Last year put trust-based philanthropy to the test. Facing crises, funders and nonprofits have learned to pivot responsively and effectively. Thanks to a decision six years ago, some organizations have been farther ahead on the learning curve — and they’ve learned valuable lessons for grantmakers and grantees alike.
In 2014, the S.D. Bechtel, Jr. Foundation made a six-year commitment to elevating character development through national youth development organizations. The Foundation funded a consortium of 13 grantees and gathered members periodically to talk about what they had learned, what was working, and what was not. These conversations frequently did not include Foundation staff, deliberately creating space for the grantees to lead their own learning.
Crucially, the Foundation supported many approaches across grantees and within each grant. Rather than expect each organization to work the same way or toward the same outcomes, Foundation staff spent time getting to know them and trusted leadership to know how best to elevate character development. When an approach proved less promising, rather than express disappointment or withhold payments, the funder encouraged grantees to share lessons with each other. These conversations happened without defensiveness or competitiveness because funding was already committed. Organizations could then take better-informed risks, avoid repeating mistakes, and try new approaches.
The result was a true community of practice, based on a growing set of professional friendships that led to powerful results. What started as a means of stewarding the Foundation’s funding became a dynamic network.
And, in this annus horribilis, this group of partners became unexpected resources for each other. Rather than hold ideas close to position themselves for funding, its members built on each other’s efforts, providing stronger services and more effective engagement — as well as a richer return on the initial investment — in circumstances that no one could have anticipated.
These outcomes demonstrate the value of partnerships based in transparency, flexibility, and trust, and aimed at genuine progress rather than attainment of artificial targets.
Traditional philanthropy assumes grantees will make straight-line progress toward a limited set of targets within a tightly constrained timeframe. Too many of us have seen what often happens under these circumstances. For fear of a funder’s displeasure, grantees polish disappointing results instead of explaining what they have learned, or rush to an assumed finish line on the calendar rather than a more organic endpoint.
Instead, funders have considerable power to manage their investments when they create real trust, a genuine working relationship, and a network of true alliances. Five ways to foster such engagement:
- Prioritize general agreed-upon outcomes over linear progress. Science is rife with examples of researchers who set out to learn one thing but discovered a different, more valuable result. Nonprofits function similarly. Funders don’t need to give grantees carte blanche, but if they define outcomes widely — with less concern for hitting every mark — there’s real room for innovation.
- Trust partners to be their best institutional selves. Funders and grantees must get to know each other, commit to their mutual values and interests, and create real relationships between leaders, so bumps in the road are seen as part of the process. As pandemic responses have shown, sometimes sticking to the plan isn’t optimal. Trusting agencies to do what’s best for their constituencies may lead to more meaningful results.
- Make a multiyear commitment with flexible check-ins. One-off projects tied to arbitrary milestones (a fiscal year, or board cycle) can constrain workflows in unhelpful ways. Given a funding commitment, with the invitation to touch base as the work itself dictates, the grantee can test needs or engage the funder more effectively. A commitment removes the dynamic in which the nonprofit focuses more on securing a next year of funding than on learning.
- Be willing to propose and fund adjacent work. Sometimes the most rewarding journey is not the most direct one. Projects take zigs and zags. When funders resist providing additional funds to explore directions related to an initial grant, grantees may miss opportunities to realize larger successes with minimal investments at the margin. And when grantees point out such opportunities, they may actually be leveraging the return on the initial investment.
- Launch and nurture genuine communities of practice. Particularly in challenging economic times, with great demands and constrained resources, funders and nonprofits alike become more tightly focused on their own objectives. Very few organizations have the structure or bandwidth to collaborate closely with others addressing the same issues; the time and space to do this is a tremendous gift that can dramatically amplify outcomes. In fact, the relationships may be the longest-lasting outcome of the work.
Funders who want to manage investments wisely may find these approaches to monitoring outcomes both easier on everyone and more effective. The result is a win-win for all partners, and often more lasting, stronger outcomes as well.
Stephanie J. Hull, Ph.D., is president and CEO of Girls Inc., a national organization that inspires all girls to be strong, smart and bold through direct service and advocacy.
Rebecca Goldberg is senior program officer for the Bechtel Foundation and focuses on character development with national youth development organizations.