The Effective Exit Managing the End of a Funding Relationship

The French American Charitable Trust and the Andrea and Charles Bronfman Philanthropies  have both thoughtfully considered how their exits from funding relationships and, eventually, the funder landscape can be useful to other funders. One strategy is to share commissioned reports publicly, so that others can leverage their learnings and wisdom.

Transitions take time. If you’ve been a core funder of an organization, it might take a while for the grantee to adjust to the idea that you won’t be around any longer. And, said one grantee, “a budget to help with the transition really helps."

A foundation can sometimes help an exiting grantee simply by continuing to treat it as a partner in ways that don’t entail grants. One foundation has a policy of allowing nonprofits working in its interest areas to use its centrally located facilities for special meetings. 

Some foundations provide special resources to help grantees document and share lessons and accomplishments. At one large foundation, for example, program staff can propose “transition supplements” for grantees within a year of closing out their projects to support communication and dissemination. The foundation awarded roughly 25 such grants annually in the first few years of the program, then studied the projects to establish a “typology” of transition activities that serve the needs of exiting grantees. The types are not always clearly differentiated from one another, a grantmaker noted, but the list has been helpful in enabling program staff to imagine the possibilities.

In a “fragile” or difficult-to-fund field, the straitened circumstances of a few key funders can threaten the field as a whole and the stability of certain grantees. A grantmaker working in one such field recalled a period after the September 2001 terrorist attacks in New York when she was seriously worried about the financial future of organizations whose creation and early growth she had supported. To make matters worse, one of the field’s handful of major funders had recently announced that it was closing its doors, and quickly. She and colleagues from four or five other foundations decided to get together to figure out what to do.

You don’t need to be an expert to help grantees find new funding. These fundraising tips from experienced grant makers are simply habits to cultivate in your own practice:

Under the right circumstances, the expertise of program staff can be a powerful resource for exiting grantees.

Some foundations offer matching or challenge grants to exiting grantees as a way to help them build their funding base.

The trickiest interaction is the one in which a grantmaker tries to make a match between a particular grantee and a particular funder. One foundation CEO characterized the process as “subtle, often indirect, and slow. It requires patience and creative thinking about prospective matches between funders and grantees.”

Program staff use this list to guide conversations with grantees — especially new nonprofits — about their organizational growth and development as the foundation’s exit approaches.