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Making the Most of the Nonprofit-Foundation Relationship

Posted Feb 16, 2023 12:29 PM
In 2020, the country’s estimated 108,000 foundations held more than a trillion dollars in assets and awarded more than $92 billion in grants to nonprofits. Working with these foundations—whether local or national—can be a powerful way to deepen your organization’s philanthropic impact.

But a strong nonprofit-foundation relationship can offer nonprofits more than secure, long-term financial support. Today, foundations can also be incredibly constructive in community outreach, data collection and analysis, and strategic planning. With this in mind, it’s important to focus on these four core elements of your funder relationships:

  1. Keep communication lines open
  2. Be clear about your goals
  3. Default to transparency
  4. Ask for feedback

Whatever stage your nonprofit is at—whether you’re writing a grant or continuing to develop a long-term engagement—these tips can help you make the most of your relationship with funders.

1. Keep communication lines open

Foundations want to feel like they’re part of a partnership, not just a financial transaction. As a first step, focus on maintaining regular communication with your foundation partners and keeping them updated on your progress.

Share the current successes you’ve found and any challenges you’ve encountered. When you take the time to show foundations the results of their investment, you help them feel like they’re making a difference and address their questions and uncertainties.

According to SureImpact’s guide to social impact assessment, this type of consistent communication is critical to successful impact measurement. Open communication helps ensure that you are on the same page, from your goals and objectives to the metrics you’re collecting. Moreover, this approach also helps prevent misunderstandings or miscommunication that can lead to strained relationships (and lost funding in the future).

2. Be clear about your goals

Be clear about your goals and objectives for your relationship with foundations from the very outset of the engagement. Before you begin conversations with a potential funder, it makes sense to first define what you want from the relationship.

Alongside key stakeholders like your board of directors, staff, and volunteers, take inventory of your nonprofit’s interests and needs. What do you hope to accomplish with this foundation? Where is your nonprofit heading? What gaps exist in your programs or operations and how will additional funding fill them?

Your goals for working with a given foundation may include:

  • Increased financial stability and sustainability
  • Increased transparency
  • Greater organizational capacity or operational efficiency
  • An ability to build and leverage relationships with other organizations
  • Increased access to resources, including volunteers and nonprofit data

Clarifying your goals and sharing them with your existing and potential foundation partners makes certain that they know your expectations and can help them provide you with better, more targeted support.

3. Default to transparency

Transparency helps build trust and solidifies the perception that everyone is working towards the same objectives. While sharing your goals and maintaining consistent communication is crucial to transparency, some of the strongest nonprofit-foundation relationships take this further, sharing a range of additional information, such as:

  • Budget. Share a clear budget that details how much you’ll need to implement a project or program, what you realistically expect in revenue, how much you’re trying to raise, and where you’re at in terms of fundraising. Additionally, identify the other resources you’ll bring to the table to increase the impact of the foundation’s contribution. For example, if you have volunteers who can help with a project, make sure to explain their role in your organization.
  • Timeline. Share your timeline so foundations know when you expect to complete the project, what you hope to accomplish in the meantime, and how much time you’re willing to invest in a given project.
  • Metrics. Share the metrics you’re using to measure your nonprofit's success in achieving its mission. For example, if you’re proposing a job training program, one of your key metrics might be the number of participants who find employment within six months. Metrics are a great way to determine if goals are being reached or not.

For further transparency, consider also sharing the impact data you collect from your programs in real-time. Today’s solutions for impact measurement can be set up to give your foundation partners a designated digital portal to view your impact data as you’re recording it. Additionally, make sure the links to your organization's social media channels (if applicable) are easily visible on your website, marketing materials, and email signature so foundations can follow them and see stories of your success pop up into their feed.

4. Ask for feedback

For best results, you should constantly be monitoring and evaluating your nonprofit’s programs. As a part of this evaluation process, consider incorporating foundational feedback in the form of continuous feedback loops that parallel your ongoing data-sharing efforts.

Because they work with numerous nonprofits, foundations often have additional perspectives and data that can be valuable when making decisions and better serving the community. Thus, they’ll likely have valuable feedback on everything from program structure to data collection to marketing strategy. For example, as you build your impact story to share with stakeholders, consider first sharing drafts with your foundation partners, asking for their thoughts and comments.

Seeking this kind of feedback from your foundation partners on a regular basis will help you identify areas where you can improve your work and garner a deep buy-in that leads to long-term investments in your cause.

About the Author: Sheri Chaney Jones

For more than 20 years, Sheri Chaney Jones has applied performance management, evaluation, and organization behavior best practices to nonprofit organizations and government agencies to improve outcomes and efficiencies. An author, professor, and internationally recognized expert, Sheri believes in data, metrics, and accountability. She is the President & CEO of SureImpact.

Sheri’s foray into entrepreneurship began with Measurement Resources Company in 2010, a firm that increases the capacity of nonprofit and government sector organizations through high-performance practices and data-driven insights. In 2018, Sheri launched SureImpact to automate and simplify the process of collecting and sharing outcomes and impact data.

Sheri is a thought leader on public sector evaluation and applied organizational research. She is the author of Impact & Excellence: Data-Driven Strategies for Aligning Mission, Culture, and Performance in Nonprofit and Government Organizations (Jossey Bass, 2014). Sheri is passionate about women’s equity and the advancement of girls. She is the Columbus Chapter President of the National Association of Women Business Owners and a Commissioner for the Columbus Women’s Commission for the Mayor’s Office.

She holds a Master of Arts degree in Industrial and Organizational Psychology from Central Michigan University and a Bachelor of Science in Psychology from The Ohio State University.