Putting Grantees at the Center of Philanthropy Putting Grantees at the Center of Philanthropy This multi-part series, produced in partnership with Grantmakers for Effective Organizations, tells the story of why and how grantee inclusion is key to effective philanthropy, from both the funder and nonprofit perspectives.

What happens inside a foundation doesn’t stay inside a foundation. We’ve written and spoken these words before: A funder’s internal culture and practices affect the experiences and work of its grantees.

This isn’t just speculation. At the Center for Effective Philanthropy (CEP), we’ve surveyed tens of thousands of grantees from hundreds of funders about the ways in which grantees experience work with their funders. Funders ask us to create Grantee Perception Reports for them out of a belief that grantees are important partners in creating social impact—and out of a commitment to engage grantees’ feedback as an important influence in learning and planning. In grantees’ open-ended comments about their funders, we find evidence of things funders do that accelerate or impede grantees’—and by extension, funders’ own—effectiveness. We somewhat regularly see cases where a funder’s internal culture seems to fairly directly influence a grantee’s experiences.

Here’s an example from one frustrated grantee:

The foundation is overly complicated. Its strategies are overly prescriptive and directive, [and] do not allow for innovation on the grantee side. The process the foundation seems to use to develop funding areas is almost completely indecipherable and maddening. We almost gave up many times and, in fact, tried to have another funder pick up this portion of our grant. Certain individual program officers were absolutely fabulous throughout the entire process—empathetic and supportive—but constantly struggling with internal process and multiple [leaders] who did not seem aligned in goals or culturally.

When I read this, I wrote it down to remind myself of the importance of foundation effectiveness, and the crucial role that both program officers and foundation leaders play. I wish I were worried about sharing this quote, as if somehow the sentiment would reveal the identity of the offending foundation. But, unfortunately, it’s not all that rare for me to run across similar comments describing how a foundation’s negative internal culture has leaked out to grantees. This feedback could apply to any number of funders that have commissioned CEP to help them gather and engage grantee feedback.

These comments are supported by a deeper quantitative analysis of the data we’ve collected from funders—those that have asked us to conduct relatively contemporaneous surveys of both their grant recipients and staff. We don’t see quantitative linkages between every question we ask a given foundation’s grantees and staff—for example, a foundation’s staff’s perceptions of the fairness with which the foundation treats its grantees is unrelated to grantees’ perceptions of the fairness with which they’ve been treated—but, on the whole, we do see quite a few statistically meaningful connections between a funder’s own internal perceptions of its culture, and the experiences and perceptions of its grantees. In three areas, those connections are particularly strong and emphasize some of the ways in which, ultimately, foundations should see nonprofits in an inclusive way—not just as recipients of funding, but as part of a larger system of shared work and impact:

  1. Staff engagement and culture matter. We see connections between staff responses about their own empowerment—including the extent to which they have a cooperative culture that’s respectful of differences across staff—and grantees’ perceptions that the foundation communicates with clarity and consistency.
  2. The foundation’s culture of learning and improvement matters. The more strongly staff agree that the foundation learns from past performance when designing new programs, the more strongly grantees tend to rate the quality of their relationships with the foundation and its staff.
  3. Foundation expertise matters. Foundations with staff members that more strongly believe they understand the fields and communities in which they work tend to have grantees that perceive the foundation as having more impact on their fields and local communities. Grantee and foundation staff comments often mention a desire for constructive give and take in knowledge and ideas. Funders’ having a nuanced understanding of what’s happening in the fields and communities they fund in is an important baseline in creating impact.

Every foundation can reflect on, assess, and manage these items. They emphasize the importance of designing internal culture, learning, and knowledge in a way that recognizes how important a funder’s culture is to grantees’ ability to effectively create the impact both partners strive for.

Leadership, of course, has a particular role in setting the tone. Some of the survey measures most strongly predictive of empowered and engaged foundation staff are the extent to which “management communicates a clear direction for the future” (a question that also receives some of the lowest ratings in our survey) and the extent to which staff feel “aligned with the goals of the CEO.” But every staff member has a part to play. No institution creates a fantastic culture or clear internal communications through the influence of one person alone. Excellence requires the efforts of all.

The results of those efforts—what happens inside a funder’s walls, the internal practices and culture it creates—ripple out to grantees in meaningful ways. And it’s important to note that for every comment we see from a grantee about the ways in which a funder’s internal culture is adversely affecting its work, we see many positive ones describing a foundation with internal alignment and culture that engages grantees.

So, I’ll leave you with this example of a grantee survey comment that reminds me of the ways in which a strong internal foundation culture includes grantees and creates a partnership that’s greater than the sum of its individual parts.

[The Foundation] showed a genuine respect for our time and the challenges we face as a grant-seeker with multiple, and sometimes competing, funders. … [The Foundation] has not forgotten the roots most of its staff have as grant-seekers. Their experience, coupled with the quality of intellect consistent throughout their staff, means they are authentic partners who truly add value, and model in their own behavior the qualities they encourage in their grantees—taking calculated but bold risks for mission; planning with ambition and executing with vigor; acting with transparency; and viewing changes to plan not as failures but as opportunities for learning.

In the end, the people that staff foundations and the choices they make really matter. And when it all works, it creates stronger work with grantees.

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