10 condescending funding practices funders need to stop doing

[Image description: A closeup on a meerkat’s face, staring at the camera. This meerkat is puzzled by many grantmaking practices that seem to be the norm but that are actually patronizing and ineffective. Image by hansbenn at Pixabay]

Hi everyone, before we get started, I have exciting news: It took over a year and tons of dark chocolate, but I’ve compiled a bunch of Nonprofit AF ramblings into a book “Unicorns on Fire: A Collection of Nonprofit AF Blog Posts Finally Edited for Spelling and Grammar, Volume 1” which you can order on Barnes and Nobles. All revenues generated from sales from now until the end of June will be donated toward relief efforts for the devastating earthquake in Turkey and Syria.

This book makes a great present for birthdays, wedding anniversaries, as an ominous warning sign for funders or board members you don’t like, or as bathroom reading material for your household. Special thanks to editor Norea Hoeft for putting up with my shenanigans, Stacy Nguyen for designing the cover, Kishshana Palmer for penning the foreword, and all of you for inspiring me to write over the past 11 years.

Now, onto today’s topic. In this line of work, I have met lots of amazing funders. Shoutout to all the brilliant philanthropy professionals who are working hard and often without much fanfare to change the ridiculous systems that make fund seeking so painful and ineffective.

On the other hand, many foundations have a condescending belief that they know what’s best for nonprofits, and that they are like a mentor to these poor misguided organizations. A sort of “benevolent paternalism.” It leads to some terrible funding practices that we need to do away with. This is not a comprehensive list:

1.Requiring funds to be matched by other sources: “We’ll give you money, but you must match it by raising money from other sources.” This practice has been so ingrained that we don’t stop to question it; some of us even start to think it’s a good thing, like funders are in with us on a used-car sales tactic: “We have a funder willing to fund this project, but only if we match it. Can you help us get this matching grant?” sounds like “My manager says we can’t go any lower on this 1993 Honda Accord, but I can probably convince her to take off another $500 if you’re willing to sign today.” Gross. Let’s stop playing games and just provide the funds needed for critical work to get done. Stop requiring matching funds.

2.Having a challenging application process to teach nonprofits: One time I encountered a grant for $5,000 that required a six-page narrative, bespoke budget, logic model, workplan, and six or so other attachments. When I asked why this grant was so complicated, the program officer told me it’s because the grant review committee wanted to help nonprofits develop grantwriting skills, so they made their process complex and time-consuming on purpose. This is a bizarre and self-fulfilling loop: Let’s create a burdensome process to teach nonprofits skills to deal with burdensome processes. No one needs you to teach them anything, and it’s not your job (which is to provide funding). If you want to be helpful, just accept grant proposals that have already been written.

3.Requiring board approval and board signatures: Some foundations require a board officer’s signature on applications. On one occasion I had to drive an hour in Seattle traffic to get my board president’s signature because he didn’t have the tech skills to do an electronic signature. When I asked the program officer why this was necessary, the response was that the foundation just wanted board members to be in the loop before they provided funding (of 10K). We are grown-ass adults here. Nonprofit staff don’t need approval from their board as if they were kids needing their parents’ permission to go on school field trips. And here’s a secret: Because of how ineffective or destructive many boards are, sometimes boards are kept out of the loop intentionally; that’s how a lot of good work gets done!

4.Tapering funds down from year to year: For the rare multi-year grants that are given, some funders like to do this thing where they taper off the funds, for example $75K the first year, $60,000 the second year, $50,000 the last year, etc. Tapering sends the message “You’re a freeloader and we actually don’t trust you to do your own planning to stop being one, so we’ll need to put mechanisms in place to wean you off our funding, you raggedy parasite.” If you trust grantees and want to work as partners, talk with them to determine the best way to allocate the funding. Maybe they may need it in equal installments, or perhaps they would benefit more from having a smaller disbursement now and bigger ones in later years. And honestly, we need grants to be at least 10-years at a time if we want to see changes.

5.Not providing significant funds in order to not “tip” nonprofits: I elaborated on this earlier in “Foundations, please get over the urban myth of tipping,” but there’s this wacky and misinformed belief among some foundations that if they give a nonprofit “too much” funding, it would “tip” the nonprofit into becoming a private foundation itself. This is mostly hogwash and malarkey, of course, but some funders really believe it, and they think they’re doing the nonprofit a favor by not providing the nonprofit more than 10% or 20% of its budget. Thank you, but you can let the nonprofit worry about being tipped, OK? It won’t affect you in the least in the 1% chance that actually happens.

6.Requiring nonprofits skip a year before reapplying for a grant: There are funders who require nonprofits to skip a year before reapplying, even if they didn’t get the grant. What’s the point of this? You’re trying to be fair? To give other nonprofits a chance? Very kind of you (not really), but this is one of those practices that force nonprofits into a perpetual game of Funding Hot Potato, constantly worrying about survival, never having stability. Knock it off and increase your payout rate, then figure out what kind of organizations you want to fund, and work to fund them with multi-year general operating dollars.

7.Requiring a certain level of experience: I’ve seen a few funding opportunities that would not accept applications from some nonprofits until they’ve had at least two or three years of operation. The thinking is that these orgs would more likely be successful because they’re more experienced and established. This is a great way to ensure you’re underfunding organizations led by people of color, LGBTQIA people, disabled people, people from rural areas, and people from other marginalized communities, orgs that are often founded to address emerging needs and so tend to have fewer years of operations as compared to established nonprofits. And they can be extremely effective. Meanwhile, there are tons of crappy organizations that have been around for decades.

8.Demanding a sustainability plan: I just saw a grant RFP today that asked applicants to submit a plan for how the project will be financially sustained after the two-year grant period. I thought this question had died years ago because it is patronizing and nonsensical and we’ve been calling it out for ages. Nonprofits will always require funding to run programs and services. So they will always be fundraising. That’s it. That’s the sustainability plan. To expect otherwise is to remain completely delusional about how funding works in our sector. Don’t ever ask the sustainability question again.

9.Not funding organizations until they “get along”: Some funders are freaked out when there are tensions between nonprofits, and their response is to not fund anyone because they don’t want to inflame tension, or they think it might incentivize the orgs to collaborate. OK, first of all, a lot of the tension nonprofits feel is because you’re forcing them to compete with one another in the funding Hunger Games. Second, this more likely happens to organizations led by marginalized communities. Not funding communities-of-color-led orgs or disabled-people-led orgs because there’s community dynamics you don’t want to get caught in is convenient for you, but only further exacerbates inequity by preventing the flow of resources into these communities.

10.Thinking short program reports will save nonprofits time: I just talked to an ED who told me she was dreading writing a grant report because it could only be three pages long max but had all sorts of questions. I can imagine foundation staff thinking “three-pages is a nice, easy, short report to write.” No, it’s not. It took my ED colleague a lot of time and energy to basically take a longer report she had already written for another funder and translate it to the shorter format. Accept a report that’s already written. Reading a longer already-written report may take you ten additional minutes, but it would save the nonprofit several hours of time from having to craft it into your snowflake format. Even better, do what some funders are starting to do: take grantees to lunch, they talk about the programs, you record and transcribe the notes.   

I’ll stop there because 10 is a nice round number. Let me know your thoughts and additional condescending practices you can think of in the comment section. Again there are lots of amazing funders. But many funding practices are archaic and ineffective because they’re based on the mistaken belief many funders have that they know how to do nonprofits’ work better than the nonprofits themselves. We can and must do better.

Related post: How “strategic philanthropy” has harmed our sector, and why it refuses to die