What Are We Thinking?

I was reminded recently of the “fine line” that we walk in philanthropy as it pertains to expectations of grantees. Also, we sometimes send mixed messages to those seeking funds. Let me explain. Two questions that most funders ask potential grantees are “what is your sustainability plan?” and “how do you intend to fund this project/program beyond this grant?” In isolation, these questions are relevant and fair. Foundation’s don’t want to fund something that is going to have a short life span and they don’t want to be “on the hook” for a long-term financial commitment to organizations they fund, thus the significance of these questions.

But what are the results in the relationship between grantee and funder if the grantee does or does not reach sustainability as the funder expects? Good question. Does the funder let the program die because they are unwilling to put up additional funding to get a program to sustainability even if it takes longer than expected? Another good question: do they walk away from a grantee that is a high achiever, reaches success with the grant funds and is sustained, but needs additional funding to take the program further?
Here is what I think? Funders, in large part, are fundamentally unrealistic about their expectations around sustainability. That is not to say that the questions should not be asked, but the reality is that nine times out of ten an organization is not going to be able to answer that question with certainty that they will or will not be able to sustain themselves following the grant award period. There are just too many variables that make the answers to the questions unachievable unless there is a funding stream that is ongoing, which is not the case for most nonprofits. Individual and corporate donors come and go, grant funding has a short life, special events take time and energy and wills and bequests happen infrequently.

Yes, foundations must be good stewards of their resources and they must operate within certain guidelines to be fair and accountable. But arbitrary time limits for grant funding and high expectations for sustainability is not helping, but rather hurting the very nonprofits that funders intend to help. So, if funders truly want to get the biggest bang for their buck then they need to consider some flexibility in decision-making and more realistic expectations around results, particularly as it applies to sustainability. During this economy, more nonprofits are fighting to survive than ever before. We, in the foundation business are investors; investors during good times and bad times. If we want a realistic return on that investment then we need to employ some alternative investment strategies. These include: a longer commitment for funding, more flexibility for those who can’t promise sustainability and let’s not punish those who have sustained themselves either.

The goal for nonprofits is to succeed with their mission and survive this difficult economy. We, in philanthropy, should not be obstacles toward achieving those goals but a catalyst for reaching those goals. This starts with a little self reflection about our processes and procedures, expectations and, yes, the questions we ask. If we can do that, then more realistic outcomes can be attained and our relationship with grantees will be stronger because they will know that we understand them better.


Tom Keith is the president of the Sisters of Charity Foundation of South Carolina