Collectivity Salon Series: Transforming Foundation Giving for Community-Led Solutions

Salon
Written By Anna Sibley

Introduction

*Quotes may not be 100% verbatim but are written from notes taken at the meeting and with the intention of being as true to the speaker’s original intent as possible.

On April 3rd, 2024, members of Collectivity’s ecosystem—clients, partners, and supporters—gathered to discuss Transforming Foundation Giving for Community-Led Solutions. Foundations increasingly acknowledge the shortcomings of traditional grant-making processes post-2020, prompting inspiring shifts and innovative models. The session explored disrupting and transforming this realm, alongside avenues for broadening collaborative solutioning efforts within foundations.


In the room, facilitators included Anne Hoyt Taff, Vice President of Partnerships at the Saint Paul and Minnesota Foundation, and Collectivity CEO and Co-Founder Scott D. Cole. Attendees represented diverse perspectives on foundation giving and community-led solutions, spanning various industries such as direct service, nonprofit consulting, administration, research, and coalition building.

Discussion Themes

  • The conversation kicked off with discussion around foundation initiatives that are either a "highway" (something the foundation intends to continue supporting itself into perpetuity) or an "on-ramp" (something the foundation intends to kickstart but with the intention to spin off at a later time). Anne H.T. responded with a third option, and new focus for SPMF, "We call this catalytic capital... engaging with local community development funding initiatives - how do we scale them up and create more space for future work for the foundation?" The theory of catalytic capital is to unlock impact and additional investment that would not otherwise be possible, thereby strengthening communities, expanding opportunities and economic growth, and fostering innovation that advances the well-being of people and the planet, while also laying the groundwork for mainstream investors to participate in transformative investments (MacArthur).

  • Both direct services and systems-change play vital roles in the nonprofit sector and in advancing social causes, but their outcomes, donor expectations, and impact timelines can vary significantly. The question arises: How do foundations navigate and balance these divergent approaches?

  • Drawing from successful initiatives like ConnectedMN and the Main Street Economic Revitalization Project by the Saint Paul and Minnesota Foundation, it was highlighted that "[these projects] were done in reaction to something: there has been so much community influence in these processes - outcomes-wise, we have thrown reports out the window. The grantee report was optional.” Regarding reporting on outcomes, Anne H.T. emphasized, "Focus on what is the FORWARD opportunity for this report? NOT just the celebratory opportunity." A disruptive approach to foundation giving involves shifting the focus of outcomes reporting to highlight the community impact generated by a funding initiative, emphasizing community well-being and potential avenues for future work when communicating success.

  • Luke W, while supportive of rethinking impact reporting and outcome measurement, raised a pertinent question to Anne: "But how did you change the expectations of your board?” When they asked , “where all the money went this year?" Anne H.T. responded, "We don’t operate under a theory of change, but a theory of philanthropy. We don’t do the community outcomes, we focus on the philanthropic outcomes. We try to inform community works, not our egos."

    In the nonprofit industry, a theory of change is a commonly used method that explains how a given intervention(s) is expected to lead to a specific desired development change (for example, providing food at a food shelf leads to less hungry individuals) and can sometimes result in increased reliance on outputs for telling the story of an initiative. A potentially disruptive approach involves considering an alternative: a theory of philanthropy, or "how and why a foundation will use its resources to achieve its mission and vision. The theory-of-philanthropy approach is designed to help foundations align their strategies, governance, operating and accountability procedures, and grantmaking profile and policies with their resources and mission" (Patton).

The Ideal Role of a Foundation

  • What could, and should, foundations be doing to best utilize their positions and resources to steward the most effective ecosystem for nonprofit activity? The most prominent theme from the conversation regarding the ideal role of foundations emerged as ecosystem development and collective impact backbone support for issue advocacy, alignment, and convening of important actors. Nausheena H. pointed out, “In my executive director days, there were always a bunch of grantees. This could be its own ecosystem. We aren’t trying enough to bring people together to strengthen these ecosystems. [Foundations with grantees] can always bring together the opportunity to collaborate on something.”

  • After or during successful initiatives, funders typically have access to reports, outcomes, lessons learned, and various approaches to future work. Elektra S. points out, “There is so much of that information that exists year over year, and it builds a lot of aligned work. To get back to the point of convenings, you have all of these actors engaged in systems change work. I find myself in spaces thinking about ecosystem strategy - is this always a part of foundation conversations?”

  • The sentiment that foundations should serve as conveners for actors working in specific issue areas was agreed upon by Anne H.T.. She remarked, "I can’t speak for everyone, or even for the Saint Paul and Minnesota Foundation, but what I do think foundations should do is, within issue areas, create funding opportunities. We don’t always need to wait for people to come to us first; we can initiate spaces and invite whoever we want there." Foundations can leverage their positions to foster collaborative ecosystems and alignment between nonprofits, utilizing their expanded resources and bird's-eye view of who is contributing to different areas of work.

  • Foundations can, and should, strive to serve as community builders for grantees within issue areas AND serve as representatives for collective grantee interests to larger actors. Anne H.T. shared a story about how the Saint Paul and Minnesota Foundation took initiative negotiating with DEED, on behalf of their grantees, for more flexible disbursement and eligibility language in the MSERP statute before its passage in the state legislature. "We were able to change a portion of the legislation because we asked, and this had a massive funding impact. It is keeping an eye out for these things - but also for smaller tweaks that also can have large impacts," says Anne H.T.

    It was inspiring to hear many voices contributing to a shared vision of a better tomorrow for foundations and community-centered giving, including perspectives from representatives of both foundations, nonprofits, and beyond.

Short-term Strategies

  • "I always expected a stronger relationship with the foundation or funder. We submit our materials and get accepted, which is great... but when I can actually talk to a program officer, there is a much bigger opportunity to build a stronger relationship and enhance the outcomes of the grant. The program officer often only has the capacity to read the application and issue the check—how can a foundation expand this opportunity?" says Nausheena H.

  • It's easy to overlook that foundations also have to fundraise, meet board deadlines, and fulfill governance obligations to donors. If a policy or reporting request seems unusual, it may be worth asking a foundation's program officer why something is structured the way it is. There's typically a rational reason behind reporting requirements, and gaining a clear understanding of that can help a nonprofit comprehend the foundation's perspective. It’s also worth noting, foundations should always strive to provide this transparency proactively.

  • Throughout the gathering, the importance of consistent and transparent communication from foundations was evident. From our discussions, we understand that conveying these narratives can be challenging, given the nuances to capture and the injustices to confront, both past and present. A sentiment agreed upon by the group was "better to err on the side of over-communicating rather than not communicating enough!" Communication, of course, extends to social media and impact reporting, but over-communication as a positive applies to communication with foundations' grantees, funders, and those with access to the levers of political change.

  • One of the most effective ways to contribute to foundational alignment, advocacy, and ecosystem development is to study who is already engaged in the work! A short-term action that nonprofits and foundations can take today is to check in with their partner or competitor organizations' efforts, participate in sector events, or conduct research on important issues to discover new information.

More to Explore!

Featured Initiatives

Here is a list of several programs, initiatives, or coalitions that were mentioned during the conversation

Theories and Concepts

During the Salon, several theories and academic concepts were discussed: if you are interested in transforming foundational giving and community-led funding initiatives, consider exploring these ideas!

Thank you to Attendees!

This conversation would not have been possible if not for the Salon participants! A special thank you to attendants, listed in alphabetical order by first name. 

Anna Sibley
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