Day III: Not Asking Nonprofits to Do More with Less

The third day of the Grantmakers in the Arts Conference opened with another set of breakfast roundtables. I attended “Not Asking Nonprofits to Do More with Less, Or the Uneasy Art of Communicating with Our Grantees During a Downturn,” facilitated by my former colleague Julie Fry of the William and Flora Hewlett Foundation and her fellow SF Bay Area funder Frances Phillips of the Walter and Elise Haas Foundation. The recession is very much on everyone’s minds, of course, and with it comes difficult decisions that may be necessitated more by circumstances than by fault or mismanagement on the part of arts organizations. This session was about how to navigate such conversations.

The central issue seemed to be one of communication. Several roundtable participants reported on negative experiences they had with grantees as a result of the grantees lying to them about their organization’s financial health or repurposing grants for operating support without permission. The lies and lack of communication were apparently motivated by a fear that funders would react badly to learning the truth of the matter. In fact, as one state arts council head pointed out, such a move backfired when distributing the NEA stimulus money earlier this year, since it undercut the case for need.

No matter how you slice it, these conversations are difficult. But some grantees are having success by opening up the process a little more. A roundtable participant reported that her foundation, for the first time, sent rejected grantees detailed letters offering specific feedback on their applications and justifying the decision. To her surprise, she received many fewer angry calls this year as a result. It seems that a better process could help to build healthier relations between funders and grantees, and demonstrating to them that you’ve taken their applications seriously in this way would be an important first step. (For further thoughts on this subject, you might check out this article I wrote in June.)

Even so, some conversations are just tough no matter what—for example, when the reason for the decision not to award a grant is because of a lack of confidence in the executive director. One participant now insists that a board member be present when she meets with directors in order to get around this difficulty.

Despite the generally downbeat tone of the conversation, the session ended on a decidedly positive note as several funders expressed their sincere amazement at and admiration for the determination shown by arts organizations and artists in navigating the recession. Participants encouraged each other to try to deliver a positive takeaway with rejections, and to tell grantees how much they appreciate their work.