How to Ensure Alignment and Trust With Grantmakers
By Drew Payne of UpMetrics
To grow their organizations and fuel mission-centric work, nonprofits need sustainable general operating revenue. However, reaching this level of revenue requires more than hosting a virtual event or launching a compelling email campaign. It takes diverse revenue streams yielding multi-year support, which is why many nonprofits turn to grants.
Relationship-building lies at the heart of successful grant fundraising. Genuine, long-term connections between nonprofits and grantmakers lead to true partnerships rooted in a shared vision.
If you’re wondering how to establish (and maintain) the level of trust that unlocks sustained funding, the answer may lie in rethinking how your organization engages grantmakers through data and collaboration. Let’s review the practical ways your nonprofit can strengthen grantmaker alignment and trust.
Build Strategic Partnerships With Grantmakers
When scouring grant databases for funding opportunities or drafting a grant proposal, it’s easy to think of the grant application process as purely transactional. In exchange for your organization’s mission-centric work and thoughtful grant application, the grantmaker rewards you with much-needed funding.
Shifting your perspective to view funders as long-term partners opens the door for deeper collaboration. When funders and grantees listen and learn from each other, they foster stronger alignment and trust that enables collective action.
This shift in the grantee-grantmaker relationship is a pillar of trust-based philanthropy. UpMetrics defines this concept as an approach in which grantmakers (impact funders) and nonprofits (impact producers) “work to overcome the normal power imbalances in philanthropy to build long-term, healthy, equitable relationships with each other and their broader communities.” Here’s a visual to illustrate this idea:
Traditional funder/producer relationships are rigid and transactional in nature. These relationships are characterized by a power imbalance in favor of funders.
Funder/producer relationships founded in trust-based philanthropy are equitable relationships based on transparency and open communication. Here, grantmakers and nonprofits focus on long-term collaboration, shared learning, and capacity building.
To make this shift toward trust-based philanthropy, nonprofits should prioritize transparency with grantmakers. Be honest about your needs, challenges, and successes, using impact data to validate your accomplishments.
In turn, work with grantmakers who seem open to long-term, supportive relationships. These funders may provide capacity-building support (i.e., training, technical support, etc.) that can help your organization grow beyond simply receiving monetary resources.
Optimize Your Impact Reporting Approach
Many grantmakers require reports to evaluate whether grantees are using awarded funds to further meaningful outcomes, but impact reporting goes beyond checking off grant application requirements. The right reporting strategy demonstrates transparency and reveals the outcomes of collaborative investment.
Effective impact reporting allows your nonprofit to ensure every stakeholder is on the same page about the organization’s priorities. By tracking your progress and reporting on the results you’re achieving with grantmakers’ contributions, you’ll also bolster trust in your nonprofit to make the most of the resources they’re providing.
Choose an impact framework that aligns with your impact measurement goals. Think about what you hope to achieve by measuring and sharing your impact, and look for a framework that will best fit your needs. Additionally, consider what the framework will help you track in light of the breadth of your operations, and what stakeholders want to know about your impact.
Once you’ve chosen the right framework, you can put the tool to work by:
Preparing your data. Practicing good data hygiene is essential to yielding accurate results. According to NPOInfo, nonprofits must “clean” their data by auditing their existing database, removing unnecessary data, organizing the data that’s left so it’s formatted consistently, and setting data input standards for ongoing maintenance.
Creating impact reports. Compile impact insights into an engaging report. Use what you know about your stakeholders to make the report as appealing as possible, and use dynamic formats (i.e., an interactive webpage or a long-form video) to encourage interaction.
Acting on your insights. Integrate your findings into your decision-making processes. After all, impact data is more than just a presentation for funders; it’s the information that drives improved operations and better results for the communities you serve.
As you implement your impact framework, remember that the process takes time. Like most long-term fundraising approaches, impact measurement is most effective when your data shows trends and patterns over time.
Strengthen Internal Accountability
Larger nonprofits typically have a strong foundation for internal accountability, including effective bookkeeping practices and conflict-of-interest policies. Evaluating these practices and improving them where possible is critical to securing grantmaker trust.
Funders need to know that your nonprofit is dedicated to wisely managing the resources they contribute. After all, grantmakers share in your nonprofit’s mission; what better way to strengthen your alignment than by demonstrating your commitment to furthering that cause through thoughtful financial stewardship?
Elevate your internal accountability by:
Maintaining regular communication. Send quarterly impact briefs or informal check-ins with funders to reinforce your commitment to shared goals. These touchpoints provide opportunities to gather feedback, troubleshoot challenges, and celebrate collective wins.
Conducting frequent audits and internal reviews. Regular financial and program audits demonstrate integrity, showing your nonprofit’s dedication to wisely investing grantmakers’ contributions. Furthermore, these reviews may surface operational gaps, helping your nonprofit improve its systems.
Investing in reporting tools. Leveraging technology to measure impact can streamline the entire process, ensuring consistency as you review impact insights and share them with stakeholders. As a result, your team can quickly respond to funder questions and present impact data in more meaningful ways.
Solid internal accountability reinforces your nonprofit’s reliability, demonstrating that your organization is a capable steward of philanthropic investment. As a result, grantmakers can have greater confidence in your organization as they invest in your growth.
Deepening alignment and trust with grantmakers calls for a renewed emphasis on data-informed storytelling, collaborative engagement, and proactive accountability. When funders see your nonprofit as a trusted, data-savvy partner, they’ll be more likely to extend the flexible, sustained funding that fuels growth.
This guest post was written by Drew Payne.
Drew Payne is an ardent advocate for education, healthcare, and community advancement, who thrives at the intersection of innovation and impact. As founder and CEO of UpMetrics, an industry-leading impact measurement and management software company, Drew's journey has been defined by his unwavering commitment to helping mission-driven organizations harness the power of their data to drive capital and resources to community.
Prior to spearheading UpMetrics, Drew founded UHV Group, where he provided operating advisory services to Blackstone portfolio companies within the real estate and education domains. His deep-seated dedication to fostering growth within these sectors fueled his passion for catalyzing transformation on a broader scale.
Drew has roots in traditional philanthropy as Vice President of the Payne Family Foundation, and has also focused on real estate and social impact investing. Born and raised in San Francisco, Drew is a graduate of the University of Pennsylvania.
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