When Foundations Exit the Field

Whether shifting away from funding in a specific program area or looking toward a total spend-down and closure, foundations seeking to make a graceful exit face the dilemma: What does this mean for our grantees, and what are we prepared to do about it?

This topic is the focus of an article I’ve coauthored with The Atlantic Philanthropies’ Christopher Oechsli for the Stanford Social Innovation Review fall issue. For now, I’d like to share just a few observations about how funders can navigate these shifts in strategy in partnership with their grantees.

In my experience, most foundations are very sensitive to the potential disruption that exiting a longstanding program area or closing down holds for their grantees, but they are unsure what to do to help ease the transition. Here, foundation staff can play a critical role by engaging grantees in a dialogue about their needs, ensuring that any transition initiatives address these (and not just what the foundation thinks grantees need), making introductions to other funders and/or capacity builders as appropriate, etc.

That said, whatever the foundation decides to offer in terms of transition assistance (particularly any type of nonprofit capacity-building initiative) must be voluntary. Grantees will only benefit from active participation in activities where they can perceive a benefit. They have other priorities and other funders with their own expectations and demands, and do not want trainings or consultants foisted on them. Remember that the goal is strengthening the grantee organizations, not helping the foundation feel better about its exit.

Most importantly, an understanding of the foundation’s desired end result is essential to shaping a sound exit initiative. Any steps taken to help soften the blow should grow out of an agreement within the foundation on why it is investing in transitioning these grantees. Is it important that the work it has supported continue, with support from other sources? Or does it just want grantees to survive the loss in funding, regardless of whether they continue a specific program or area of work? Once these goals are clear, the appropriate interventions can be developed and resourced.

Watch SSIR this month for more detailed discussion of this complex topic and lessons from The Atlantic Philanthropies’ culmination.

And, if you have been involved in or affected by a foundation leaving a program area or closing down entirely, please share your comments or questions below. We’d like to hear from you.