All happy grantees are alike: They focus on ideas, interactions, and important details

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Editor’s note: This is the third of six reflections by Ruth Levine, Director of the Global Development and Population Program, before her eight-year term ends. The first post was “Closing the Gap Between Social Movements and Policy Change.” The second was “Strength in Numbers:  Taking a Field-Level View.”

In eight years, I’ve had about 750 meetings with people who want money. I’ve had another 600 or so meetings with people whose organizations already receive support from the Hewlett Foundation and, for the most part, would like to keep that good thing going. On top of those, I’ve had daily conversations with my colleagues here—program officers, program associates, our grants management officer, our communications officer, legal counsel, finance team members, and others—about the joys and frustrations of making grant decisions on behalf of the foundation.

With that much data to work with, clear patterns emerge. I’ve seen what goes well in the interactions between funder and prospective or current grantee, and what goes awry. It’s also pretty easy to figure out how a few tweaks on both sides could go a long way toward more good outcomes and fewer unsatisfying ones.

There are three points where a foundation and a nonprofit can make beautiful music together or hit some false notes: aligning on strategy, maintaining a productive relationship, and making sure the transaction doesn’t waste anyone’s time. Ideas, interactions, and important details. As Tolstoy wrote, “All happy families are alike; each unhappy family is unhappy in its own way.” In happy grantmaking, everything goes right. The rest of the time? Ouch.

What is this “strategic alignment” of which you speak?

Every organization that gives money to charitable causes makes a huge number of choices because needs always exceed grantmaking budgets. We have to figure out to whom, for what, where, how much, and for how long. The primary way the Hewlett Foundation and many of our peers make those decisions is by invoking a “strategy.” A philanthropic strategy articulates what we’re trying to achieve overall, what we think needs to happen in the world to get to the goal, and what set of actions we will take, including grantmaking and activities we ourselves will do. (For a far better description, see Outcome-Focused Philanthropy.)

For its part, every nonprofit organization that needs money from a private foundation to do its work also has choices to make. In particular, the leadership needs to figure out which funder might be inclined toward supporting some or all of the work, and whether the conditions imposed by a potential funder will distort the organization’s work in unacceptable ways.

If what the funder wants to do is consistent with what a nonprofit organization wants to do—bingo! Strategic alignment.

Or at least that’s the theory. Now let me tell you why lack of strategic alignment—or perceived lack of strategic alignment—often gets in the way of a happy outcome.

First, we may not be very good at spelling out and sharing our strategies in ways that permit people in nonprofit organizations to figure out whether and how their work fits or doesn’t. Strategy documents can be overly conceptual, vague, and jargon-laced. We use words that mean something particular to us but can be interpreted in vastly divergent ways by others. “Leverage,” “learning organization,” and “catalytic” come to mind. In addition, as I wrote last week, our field-level vantage point may not make sense from the perspective of an individual organization.

In the Global Development and Population Program, our strategies are written first and foremost to guide our decisions and we share those publicly. But if we want others to understand how their work aligns, we need to keep pushing ourselves to write and communicate in ways that are clear to our external readers, too.

Second, many nonprofit organizations are great at reciting their mission and listing their activities, but have a harder time constructing a clear storyline about the connection between the two. Is that because there is no connection or there’s a strong one that just isn’t well articulated? From a funder perspective, it’s impossible to tell. And if there’s no strategy, there’s no strategic alignment.

Third, the underlying ideas may be well thought through on both sides, but neither the funder nor the prospective grantee may take the time to understand each other’s organizational strategies. I am sure I’ve been guilty of not reading every word of a prospective grantee’s strategic plan. I’m equally sure that lots of people approach us for money who have not taken the time to look at the materials on our website.

But now you say strategic alignment is not enough. We also need a “relationship”?

Let’s say we’re past the “strategic alignment” hurdle. The next element that makes a difference to the ultimate success is the quality of the relationship between the people making the funding decisions and the people receiving support.

This is both the most complicated and the simplest part because the only parameter is the Golden Rule: “do unto others as you would have them do unto you.”

Yes, I realize there is a power differential between those who are making decisions about money and those who need money. Believe me, this is the subject of at least one conversation a day, and as a foundation we spend a lot of time trying to figure out how to wield power lightly. But the reality is that the power dynamic only gets in the way of a mutually respectful, honest relationship between professionals to the extent that they let it. I have observed among my colleagues and experienced myself that it is indeed possible (and a lot of fun) to have relationships with grantees in which we’re all just people working toward the same goals but with different tools, without a whiff of sycophancy or arrogance.

What does it take? Just this, on both sides: Listening. Providing feedback. Answering questions in a timely way. Asking questions in a timely way. Sharing stories of disappointment and success. Asking for and offering help. Telling the truth, with empathy. Giving the benefit of the doubt.

As sure as I am that this can happen, I am equally sure that it often does not, even among people of good will. Making time for relationship-building is a huge challenge. Program staff are often not as responsive and deeply connected to all grantees as they’d like because they’re under a lot of time pressure. Beyond that, however, I’ve observed that some grantseekers seem to see their job as sales rather than co-creation; once they’ve gotten a grant, there’s a tendency to minimize contact to reporting on “deliverables,” rather than engaging in any version of ongoing dialogue. This makes each and every interaction feel transactional—not a great experience for anyone.

The details are important you say? Even the annoying ones?

In the end, we are in the business of moving money from the Hewlett Foundation’s bank account to the bank accounts of nonprofit organizations and justifying those expenditures under Subsection 501(c)(3) of the United States Internal Revenue Code.

Behind that sentence are a host of important details. We have target amounts of money to get out the door every few months. We have restrictions on what that money can be used for, and we have to demonstrate that we’re paying attention to those restrictions. We have to document how much money was spent on what and by whom. These are not our rules and regulations; they are the rules and regulations of the U.S. government. And following them means that we have to pass on some requirements, along with deadlines, to the nonprofit organizations we support.

I’ve been surprised, through all the interactions with grantees and staff members, how many revolve around failing to meet the basic requirements in a timely and complete way—we spend an awful lot of time chasing down organizational paperwork, getting clarifications about the use of funds, or pestering grantees for late reports. It has been especially surprising to me that some of the most challenging organizations to work with from an administrative perspective are large and well-staffed. (For my curmudgeonly treatise on this topic, see “Get Your Reports in on Time”).

From the funder side, we need to keep working on clarity about what’s required by when, and we need to make it easy to comply, through online and other tools. We need to be responsive to the inevitable questions that arise about the arcana of IRS regulations and foundation processes. And we should minimize the amount of new material that we’re asking of grantees.

From the nonprofit side, it’s as simple (or, apparently, as occasionally confounding) as knowing that each check brings with it the administrative responsibility of accounting for the money in a particular way.

Put it all together, what do you get?

Strategic alignment, a constructive relationship, and efficient administration are interlocking gears. To know if there is strategic alignment requires a type of back-and-forth that is the hallmark of a future constructive relationship. For nonprofits looking for funding: We have our ideas; you have your ideas; where do they fit (or not fit) together? For current grantees: Through conversations and written reports, keep us updated on how your thinking is evolving, because we will learn from and potentially change our perspective as you do.

Similarly, the quality of the relationship and the transactions can be mutually reinforcing. To have a constructive relationship requires that the limited time we have together is not taken up begging for an overdue report. Even more importantly, it is in those required reports that grantees have the opportunity to tell their story—the story of how their work continues to lead to our shared aims, and how their thinking is being updated with experience.

I’ve noticed that these gears are most likely to get jammed when the work is distributed across fundraising, programmatic, and administrative departments without adequate coordination. Things work best when there’s a central point of contact with the foundation who deeply knows the substance of what we’re supporting or could support and also cares about those niggly details.

In each of those 1,350-plus meetings since 2011, I’ve had the pleasure of learning something new. Mostly, I’ve learned about remarkable ways in which nonprofit organizations are truly making the world a better place. But, I’ve also learned that we have work to do to build better bridges across the funding divide.

My successor will no doubt have at least as many occasions to speak with prospective and current grantees, as well as colleagues here at the Hewlett Foundation, and will be just as eager to learn. With the benefit of the advice above, I’m hoping that the next program director will be learning that everyone in the room is amazingly and unfailingly strategic, engaged, and well organized.

Read the fourth reflection: Driving change when we’re Menlo Parked >>

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