Funders urged to engage stakeholders

Grantmakers can help keep grant initiatives from failing if they do more to involve grantees and other stakeholders in identifying problems and developing solutions, a new article says.

Grantmakers should “follow the lead of others who understand that good things happen when you reach out and involve more people in your work,” says the article, The Case for Stakeholder Engagement, published in the spring 2010 issue of the Stanford Social Innovation Review.

Co-authors Kathleen P. Enright, president and CEO of Grantmakers for Effective Organizations, and Courtney Bourns, GEO’s director of programs, say foundations’ outreach “must go beyond the usual suspects” such as business leaders, academics and consultants, and “develop a fine-tuned sense of what is happening inside the communities and the organizations that are touched by a foundation’s work.”

Among stakeholders “philanthropy most desperately needs to engage,” the article says, are leaders of organizations that get grants and those that do not, as well as community residents “whose lives and neighborhoods are or will be affected by the foundation’s work.”

While involving more stakeholders in grant decisions “gives people a better sense of how philanthropy works,” the article says, the main reason many grantmakers engage stakeholders is their expertise.

And while it is “perfectly appropriate for foundations to make decisions without a wide range of external input,” the article says, “engagement that isn’t skillfully done can do more harm than good” to the relationship between grantmakers and grantees.

“The key is to engage the right people on the right issues at the right time, rather than asking people to attend lots of meetings or provide input that isn’t used,” the article says.

Engaging grantees and stakeholders, it says, can help develop a better understanding of problems, create new and better solutions, and build more effective organizations.

Social ills, for example, are complex and difficult to understand, making it important for grantmakers “to get the input of people who are directly involved in the issue to help provide a more complete picture of the problem.”

Grantmakers “cannot develop practical solutions on their own,” the article says.

And while important, consulting with academics and other “experts” on issues “is not enough.”

Effective strategies for taking on tough issues will emerge “only from a concerted effort to engage the real experts – those who see these issues playing out in their communities each and every day.”

The key ingredient in forming productive engagements, the article says, is to “create ways for stakeholders to provide candid feedback to the foundation about its grantmaking practices and approach.”

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