This week, I read the Road Block Analysis Report by the Open Road Alliance that shows that the biggest barrier nonprofits face is…our very own funders. In fact, according to the executive summary:

Funder-Created Obstacles makeup 46% of the roadblock dataset and include specific obstacles such as a Delay of Disbursement, a Change in Funder Strategy, and Funder Policy Inflexibility.

It’s nice to get some empirical evidence that we nonprofits are not exaggerating. We need to acknowledge that this is a serious issue, that funder behavior is hurting nonprofit work and also driving effective leaders out of the sector.

For this post, though, I want to highlight one particular funder practice that is extremely harmful. This is when a nonprofit is undergoing a leadership transition, and funders freak out and go “Eeeeeek! They’re going through a time of turmoil! We don’t know if they’ll make it out OK. So let’s pull back funding, or not start funding them just yet. We’ll wait and see. Once they’re stable, we’ll re-engage!”

Instead of engaging in the frustrating and destructive Wait-And-See death spiral when a grantee or prospective grantee is going through a transition, please do these things:

  • Examine the past and potential effectiveness of the nonprofit
  • Examine its role in the community
  • Assess its board and staff’s commitment
  • Remind yourself that you fund missions, not individuals
  • Double down
  • Team up with capacity builders and other funders

Read the full article about funders for nonprofits by Vu Le at Nonprofit AF.