Keeping the Doors Open

What to do before your primary funder backs out

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How many large funders do you have? Three? Five? Ten? Sometimes our clients rely on a single, generous funder to sustain them. It’s an amazing opportunity that allows for focused time on strategy and programs, rather than on fundraising. However, that notice is bound to arrive: “We regret to share that we are unable to fund you after the completion of this grant cycle.”

Besides that twisting in the gut, what happens next?

A panel at this year’s annual Grantmakers in Health conference tackled this very issue. The session included leaders from Active Living by Design, the Robert Wood Johnson Foundation (both past clients), and the Safe Routes to School National Partnership. I was delighted to hear key recommendations that align with what we tell our clients:

  • Plan for the transition early. Very early. Anticipate it.
  • Stay true to the organization’s mission and vision as you seek out new funding. Don’t swerve to meet goals of potential funders, as it can actually weaken the organization.
  • Have a cost-effective organizational structure in place (keep staff size lower, no more than 10 to 12).
  • Bring new staff on with great intention, and focus on creating staff longevity.
  • Set up a rainy day fund, knowing there will be a transition period in the future requiring it. 
  • Do your work well and be ready to share the story of impact, which will contribute to the trust of new funders. 
  • Engage the departing foundation to connect you to other funders and to expertise you might need during the transition: strategic planning, legal, human resources, whatever is needed for a smooth transition.
  • Engage new funders that will have credibility with other funders, in order to generate funding from multiple sources.

For some of you, these points may already be known or obvious, and they are good reminders about how to prepare for uncertain times. From a communications perspective, we can’t emphasize enough the value of having a clear, focused mission and vision that guides an organization’s work, particularly its programmatic decisions. It’s also crucial to collect qualitative and quantitative data so that you can tell a compelling, investment-worthy story of impact to potential new funders.

While funding can be unstable, organizations can take steps to make it through challenging times with limited scratches. Our team is always here to help.

Image Credit: Klearchos Kapoutsis | Flickr CC BY 2.0.

Denise Rhiner is one of Pyramid's senior communications strategists. She works to advance the missions of clients like the MacColl Center for Health Care Innovation, PATH, and Oregon Patient Safety Commission. She's also a nature geek and foodie with a passion for wild mushrooms.