Healthy Goodbyes: Exiting Grantee Relationships With Care
As we continue our philanthropy learning lab on how the Walter & Elise Haas Fund is operationalizing trust-based philanthropy, I am offering a reflection about how we exit funding relationships with grantees. Exiting grantees is the process a foundation takes to discontinue funding to a grantee. While it is a routine occurrence in philanthropy, it remains difficult because it is discouraging news for an organization and may leave a gap in funding. That is why we believe wholeheartedly that it should be done with care and compassion.
The programmatic and strategic shifts in our new grantmaking philosophy required us to exit grantees in several cycles between 2019 and 2024. After listening to our grantees, we determined that to more effectively support nonprofits to win, we need to provide larger and longer-term grants. Even with fewer grantees, we know these multi-year grants are more meaningful for our nonprofit partners and the communities we collectively serve. Moving from siloed program areas to a more holistic approach, we aim to align with our organizational values, our intention for reparative action, and to de-silo program content and staff roles.
Toward this end, we integrated Economic Security, Education, and Safety Net programs into our new Economic Well-being portfolio. We exited 29 Education program grantees in 2019, then 35 Safety Net grantees, and 58 Economic Security grantees in 2022. This year, we are exiting 112 grantees in our effort to integrate our Arts, Disaster and Climate Resilience, Jewish Life, and Racial Justice grantmaking. This second integration will focus on community and social well-being to fuel the natural synergy across program areas and drive holistic outcomes for communities. Already, this year’s exits build on learnings from the prior cycle.
For us, exiting is all about relationships. How we end a funding relationship is part of enacting and earning the trust that we will need to sustain strong connections with the Bay Area nonprofit community for the long term. We have deep respect for nonprofit leadership and are committed to maintaining these relationships. Our belief is that even when we are no longer in the same funder-grantee relationship with organizations, we continue to share similar values, priorities, and care for the same community. We know that as professionals committed to social change, we will see each other again and will likely partner in different capacities, roles, and organizations. In this blog, we offer lessons learned along the way and tips for exiting with care.
Staying accountable with our values throughout the process
Our core values of family, possibility, shared responsibility, and belonging lie at the center of our vision for creating a more prosperous future for everyone. These values guide our work everyday, including the practice of exiting grantees.
We believe the process of exiting grantees should be done as clearly, transparently, and timely as possible. We signaled change as early as we could because we recognized that a last-minute notice could adversely affect an organization’s fundraising projections and programmatic plans. We requested meetings with organizations, and the email invitation sent to each grantee revealed the purpose of the meeting to avoid any surprises. We were transparent about how and why the foundation was changing course.
Our goodbyes, at best, have been person to person. We do not believe in mass email dissemination as an appropriate tactic in this instance. For our relationships, we know it is important to show up with humility and recognize the grantee-grantor power dynamic to honor the grantee and show respect. We had one organization that did not respond to the request to meet, and that organization received a letter, instead of a one-on-one meeting.
In our conversations, we reviewed the history of our partnership, shared our gratitude with each grantee, and our belief that we will never be strangers. We shared that as we engage with funder peers, we will keep the organization top of mind, and keep the door open for the organization to contact us with questions or updates as they wish.
We also communicated about the prospect of future funding, being honest about when there was no opportunity, a limited one, or real possibility. Since these were exits tied to larger strategy shifts, we knew that the majority of organizations had limited to no chance of a grant from us in the near future, so we said that clearly. We were also clear if the organization would receive one last grant, an exit grant, from the Fund.
We did not require further reports, and in some cases, waived final reports that had initially been requested at the start of the grant. Our grants manager attended several of these calls as well, so that he could speak to our evolving strategy and also any waived requirements, changes to grant agreements, and prospects for the exited grantees. He carried his insights to our grants management team, ensuring that the tactical aspect of the exit was handled with care and responsiveness to grantee needs.
Staying connected and continuing to support their work
Saying goodbye is a key part of grantmaking, so we continue to document our practice and learning. This matters to our internal practice — how we can do our jobs better — and to the broader philanthropic sector. We listen to what grantees, former and current, tell us. We honor and value their unique perspectives, and know that we are our best when we are responsive to their needs.
In exit conversations, a few themes came up. For one, many organizations were excited for the shift in our practice — making fewer but larger grants over multiple years. Some frankly acknowledged that they wished they were remaining a Fund grantee in the newly minted Economic Well-being program, but that even without it, they believed this was good change for the sector as a whole. They asked us to make sure we told other funders what we were doing with multi-year general operating support.
Some organizations also expressed that philanthropy is a black box to them; opaque and inaccessible, and that we had more work to do to make sure we continue to think about, and be ready to act on, transformative practices. They asked us to stay connected with them to help them understand what was happening in the philanthropic world. We agreed because we know this transparency is the path to deeper trust.
Most of all, we heard that our one-on-one conversation about the exit was rare, and deeply appreciated. We hope more of our peers will take on this element of the relationship work, and continue to take opportunities to pause, reflect, and learn through the process.
Centering community to guide our second integration
As we move forward, we continue to ask ourselves: How do we enact and earn the trust that we will need to stay in right relationship? How do we cultivate space where people can build connection, as individuals as well as representatives of our institutions? How do we value their expertise and insight?
These questions are critical to us as we enter 2024 with a plan to integrate our Arts, Disaster and Climate Resilience, Jewish Life, and Racial Justice grantmaking. We shared the exit plan in late 2023, and 2024 started with exit grantmaking so that grantees would not have to wait or wonder and could have stability with the final funds. In the spring, we’ll host town halls and focus groups to listen to these former grantees. Community engagement will guide the Fund’s next steps of design and implementation of our second integrated portfolio.
In the end, we believe that the big picture of our work, as it is for grantee partners, is towards a collective purpose of racial equity and justice, where our community members have real choices about how they live their lives with dignity and joy and where we all have the chance to create and learn. We understand that we play a part in this big picture, and that we do not do it alone.
Resources
210 Goodbyes: Lessons from Ending Grantee Relationships
Shifting our Strategy to Support Detroit’s Afterschool System
Blog, Grantmaking, News, Reflection
