Effective grantmaking can take many forms

By Mary Mountcastle

Effective grantmaking is like the saying about beauty:  It’s in the eye of the beholder.

Are there guidelines we can follow to help us be more thoughtful – and more effective – grantmakers?

Here are a few thoughts about the beginning of the process.  In the future, I’ll look at other pieces of effective grantmaking.

* What’s your goal?

A classic grantmaking dilemma is captured in the maxim: Give a person a fish and they eat for a day; teach a person to fish and they eat for a lifetime.

And what if the fishing pond is polluted and has no fish?  When does it make sense to fund services and when to get at the root causes of issues through advocacy or change-oriented programs?

MDC’s State of the South report on philanthropy reviews several traditions of American philanthropy that stem from grantmakers trying to achieve different goals – philanthropy as relief, as improvement, as social reform and as civic engagement.

Grants for services provide relief or improvement but won’t necessarily change the underlying situation.

A grant for any of these purposes can be effective in the right context. For instance, in the aftermath of a disaster or in the face of huge need, relief can be the most important thing to support.

Individual donors often prefer supporting service providers because they like the visible and concrete evidence of their dollars at work.

Effective grantmakers recognize that a reform strategy must be a component of their overall grantmaking portfolio.

* What’s your time frame?

Obviously, change takes time. At the front end of a relationship with a grantee, it’s useful to have an idea of whether this is a short-term relationship or could be longer-term.

It’s important to pick at least a few organizations that have a change agenda in the area in which you want to have impact and stick with them for a number of years.

* What’s your tolerance for risk?

Philanthropy is America’s form of social venture capital and a source for new or less tested ideas or strategies to advance social change.

However, strategies for change are harder to assess on the front end and over time.

They also require more partners since it is hard for any one organization to achieve successful reform alone.

Grantmakers can choose a segment of the problem that they think is being underfunded, such as community organizing, research and data gathering, or development of new ideas.

Or they can fund an array of organizations that are working together to advance change on a particular issue.

It’s useful to take a kind of “portfolio” approach to grantmaking.

Does the overall grant portfolio achieve your need for concrete, short-term outcomes, or the “bonds” in your grantmaking portfolio, but also include longer-term investments in organizations with a change agenda and the potential to leverage tremendous results.

An upfront discussion about the appropriate balance for your grantmaking can help achieve a beautiful result.

Mary Mountcastle is a long-time trustee of several family foundations and sometime student of philanthropy.

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