Too often in America, as people achieve success, they seem to think they need to listen less to others around them. That’s why we hear creeping bombasticism in politics, religion, business, and the world where we work: big philanthropy.
Indeed, both elite, old-line philanthropy, like our institution, the Ford Foundation, and the new donors who made their fortunes in high tech and finance suffer from the same malady: talking to peers in an echo chamber of ideas and theories about how best to put charitable donations to work to solve big problems. These conversations may or may not be grounded in the realities faced by the people and organizations we are trying to help. As a result, grants may be construed in ways that ultimately fail to meet the goals of the nonprofit and the donor.
How can more of us in philanthropy burst this bubble and tune our ears to the real needs of those we seek to serve?
One way is to do more listening to our grantees — ask them how they are doing, including asking about their financial needs and the success and obstacles they are facing in carrying out their programs. Another is to listen to ultimate consumers of our grantees’ services — the people we and grantees both seek to help.
In both cases, our will to listen also requires tools and capacity, plus a trusted relationship among all we ask to speak out candidly.
At Ford, we sought to do more listening by starting a deliberate series of one-on-one conversations with grantees and creating a feeling of safety so that they felt comfortable being candid and honest with us. We asked them things like, “What do you really need from us?” “What haven’t you been getting?” “What can we do better?” And so on.
At the same time, we asked the Bridgespan Group to conduct an independent analysis of our grant-making practices. We were shocked to find that more than half of our grantees suffered from frequent or chronic budget deficits — defined as at least two of the past five years. And 40 percent had fewer than three months of reserves (specifically, liquid unrestricted net assets) in the bank to cushion financial shortfalls. A couple dozen organizations showed no reserves — making them technically insolvent.
We also found that many nonprofits lacked critical capabilities like talent management, fundraising, and program evaluation because of their tight financial resources.
As we listened more closely to our grantees, we learned that we were exacerbating these problems by our approach to grant making. For example, where we had multiyear relationships, we were still funding one year and one project at a time, creating short runways for our grantees to plan.
Explaining how easy it is for nonprofits to slip into financial fragility, Marcia Smith, president and co-founder of grantee Firelight Media, which works to lift up films made by and about diverse people, said: “It’s very rare to have a funder that is willing to partner with an organization rather than either dictate to [it] ... or to narrowly prescribe their funding to support a single program or effort.”
This hampers a nonprofit’s ability to plan for the long term. “It’s just not practical from an organizational standpoint to be able to look down the road if you have to keep doing that shuffle every year and hoping that it’s going to work out,” said Smith.
Turns out funding for indirect costs, or overhead, like training, financial systems, communications, and the like, is a deeply felt need of most nonprofits, but it’s not sexy. Therefore, it’s unlikely to captivate a supersuccessful entrepreneur-cum-billionaire who wants to, say, save public health. The billionaire will only hear about it if she asks and listens. And if she does, what she might hear is that saving public health actually requires big dollar investments in the organizations that provide advocacy, research, and direct service — including flexibility for them to adjust their strategies over time as well as funding to strengthen their structures, systems, and people.
To make this type of support part and parcel of our grant making, Ford has created a program called Build, which offers five-year grants that provide both operating dollars and institutional strengthening support, an approach we hope others will adopt. With this kind of intentional, focused support, nonprofits can invest in critical capacities in ways they have never done before. Capacities like what Sarah Johnson, director of Local Progress, a national network of progressive government officials, calls “unsexy infrastructural work.”
“We have a bigger staff, so we need tools that work better,” said Johnson. “We updated our CRM [database] and our website. We’re no longer three people looking at an Excel spreadsheet and making a plan together. We have tried to build infrastructure at pace with growth, and I’m proud of that.”
Nancy Northup, CEO of the Center for Reproductive Rights, which also receives Build support, adds, “Even though there’s an impulse to just do program, program, program, having that institutional support is what’s going to allow our staff and the partners that we work with to really flourish.”
Beyond listening and responding to what grantees say, philanthropy needs to listen to the ultimate beneficiaries of nonprofit services and advocacy. And, again, they need to act on what they hear and keep the conversation going with those they seek to help.
Most entrepreneurs wouldn’t dream of launching a service or product without asking potential customers their preferences and responding to what they learn, yet nonprofit leaders too often do. It’s not for lack of wanting feedback but rather because nonprofits don’t have the resources, tools, and staffing to collect this data in a meaningful and timely manner. Indeed, a recent survey conducted by the Stanford Social Innovation Review of 2,000 nonprofit leaders found that more than two-thirds identified “limited staff time/resources” as the main reason they did not collect feedback on their programs and services.
Addressing this dire need is the explicit goal of the Fund for Shared Insight, a donor collaborative that aims to find ways to make listening to clients a feasible measurement norm in the nonprofit world. Today, nearly 100 grant makers and more than 200 nonprofits are advancing this movement, and 80 percent say they have made changes to their services based on feedback from clients and beneficiaries.
Take for example, the Center for Employment Opportunities, which helps people leaving prison find jobs. Through a Fund for Shared Insight grant, it now offers its clients four approaches to providing feedback, through text survey, focus groups, one-to-one counseling, and anonymous input they can tap into tablets in each of the center’s 23 locations.
Feedback from one client, Shannon Revels, prompted the center to put information on renewing drivers licenses into its waiting room.
“It’s an important piece of getting your life back together,” said Revels. Feedback from another client, Betty McKay, led to streamlining next-day sign-ups for temporary job crews in ways that didn’t require clients to multitask while on interviews for permanent jobs. “They made the changes within a week,” said McKay.
The fruits of listening to both grantees and beneficiaries are ripe with insight. Longstanding foundations such as Ford, and those new to philanthropy who want to make a difference, should eschew the echo chamber and instead listen to the people we want to help. More important, we need to take what we hear and ensure that our grant-making priorities reflect what grant seekers and their clients really need.
Hillary Pennington is executive vice president for program at the Ford Foundation, and Kathy Reich is director of Ford’s Build program and co-chair of the Fund for Shared Insight.
