December 1, 2016

Elevate routinely writes grant proposals and reports for clients, and increasingly often, we encounter questions that ask organizations about their weaknesses or challenges. Our clients often ask us: how transparent should we be about our challenges? Unfortunately, there are no easy answers.

We cannot say that you should always be fully open with your funders at all times. What is too much information for one person or funder might be expected information for another. Sometimes funders do not want the messy details, they simply prefer to know their money is making a difference. Knowing your funders well and having a strong cultivation and stewardship program can help you understand their interests and expectations better.

Nevertheless, there are some general guidelines and some universal red flags, which we’ve detailed below.

General Guidelines

First, establish real relationships with your funders, and classify them into three basic categories:

All the Details:

These funders want all the details, good and bad. They approach their relationship with you as a partner. They will support you during the hard times and might even be concerned if they do not know what is going on inside your nonprofit.

Enough Details:

These funders want enough details to feel invested and ‘in the loop’ but they might get antsy if you shared all your ongoing problems. Remember: not all funders have been fully exposed to the ups-and-downs of running a nonprofit. Sometimes, these funders simply trust you, and know that you will handle the inevitable challenges you face. They do not think it is the best use of their time to know everything you are working on, even the challenges.

Stick to the Successes:

Some funders really enjoy reading about your successes and your stories of transformation. These funders do not value reading about all the problems you face. Alternatively, they might not be used to reading about nonprofits’ challenges. Sharing your problems when they are not welcome or when the funders are not getting the same transparency from their other grantees is unnecessarily risky.

Elevate does not have a preference or opinion on which of the above is better. Everyone gives for their own reasons, and wants to run their giving programs in the way that makes sense to them. We have noticed trends, however.

Trends & GuidePosts

In general, smaller, unstaffed private family foundations prefer to hear your successes, with a light touch, at most, about your challenges. Stick to your successes with them.

The less close your relationship with your funder, the more you should stay in the second lane – just sharing enough to be credible and framing your challenges well. This is particularly important with funders who have broad, rather than deep, interests and and where a flailing organization or program will raise concerns.

Finally, the more closely you work with a funder or program officer, the more important it is that you be fully transparent about your challenges and response. Relatedly, the more sophisticated your issue area, and the more knowledgeable a program officer is about the issue, the more transparent you are going to have to be to gain their trust and appear credible. Sometimes, program officers will even want regular meetings with you if they have fully invested in your work.

A final note: the relationship you can have with your funder depends a lot on who the ultimate decision maker is, and the role other people have in influencing their opinions. For example, at public agencies, the decision makers might be a selected group of experts and the program officers are helping you to prepare your application for review by those experts. You can be more transparent with them and even ask for advice about what they recommend.

What to Share

Always share:

You should always share the following with your funders:

  • Key leadership transitions, like when your executive director is leaving;
  • Key program changes, expansions, or contractions, for the programs they are funding; and
  • Potentially negative news, that is going to become public anyway – like a lawsuit.
Important Note

It goes without saying, that you must always be 100% honest about the activities you have completed and your achievements or lack thereof. Your job is to frame it honestly and effectively, but never incorrectly.

Sometimes Share:

Depending on your relationship with the funder, discussed above, you should sometimes share the following (and frame them well):

  • Disappointing or concerning outcomes;
  • Decreased participation or key partnerships that are ending; and
  • Major financial challenges. You are not going to hide these anyway, as your finances will be public, so be sure to provide context.
Be Thoughtful About:
  • External factors limiting your success, such as challenges with the local government; and
  • Partners who did not fulfill their commitments; and
  • Any similar negative discussion of other organizations.
not necessary:
  • General staff transitions that are not at a high level, like a program director or executive director;
  • An office move, unless you need funding for it or it opens new opportunities;
  • Small program innovations that did not work well: in general, you are not being more transparent by focusing on your failures rather than successes. And more importantly, you are distracting from big picture. Small details, for good or bad, are usually not worth including.

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