As Foundations Shift Priorities, Nonprofits Scramble to Adapt

Dazon Dixon Diallo has been running an Atlanta nonprofit that educates women about HIV and safe sex since 1989.

That means the charity veteran has seen it all: surging attention to fight the disease, donors shifting their focus to the global AIDS pandemic, foundations moving grants away from preventing the disease to treating it or from helping afflicted children to men.

Her nonprofit’s budget has gone up and down as grant makers changed their priorities. But she’s been able to manage in part because of how she pitches the work of her group, SisterLove, to donors.

When the Ford Foundation began to change its grant-making approach on reproductive health a few years ago, Ms. Diallo worried that her money was at risk. But she was able not only to continue receiving money through Ford’s reproductive-health division but also to secure a grant through its human-rights program by emphasizing her organization’s advocacy work.

Tough Economy Causes More Transitions

Nonprofits of all sorts have been whiplashed by foundations that take on new causes or approaches, only to abandon them or rejigger their strategies a few years later. And the tough economy has made the roller-coaster effect even worse, experts say.

Some hot causes of yesterday have gone cold. Sometimes, foundations get new leaders with a different vision or they worry their giving isn’t producing results. Other times, they simply want to try something new. And as foundations seek to become more strategic, raising money can be more about shoehorning a group’s work into the priorities of the donor and less about making the case for needs.

“This is a major issue, and it’s been exacerbated by the recession, changes in leadership at foundations, and the romance with impact,” says Michael Seltzer, a fundraising expert who has led groups including Funders Concerned About AIDS and Philanthropy New York.

He notes that the civil-rights movement was arguably “an 80-year phenomenon that’s still going on” and contrasts that to foundations’ unwillingness to be “long-distance runners.”

While strategies for adapting do exist, that can be frustrating for nonprofits that are fighting society’s long-term challenges.

Success Is No Guarantee

Sometimes even charities that can prove they have made a difference can’t attract steady foundation support.

Khary Lazarre-White is a co-founder of Brotherhood/Sister Sol, a New York nonprofit that provides comprehensive services to youths, including tutoring, sex education, and college preparation. He says that fewer foundations seem to be interested in supporting holistic work to help young people; more of them are backing ways to improve schools.

Despite strong results like an 88 percent high-school graduation rate among its participants, Mr. Lazarre-White says Brotherhood/Sister Sol has lost the support of three big foundations in recent years. He has coped in part by securing a state government grant, but that money lasted only a year.

He says that foundations tackling tough social issues sometimes stay interested only if they see the potential for reproducing the group in other locations. But not all organizations can or should spread nationwide. He notes: “There is no Harvard No. 2, there is no Spelman No. 2.”

Of course, it can be a very positive thing for foundations to abandon old approaches, say nonprofit leaders. Unlike governments, their money is flexible and can help spur promising new solutions.

But the downside comes when effective nonprofits lose support simply when they’re not in vogue any longer or if they’re too small or inexperienced to find other sources of money.

“That’s when ‘fickle’ gets a negative connotation,” says Vignetta Charles, a vice president for AIDS United, a nonprofit group in Washington. “A more savvy nonprofit with more capacity can navigate those changes,” she says, but smaller organizations often cannot.

Creative Ideas

To cope with grant makers’ ever-shifting priorities, sometimes it makes sense for a charity to expand its mission. That’s what Food & Friends did in 2000.

The Washington nonprofit had started to provide food and nutrition counseling to people with HIV. At the same time that money for HIV/AIDS began to dry up, the nonprofit saw a chance to serve people suffering from cancer and other illnesses. Other groups that began by providing housing to people with AIDS have likewise extended their reach to people with other needs.

But often, a nonprofit cannot or should not take on additional work. Instead, maintaining foundation support may be a question of recasting.

Take AIDS United, an advocacy group that also awards grants to smaller HIV/AIDS charities. One foundation that had long helped AIDS United support organizations working with HIV-positive women shifted to supporting nutrition. AIDS United reshaped a grant proposal on behalf of two groups, emphasizing how the organizations help meet the nutritional needs of people suffering from AIDS.

“The scope of their work isn’t going to change, the scope of our investment isn’t going to change, but it will change the objectives on which we report to them,” says Ms. Charles.

Easing a Transition

Nonprofits may also have an edge if they successfully map out for foundations their long-term plans. “The more they understand where an organization is headed, the more ownership they feel,” says Chris Tebben, executive director of Grantmakers for Education, a group of foundations and corporate donors. She also says that charities might consider staying in closer touch with donors than “they’re comfortable with.”

Such a strategy may give them warning when change is coming.

Says Ms. Charles: “People don’t change their portfolios overnight.”

When a nonprofit is facing the loss of several big donors, Mr. Seltzer suggests being candid about the challenges it’s facing. He says it might consider inviting a foundation staff member to serve on the board during the transition and beyond.

Sometimes nonprofits also stretch out support over a few years to ease their transition.

That’s what the National Hospice and Palliative Care Organization did when a grant from the Robert Wood Johnson Foundation ended. Robert Wood Johnson discontinued a longstanding commitment to improving end-of-life care in 2005, while Open Society Foundations did so in 2003.

Kathy Brandt, senior vice president, says the organization made a yearlong grant last for three by “being lean.”

The money covered grant-proposal writers, who reached out to other donors regarding the endangered program.

It gave the organization time to put plans in place to sell some of the program’s education materials about end-of-life care.

Advance Notice

Foundations can also do a much better job of ending their support for specific causes, nonprofit leaders say. Some don’t even communicate clearly their intentions.

At their worst, foundations are like the friend who disappears from a party without saying good night.

Mr. Seltzer and others say foundations should give grantees notice as soon as they decide on their plans.

They can also provide charities with money to help find other sources of support, plan for the future, and strengthen their operations, he says.

The Bill & Melinda Gates Foundation, for example, hired consultants to help some of its education grantees prepare for the loss of its money when it was getting ready to stop paying organizations to start small, innovative schools.

Mr. Seltzer also advises foundations to introduce their grantees to other donors and write letters on their behalf.

But even if foundations take those steps, the loss of big donors can be tough.

After Robert Wood Johnson and Open Society stopped awarding grants for palliative care, a few nonprofits that worked in that area closed, says Ms. Brandt.

And groups that are still operating aren’t always able to seize opportunities in the same way. For example, says Ms. Brandt, she would love to have seen her organization and others call attention to palliative care when the topic of “death panels” flared in the 2009 health-care debate.

Says Ms. Brandt: “There’s not a funder out there right now who has this at the top of the priority list, and that’s a challenge.”

Tips to keep financial support

• Stay in close touch with donors to avoid unpleasant surprises.
• Recast the charity’s work to align more closely with grant makers’ new priorities.
• Map out long-term strategies. This helps donors see beyond the benefits of short-term support.
• Be frugal. Make a grant last beyond the time period for which it was allocated.
• Ask a representative from a supporting foundation to serve on the charity’s board.