Foundation staff can have deep and long-lasting relationships with grantees. But no matter what, as long as you work for a foundation, grantees will see you as a funder, and that view factors into the power dynamic of your relationships with them. As one foundation staff person said, “Remembering what we fundamentally embody to grantees can sometimes be hard for those of us that come to foundations from careers as activists or former nonprofit experts. We know about the power dynamics we experienced with funders when we were in the field. We want to do better. Maybe we believe that we can be the exception — that nothing will change in our relationships with our colleagues in the field. But it does. Thinking it won’t can be a huge blind spot that affects power dynamics with grantees, especially when we start talking with grantees about building capacity.”
It’s not surprising that the survey for this guide, which foundation and nonprofit leaders both responded to, found differences between the type of capacity building that funders are most likely to support and the top needs nonprofit leaders observe in their organizations. Funders and grantees don’t always see eye to eye on nonprofit capacity-building needs. “Sometimes grantees may be too close to their own issues to see all of the larger structural needs of their field.” or something like that? That’s where funders can provide critically important perspective and advice. But sometimes, grantees are afraid to share. Nonprofits contributing to this guide described their capacity-building paradox: they don’t want to appear desperate or institutionally defective, yet at the same time, they fear that if they appear too strong, they won’t get the capacitybuilding support they really need. And then some grantees, especially when approaching newer funders, become eager to please and spend more time saying what they think the funder wants to hear than describing what is really happening within their institutions.
Success in grantee capacity building requires funders and grantees to communicate their interests and needs well. Funders must have good listening and analytical skills so that they can be responsive to what is really happening with grantees, and frame questions in ways that promote comfort and candor.
Grantmakers have what some might call “hard” power: they can say yes or no, and they can decide whether a grantee gets funded. They also have other powers that can be leveraged to support strong, productive grantee relationships. For example, grantmakers with track records and relationships from years of working in field areas like human rights or education, and those with backgrounds in organizational development, have “expert” power. Foundations have powers as institutions to convene and connect stakeholders, and take stands on issues as long as they stay within the regulatory requirements that govern them. Consider which forms you and your foundation recognize and use well and ways you could do so more effectively. Also think about how those powers may be perceived by grantees. Are they helpful or intimidating? Useful or complicating?
When funders bring up issues of capacitybuilding with grantees, intent may not always be clear. For example, if a funder approaches a grantee about a capacity-building concern, such as how the organization will address a leadership transition when an executive director or board chair has been in place for decades, it is likely for a good reason. It could be a way of wanting to ensure the foundation’s long-term support for the institution won’t be for naught.
But sometimes raising issues or making capacitybuilding suggestions, even when responding to a nonprofit leader’s desire to build organizational capacity, can be perceived as “we (grantmakers) know best.” Funder intent perceived this way almost always goes over poorly. As one funder said, “There’s just a whole nest of issues embedded in us coming in and telling nonprofits, especially those that are grassroots and founded by and for marginalized communities, how they ought to be running their organization. I find those circumstances particularly dangerous around the power dynamic.”
In other instances, a grantmaker may be pushing for organizational standards, such as around financial management or board practice. Foundations can say the bar must be raised, and maybe they’re right. But they have to be aware of how people in different communities and countries perceive their efforts, and how this can impact the funder-grantee relationship, especially if the foundation is setting a different bar from the regulatory standard or generally accepted culture of nonprofit practice in a particular country or region. According to one funder from outside the U.S., “When a new capacity-building program is offered, the first thing everybody says is ‘It’s American,’ and then half walk out.” Others raise the concern that grantees feel uncomfortable with the professionalization of social movements. We heard, “Can building organizational capacity threaten the innovation and creativity needed to change society?” Consider ways to talk about these issues openly in your foundation and with some degree of external transparency so that grantee relationships don’t suffer.
Takeaways are critical, bite-sized resources either excerpted from our guides or written by GrantCraft using the guide's research data or themes post-publication. Attribution is given if the takeaway is a quotation.
This takeaway was derived from Supporting Grantee Capacity.