There are real-world consequences when difficult conversations are avoided between grantees and funders. GlobalGiving’s Chase Williams shares three tips you can use to establish a healthier relationship with your nonprofit’s funders.
Aversion to challenging conversations is our default mode—and it’s universal across many types of relationships. We avoid difficult conversations precisely because they are difficult. They can stir up a mixture of strong emotions and are perceived as risky.
Conversations between a funder and a grantee can certainly meet this criteria and can be even more challenging than others. Jennifer Choi at the National Committee for Responsive Philanthropy explains, “It’s very difficult for funders and grantees to be honest and lean into tough conversations about solving complex problems when a pronounced power dynamic exists between them.”
Grantees can feel that they have a lot to lose in a difficult conversations with funders—often millions of dollars for urgent causes are on the line.
There are real world consequences, however, when these difficult conversations are not had between grantees and funders. Open Road Alliance, through a 2015 survey of 200 funders and 200 grantees, found that one in five projects are negatively impacted by unforeseen and disruptive events. At the same time, Open Road Alliance discovered that it is not a standard practice for grantees and funders to address these potential risks together beforehand, while grantees are also wary of communicating with funders about obstacles for fear of losing future funding.
This means that 20% of projects are at risk of not achieving their full impact and grantees and funders are often not having the difficult conversations needed to address this risk.
Here are three important steps you can take to be prepare in advance for those inevitable difficult conversations:
As the research from Open Road Alliance confirms, unexpected challenges and disruptive events are commonplace when implementing projects in a complex world and should, in fact, be expected. When considering a project for which you are seeking funding for, you should first analyze all risks that could be associated with the project and be realistic about the risks that could require additional resources. At the most simple level, this means honestly asking yourself, “What could go wrong with this project?” And then honestly sharing that information with a funder.
Contingency funds are funds that are set aside to deal with the unexpected costs or unforeseen circumstances that occur during project implementation. These funds serve the purpose of ensuring the project’s originally intended impact.
At the very outset of your relationship, ask your funder about their thinking and policies around contingency funding.
You should also be comfortable in requesting contingency funding if your project has been impacted by any of the risks that you mapped out prior to the project being implemented. This can potentially be unnerving, especially given the power imbalance, but Open Road Alliance notes that funder and grantee perceptions here are often misaligned. Their research indicates that while grantees view discussion about or requests for contingency funding as negatively impacting their likelihood of receiving future funding, the majority of funders say that such things have no influence on their future decision-making.
In addition, you should specifically create project budgets that take into account potential contingency funds needed in alignment with project risks. Such budgets can be complemented by internal policies or plans that are used to communicate when contingency funds are needed. This will demonstrate to any funder that your organization is serious about mitigating risk.
Not every conversation with your funder will be a difficult or challenging one. However, the difficult conversations will be much easier to navigate if you have a preexisting and intentional schedule of touch-points with your funder to share information, give updates (both good and bad), and solicit advice.
Lean into transparency and establish an agreed upon timeline of communication with your funder.
This can be in the form of phone calls, narrative or video updates, and/or site visits. Not only will this lend itself to strengthening the trust and relationship between you and your funder, it will set the stage for ensuring that the impact of your grant projects carries forward when you find yourself preparing for a difficult conversation with your funder.
Ultimately, a difficult conversation with a funder will always be daunting, but the act of avoiding the conversation has real and negative consequences for those you seek to help. As a grantee, you should feel empowered to take the important steps necessary to set yourself up for success.
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