Some Truths about Grantmaking:
It is sometimes hard to speak the truth about grantmaking. As one foundation executive put it: “Since I joined the foundation world, I haven’t had a bad idea or a bad lunch.” Foundations have power and prestige. People are sometimes afraid to be candid. There is a real risk that foundation initiatives suffer the “emperor has no clothes” syndrome. The following section is deliberately controversial. The intent is to put things out in a stark way and then see what constructive things follow from that. It is OK to disagree. Please don’t be mad and cut my grant.
So, here are some truths about grantmaking:
1. Giving money away responsibly is a surprisingly hard thing to do. People think it’s easy. But the process is so easily gamed. And the tax code pressures to spend a minimum percent of endowment puts pressure on spending money too soon and too fast. It should not be surprising that it is often not done well.
2. The normal process of grantmaking involves (1) spending several years planning an “initiative,” (2) inviting people to lie about what they can accomplish, (3) believing them, and giving them money, and (4) being disappointed with the results.
3. Foundations want to buy change, and just as importantly, they want to buy credit for change.1 Credit is a tricky business, because there are many factors affecting change in states, counties cities and communities, and foundation contributions are just one. There was a community I worked with where we were discussing some new initiative, and the potential effects this work might have on the teen pregnancy rate. Several people present said that we could not take any credit for teen pregnancy reduction because all of that credit had been used to get a grant from another foundation.
4. Grantees will say anything to get a grant. Grantees will say anything to keep a grant. Foundations actually believe them (or act like they do) because they want to believe them and need to believe them. There is actually a strange kind of symbiotic relationship between foundations and their grantees. They both need each other for different reasons. And sometimes they will dance together so that neither looks bad.
5. Most initiatives and pilots fail, some dramatically, most slowly. I have no data for this. I just think it’s true. There are many reasons why this might be true. Partly it is the time limits on foundation support. Foundations usually do not see themselves as sources of on- going support for services. When the 3 or 5 years is up, grantees are expected to have other forms of support, or go out of business. Mostly, grantees don’t think about this until it is too late. Then there is a mad dash to provide assistance around “sustainability.” “Sustainability” is a defeatist word. It signals that a grantee has staked out some territory and now must hang on for dear life to sustain it. Grantees often become just another in the long list of non-profits competing for donations. Instead, a proactive approach would think about sustaining and growing the work from the beginning. If it is a good idea, it should become part of the way people do business, it should attract support because it is useful, and it should grow over time.
6. Foundations preach collaboration but don’t practice it well. Foundations are sometimes/often in competition with each other over ideas and territory. This goes back to the credit problem above. It is important for foundations to establish an identity, and their grantmaking agenda is their identity. If some other foundation is doing the same stuff, how are you and they different? It sometimes happens that foundations identify common interests, pool their resources and coordinate their grantmaking strategies. More often they function as lone rangers.
7. Cause and effect is hard to show. This is another credit issue. But it has its roots in the complexity of the work. We have been spoiled by the simple control group research design, and much of the time it can’t be done, won’t work or isn’t appropriate. We know from chaos and complexity theory that traditional views of cause and effect don’t apply to complex systems. Communities are complex systems and cause and effect relationships between grant funded activities and change may be impossible to determine. We now know that single simple strategies don’t work. We need complex multipart strategies to effect the well-being of children families or anyone else at the population level. We therefore need different ways to explain and evaluate this work. Foundations have been slow to move to new approaches to evaluating how complex strategies act on complex systems.
8. Money is desperately needed; and money can be poison. We have all seen the food fights which occur when a stack of new money is put in the middle of the community table. Old friends can become bitter enemies. We need to be more thoughtful about how to give money, when and to whom. We need a theory of grantmaking to go with our theories of change.