Giving Compass' Take:
- Matthew Mannix and Charlotte Lamb share advice for funders who need to end grantmaking relationships but do not want to cause excessive stress to grantees.
- Are you approaching your funding relationships with power dynamics in mind? How can you better serve nonprofit organizations throughout your giving process?
- Read about a case against grant applications to decide funding.
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This blog provides three tips for funders thinking about bringing a funding relationship to a close, based on our personal experience advising The Stone Family Foundation. We hope these tips can help other funders rethink their funding practices, so that we can build a better funding ecosystem following the Covid-19 pandemic.
Tip 1: Understand the organisation’s situation and needs
Whenever you are thinking about ending a funding relationship with a grantee, it’s essential to ask questions about how the loss of your funding might affect the organisation and the challenges it faces. This will enable you to better understand the potential negative impact that choosing not to renew your funding may have and also help you to support your grantee to mitigate risks.
The end of a funding stream can force a charity into making difficult choices and significantly alter its plans. It might leave it having to think about ending some of its programmes and partnerships, or downsizing its core function to remain sustainable. It might mean the organisation has to put significant resources into seeking funding and partnerships elsewhere.
Tip 2: Decide if now is the right time to stop funding an organisation and consider providing it with an exit grant
Based on your attempts to understand how the loss of your funding might impact your grantee and how this might interact with the other challenges they are facing, you should have a good idea about whether now is really the right time to not provide the organisation with a new grant.
If the organisation is in a good position to face the future without you, and you think that your money would be better spent elsewhere, then you can feel comfortable that ending your relationship with them is the right thing to do. However, if the grantee faces challenges that the loss of your funding would compound, then you should consider providing the organisation with an exit grant. These are short-term grants designed specifically to help the organisation mitigate the potential negative impacts of your funding coming to an end.
Tip 3: Throughout, communication is important
Throughout the process of deciding whether to stop funding one of your grantees, it’s critical to communicate with the organisation effectively.
Read the full article about ending funding relationships by Matthew Mannix and Charlotte Lamb at NPC.