Hilary Pennington is Vice President of the Ford Foundation's Education, Creativity and Free Expression program. She is an expert on postsecondary education and intergenerational change. In this latest installment in our series of conversations with foundation leaders, Hilary and NFF CEO Antony Bugg-Levine discuss how to improve funder/nonprofit dynamics.
Antony Bugg-Levine: Our latest State of the Sector Survey results continue to show nonprofits reporting discomfort discussing core aspects of their financial state honestly with their funders. Yet we’re also seeing some foundations partner with nonprofits in new ways to overcome common constraints. What worries you, and what excites you, about the ways foundations support nonprofits?
Hilary Pennington: I've been thinking about the perennial way in which foundations starve nonprofits through "project-itis" -- consistently funding them to do particular kinds of projects without paying attention to the organization as a whole, and what it takes for it to be a sustainable and durable organization. It does seem as if there is a beginning of a healthy pushback on this issue, that people are more willing to say that unrestricted does not mean unaccountable, and there are ways to work together.
Many of Ford's particular kinds of grantees, including advocacy organizations and social justice organizations, are always going to be disproportionately dependent on foundations. So the challenge for us is: how do we keep that relationship alive, not on autopilot, both for us and the grantees?
Core support can be critical for building organizations, but it can also create a kind of dependence, and in some cases, an expectation of continued support at the same levels. It may be more useful for a funder and nonprofit to admit to each other, at the beginning, that it will likely not be a "forever" arrangement. As such, a funder has an obligation to help the grantee grow their resources. You have an obligation to advocate for them, introduce them to other funders, and to be an opportunity-spotter for areas of growth and development.
How do you ensure that a grant that is unrestricted is not unaccountable? In my earlier conversation with Ben Cameron of the Doris Duke Foundation, he spoke eloquently about how to achieve that balance in arts organizations. With the social justice organizations you work with, what have you learned in terms of what works and what doesn't work to enable the funder/nonprofit relationship to be one that is empowering and trustful but one that also includes mutual accountability?
Ideally, you establish a relationship of trust so that a grantee can safely say, "we gave you this plan, and we thought were going to be on track for reaching it, but because of these reasons, it is not turning out the way we expected." Sometimes, it is about seizing opportunities. For example, there are nonprofits that are part of the social justice movement that may find there is a moment that happens -- in this case, events in Ferguson and elsewhere -- where the work they do is poised for a breakthrough. So you also want an organization, particularly one where funding is very project-based, to feel safe saying, "we may want to consider a different growth trajectory. If we had an infusion of capital, here is what we would do, and how we would use it to take advantage of this unexpected moment of potential."
One of the only ways you get these kinds of relationships is to invest time. Ideally, you the funder need to be physically in the space of the grantees' organization, not always in your own offices. You have to ask the questions and create a feeling of safety that someone could answer them. You need to ask the leader, "what do you need?" "what is going on?" "what aren't you getting?" and things like that.