To intervene or not intervene, that is the question – for funders impatient to make a difference
by Richard Marker

Who has the better perspective: a funder or a [prospective] grantee?

An organization providing a service to a given population has its mission, competencies, history, and governance. Who would know better than they about what they need, what would make a real difference, what bumps in the road are ahead, and what strategic decisions are in the offing?

A funder receives proposals from many organizations, often in the same catchment area or field of service and thus has the advantage of a bird’s eye view of trends, emerging demographic shifts, innovative program delivery, perspective.

Not surprisingly, these two vantage points are not always aligned. The question for funders: what is our role, responsibility, privileges when we are faced with such a situation?

Let’s eliminate the easy parts: let’s assume that the organization is well-respected so there is no question about the quality of their service delivery. And to make matters a little more real, let’s assume that this is an organization the funder has funded for some time. Yet the funder is beginning to be concerned that the organization is getting a little stale, or seems to be overlooking impending changes in their target market, or has suffered significant financial reversals.

What should the funder do? What is the funder’s responsibility? What should be the limits of the funder’s intervention with the organization?

Now, let’s make it even more complicated – but very real. Suppose there is another, a second grantee in a similar situation – financially at risk, having competencies only partially suited to new demographic realities.

Should our proverbial funder sit back and let the organizations determine their own futures? It may lead to the demise or radical reduction in each of them. There are those who emphatically would argue that this is the way the sector reinvents itself – organizations should be allowed to fail if they cannot figure out how to change, adapt, reinvent themselves, and excite new users and supporters. According to this view, intervention is not only not appropriate, but is counterproductive to the vitality of the sector since it may delay what should be the inevitable. A funder’s responsibility is to fund that which is perceived to be viable but not to micromanage their grantees.

Others take a view diametrically opposed: They would argue that most organizations are under-capitalized even in the best of times. After four straight years of financial stress, it isn’t getting any easier. Indeed, those organizations dependent on public funds will be faced with another few years of deterioration in their funding base. The interventionist argument is that these agencies provide vital services, have expertise, community knowledge and access, and if they were forced to close, the cost to communities would be huge. And then we would have to reinvent them anyway. What a loss on every level. Thus the most responsible thing would be to assertively encourage mergers, collaborations, takeovers, and any combination thereof. Activist intervention may not be easy, and it may challenge the egos of the various organizational leaders, but resistance to these changes might be organizationally suicidal. A funder’s responsibility is to take advantage of their larger and more expansive perspective and use their influence, resources, and experience [read: power] to impact change.

Therein lies the dilemma. Funders have a tremendous ability to influence – even by purposeful inaction. Often they can see things as outsiders which an overly busy and understaffed organization cannot. Or even if they can, is too overwhelmed to address. Most of us would argue that there is a continuum along the lines of the two extremes stated above – but both represent strong trends and distinctive tendencies in the contemporary funding world. They represent profoundly different philosophical and pragmatic views of the role of the funder.

I wish there were an easy answer to this one. In my many years in this arena, I have seen interventions which have been brilliant, transformative, and revitalizing. The foundations and funders were thoughtful, perceptive, intuitive, and, ultimately, right. The impacted organizations or field didn’t always start out happy, in agreement, or comfortable, but in the end they benefited – even when there may have been some genuine discomfort along the way. These interventions have included mergers, spin-offs, staff and/or board changes, funding model revisions, and more. But overall history would rate the interventions highly.

The problem of course is that I have also seen interventions go terribly wrong. Mergers which were forced, flawed, and therefore failed, staff changes which were ill-considered, funding expectations which were unrealistic, misreading of the demographics, ignorance of the cultures of the organizations, and more.

The funders who made the errors were not necessarily any more ego driven, heavy-handed, or unaware of the evidence in front of them than the ones who were successful. Their motives were typically quite the same at the beginning. And while, in retrospect, one can and should point to their missed signals, it is all too easy to do so from the vantage of hindsight.

What are the lessons:

1. Be clear to yourself and to your grantees what your philosophical starting point is. If you are an interventionist, let that be clear and explain why. There may be good reasons to support your position but there may be credible reasons to rethink it. Or if you are a Darwinist, let that be clear as well. Consider what the costs would be if the organizations were to fail because of funder passivity or inaction.
2. If you do wish to intervene, do so with care. Even an organization which fully endorses your vision of change needs to have an opportunity to implement changes with full respect to their own culture, field of service, expertise, and clientele. Speed may be the enemy of success – and a too impatient funder may actually be working against their own aims. [That doesn’t mean that the process should be endless only that implementing change among many stakeholders is often a more delicate task than it would appear at the outset.]
3. Be humble. You might be right – but you might be wrong. There is a very thin line between heavy-handedness and productive influence so it makes sense to consult with colleagues, field experts, and others who may have other points of view.
4. Remember that the public benefit sector is going through profound and dramatic changes these days. There are a lot of folks with very creative and forceful ideas about where it should be going. Some of them are really onto something, others might simply be believing their own hype. Change and reinvention is a good thing, but not all change and reinvention is necessarily better than the old. We rely on funders to have the perspectives on the value of change and also on its limits if they are going to be effective in getting their grantees and ideas to impact.

To intervene or not to intervene: that is the question. The answer, it seems, is not so easy. Your thoughts?

Richard Marker teaches and advises funders from around the world through both the NYU Academy for Grantmaking and Funder Education and the Wise Philanthropy Institute, both of which he founded. His blog can be found at Wise Philanthropy.