Most of my postings are targeted to those of us on the funder side of the table. This one is quite explicitly targeted to those of you who seek money, not give it. Hopefully these observations from this side will be helpful to you. Funders are invited to eavesdrop.

1. No #1: When Funders Say NO.

“No” really does mean “No.” I have heard many fundraising experts lead workshops for those anxious to learn how to be better and more effective development professionals. There seems to be a mantra among such experts: tell those newbies: “No is not no,” they say; “it is only the beginning of a conversation.”

I cannot know for sure what they all mean by that advice, but it is really bad advice. Funders, especially foundation funders, are not engaging in a game. Funders today are sophisticated and make decisions based on a whole range of considerations. There is neither time nor inclination to say no as a teaser, or as a way to see if the fundraiser comes back with a better offer. By the time a decision is rendered, it reflects all sorts of reviews of data, other information, balancing of requests, and best judgment. It may not be the judgment or decision an organization wants to hear, but it is a real decision.

It is fair, of course, to ask a funder if there is anything to learn or even if there is interest in follow up in the future. A foundation or individual funder may very well choose to give very useful information about the possibility of future connections. [You will notice I am not using the word “relationship” – another word which often misleads those seeking funds; see below for more on that.]

More often than those seeking funds would like to believe, there really isn’t anything more to know beyond a “no.” There might have been so many legitimately compelling proposals that a board or staff did a virtual coin toss. There may have been a number of grants already made to your region, state, city, organization, field had yours been higher in the docket, you might have been chosen, but that region, state, city, organization, field is filled. There may have been a contentious discussion about the proposal just before yours leaving the decision makers in a crabby mood. Who knows? A program officer or a family member may or may not choose to share that with you – it is a level of transparency about which there is not yet consensus in our field.

Moreover, how one asks if there is something more to discuss can make all the difference. I am sure none of you readers would ever do what some actually did when I was heading a foundation – couple of examples: some would not ask for more information but angrily demand to meet directly with the board to plead for a review of their case. It is impossible, they argued, that the board would reject them if they really understood their proposal. That demand surely endeared them to everyone on the funder side. [Not!]

Or, to take another real case: after repeated ‘no’s, the chief development officer of an organization asked to meet with me. He said that he certainly understood that we were not funding what they had asked for but he still wanted to meet. When he came to the office, I repeated what I had told him in writing and verbally: that his organization seemed perfectly fine but way outside the priorities and funding parameters of the foundation. It turned out, after repeating this a dozen times, he explicitly said, “I came here so that I can learn from you how we can get funding from this foundation. Why won’t you help me?”

Now, to be sure, in some cases a funder will indeed encourage further discussion. If so, go for it [asking, of course, how and when the funder recommends doing so.] But, in general, those seeking funds should assume that a funder means what he or she says. And if it is NO, please take our word for it.

2. No #2: When You should say NO.

The funder-grantee relationship is a power imbalance. Despite the current popularity of the word “partner,” most of those are not partnerships at all. As we discussed above, a funder says “yes” or “no” to a request for funds. Only sometimes is there a shared planning process between them that rises to the level of partnership.

Not infrequently, though, a funder’s priorities are not fully aligned with those of an organization. That misalignment might be quite reasonably based on carefully honed priorities and interests of a funder, or simply based on a funder following a fad. Sometimes an organization does many things but a funder is only interested in supporting one. Some funders act as if the grantmaking process is a negotiation – you ask for $X, that request must be inflated so we’ll offer $Y. Sometimes a funder has his/her/its own idea of what an organization should do which doesn’t align with what the organization itself thinks is ideal/a priority/ in its own best interest.

It is at this moment when the balancing begins. If a multi-service organization already serves both early childhood and senior adults, the organization may prefer to receive money for early childhood, but isn’t compromising its values by accepting a grant for senior adults. If it doesn’t already serve senior adults or have a well developed plan to do so, a grant in that area is way off the mark. Just because it is offered doesn’t mean you should say yes; in fact you probably should say no.

If a program or facility or project is really going to cost the $X dollars you asked for, and anything less compromises the program, guarantees a lower quality outcome, or will have an impact on other things you do, say “no.” Funders don’t want to fund failure or mediocrity if they can help it. Make that clear. Just because a funder offers it doesn’t mean you have to accept it. If a lower amount won’t jeopardize the quality of a program, just its scale, it makes sense to accept what is offered and not to begin an unhelpful negotiation. Just make sure that you and the funder have a mutual understanding of the likely outcome when the funds are accepted.

Accepting funds for a facility is a special challenge. So many nonprofit facilities were built over the last 60 years with no deferred maintenance funds, with horrendous long-term results, that it should be a mandate that nothing gets built without accompanying funds for upkeep – or a credible plan for those funds that doesn’t jeopardize the core work of the organization. No funders who think about it want a facility bearing their name to look shoddy 5 years down the road.

Organizations hungry for capital funds do themselves a long-term favor saying no to any major gift which will prove onerous years hence.

Funders want their money to accomplish something, to receive deserved recognition for their funding priorities, and to bask in the success of the organizations they fund. If those organizations are not willing to articulate what will allow them to accomplish something, truly honor the intent of the funder’s funding priority, and to be successful in their efforts, funders will make mistakes, organizations will resent them, and mediocrity will be the result.

The overwhelming majority of funders will welcome this discussion. The worst – and I am not belittling this outcome – is that the funder doesn’t change the priority, condition, or amount. In the short run, it may be a big price to pay to say “no;” in the long run, the “no” will almost certainly strengthen respect for your organization and sharpen its focus to do what you wish to do.

3. The Maybe: Do Relationships Matter?

“It’s all about relationships.” You have heard this one, too, I am sure. And it is sort of true, but … A funding relationship isn’t about having someone buy us a cup of coffee or lunch. It isn’t about getting to know us for the sake of getting to know us. Believe it or not, most funders can afford their own lunch and already have plenty of friends to hang out with. No, a funding relationship starts with shared funding interests. If there are no shared funding interests, move on. Let me repeat that: If there is no shared funding interest, move on. Nothing annoys funders more than those hoping or trying to insinuate themselves into their schedule – for the purpose of cultivating a relationship, with the hope that someday that relationship will yield a gift.

If there is a shared interest, then building a relationship does matter. Then the tricky part: with whom? If a funder is interested in the totality of an organization, he or she may wish to deal directly with the CEO, or if the gift is sufficiently large, the Board Chair. Or a funder with an interest in a particular project or field of interest may wish to develop a relationship with the staff specialist working on that project or in that field of interest. Even if a development professional has been the one to make a successful pitch, it doesn’t mean that a funder is interested in being continually cultivated or managed by the fundraising pro. Or maybe it does. It is these fine tunings that can make or break the “relationship.”

This is especially true after a grant or gift has been made. Often a development pro is charged with being the relationship officer. But if a funder wants the primary relationship to be with a department chair or field expert, the smartest thing the development officer can do is facilitate that connection and get out of the way.

Over the years, I have been rebuked by chief development officers on this. They tell me that it is their job, or that program staff don’t know how to talk to funders, or that I might misunderstand the data as presented by direct service workers who don’t have the full institutional picture. I guess that they perceive that I am not smart enough to know what to listen for or how to understand what people are telling me. Guess what? In those situations there was no relationship – and no continuing funding.

The smartest thing an organization receiving funds can do is to ask what a funder expects, how they want things to move forward, and with whom. If the funder’s desire isn’t reasonable [e.g., a $500 gift to a university doesn’t typically qualify one for board consideration; a $1,000 contribution is not likely to warrant a building naming or a press conference], as stated in #2 above, an organization should say no. But if it is a matter of managing the relationship such as whom to talk to, how often there should be site visits, if there should be deliverables at the end or along the way, the lead should be taken by a funder, and modified, as necessary by the recipient. That is a funding relationship that makes sense.

A word to funder eavesdroppers: This doesn’t exempt those of us on the funder side from good practice in a relationship. In fact, when we conceptualized the NYU Academy 13 years ago, one of the competences identified by the field was good interpersonal relations. Good organizational and funding relationships take two sides. There needs to be appropriate responsiveness on the side of the grantee and appropriate expectation and expression on the side of the funder. A difficult or unreasonable or power-driven funder is likely to get highly filtered reports, carefully scripted interactions, and kept away from staff who would feel intruded upon. It is important to remember that even a very generous gift does not transform us into owners or supervisors, or give us unfettered access to anyone and everyone whenever we want. Nonprofits have a valid interest in drawing appropriate boundaries, and we have an ethical responsibility to be responsible funders in making sure the relationship is healthy and constructive.

At the end of the day, people make relationships and not organizations. If built on appropriate shared interests, openness and mutual understanding of risks, potential, and culture, a funder-grantee relationship can make a tremendous difference – to both.

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.