In February I had the pleasure of chatting with my friend and colleague Jessica Mindnich on a webinar that focused on the importance of shifting the funder-grantee relationship toward one that encourages continuous knowledge sharing between parties. This is a topic close to my heart as well as Jessica’s, who is the Senior Director of Evaluation, Learning and Impact Stories at Ewing Marion Kauffman Foundation. The truth is that trust-based relationships that prioritize collaboration and transparency are the only way we will be able to move the needle on some of the social issues that philanthropy, and the greater public, are looking to take on.

We have an opportunity to double down on relationships, leveraging information with open and ongoing discussion across a very diverse stakeholder base. Why relationships? Relationships allow for alignment across all stakeholders. With a set alignment framework, the “why” is nailed down which allows you to stay on track toward the end goal. As Jessica highlighted in our webinar, this is essential in today’s climate where things aren’t “normal” – there was a lot of disruption over the last year or so. There were things out of your control.

“It is really important to focus on the impact. What is the impact you want to have that shows that [desired] change? It might take you longer to get there because there are things you can’t control. But that shouldn’t change, you should be very clear on what your Northstar is. We know there’s going to be noise and things that are going to accelerate or slow down your progress towards that impact. That’s where we need to learn.”

-Jessica Mindnich

To drive a culture of learning – one that encourages discussion around what’s working as well as what isn’t – requires trust, which is the second advantage that comes with a focus on relationships. I experienced this firsthand at my family’s foundation. We need to build a culture that encourages a level of transparency that sees genuine reflection in our annual reports, not just the static results.

This shift toward learning is one that some philanthropic leaders are pursuing for the very reasons described above. Ewing Marion Kauffman Foundation is one of those foundations, led in part by Jessica. Jessica describes their reasoning for making this shift as follows:

“Kauffman’s commitment to racial equity, diversity, and inclusion led us to shift to a learning stance. Inequality is deeply ingrained in our systems, policies, and ways of being. It has been an intractable issue that has a long and painful history in our country. And because we are earnest in our commitment, we recognize that this work requires us to be humble while learning with and from grantees and community leaders.”

But what does a commitment to this shift actually look like? Will it be an easy transition? If you’re also in philanthropy, you and I both know that it will be a challenge. There’s a lot to consider to make this shift. As Jessica also observed in the webinar: “For many foundations, the function of evaluation and learning was established as an accountability function. As a result, practices, policies, systems, and the expectations of senior leaders and board members often act to reinforce accountability instead of promoting inquiry. And so there’s a lot to deconstruct…”. But this doesn’t mean it is impossible – it just requires a commitment to open conversations around alignment, streamlined reporting, and change management. Here’s how the Kauffman Foundation is taking it one step at a time.

1. “You’re going to have to get to a place where the infrastructure supports learning and collaboration. So start by building from things that are working. Find places where you pilot new ideas, approaches, and practices. This will provide proof points and help cultivate champions for these changes. And this will help alleviate the fear, loss, and anxiety that is so often associated with change.” - Jessica Mindnich

A significant element of this slow education to stakeholders is the element of alignment. As Jessica advised in our conversation – who are your stakeholders and what do they need to get out of reporting? There are valuable pieces of the traditional reports you’re doing today or we wouldn’t keep doing it. But what are the most important things and are there other ways to get that information? That’s a great starting point.

Kauffman Foundation was piloting a new approach to impact measurement with a group of grantees at the time of the webinar, and Jessica referenced how they were considering alignment despite not having much of a baseline to work off of. Within a few small portfolios Kauffman is testing developing a small set of impact metrics that can be useful to both the foundation and to grantees. After creating a small prefix menu of impact indicators, Grantees can select one or two measures that are most relevant to their work. 

The number one thing stressed by Jessica in our conversation was the importance of giving the grantees flexibility to pivot based on learning. Why? It allows the focus to remain exclusively on the shared desired impact that both parties agreed upon. COVID showed how hard it is to anticipate a year in advance what you’ll be doing and what progress you would have made – no one expected the pandemic to hit. If there’s no room to acknowledge that context or the need to pivot, the grantee report will simply appear like milestones and goals were missed.

In the months that have passed since this pilot launched, Kauffman has collected more learnings to strengthen their alignment with grantees. For example, each grantee is at a different point in their data maturity. When working with this group of nonprofits, or any group of grantees, it is important to ask about and understand their data needs and capacity. That additional layer of transparency allows Kauffman to implement a data strategy with each grantee that enables them to focus on key priorities, including their ability to capture both qualitative and quantitative data, analyze that data, set goals, and track progress toward the completion of those goals.

2. “Provide solutions to how we can collect the data we need without getting it ten different ways from grantees.” - Jessica Mindnich

In order to understand how the Foundation is advancing inclusive prosperity, Kauffman is discovering that there will need to be changes in the data that is collected. For example, the Foundation has just started to collect race and ethnicity data. And in consideration of grantee burden, they used questions and categories created by Candid. As a result, if a nonprofit has completed their profile in Guidestar, they do not need to provide data to the Foundation. Instead, foundation staff transfer the data from Guidestar. Streamlining reporting is another crucial element of this shift toward learning as it provides the time back to grantees to evaluate and ask questions about the data they’re seeing.

“This year we are looking at our grantmaking process. Is it equitable? Is it accessible? We’ll be talking to grantees and people that have applied through our systems to see how we might reduce the burden on the grantee. I don't think it's a good use of our dollars to ask grantees to spend their time on reporting - I think we want them to spend their time doing what they do well and what we're funding them to do. So we really have to think about the requests we make of grantees. How do we take them as partners? How do we really understand and unpack where our power is showing up? Can grantees be writing the questions that are defining our success, versus a top-down approach?”

3. The one thing that is absolutely needed for this shift to go smoothly is change management.

Communicate early and often. That was the one piece of advice Jessica was adamant about in our conversation. Use what you learn in those conversations to strategize your next steps. Where do we have room for some experimentation and where am I hearing that there is more resistance to change? What is valuable and what isn’t? What am I hearing most consistently?

A big part of change management is the ability to make decisions in real-time, which requires access to dynamic and usable data. Stagnant data traditionally created from foundations may not be helpful in supporting your decision-making tomorrow.  Collecting data in real-time is often a capacity issue with grantees and funders alike, a challenge that you’ll need to address to be successful in this shift.

Explore additional steps your impact organization can take today to make this shift with our guide, Rethinking Reporting.