Things are going just great for your nonprofit. You’ve painstakingly constructed a stable group of foundations that is providing a steady stream of grants to your organization, program officers like you and invite you to their convenings, and you’ve achieved that much-desired goal of having a diversified funding base.
Then comes the press release: “Mary Doe, president of the Acme Foundation in Anywhere, USA, has announced that she will retire after twenty years of service. The foundation’s board has contracted the services of Russell Reynolds/Spencer Stuart/Heidrich & Struggles/Issacson Miller to conduct a national search.” The Acme Foundation is your main funder and the future is in doubt. The headhunters call you to inquire about what qualities the foundation should be looking for in their next leader, and you have to stifle the urge to scream, “Just find somebody who won’t feel s/he needs to change everything and screw it up!”
Then the first symptoms appear. Big-name consulting firms start lining up at the foundation’s door. Foundation messages include phrases like “no new commitments will be considered while the foundation undergoes a strategic review.” Your program officer is unable to commit to your proposal. It’s difficult to get a meeting with someone at the foundation who can tell you what’s going on. After a year or more, a letter from the president explaining how the foundation’s new priorities will further its mission appears on the foundation’s Web site. Eventually, you learn that the “urban poverty” program under which you’ve been funded is being phased out in favor of a new “innovation economy” initiative.
As a grantseeker, you don’t have to remain powerless on the sidelines during foundation transitions. There are things you should know and can do that will help you and your organization weather the storm.
Take heart, the odds are in your favor
If you are already a grantee of the foundation, there’s a good chance you will remain one. Between 2008 and 2010, some 1.1 million grants tracked in Foundation Directory Online went to 128,000 recipients. In other words, the number of new organizations entering the funding portfolio of a foundation is far less than the number of grantees who are renewed year after year. Foundations are more faithful than you may think.
Give it your best shot
The above notwithstanding, if you are not currently a grantee of the foundation, foundation transitions are a great time to lob a proposal into the process. It just might be that your ideas align with its new direction or provide the spark that helps the foundation find one. Even if you can’t submit a proposal, write a blog piece or share your ideas with a foundation consultant or insider – anything that might get your insights noticed at a time when things are in flux.
Remember, the foundation is still making grants
The kinds of form letters and statements foundations crank out during foundation transitions can sometimes give the impression that all they are doing is reflecting and planning. Not true. Regardless of how much a foundation is refreshing, revisioning, or renewing, the IRS still requires that it pay out 5 percent of its assets or be hit with a higher excise tax. Organizations are still getting grants; it might as well be yours.
Ask who your contact at the foundation is
It’s amazing how many foundations drop the ball on this one during foundation transitions. Ensuring that grantees know who their contact is at the foundation is a basic tenet of grants administration. But with the inward focus and many moving parts that typically accompany foundation transitions, grantees sometimes get left in the dark. Asking who your contact will be during a transition conveys an impression of good management while reminding the foundation that you exist.
Be careful about praising the past
If you find yourself in a meeting or at a reception with a new president or program officer, don’t go on and on about how great the foundation was in the past. Especially in the early years after a transition, s/he may feel the need to break with the past so as to focus on creating a new future for the organization. Lest your remarks be interpreted as a critique of the new direction, you are better off listening and engaging about the future than waxing nostalgic.
Think like a chameleon
Very few foundations ever make a radical break with their past – donor intent, mission, history, boards, and relationships all work against it. Transitions are more like a variation on a theme. So your organization needs to act a bit like a chameleon in adapting to the new direction. There’s nothing wrong with this. A chameleon does not stop being a chameleon because it adapts to a new environment; it survives. Besides, it might be that the new priorities and programs articulated by the foundation point to the kind of re-think you should be doing in your own organization.
Foundation transitions are seldom seamless affairs. Incoming presidents, more often than not, are replacing an incumbent that has been there for a decade or more. Typically, they must navigate a range of time-honored practices and figure out a way to unlock the knowledge in the heads of existing staff, family members, and/or trustees. Getting the information needed to run the ship and chart a new course is challenging and time-consuming. Moreover, because foundations are free from market pressures and insulated by endowments, foundation leaders just don’t have a whole lot of levers to encourage staff to work in different ways. As a result, transitions are often drawn out and anxiety-provoking affairs for grantees. Take heart. While you can’t control what happens inside a foundation, as a grantseeker you have more power than you think.
Brad Smith is the president of the Foundation Center. Taproot Foundation and the Foundation Center recently launched a partnership that seeks to expand knowledge-sharing resources and support for the nonprofit sector. This is the second in a series of five blogs in which Brad explores some of the most pressing topics in the field, including fundraising, innovation, data-driven decision making, and the state of philanthropy today. This blog first appeared on Philanthropy News Digest’s PhilanTopic blog. Philanthropy News Digest (PND) and PhilanTopic are services of the Foundation Center.
