Last week I explored some of the concerns grantmakers have when assessing requests for funding. My comments were prompted by remarks made by Wally Pinkard and Tim Armbruster, both foundation directors, during a recent panel presentation for Catholic Charities.
Private foundations on the cutting edge of philanthropy typically look for ways their gifts can truly make a difference to an organization in carrying out a mission that is dear to the hearts of the foundation directors.
They also seek to be a catalyst, rather than the sole source of support for an organization. They look for a reasonable exit strategy in their relationship with a charity, so that the organization does not become overly dependent or less empowered by their gift.
What are some other critical concerns that private foundations address when making funding decisions?
In nearly every foundation I know, directors and program officers are insisting on accountability measures. They want reasonable assurances that their funding will be applied as outlined in the grant request and the results of that effort measured for effectiveness.
t's not that private foundations want guaranteed results. Some, in fact, look for innovative, risk-taking approaches to difficult problems.
It's just that, in the scheme of things, foundations actually supply very little of the operating revenues to nonprofits. Competition is intense for those limited resources. So, foundation decision-makers want quantifiable results to justify their investments. In some cases, I know of grants that have been increased unilaterally by the foundation or corporate giving program to provide technical assistance to grantees that would enable them to offer more accountability.
Another issue dear to the hearts of foundations is leadership. Does the organization have both the paid and volunteer leadership necessary to support the current efforts and to position them for a solid future? In far, far too many cases such leadership is sorely lacking. Worse yet, there is no clear plan for bringing on that leadership.
Next, does the charity have a strong financial plan, endorsed by the board, which indicates a bright future? Or, does the charity reflect an air of desperation, literally begging for money to keep from closing its doors? Fund granters are not very fond of debt financing or short-term fixes that simply delay the inevitable. If an organization wants solid support, it must support that request with an equally solid financial plan.
What constitutes a solid financial plan? Well, for one, it makes assumptions about its immediate environment that are realistic. It seeks to diversify its revenue stream. And, most of all, it reflects a board commitment to seeing that the needed funds are raised. Lost on too many board members is the notion that when a board approves a budget, it is committing to see that the revenue goals are met.
Next, and eloquently stated by panelist Wally Pinkard at the Catholic Charities seminar, organizations should offer an institutional approach to the problem for which they are seeking funding. In past columns I have referred to this as a systems approach. That requires agencies to get out from between the trees and take a forest-eye view during the planning stages.
Systems development means looking at a problem, uncovering contributing causes, then seeking out strategic partners. Rather than duplicating strengths, each player brings its own strengths to the table.
Institutional approaches also seek internal consistencies, matching programs with delivery and billing systems, for example. It matches evaluation with public relations and marketing.
This is the time of year when the majority of foundations are in the midst of intense grantmaking. Nonprofits would do well to heed the advice of thoughtful fund granters in designing programs aimed at private foundations.
Les Picker is a philanthropy consultant. Write to him at The Brokerage, 34 Market Place, Suite 331, Baltimore, Md. 21202; (410) 783-5100