Transparency Talk

Category: "Open Applications" (3 posts)

Invitation Only: Closing the Door to Equity?
November 15, 2019

Clairepeeps
Claire Peeps

Claire Peeps is the executive director of the Durfee Foundation, a family foundation that focuses on investing in extraordinary people who are making a better Los Angeles.

This blog also appears in Candid’s GrantCraft blog.

After more than 20 years of grantmaking in Los Angeles County, you’d think our staff at the Durfee Foundation would know all of the eligible nonprofits in our region. But we don’t.

Not long ago, for example, we got a grant request from a car mechanic who had opened his garage to foster youth in the high desert, a couple of hours north of us. Aaron Valencia, founder of Lost Angels Children’s Project, is now among the most innovative and talented leaders in our grant portfolio. But we would never have met him, had we employed an invitation-only application process.  The lesson to those of us in philanthropy: you just don’t know what you don’t know.

Every time Durfee opens an application cycle, we meet eligible nonprofits that we’ve never heard of before.  It hardly seems possible, but it happens, every time. Even with our lean staffing, we think it’s increasingly important to keep the door open, so let me share with you why and how we do it.

As a generalist funder, our grantmaking lens is as wide and diverse as Los Angeles. These circumstances might explain why it would be hard for us to craft a list of ideal grantee partners. But even if we could, we would still prefer the open application process.  California

No matter how much time we spend on the ground, in the community, we can’t possibly keep up with the goings-on of all worthy, high-performing nonprofits. Plus, we’ve heard from so many of them how much they appreciate the opportunity to put themselves forward, and to state their case directly to us. Nonprofit leaders are active change-makers, and they seek agency over their future.

We also hear rueful complaints by leaders who are frustrated by their inability to get in the line of vision of funders whose mission seems to align with their own.  We field a lot of “do you know anyone there?” calls.

Which makes us wonder—what if we looked at the grantmaking process through an equity lens?

At a time when our field is focused on equity and inclusion, an invitation-only application process seems counter-intuitive. Or worse, it can project autocracy, instead of partnership—a sort of opaque “don’t call us, we’ll call you.” Imagine what it would feel like to stand at the door of a windowless, locked building to which you seek entry, with no bell to ring.  And yet, that’s very often how foundations present to would-be grantseekers. Why?

"At a time when our field is focused on equity and inclusion, an invitation-only application process seems counter-intuitive."

I recognize that sometimes, invitation-only makes sense.  A place or issue-based initiative, with a specific goal and time horizon, might best succeed in a sustained, collaborative model with a set of close, expert partners.  Or, grantmakers in spend-down mode might choose to bring their work to a close in a deliberate fashion with a select few longstanding colleagues. It can streamline limited resources, reduce the demand on nonprofit leaders’ time while increasing their odds of being funded, and reduce the time foundation staff invest in application review.

While all of this seems great for the nonprofits who find themselves in a funder’s favor, what about those who fall outside their line of vision?

What Do Nonprofit Leaders Say?

The opinions above are my own, and I’m a grantmaker. Knowing that we alone shouldn’t be the ones to decide about our process, the Durfee Foundation sent a survey to approximately 100 nonprofit leaders in Los Angeles to ask their opinion on the matter. The leaders surveyed are recipients of the Durfee Sabbatical Award and are arguably among the strongest nonprofit sector leaders in our region.

We asked two questions:

  1. Do you prefer foundation application processes that are open, or invitation only?; and
  2. Do you think “invitation only” processes help or hinder the work of your organization?—and, in both cases, why?

The results were mixed and thoughtful. Overall, 78% prefer open processes, an overwhelming majority.  Not surprisingly, those who tilt in favor of invitation-only represent larger organizations, but even they recognized the challenge of achieving a spot in the inner circle. Almost all acknowledge the dilemma of a Hobson’s choice – invitation-only is always preferable if you are offered an invitation.

“If I’m in,” said one leader, “of course I prefer the invitation-only application because it increases my odds of getting the grants. But if/when I find myself in need of finding new foundations to fund our work, it seems the likely ones are invitation-only, so I’m stuck.”

Other leaders expressed appreciation for the satisfaction they feel when they work in partnership with funders.  “When we are on the ‘inside,’ it’s of course great! The collaboration with a funder is very rewarding.”

Those circling closed shops while looking for entry were incisive and blunt.

“Invitation-only applications further the funder as an all-powerful source,” said one leader. “They exclude small community-based organizations who are doing great work, but don’t have access to the privileged circles big funders run in. My organizations have been in the select group for some of the biggest foundations. It takes years of relationship-building, and the skill and ability to spend time doing that. Often those most impacted by the issues being funded do not have the time or ability to spend in that way. It’s an equity issue.”

“The open process speaks to me about the receptivity of the foundation," said another. “It tells me the foundation doesn’t think they know about everything that’s going on that might be mission-aligned.”

“Invite-only foundations can perpetuate income/gender/racial inequity in the same way as invite-only clubs,” said a third.

In addition to posing a challenge regarding equal access, some see invitation-only as limiting to experimentation: “Invitation-only, it seems, reduces the ability of the nonprofit organization to innovate and move in a new direction. If, say, our board has decided through strategic planning that we need to engage in green infrastructure when we are known for habitat restoration, how can we telegraph that to a funder that funds in this new area?”

So What’s a Funder to Do? Advice on a Hybrid Approach

The survey results yielded lots of practical suggestions, with nuanced perspective.

“More hybrid approaches are needed,” said one leader.  “Open processes should still be focused and targeted. Before applying, I want to know if my organization’s work is a fit for the foundation.  For those that are invitation-only, I would like to see more mechanisms for opening their processes, like polling current grantees for younger, smaller, newer organizations that deserve a ‘look.’ Another idea might be for grantseekers to have an exploratory interaction with the foundation, like an ‘office hour,’ a ‘meet and greet’ or a systematic process by which foundation officers actively seek out new groups to add to their portfolio.”

“I believe that an open process is perceived by the field as being more equitable," said another, “however, I don’t think this is necessarily true. The ways in which the open applications are vetted is where real equity happens or doesn’t. Who’s making the decision? What are the guidelines? These are the real questions when it comes to equity.”

So, my fellow funders, let’s start there—with these simple and complex suggestions that emerged.

Write Clear Guidelines. This may be the most challenging, but essential practice of them all. Clear guidelines may enable a foundation to shift from invitation-only to open application, without opening the floodgates to impossible numbers of applications. Vague or imprecise guidelines generate vast numbers of unsuccessful applications, and waste valuable time for both grantseekers and reviewers. Clear guidelines help nonprofits take agency in determining whether they are a fit for a grant opportunity or not.

Invite a Letter of Interest. Even if your foundation prefers to work with nonprofit partners by invitation only, offer a letter of interest option or an online platform for nonprofits to introduce themselves, and to get in your line of vision.  Acknowledge that you have received the communication, and let them know what you will do with the information.

Explain Your Selection Process. If you are invitation-only, take the time to explain why. Whether you are open or by-invitation, let grantseekers know how decisions are made, by whom, by what timeline. If there are set opportunities to invite newcomers and expand your portfolio, share when and how.

Durfee uses a peer review process for most of its programs. We’ve found this an excellent way to expand the expertise of our small, generalist staff, and to offer some transparency to our process. Our peer panelists, usually alums of our award programs, bring deep community knowledge to our decision making, and subsequently serve as ambassadors in the field, clarifying and demystifying the foundation’s process to their peers.

Be Available by Phone. In our digital age, this practice might seem old-fashioned, but we’ve found it’s incredibly valuable at Durfee for building relationships. One compassionate, articulate staff person on the phone can right-size an applicant pool by helping applicants determine if they’re a fit. When they’re not, we find we can often point them in helpful directions, offer feedback, and provide a heartfelt thanks for the organization’s work. This really can go a long distance. Regardless of the outcome, the cost of this simple strategy yields dividends in goodwill.

List Board and Staff. All grantseekers deserve to know who has decision-making authority at foundations, which are, after all, tax-exempt public entities. It’s reasonable for nonprofit leaders to consider who’s in the room before investing time in an application, so board and staff should always be listed on a foundation’s website or in print materials.

Acknowledge Funder Fragility. Let’s face it, it’s a real thing. Whatever prompts funder fragility—uneasy power dynamics, concern about being overwhelmed by requests, disinclination to express rejection, deference to our boards, fear of criticism—we often work behind a buffer that separates us from the sector we serve. Most of our decision-making takes place behind closed doors, out of public view.

For those who truly seek anonymity in their grantmaking, a donor-advised fund might be a more appropriate giving vehicle than a foundation.  Indeed, a more honorable one. If you choose to hang out a shingle—if you seek and are awarded IRS status as a private foundation—you owe it to the public to make your grantmaking process reasonably accessible and transparent. That’s also one of the reasons that Durfee was an early adopter to participate in Candid’s GlassPockets transparency initiative to encourage greater openness in philanthropy. We hope our profile there signals our ongoing commitment to working in a trusted and transparent manner.

"If you choose to hang out a shingle—if you seek and are awarded IRS status as a private foundation—you owe it to the public to make your grantmaking process reasonably accessible and transparent."

Build Trust. According to Southern California Grantmakers, only about 30% of its members currently offer an open, accessible application process. Let’s collectively inch that number higher!

I’m hopeful that we are trending in that direction. The recently-launched Trust-Based Philanthropy Project, a national initiative spearheaded by the Whitman Institute, the Robert Sterling Clark Foundation and the Headwaters Foundation, seeks to rebalance power in philanthropy by promoting trust-based relationships between nonprofits and foundations. Being responsive, streamlining paperwork and seeking and acting on feedback from nonprofits are among the pillars of best practice that they recommend. Other important endeavors, like California’s Full Cost Project and LA’s Nonprofit Sustainability Initiative, prize clarity and candor in nonprofit and funder exchange, and strive to put more strategic decision making in the hands of nonprofit leaders.

It takes two to tango, as they say. But a trusting relationship between nonprofits and funders shouldn’t begin on the dance floor, after funders have chosen their dance partners. It needs to begin much earlier, as they explore shared interests and skills.

And access to the dance floor? The building that houses it needs windows, and a front door with a bell that rings. Or better yet, an open door to a standing invitation.

--Claire Peeps

Meet Our New GlassPockets Foundation: An Interview with Chris Langston, President & CEO, Archstone Foundation
August 8, 2019

GlassPockets Road to 100

This post is part of our "Road to 100 & Beyond" series, in which we are featuring the foundations that have joined us in building a movement for transparency that now surpasses 100 foundations publicly participating in the "Who Has GlassPockets?" self-assessment. This blog series highlights reflections on why transparency is important, how openness evolves inside foundations over time, helpful examples, and lessons learned.

Since its inception in 1985 as a healthcare conversion foundation, Archstone Foundation has responded to the implications of changing demographics by supporting innovative responses to the emerging and unmet needs of older adults. The Foundation has funded a wide range of grantees making important contributions in critical, yet often overlooked areas of need.

Today, the Foundation focuses its grantmaking on four major areas:

  • Enabling older adults to remain in their homes and communities;
  • Improving the treatment of late-life depression;
  • Developing innovative responses to the family caregiving needs of older adults; and
  • Expanding the health care and broader workforce needed to care for, and serve, the rapidly growing aging population.

Archstone Foundation is among our newest GlassPockets participants. In this interview with GlassPockets’ Janet Camarena, Chris Langston, President & CEO of the Archstone Foundation, explains why transparency is central to its philanthropic efforts.

GlassPockets: Archstone Foundation was born out of a healthcare conversion, when a nonprofit HMO became a for-profit corporation. Do you think transparency is more important for healthcare conversion foundations to demonstrate that these dollars are being used for public good? Or are there other reasons that you are prioritizing philanthropic transparency?

Langston_hi_Staff_Photos_3.0_165_165_c1_c_t_0_0
Chris Langston

Chris Langston: I’m sure the public is more interested in what’s going on with healthcare conversion foundations, as the funds are more clearly a public trust because they derived from the tax advantages given to the nonprofit parent. As an older, smaller conversion, the public has long since forgotten the origin of the endowment, but what we do is still supported by the taxpayers granting favorable treatment to the endowment. Nevertheless, to my mind, conversions or foundations born of a wealthy individual’s gift (or other source) have the same obligation to transparency. Foundations are granted tremendous autonomy in what and how they do their work and, beyond some very broad IRS regulations, are only accountable to their boards. As a consequence, I think that we owe the public great visibility into what we do and how we do it. I believe that the great diversity of foundations is a strength in the sector, and I oppose external mandates regarding subject matter, limited lifespan, payout rates, or other aspects of foundation discretion. So, the only remaining constraint is public scrutiny of our process and our work.

GP: We often hear concerns that transparency takes a lot of time and resources, so it's really more relevant for large foundations. Why would you say transparency and openness should be a priority for even foundations comprised of a small team? How have you benefited from your efforts to open up your work?

CL: I see the GlassPockets standards as a floor and not one that takes a great deal of effort to keep shiny. We share through our website our current grants, our strategic plans, our governance documents, and financial reports. Even small foundations need to have these tools and structures and sharing them digitally is no burden. These things change relatively slowly and in the modern era are relatively easy to keep up to date.

Moreover, I’ve worked at two other foundations previously, one which started as not very transparent because of inattention to communicating to the public and one which had historically gone to great lengths to be opaque – the Atlantic Philanthropies during its anonymous giving phase. In neither case did our lack of transparency make our work better – I think it made it worse. We got less constructive engagement from the field, we got less alignment between us and grantees, and we didn’t benefit from the extra energy that comes from knowing that your successes and failures are going to be visible for all to see.

GP: Your commitment to openness includes maintaining a responsive grantmaking program with an open RFP that can be submitted on an ongoing basis. At a time when many foundations are putting up walls by shifting to invite only grantmaking, this is notable in that you are maintaining this kind of openness with a very small program team made up of three officers. Why has it been important to maintain the open RFP, and what is your advice to keeping it manageable for lean teams?

CL: Actually, we are right now reviewing our responsive grantmaking program and could very well stop or constrain it. While having an open RFP mechanism is one kind of openness, I am more committed to having an open-door policy. I think it is a legitimate strategic decision as to whether a foundation takes grant applications by invitation only, has a monthly letter of intent review (as we currently do), or something in between. What’s more important is that there be regular opportunities whereby grantseekers can learn from foundation staff about foundation priorities and strategies for change and where foundation staff can learn about the needs and interests of nonprofits in the field and the people in need.

”The GlassPockets process is a thoughtful and well-structured way of getting started in opening up to the public, what largely belongs to the public, even if it is held in trust for them by us on the inside.”

GP: How did the GlassPockets self-assessment process help you improve or better understand your organization's level of transparency, and why should your peers participate?

CL: The GlassPockets process is a thoughtful and well-structured way of getting started in opening up to the public, what largely belongs to the public, even if it is held in trust for them by us on the inside. Providing the information helps you in many ways – it helps you be sure that you even have all the tools, policies, and procedures of a modern nonprofit (e.g., conflict of interest, committee charters, etc.). It helps you whenever you have a twinge of conscience at the thought of making something public, in so far as that is telling you that you are doing something that you don’t feel good about – something that doesn’t pass the “would you want to see it on the front page of the paper test.” And the process is part of creating a culture of openness and honesty among and between board, staff, and grantees. Creating this kind of culture is an enormous project undermined by fear, norms of silence, and power differentials – but I think it is critical for effective grantmaking.

GP: Since ideally, transparency is always evolving and there is always more that can be shared, what are some of your hopes for how Archstone Foundation will continue to open up its work in new ways in the future?

CL: Having earned a GlassPockets designation now at a second organization, it is this issue that really interests me – how can we take further steps in transparency. While it is scary and a long-term project to build a shared understanding and the will to change, I hope to make much more information public – for example, grant proposals (at least the funded ones), evaluations, board minutes, budgets, and more. The federal grantmaking process at the National Institute of Health already does much of this. When I think about government processes, I expect all of that transparency and more -- and yet government is at least nominally subject to the control of the voting public. Since foundations do not make their grantmaking or staffing decisions subject to elections, shouldn’t we be even more transparent than government?

Fundamentally, the issue is that among funders and nonprofits, we spend a lot of time not just “reinventing the wheel” but more accurately, reinventing the flat tire. It is not that there is more knowledge or skill on one side or the other of the grantmaking table, it’s that there isn’t enough truth and light illuminating the conversation. And as the party with the power of the purse, it is incumbent on us to go first to change the dialogue if we want to have better results.

--Chris Langston & Janet Camarena

Open Yourself Up to New Solutions
April 5, 2017

SAVE THE DATE: April 13, 1:30-3:00 p.m. EST.  Like this blog series?  Attend our Inside Innovation Funding event in person in San Francisco, or virtually via livestream in San Francisco.

(Christie George is the director of New Media Ventures, a mission-driven venture firm and donor collaborative supporting progressive startups.  New Media Ventures supports companies and organizations that – through the use of new media and technology – build advocacy movements, tell new stories and drive civic engagement.)

This post is part of the Funding Innovation series, produced by Foundation Center's Glasspockets and GrantCraft, and underwritten by the Vodafone Foundation.  The series explores funding practices and trends at the intersection of problem-solving, technology, and design. Please contribute your comments on each post and share the series using #fundinginnovation. View more posts in the series.

Christie-George1-163x164

If you’ve been following the headlines since the 2016 election, you’ve probably thought about the growing polarization in our country. You may share my worry about filter bubbles and political echo chambers, or you might have recommitted to sparking conversations with friends across the aisle. At New Media Ventures (NMV), we see the same need in the funding world. From our perspective, most people fund people and organizations they already know, moving money through referrals and established networks. But if we’re going to solve the big problems facing our world, we need to move beyond our personal echo chambers.

As a mission-driven venture fund that invests in both for-profit and nonprofit startups, NMV stands with one foot in the venture capital world and one foot in philanthropy – driving change at the intersection of technology, media, and civic engagement. When we first got started, we found ourselves sourcing opportunities in all the traditional ways – using our personal networks and attending conferences – but we quickly realized that we needed to try something different to ensure that we were actually identifying new approaches to the problems we wanted to solve. In 2014, we launched the NMV Innovation Fund with two main goals: 1) increase the number of investable projects crossing our desks (our deal flow); and 2) break through the bias for “the usual suspects” to fund more diverse entrepreneurs.

In the simplest terms, the Innovation Fund is an open call for world-changing innovations. Twice a year, we ask our network, and our network’s network, and their networks (you get the idea: we cast a wide net) to send us the best opportunities they’ve seen for how technology can catalyze progressive change. This year, in response to our “Resist and Rebuild” Open Call, we received nearly 500 applications – a new record – and we are blown away by the creativity of the applicants.

“...If you haven’t tried an open call, you might be missing out on amazing solutions beyond the usual suspects.”

While it may sound overwhelming to sort through hundreds of applications, we have developed a methodology for doing this work efficiently.  This process includes recruiting a volunteer screening committee of funding peers, simplifying our application as much as possible, asking more detailed questions only to the applicants who rise to the top, and using a technology platform to easily manage all of the applications in one batch. Ultimately, New Media Ventures makes the final funding decision, but the screening committee is one of the most powerful aspects of the process – many heads are better than one – and working collaboratively with other funders allows us to leverage different domain expertise in evaluating opportunities. 

Here are two takeaways from our experience opening ourselves up to open calls, and the reasons why we hope other funders will consider similar approaches:

1) Big problems require new solutions (and diversity is not a “nice to have”). Funding exclusively through referrals can limit what funders see and increase the risk of confirmation bias – one of the reasons white men are so much more likely to get venture capital funding in Silicon Valley. By having an open and transparent application process, heavily marketed to ensure we’re getting outside our own bubbles, we’ve made a tremendous
impact on the diversity of our portfolio. Our website, blog, social media platforms, and partners broadcast details about the open call, allowing us to
reach new audiences who may be deterred by less transparent philanthropic opportunities. We’re proud that 65% of Innovation Fund applicants have New Media Ventures logoat least one female and/or trans founder, and 30% have at least one person of color on the founding team. We still have a long way to go, but by comparison 8% of venture capital goes to women founders and 13% to founders of color.

However, focusing on diversity is not a “nice to have” and it’s not just about the numbers – it’s a core part of our strategy. Our societies and systems are facing entrenched problems, and solving them will require new and bold solutions. We need all hands on deck. Women, trans people, and leaders of color have much-needed perspectives and expertise, but often lack access to capital, networks, and traditional philanthropy. For example, news platform Blavity, founded by a young black woman, has grown to reach 7 million readers by creatively combining pop culture content with thoughtful coverage of race and gender issues. We might never have identified this opportunity were it not for our open call.

2) Less control over outcomes leads to more welcome surprises. When funders issue a request for proposals (RFP), we essentially define the terms of the discussion: we’ve often developed a strategy, and we’re looking for organizations to execute that strategy. Unlike a traditional RFP, the Innovation Fund Open Call process has very broad parameters by design. We’ve found this requires us to be comfortable with uncertainty and develop the humility to stay in a learning mindset. The approach isn’t without risks. What if you open the gates for a broad range of applicants, and don’t find anything you want to fund? What if you keep your parameters flexible and only get applications that aren’t in your wheelhouse? But with careful planning and a good process, we have developed strategies to mitigate the risks, and find we gain real value from being able to scan the field and identify gaps as well as opportunities. It has paid off in delightful and unexpected ways.

For many of our portfolio organizations, NMV is their first institutional funder, and our early investment gives our grantees the validation and runway they need to go on to great things: CoWorker.org hosted the Summit on Worker Voice with President Obama; Blavity went on to participate in 500 Startups; Vote.org got into Y Combinator and scaled up quickly to send SMS voting reminder messages to more than 1 million people in swing states leading up to the election. And that’s just a few examples.

To sum it up, if you haven’t tried an open call, you might be missing out on amazing solutions beyond the usual suspects. If boosting innovation is one of your goals, we recommend starting small and collaborating with others to share the work. Consider carving out a portion of your grantmaking budget to fund projects selected through an open process, and remember that you don’t have to reinvent the wheel. NMV and other similar groups have developed deep expertise around open calls and we’re excited to partner with other funders. In fact, we did just that when we worked with the Pluribus Project on a democracy-focused open call last year.

So go ahead, open up and let yourself be surprised. It worked for us.

--Christie George

 

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About Transparency Talk

  • Transparency Talk, the Glasspockets blog, is a platform for candid and constructive conversation about foundation transparency and accountability. In this space, Foundation Center highlights strategies, findings, and best practices on the web and in foundations–illuminating the importance of having "glass pockets."

    The views expressed in this blog do not necessarily reflect the views of the Foundation Center.

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