January 27th, 2016
It is only coincidental that this post is being published during the current international financial whirlwind, but I suspect that some of the suggestions will prove useful to funders this year. In fact, though, as any who have taken our seminars in grantmaking strategies over the past years can attest, it is my view that every grant should have an exit strategy from the very beginning. This short piece will outline only a few guidelines for how to think about exit strategies. At the conclusion, you will see a reference to a more expanded piece that funders may request.
The essential principle is that one should think about the end of a grant or contract at the time one decides to make the grant. When expectations are articulated properly, it helps define what will determine if you deem it successful and if the experience is gratifying for you as a funder. More, an exit strategy stated upfront will help grantees know what your expectations for the project are, and what their relationship with you as funder should be going forward.
Articulating these expectations along with the decision allows for a very constructive discussion with a grantee at an early enough stage that record keeping, modifications, deliverables are built into their accepting the grant – or, perhaps, rejecting or renegotiating it.
When I first started teaching about exit strategies in 2002 I was guilty of a common error that many of us on the funding side make. We have a tendency to think about exit strategies only at the time we decide to discontinue funding – for whatever reason. The issue was particularly acute in 2001 and then again in 2008 as funders were faced with very difficult choices as the economy – and shifting priorities – forced some challenging funding choices. My earliest presentations focused almost exclusively on best practices and ethical principles of discontinuing funding for long time grantees. Those principles are still useful guidelines in those circumstances.
It didn’t take me long to realize that I wasn’t adequately addressing the underlying and essential principle of exit strategies: every single grant has an end. That doesn’t necessarily mean that a funder will no longer provide that grantee additional funds. Indeed, often the end of one grant can lead to new or renewed funding, It does mean, though, that, at least implicitly, there are some assumptions about what would be required for additional funding. Thinking about exit strategies from the beginning can help formulate and make explicit what those requirements should be.
Another area where an exit strategy is indispensible to effective grantmaking has to do with deliverables. If one wants publishable results, or a robust evaluation of the project or process, or replicability of some sort, or insistence that there must be sustaining support beyond your own, waiting until the end of a grant to articulate these expectations is a very counterproductive approach…for everyone concerned. Thinking through, articulating, and agreeing upon these matters at the very beginning of the grant will radically increase the probability of mutual satisfaction and a successful experience.
Many funders, sadly, find that their experience with their grantees leaves them less than gratified. Sometimes it is because a project didn’t meet the desired expectations of both the funder and the grantee. Nothing wrong with that – failure happens. Sometimes it is because, in retrospect, it wasn’t a grant or project that fit well in a funder’s portfolio. It wasn’t the grantee’s fault that your own decision making process was a bit off base. Sometimes, disappointingly, grantees don’t do what they say they will do, and that needs to be addressed or redressed.
But sometimes it seems that you and the grantee are just out of sync. There doesn’t seem to be anything wrong with the project, or even the behavior of the grantee, yet you don’t feel good about it. In these cases, there is a pretty strong likelihood that you didn’t formulate your expectations in a coherent or actionable way, or more likely, think through and pre-determine what relationship would make you happy. If a grantee has to guess what you want, that is your fault and your responsibility. [Note to grantees: if a funder doesn’t tell you, ask! Not every funder will have read this or taken our courses.]
Exit strategies are always the responsibility of the funder as are setting expectations. The earlier a funder does so, the easier it will be for a grantee to respond appropriately and effectively. In the end, figuratively and literally, it makes for more successful grantmaking on all sides.
[For those who are interested in a PowerPoint on “exit strategies” for a variety of different circumstances, please send a request via email or through our website. That presentation expands on many of the items in this post.]