by Benjamin Greene
It is my hope that this series will provide insight and help for those seeking to establish or improve their relationships with philanthropic foundations, as well as for foundations seeking to advance the relationships they have with their grantees. For a more detailed introduction to this series, please see my first post.
I begin this series on the topic of Transparency, because of its relation to the current culture of uncertainty. Although honesty or being forthright relate to transparency they are not completely synonymous. Transparency should be viewed as the ability to provide a clear and up to date picture of where an organization or project stands and is most likely headed. Therefore transparency is not just an organizational intent but a vital competency.
Providing a high level of transparency can be particularly challenging in the current environment. As recently chronicled by the Washington Jewish Week many organizations are still striving to negotiate and adjust to the financial situation: working with multiple contingency budgets and seeking to delay particular decisions (often staffing or programmatic cuts) until absolutely necessary. Although in some regards, such practices can be reasonable (as long as they don’t leave an organization in a long-term state of flux), from a foundation perspective they can also make evaluating a potential grant all the more difficult. If an organization can’t internally determine where they are headed, it will be nearly impossible for an external foundation to do so.
In addition to weakening a foundation’s confidence in a grant or organization, a lack of transparency also means that a foundation must expend additional staff time and resources into the proposal or evaluation process, resources that some foundations may not have at their disposal. A lack of clarity can also lead to missed opportunities for foundations to support their grantees by providing expertise and insight in the challenges the organizations may be facing. Further, as discussed by David Roth and Ardie Geldman, two philanthropic consultants, “transparency and oversight are what enable genuine trust to develop” and such trust is essential in establishing and furthering long-term foundation grantee partnerships.
In terms of developing new relationships The Chronicle of Philanthropy (subscription required) recently discussed how most non-profits’ “web sites do not offer enough detailed information about the organizations’ finances, programs, and leadership” and how such data could be crucial to engaging web-savvy investors. As an organization’s website is often one of the first places a foundation may look when researching or considering a potential new grant, it can be very helpful to have key information accessible, such as a list of board members, a copy of their most recent annual report or even programmatic metrics. In this regard, establishing a heightened level of transparency is also not just about what is conveyed to funders in private, but what is also available to anyone interested.
The following are four ways to help ensure transparency in the grantee foundation relationships.
1. Clear and detailed reporting
As a general rule, someone who knows little about a specific grant or the organization should be able to fully understand a report that is being submitted to a foundation. The original goals, metrics and background of grant should be included and referred to in reports, and should be consistent with those aspects discussed and envisioned in the proposal process. To be sure, some grants evolve from their original proposal stage, in which case such deviations should be properly noted and explained. Likewise uniquely organizational terms or abbreviations should be avoided or clarified.
Detailed budgets should often (if not always) be included. Budgets, particularly on the income side should avoid any confusion by using semi-synonymous terms like “expected income” and “anticipated income.” It is often okay to include multiple budget scenarios, but the reasons for these scenarios should be clear, as well the factors that will determine which budget will be implemented.
Overall, it is important to note that detailed and clear reporting does not necessarily correlate to length, and that organizations should still aim to be as succinct as possible. Since it is often the job of foundation professionals to summarize reports for others, and in particular their principles, overtly lengthy reports can often become more of a burden than an asset.
2. Sensible fundraising and organizational projections
Although it can be important for organizations to be ambitious and have high aspirations, budget and programmatic projects must be grounded in prudent and realistic projections. A project is unlikely to be considered if does not appear to be a realistic and sound investment, particularly in this financial environment. Further grants that fail to live up to proposed expectations (because such expectations were overly grand) can easily undermine the foundation grantee relationship. It is okay for an organization to express its hopes and dreams, yet it is essential for proposals and reports to convey what is actually currently possible to achieve.
3. Clear organizational leadership and decision making
It is not enough to simply be reactive to this economic climate, organizations must demonstrate strong leadership in pro-actively managing the difficulties they are (or expect to) encounter. Further, it is often helpful for foundations to understand what the organizational decision making process is: how involved is the organization’s staff, board, constituents or volunteers? What factors are being used to make important decisions? How is the organization balancing short-term and long-term needs?
4. Pro-active communication
As stated these are times wrought with uncertainty. As such it is important for grantees to pro-actively communicate to their funders unexpected challenges they are encountering or key decisions they are considering. This does not mean providing weekly phone calls or updates, but that funders should not have to wait for scheduled reports to learn of issues or decisions that will greatly impact the course of a grant. Further, foundations often see great value in, serving as a resource to their grantees when they could use support in working through challenging situations.
Again, I greatly welcome your comments, feedback or questions throughout the series and will seek to address them in subsequent posts.
Benjamin Greene is the Program Associate at The Samuel Bronfman Foundation where he collaborates on a variety of national initiatives and research projects. Benjamin has a master’s in Jewish Education and lives in Brooklyn, N.Y.
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This is an obviously important matter that is being presented here in a helpful,straightforward fashion. I would hope that funders and 501c3s alike find the information to be helpful.
I do believe that “genuine trust” develops from much more than what the consultants you quote claim is achieved via “oversight and transparency.” With such an imbalance in power (funders control precious resources that grant seekers need), fostering genuine trust entails does not emerge, I would argue, from just disclosure (transparency) and monitoring (oversight).
Perhaps your future column will delve more into the evolving nature of grantor-grantee relationships and account in a deeper way for what (convenantal and contractual) funder-grantee agreements mean to the field–beyond transparency and oversight.