Ask NCFP: How do we set expectations about our funding capacity?

NCFP receives a number of questions about family philanthropy and is particularly equipped to answer inquiries about philanthropic purpose, governance, next-generation engagement, family dynamics, and succession and legacy. This series is designed to answer commonly asked questions and provide resources and considerations for family funders. If you have a family philanthropy question, consider submitting a request for assistance to NCFP staff members.   

Question: We are giving additional dollars to our grantees this year while they navigate federal funding rollback and uncertainty. We want to be a good partner but are worried about how to set expectations for the future, given that we don’t anticipate being able to continue giving at this level next year.

All funders have to make difficult decisions about what grantees to support and how much to give. It’s wonderful that you (and many other funders) are able to increase your payout to respond to the current moment. We expect that government funding and the broader funding ecosystem will continue to be uncertain in future years and planning for how you can support your partners with the resources at your disposal will be critical. In this fluid environment, it’s important to be in dialogue with your grantees and to be honest and transparent about your capacity, your goals, and ways that you can provide support beyond the check. Being transparent with your grantee partners will help them plan and help you develop a more trusting and meaningful relationship—ultimately making you a more effective funder. 

Set Expectations

In cases when you make a grant above and beyond what you would traditionally give, be clear that the grant is extraordinary and for what reasons. For example, if you’ve increased the dollar amount tell your grantee partner what you would typically give and why you are giving more. Explain what they can expect in future years. If you’ve loosened reporting requirements or are giving general operating support—something we’d encourage you to do always—but usually have more reporting requirements or give project-based grants, let them know that this is atypical for your philanthropy.  

Manage Your Timeline

We encourage funders to think about this current “moment” as one they’ll be facing for three or more years and to fund accordingly. Providing a funding infusion for one grant cycle and then pulling back can create a disruptive boom-and-bust cycle so we recommend ramping your funding down over a few years. Your nonprofit partners will have a longer period to plan, particularly if federal funds aren’t available to replace the dollars you’ve given. Regardless of your funding timeline, be clear about it with your partners. 

Be in Relationship 

Talk to your grantee partners honestly and openly. Find out how they want to receive funds (e.g., quickly or in installments during a few years). Ask how additional funds or less restrictive parameters are helping them meet their mission. This information can be useful to you as you evaluate how your responsive grantmaking is creating the impact you desire. 

Ask what new or unanticipated challenges your grantee partners are facing. Be receptive to being asked for requests that you might not think you can fulfill and be open to reassessing what support you think is possible for you to provide.  

Having a strong relationship with your partners, bolstered by open communication, will help you gather the information you need to make informed, values-driven decisions.  

Offer Support Beyond the Check

If you truly don’t have the capacity to give at the same level next year, talk to your grantee partners about what else they need. Can you provide capacity-building support? Can you introduce them to other funders? Can you use your platforms to amplify their work?   

The world is asking funders to step up in many ways and it can feel overwhelming. Think about what’s possible for your philanthropy in terms of increasing your grantmaking and how you else you can uniquely support your grantee partners using your influence, expertise, or time.

Maggie McGoldrick is a senior manager of marketing and communications at NCFP.