Philanthropy has had a history of being notoriously opaque and inaccessible to organizations seeking funding. In my years as a grantseeker and nonprofit consultant, I’ve waded through dozens of ambiguous foundation websites that make it impossible to know how to get even a foot in the door to be considered for funding.
And that’s just the tip of the iceberg when it comes to our sector’s lack of transparency.
Even once a nonprofit makes it through the seemingly impenetrable barriers of accessing philanthropic dollars, they are often faced with a whole new set of challenges. Long waiting periods for grant approvals, uncertainty about grant renewals, hard-to-reach program officers, and sudden shifts in grantmaking strategy put nonprofits in a constant guessing game. Not only does this lack of transparency exacerbate the already uneven power dynamic that exists between funders and nonprofits, but it also inhibits the possibility of a relationship rooted in trust and mutual accountability.
However, when funders proactively model transparency, power awareness, and vulnerability, it can be transformative. By setting a tone of honesty and openness, funders create the conditions for a different type of relationship, where everyone’s time and contributions are valued. And more importantly, nonprofits feel safe enough to share openly about what is really happening in their organizations and in their work.
These six steps can foster a more intentional tone of transparency and help you create better relationships with your grantees.
1. Be up front about what you do and don’t fund.
Ambiguous or unclear funding priorities can make it difficult for organizations to know whether or not they are a candidate for funding. Being clear about your funding criteria prevents ineligible grantseekers from wasting their time, and also saves foundation staff from having to wade through unnecessary proposals. Being transparent about your priorities also means being clear about your submission process, grant deadlines, and decision-making criteria. If you don’t have the power to determine what’s on your foundation’s website, do what you can to communicate these guidelines and processes to prospective grantees in your verbal and email communication. It will save you precious time in the long run.
2. Don’t lead anyone on.
Usually, if a funder invites a conversation with a nonprofit leader, chances are that leader is going into the conversation wondering about – or hoping for – prospective funding. Be aware of the power dynamic in this context, and be upfront if the possibility of funding is (or isn’t) on the table. If the answer is no, be swift in letting the organization know rather than keeping them guessing. Even though no one likes rejection, it is far worse to be rejected after months of being strung along. Being upfront in this way will save you from having even more awkward conversations down the road.
3. Be accessible.
For many nonprofits, especially BIPOC-led and grassroots organizations that have historically had less access to philanthropic dollars, foundations can seem like a black box. Include contact information on your website or offer other ways prospective grantees can get in touch, such as office hours or virtual information sessions. If your organization has a policy of not publishing contact information, advocate for including an option on your website that offers a way for interested and eligible organizations to get their work on your radar. You may come across a great organization that you didn’t know about, and it will help improve the perception of your foundation among prospective grantees.
4. Acknowledge the source of money.
Funders rarely name the source of their organization’s wealth, often making money the big elephant in the room. Naming the source of money is a powerful way to demonstrate openness and transparency, even if it means confronting a history of extractive labor. Showing up openly and vulnerably in this way can help foster candid, honest conversations with grantees in the future.
5. Admit your mistakes and failures.
We’re all human, and making mistakes and learning from failure is part of all of our work. This may mean being honest about your organization’s racial equity journey and acknowledging areas where you need to continue to improve and grow. This can also include sharing your face plant moments when your assumptions have been challenged. Modeling this type of honesty can help make nonprofits feel comfortable sharing their own missteps and learnings. When you set the tone of transparency about failure, nonprofits feel safer sharing their own missteps and learnings about their work, which in turn allows you to gain a clearer picture of the realities your nonprofit partners are facing.
6. Keep partners informed about shifts that may affect their funding.
According to the Open Road Alliance, funder-created obstacles make up 46 percent of the reasons why nonprofits are unable to achieve their intended impact. Among these obstacles are changes in funder strategy, delayed disbursements, and changes in grant cycles. This is why it is critically important for funders to be upfront about anything happening internally that may directly impact grantee partners’ ability to do their work. Keeping grantee partners informed – and giving them a runway to plan ahead – helps maintain the integrity of the relationship while also preventing irrevocable harm.
Transparency Builds Better Funder-Grantee Relationships
Ultimately, being intentional about transparency with grantee partners creates the conditions for more honest funder-grantee relationships. This translates to a better understanding of grantees, their work, and their challenges. It also offers insight that can help funders be more strategic and intentional in their grantmaking. As you reexamine your foundation’s transparency practices, consider for yourself, is our current approach helping – or harming – our ability to nurture relationships of trust and mutual accountability with our partners?
To explore these ideas further, register for our webinar, Transparency as a Grantmaking Strategy to Build Trust and Mutual Accountability, where I’ll be in conversation with grantmakers across the sector about practical ways to embrace transparency in philanthropy.