is an energizing model. And enabling energized nonprofits is at the base of your concern.

  5. Gerry says:

    Very interesting post and comment, thank you.

    If administrative load is killing your grantees, why not eliminate it? There are other ways to measure performance without undo overhead, and what your grantees really need is partners anyway.

    I have a different view of scaling. Best practice is to take advantage of network organization structure. If a group of foundations got together to fund small distributed nodes of organization and action capacity. They could also fund infrastructure development, software and shared data. Think of Wikipedia and open source software.

    The idea would be to peer produce shared assets that would then be available to the entire network of grantees of the entire group of foundations. The nodes would specialize in doing certain kinds of work and cooperate and collaborate to deliver efficient infrastructure.

    That way nothing has to grow big and complicated, and the promising grantees that you find can be developed as network assets as well. Leading projects to replicate the good work they have been doing in independent nodes. Network tools and face to face to share lessons and tools, and so on. Each node is simple, but the network can do much much more.

  6. Holden says:

    This is a GREAT topic; thanks for bringing it up. One of the biggest questions that constantly nags at me is, “How can we *coordinate* funding so that we don’t just end up dumping all the money on the best project [even once it’s out of capacity to use the money]?”

    Collaboration between funders is definitely a step toward this. Another possibility would be to ask charities to set targets after which they *close their doors* – kind of like DonorsChoose on a large scale. To make this work we need a culture that rewards a charity for refusing money (i.e., gains trust in it for the future) rather than punishing it (ending the relationship). That, in turn, means getting organized about grantmaking, enough so that you don’t fall into the inertia of granting the people you’ve been in touch with lately.

    As a side point, I wish this area of blogland had more conversations about practical, important issues like this.