Educating the givers

Richard Marker of the Heyman Center for Philanthropy and Fundraising at New York University talks about what most grantmakers don’t know they don’t know, but that would make their lives a whole lot easier.


What are the most important skills or competencies any grantmaker should develop?


I used to run a pretty large foundation, and one of the things that I realized in retrospect is that there are things no one taught me that can make one a good grantmaker.

There’s a myth in the philanthropy world that everyone is so individual, so idiosyncratic, that there can be no best practices.

Too often people say, “You’ve met one foundation, you’ve met one foundation.”

The majority of us who are in this field came to it from different backgrounds, yet there really are fundamental principles that one can learn in the field without limiting one’s autonomy.

* Understand the nonprofit sector

For somebody to really be good at funding nonprofits, they need to understand the nature of the nonprofit/voluntary sector.

An effective grantmaker should know the history, particular legal and financial structures, decision-making processes, and stakeholders of the nonprofit sector.

* Balance law, ethics and best practices

A good grantmaker also needs to understand the particular challenge of the relationship between law, ethics and best practices.

On the surface, understanding the legal prohibition against self-dealing within foundations seems pretty self-evident: No transactions that are for personal gain. Self-dealing, though, can be an ethical issue, not only a financial one. There is a power relationship that a funder always has with a nonprofit, and one has to learn the proper use of self so that that this power isn’t inadvertently abused.

For example, if a nonprofit sends you free tickets as a potential funder, is it right to accept? The law permits a funder to accept these tickets under most circumstances; best practices, though, suggest you probably shouldn’t. These issues are often not so clear cut. Thus, it’s learning how to carefully mediate the continuum between law, ethics and best practices that will help one through these gray areas.

* Align mission, process and expectations

A strategic grantmaker needs to understand the alignment of mission, process and outcome expectations.

A lot of times, funders have self-contradictory notions of how things are going to happen or expectations of grantees that turn out to be unrealistic.

If you’re going to fund a large museum, it’s reasonable to assume that they have the resources to give regular professional reports. But a small soup kitchen may never be able to meet those expectations – and probably it would be wrong to ask them to do so.

* Think in terms of outcomes and exit strategies.

We’re in an era today when almost every grantmaker says, “We want to evaluate; we want to know the outcomes of our grant.”

However, not every grant lends itself to metrics, and many grantmakers do not have an understanding of how and when to get meaningful and useful data or, more specifically, how to match a program with an appropriate and productive evaluation strategy.

A funder doesn’t have to be an evaluator, but he or she does have know how and when to use evaluation effectively.

* Communicate effectively

The last core competency has to do with communication — written, oral, and interpersonal.

To be an effective grantmaker, you must learn how to communicate with potential grantees and with your board in a way that inspires confidence, trust and honesty.

Most errors in grantmaking are made because someone has not learned to understand the proper and most effective role of the funder.

It’s always a delicate balance between using the appropriate influence of the funder and improperly abusing the power imbalance.

The advantage of philanthropy education is that one can learn to choose from among the huge range of possibilities of how do to responsible funding in a way that has real impact, with full respect for the uniqueness of the sector, is gratifying to the funder, and accomplishes something of value for the public good.

— Compiled by Elizabeth Floyd

Richard A. Marker is Senior Fellow at the Heyman Center for Philanthropy and Fundraising at New York University. He is also co-principal at Marker Goldsmith Advisors and formerly headed The Samuel Bronfman/Seagram Foundation

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