Guest blog post by: Emily Yu, director, Social Innovation, Case Foundation

What happens when you bring funders and grantees to the same table to talk about power dynamics in the public, private, and charitable sectors? Mike Goorhouse set out to address this very question during this "Connections" session the following quote:

“The giving/receiving process is fundamentally a relationship, one which deserves to be respected in its own right. Both giver and received must work to create the basis for mutual respect and appreciation. If this is not true the whole thing is a shame.”

The reality is not much has changed since this statement was first made by Roy Menninger, MD, at the Council on Foundations Conference—30 years ago. As attendees nodded their heads in agreement, Mike challenged attendees to think about what the world could look like in a world where dynamics between funders and grantees were equal. The discussion that followed was inspiring and unexpected, and the responses included some of the following ideas:

Nonprofits would:
• Institute increased transparency
• Allow themselves to admit failure and share lessons learned (positive and negative)
• Foster honest dialogue, especially in regard to financials and business models
• Build agreement around community priorities

Funders would:
• Increase engagement with nonprofits to understand what are their operations and real world realities
• Find ways to work together to solve problems
• Provide for more transparency around the grant selection and award processes
• Factor in more operational funding
• Take more risks when it comes to awarding grants to small nonprofits
• Streamline numbers; there would be less foundations and less nonprofits (assumption that larger forces such as taxes etc would be redistributed in this model)
• Provide better accessibility to their program teams (funders)
• Foster longer term funding relationships with grantees

With the vision of this “balanced” world in sight, what was the problem then? After further discussion and exchange of personal experiences within the sector – the conclusion was that there is no “easy” solution to this decades old issue. 

In closing though, Mike offered several ideas that have the potential to move the needle—hopefully before another 30 years has passed by:

1) Look at state rules around the number of trustees in foundations… rather than requiring 1 or 2 trustees, require 5 or more and follow more of a “public charity” model.

2) Provide more grantmaker training. Mike referenced a study from the Center for Effective Philanthropy that highlighted how a program officer’s relationship with a grantee is the most important factor when it comes down to how the grantee views that foundation.

Mike Goorhouse is the Director of Membership and Project Management Systems for the Council of Michigan Foundations. In addition, he also serves as Chair for the Independent Sector’s NGen Advisory Group.