What do foundations do when something goes wrong or goes nowhere? - Exponent Philanthropy

What do foundations do when something goes wrong or goes nowhere?

This question and its responses were posted to our Member Discussion Community, our online discussion lists where members are encouraged to ask questions, share successes, and respond to other members with tips and good practices. We are grateful for the members who share with one another on our discussion lists, because many questions are best answered through members’ firsthand experience.

When something goes wrong or is challenging at a foundation (e.g., a grant or initiative fails to make impact, or a convening or a communication goes nowhere)—either in the normal course of business or because you took a risk with something new or bold—what tends to happen?

  • Are there formal consequences?
  • Is the board, chair, or donor unhappy?
  • Is the trial and error a learning opportunity?
  • Did the “failure” open other doors or spark new ideas?
  • Nothing happens?
  • Other?

Response #1

The first time this happened to me one of my board members kindly told me and the board, “The secret to life is to make new mistakes!” She is a successful business, arts, and philanthropic leader and one of the wisest people I know. Be bold folks!

Response #2

We have certainly made mistakes and have learned many lessons. We believe this is normal for entrepreneurial foundations awarding large grants. Frequently agencies see dollars without recognizing the purpose of the grant.

We discuss mistakes among staff and with the board. As a result:

  • We try to ascertain if prospective grantees accept our mission.
  • We have tightened our acceptance letters which serve as contracts.
  • We have frequent site visits.
  • We have found necessary major factors for success among grantees.
  • We require three reports a year which trustees read, discuss and give feedback to grantees.
  • We hold a daylong grantee conference and a half-day grantee training each year.

The partnership relationship between foundation and grantee is considered a boon by some grantees. Agencies that don’t find this type of relationship generally don’t apply or leave after one year.

Response #3

Our foundation has its share of lessons learned, and we use those experiences to fuel discussions around future strategic priorities. We’ve handled those experiences differently, depending on the circumstances:

  • In the case of one program, the grants were made to scale support to additional participants; the increased participation did not materialize. The decision to end this type of grant resulted in an internal restructuring and the elimination of several positions at our foundation.
  • In another program, we were very clear about being a seed funder and assisted with development strategy for our grantees. As ongoing sustainability became an issue with some of them, we offered short-term subsidies after the seed funding ran out. Ultimately, we let the program cycle at these locations as it became clear new leadership did not have the same level of commitment to the program.
  • The failure of our signature program at several locations prompted a good deal of reflection and an adjustment of what “national impact” looks like for us. We are working with a different type of organization to achieve our goals.

Our board members (family who are very engaged) certainly have been upset/emotional and/or disappointed on these occasions. We let the venting happen (sometimes over several meetings) and then look at facts and determine if there were things we could have done differently or can improve moving forward to prevent a similar result.

We work hard at learning from “mistakes.” Many of the issues have been related to internal politics, personalities, and organizational climate at our grantee organizations. We have been fortunate that those served by the program have benefited and that the program results are successful, despite messy personal and organizational dynamics.

Response #4

We have also had our share of disappointments. They are all ‘learning opportunities’ so we choose to look at how we can improve our processes going forward to limit these situations occurring in the future.

We have made alterations/adjustments such as:

  • Tightening our contracts to include clauses around notification regarding staff changes (risk factor to the success of any program);
  • Increased frequency of check-ins with partners to maintain communication momentum (so we are very quickly ‘up to speed’ if there are problems);
  • Regularly reinforcing our commitment to honesty and transparency (so grantees know we expect the same from them during the partnership);
  • Periodic expenditure updates so there can be no surprises at the end;
  • Refining our report template to more accurately capture learnings; and
  • Discussing program evaluation from Day One! We learned that one the hard way…

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