March/April 2000 Vol. 41, No. 2

BACK TO INDEX

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"Best practices" are receiving increased attention in the expanding literature on foundation management. This is a good thing, because successful models of grantmaking, strategic planning, board process and management can provide instructive guidance to our work.

Missing from the literature of the "best," however, is attention to one important, but frequently neglected, area of foundation behavior: what the for-profit world describes as "customer service."

For a variety of reasons—preoccupation with grantmaking, small staffs, lack of vehicles for critical feedback and, sometimes, sheer arrogance—foundations tend to come up short in their attention to applicants and grantees.

This becomes painfully apparent in meetings of nonprofit organizations when the topic of grantmaking arises. Often starting with a lament about how a particular grant request was mishandled by X foundation, the discussion often becomes a "Can you top this?" exchange of horror stories about foundation treatment.

The longer one's history with the field, the more one realizes that these are not isolated incidents. From personal experience—both as admitted sometime perpetrators and as observers—we know there are serious problems in the way grant applicants and recipients are treated.

We therefore think that it is useful for our field to consider foundations' "worst practices" as well. Here are our nominees for the top ten—based on our own observations as well as those of our friends in nonprofit organizations and various anonymous tipsters.

The tales that follow are told from the foundation "customer" point of view. Unfortunately, they are all based on real experiences. We've changed names and specific circumstances to protect the innocent (and the guilty). We also offer some constructive (we hope) advice after each example.

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WORST PRACTICE #1
Anyone there?

The foundation guidelines said to send a two-page letter of inquiry before sending a full proposal. You have carefully followed the directions, but it has now been three months since you sent your letter and still no response. Although you do not want to be bothersome, you wonder whether your letter was ever received. The first time you call, the receptionist says he will check on its status. You ask the name of the program officer who would be responsible for it. He doesn't know but will check on that, too. Another week goes by. You summon your courage and call again. This time, the receptionist say the proposal was received and is under review by Ms. Smith. Feeling greatly relieved, you ask whether you can speak to Ms. Smith. Learning that Ms. Smith is "unavailable at this time," you ask to leave a voice mail message.

Another week passes and no response. You are becoming increasingly concerned because you are worried that you may miss a docket deadline. Other prospective funders are interested to know Ms. Smith's reaction to this request, since she is highly regarded in the field. You leave another voice mail message. Still no response. After several days you call and are connected to her assistant. Informed that she is in the office but "very busy" at this time, you ask when she might be available for a phone appointment. She says she will check with Ms. Smith and get back to you. Hearing nothing for several more days, you resort to calling daily and leaving polite messages asking for a short phone meeting so you can get a reaction to your inquiry letter. You continue this process every day for two weeks. Finally, you give up and continue to wait…and wait…and wait.

ANALYSIS Nonprofit organizations' number one complaint about foundation behavior is the difficulty of getting a response to an inquiry—whether via telephone, mail or e-mail. Businesses know that response time to customers' requests is critical. But foundations don't have customers, and they often seem oblivious to the need to provide timely responses to applicants' inquiries. Even if understaffed, foundations need to find ways to let applicants know the status of their requests—if only by having an assistant call to acknowledge receipt of a request and schedule a brief telephone call.

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WORST PRACTICE #2
Freebies

It's happened to you before. Your opera company is presenting The Three Sopranos and the concert is sold out. A week before the performance, you get a call from your program officer at the Freeload Foundation, one of your biggest supporters. You're advised that it's time for a site visit and that it's important for your program officer, her husband and two board members to attend the concert in order to assess just how well your opera company is doing and whether it merits further support.

You are also advised that the site visit would best occur in the center seats in the dress row circle—the best seats in the house. The Freeload Foundation will, of course, expect to receive complimentary tickets, given its past and perhaps future support. Feeling that you have no real choice, you do all you can to accommodate them.

ANALYSIS While this case may seem a little extreme (it's real), less dramatic versions happen all the time. Many funders feel they are entitled to free tickets to performances and other events to assess an applicant or keep up with a grantee.

In our view, this is always inappropriate. The respectful thing for foundations to do is to pay for any tickets they receive, regardless of whether the tickets would have gone unsold otherwise. An organization should never suffer a loss of revenue or out-of-pocket expenses in order to be assessed by a funder. After all, the money ends up in the pocket of the organization one is visiting, and that's what it's all about.

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WORST PRACTICE #3
What's this meeting really about, anyway?

You finally have an appointment with Jim Dandy at the Root Canal Foundation. Your proposal responds directly to the guidelines they've published and you have submitted all the relevant materials.

You know you only have one hour to discuss your project and answer questions and you feel well prepared. The meeting starts off nicely, although you feel slightly anxious after hearing 15 minutes of stories from Jim about a safari he was recently on, knowing you only have 45 minutes left. Finally you begin to discuss your organization.

Imagine your surprise when you realize that Mr. Dandy has not read your proposal, or if he has, he's forgotten it. You don't think he has you confused with another organization, but you're not clear why he's grilling you about questions fully answered on page two.

How do you politely tell him that while his idea to develop a long-range plan is a good one, you in fact have, and it's attached and the reason that you have no endowment income is that you have no endowment?

ANALYSIS It is difficult to find anyone with much experience in fundraising who has not encountered a completely unprepared or misinformed foundation representative. Adequate preparation is a minimum professional requirement.

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WORST PRACTICE #4
By the way, do you have a babysitter?

You are excited to have received a call from Mr. Caring, a senior program officer at Behemoth Foundation, informing you that he is coming to a site visit to talk with you about a prospective grant to your small nonprofit. There is only one time when he can meet—4:00 p.m. Friday before a holiday—because of personal plans he had on this trip. After asking your staff to rearrange their schedules, you are confident that everything is in place for this critically important discussion.

When Mr. Caring appears, he is accompanied by two small children. "Oh, didn't my assistant tell you?" he asks innocently. "We're on our way to Disney World. Would you mind having someone watch them while we meet?" It takes you a moment to recover. "This is a disaster," you say to yourself.

Still, you assign one of your two staff members to babysit the children. One of the children periodically interrupts the meeting by asking how much longer this is going to be. You want to say to him, "Would you bring your kids to a meeting with your boss and ask him to babysit?" Instead, you bite your lip and, commenting on how cute the kids are, thank him for taking time out of his busy schedule for the meeting.

ANALYSIS It is often difficult for foundation staffers to find time for the many meetings they are expected to attend. Sometimes they involve hard choices between personal and foundation obligations. However, it is essential to treat such meetings with professionalism and courtesy, demonstrating the same respect for the nonprofit organization's time and sensibilities as one would do for meetings with colleagues or superiors. It is not appropriate to mix one's personal responsibilities with business meetings.

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WORST PRACTICE #5
Come hither and do it at your own expense

Carl, the executive director of Hawai'ians for a Clean Environment, was finally going to have a chance to meet with the environmental program officer at the Save the World Foundation on the East Coast. That was the good news. The bad news was that he was told the only time he could be seen was next Wednesday at 2:00 p.m. He had pleaded for a Monday or Friday appointment with the idea of staying over Saturday night and saving a lot of money, but it was to no avail. He was told he was lucky to have the Wednesday appointment; the program officer was a very busy person. The Save the World Foundation made large grants in Carl's field, so Carl felt he really had no choice.

He arrived at the appointed day and hour. While waiting in the opulent reception room, he was summoned by the program officer's assistant, who advised him that the program officer, Mr. Goodheart, would not be able to see him as his son had soccer practice that afternoon and the nanny had taken ill. The Save the World Foundation was very family-friendly and encouraged its staff to be fully involved in their children's lives. Carl had planned to return home that night but said he could stay over and visit Mr. Goodheart on Thursday. That would be impossible, he was told. Thursday and Friday were fully booked. Perhaps the following Tuesday.

ANALYSIS While foundations cannot be expected to pay for the travel costs of all who solicit them, they can and should do all that they can to accommodate those who visit them and those they visit. It is not unusual for applicants to have appointments canceled at the last minute or to have funders show up late (or sometimes not at all) for appointments. Often these appointments involve not only a staff member or two but board members and volunteers. It is embarrassing and disrespectful.

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WORST PRACTICE #6
May we approach the throne?

The Imperial Foundation occupies impressive office space high above the streets on which many of its grantees carry out their work. You have often walked by the Imperial Building on your way to your own organization's office, admiring its architecture but thinking it somewhat forbidding. Now your director has given you the task of finding out whether Imperial might have an interest in a new program idea.

You place the call. The person who answers the phone sounds flustered and slightly annoyed. "Imperial Foundation—hold please," she says. Before you can respond, you're placed on hold. After a while she comes back on: "Imperial Foundation—who are you holding for?" "Actually, I was calling to inquire about Imperial's potential interest in..." Before you can finish, she interrupts, "What is the name of your program officer?" "I'm not exactly sure what program area this project might fit," you reply. "Well, do you have a copy of our guidelines?" the receptionist asks, icily.

It is becoming increasingly clear that you are, in her eyes, barely worth talking to. "Yes, I have read them," you respond, "but it is still not clear whether this project fits." "Hold," she says again. After what seems like an eternity, she comes back on again. "You're waiting for whom?" she asks. Patiently, you reply that you are not familiar with the program officers there. Now, quite annoyed, the receptionist tells you that you can leave a voice mail message for Mr. Brown, a program assistant who is currently on vacation, but who will reply when he returns. With that, you are placed in the voice mail system.

ANALYSIS Calling a foundation office can be intimidating, particularly for those who are new to the nonprofit world and who do not have contacts in the field. Foundations vary greatly in their degree to which their "gatekeepers" present a welcoming or off-putting impression to those calling for assistance. Even in the most hectic of situations, it requires only modest effort to make callers feel like valued colleagues rather than unequal supplicants.

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WORST PRACTICE #7
Can't say yes and can't say no

You've submitted your proposal to the Why Not Foundation. It seems like a good prospect, almost as if its guidelines were written for your organization. You have received a letter acknowledging your application and inviting you to call for an appointment. You can't help yourself, you're already wondering how much you might get.

You call the program officer assigned to you. Her assistant has called you back to let you know that her first available appointment is six weeks away. When you finally visit her in her office, the meeting goes very well. She is impressed with your organization's work and wants to schedule a site visit…five weeks hence.

The site visit also goes well. The Why Not Foundation's program officer spends two hours with you, members of your staff and a board member. As the meeting comes to an end, she says she needs more information. If you can submit all the information within two days, you should be able to be reviewed at the foundation's next board meeting, seven weeks hence. It's a struggle, but you make it.

Two months later you have not heard anything, so you call the program officer to find out the status of your proposal. Her assistant tells you that the docket was too full and your proposal has been put over to the next board meeting, which is two months away. After several weeks, you get a call from your program officer advising you that the foundation CEO is concerned that your organization's work is similar to some work the foundation funded a few years ago; could you supply more information? You do. A few weeks later you hear back from your program officer advising you that action on your proposal has been deferred once again. No one seems to know when you'll get a resolution.

ANALYSIS Many foundations need to improve their response time as well as give applicants an accurate time frame for decisionmaking. While proposals sometimes do raise nuanced policy concerns, we need to be candid with our applicants. We need to do all that we can to keep the process from dragging on and on.

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WORST PRACTICE #8
Do my work for me

Things look promising with the Bottom Line Foundation. Your interests meet their guidelines and you've been invited to submit a full proposal. Now comes the hard part. For the past ten years you've been using common nonprofit accounting software and have had a certified audit every year. Unfortunately, you discover that almost none of your financial information, including budgets and projections, are acceptable to the Bottom Line Foundation. They have a custom-designed set of financial forms that their staff and trustees like and you have to reformat everything you do to fit their forms.

Not only that, but you have to reallocate a lot of your income and expenses in ways that you've never even thought about. What's wrong with your financial information the way it is? Why can't they just ask you some questions if it's not clear, and why is it that half of your funders have entirely different reporting requirements which don't conform to your accounting periods or financial formats, or each other's? Beyond that, some of your funders require you to summarize all of your activities in no more than one page, while others require that much of your proposal be on their forms. It seems like waste of time.

ANALYSIS Increasingly, funders are requiring applicants to restructure and reformat financial and narrative information in a fashion that might be convenient for the funder but requires an enormous amount of work for the applicant.

We have to find ways of being more sensitive to the consequences of our demands, and perhaps begin to agree on common application forms and common reporting forms for much of what we need.

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WORST PRACTICE #9
Condition 22

Finally, after a long process of interaction with the Picayune Fund, you are thrilled to have received a phone call that the grant has been awarded. The program officer mentioned that the grant was awarded with "a couple of contingencies," but since you had worked on the project extensively with him already, you were confident that these would not be significant.

What a surprise, then, to receive the formal award letter that stipulates two critical grant conditions: a matching requirement—which will delay your ability to start the project in a timely fashion—and, more problematic, a requirement that your organization must make your half-time development officer into a full-time position prior to the release of grant funds. The latter condition poses real difficulties for you, since you need Picayune's funding in order to support the half-time development officer, who, you had intended, would play a key role in raising the additional funds.

You explain this problem to your program officer, but he advises you that once the board has acted, a reconsideration can only take place at the next board meeting six months hence. So there you sit, unable to move forward without the grant and unable to move forward with it.

ANALYSIS Although foundations have many legitimate reasons for applying conditions to grants, sometimes such conditions are applied without carefully considering their impact on the grantee.

Clearly, it is the obligation of the program person at the foundation to try to anticipate such conditions and discuss them in advance with an applicant. If this is impossible, the foundation staff should at least make sure the foundation's board is aware of possible detrimental effects of such conditions on the project and structure them in order to minimize adverse consequences.

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WORST PRACTICE #10
The bull in the nonprofits' shop

Although Pyramid Venture Foundation is only a year old and the executive director, Ms. Bright, has just arrived with her newly-minted MBA, you know they want to "make a difference" in Central City and to do it quickly. As Ms. Bright reportedly has said in a newspaper interview, she "does not want to get bogged down in all that time-wasting nonprofit process stuff." While you appreciate Pyramid's new energy, your 20 years building Central City Kids' Jobs has left you somewhat nonplussed by the foundation's brashness and its apparent lack of knowledge or interest in the complex matrix of local players.

Now, sitting at a luncheon at which the new "Pyramid Venture Community Initiative" is being introduced, you are beginning to have a case of nausea. Ms. Bright has just announced the formation of a Community Development Team and an accompanying award to it of $500,000—a huge sum in Central City—in order to begin an "aggressive community development program." You and the other luncheon guests, representing nonprofits and businesses, have been invited to serve on "The Team." The trouble is, this effort appears to duplicate structures that have taken years to put into place in Central City, and, despite the flashy new terminology, the initiative employs an approach to community development that has notoriously failed here.

Further, the just-announced chair of the team is none other than Willie Slick, the fastest moving wheeler-dealer in the community development world, and it includes several other unimpressive members.

When you ask a couple of mildly critical questions, Ms. Bright bristles. You realize why: With Pyramid's trustees sitting admiringly by her side, this is Ms. Bright's moment in the sun. Knowing that you can't afford to alienate what is now the largest funder in your field in Central City, you lament years of work down the drain and have another drink.

ANALYSIS Most foundations understandably want to see their funding make a mark on the world. A problem arises, however, when a foundation's strategy does not adequately take into account the complex ecology of the existing organizations, programs and players in a given social arena. It is easy for foundation staff and board members, wielding the enormous power of the checkbook, to fail to recognize potential hubris in funding decisions. A good maxim for the field might be borrowed from the Hippocratic Oath: "First, do no harm."

Suggestions for Improvement

Surveys, focus groups and stories we hear tell us that applicants and grantees often experience tremendous frustration and worse in their relationships with funders. Although some of this may be inevitable, there is much room for improvement.

Our field is almost totally void of feedback from the organizations we seek to serve. That lack of feedback plus only minimal accountability make a dangerous combination.

We must seek new and creative ways to improve our practices, learn from our grantees and respond to their concerns, and constantly strive to improve our process. Many foundations, in fact, take these concerns very seriously and do an excellent job. A few foundations go to great lengths to solicit anonymous feedback from grantees and applicants, both successful and unsuccessful ones; and, more important, they use it.

Some foundations periodically bring in teams of outside evaluators, including representatives from the larger nonprofit sector, who look carefully at the foundations' internal processes and conduct confidential interviews with foundation staff and board members as well as applicants and grantees.

Other ideas have been put forward, including the development of a feedback program (such as an "ombudsperson") that would be a vehicle for those dealing with foundations to make both positive and negative comments, express concerns and try to resolve problems, as well as to acknowledge what is working well. Although such a program might be adopted by an individual foundation, it would probably be more effective if it were administered by the Council on Foundations (see "Sticky Wickets," page 57, for what the Council on Foundations plans to do to strengthen foundation accountability). Information gathered and lessons learned could be shared with the field as a whole at the Council on Foundations' annual meeting. Foundation News & Commentary also can be a powerful and effective vehicle in this regard.

Although some in our field resist and even fear feedback and some hold on to an extraordinary sense of entitlement, we believe that if we wish to preserve the freedom and flexibility that foundations have, we will have to develop new and better ways of doing business and new and better ways of learning from each other.

After all, we are all in this together.