It’s safe to say that in the 70-plus years since its inception, the J.W. McConnell Family Foundation, a private Montreal-based funder, has established itself as a veritable mainstay of Canada’s charitable sector. With an objective of encouraging active citizenship and creating resilient communities, the grantor focuses on programs that are innovative in nature and with potential for nationwide impact. It’s also developed a reputation for providing more than just financial support; the foundation is truly invested in successful and sustainable outcomes. It should come as no surprise, then, that is has received its fair share of funding requests over the years.

Due to some larger investments, however, in early 2008 the foundation announced its granting budget was fully committed and would be unable to accept any new requests. With the situation status quo in 2009, one wonders about McConnell grantees looking for assistance in today’s more difficult times. And they’re not alone. For, while the economic downturn wasn’t a factor in McConnell’s suspension of new granting, it certainly impacted a number of other grantors nationwide who’ve limited or halted their funding as well. So how do grantees steward these vital relationships when granting is at a standstill? And where do they go from here?

Toward sustainability

If Tim Brodhead‘s wish came true, grantees would still go far despite the situation. President and CEO of the McConnell Foundation, he says his foundation grants – most of which are long-term – are structured to help organizations avoid over-reliance and foster sustainability over the course of their funding relationship. So by the time the program is done, the funding has been tapered, “with the understanding they are already working on other sources of revenue.”

Take ArtSmarts, for example. One of the foundation’s longest running relationships, this nonprofit works with artists and educators to stimulate learning through the arts. Beyond a simple funding relationship, however, ArtsSmarts was actually created by the foundation in 1998 and, over the years, the two have developed a vibrant, collaborative association, learning from each other, with social change their mutual goal. Though the actual model of ArtsSmarts is complex, suffice it to say the organization has been going through a huge evolution since its launch. “Our primary objective after the first three years was to build sustainability in the field, so we spent seven years building sustainable models,” explains executive director Annalee Adair.

What now?

When the organization got word in 2005 that the foundation was looking at culminating their granting relationship, they decided to transition to a stand-alone nonprofit, with McConnell agreeing to fund the three-year process. Thankfully, after 11 years in operation, ArtsSmarts has established 20 strong partnerships in the field, and local programs are pretty solid. That said, it takes time for partners to evolve into new roles. “They’re transitioning from being grant recipients to program developers to partners in a network,” says Adair. But the real challenge is core operations. “We’ve transitioned from being a funder to a catalyst to an organization,” she explains. “We now have such a large field to service that the organization itself is basically just starting up.” What’s more, they now have to diversify their funding base and scale up the organization at a time not really conducive to diversification or growth.

Diversify, diversify

To meet its challenges, ArtsSmarts is looking at a number of new avenues. They approached other foundations and, still on the lookout for cornerstone funders, they’ve started to ramp up their search for individual donors. And they’re hoping their newfound board will come in handy. “We now have more expertise and contacts that we hope we’ll benefit from,” Adair says. Diversification is important at any time, but especially now, says consultant Ligia Pena of Diversa Consultants. “If you’re only focusing on government or foundations, then you’re selling yourself short.” And if you don’t approach your fundraising strategy the same way you approach your RRSP investment for retirement, you’re asking for trouble, she adds. So, make sure you have an annual campaign for individual donors and start building that donor database.

Steward that ship

Keep your stewardship going strong, she adds. Continue to send funders updates on your work and new opportunities, continue to invite them to events, send them annual reports. “Because when a funder feels better and will want to invest, they will know you haven’t been sitting around scared of the economy, and that you are continuing to realize your mission, that you’re relevant,” says Peña. Bottom line: it should be business as usual. “If you don’t steward them all the time, you don’t deserve to have the money in the first place, plain and simple.” And, even if you’re unsuccessful, consider it a good training ground.

Organizations should also keep conversations open, healthy and honest, offers Mark Gifford, director of grants and community initiatives at Vancouver Foundation. Broaden the conversation beyond the grant itself and try to understand the circumstances of a particular funder so as to ensure the conversation is less defensive and more open. And keep funders abreast of what’s happening in communities, he adds. After all, funding commitments are often based on the best thinking of a year or two years earlier. But if the organization’s reality has shifted, it needs to demonstrate its current needs servicing its constituencies.

That said, the Vancouver Foundation, the largest community foundation in Canada, may be limited in its own ability to help nonprofits fulfill those needs. Due to the economic downturn of recent months and the ongoing volatility of global markets, the funder has reduced its distributions for 2009 and will have only one granting cycle in the fall. Gifford is anticipating a greater demand for obvious reasons and is already fielding calls from concerned organizations asking how best to communicate with them. He advises grantees to consider flexible funding arrangements, where possible. Ask about extensions or about pushing off a grant if the project would be better served at a later date, for instance. “We’re open to that,” he says.

Though easier said than done, he echoes others who emphasize the importance of a diversified funding base and strong, active stewardship. One grantee who heeds that advice is Vancouver Opera. Helping the organization celebrate its 50th anniversary, the Vancouver Foundation invested in some of their upcoming projects. The funding is secure and the relationship is sound but, says chief development officer Jeff Sodowsky, if there’s one thing the economic slump has proven it is thst you can’t take funders for granted. And while, it’s hard juggling their demands, schedules, etc., “stewardship is an incredibly important part in keeping your funders close.”

Vancouver Opera feels good about current relationships but the economic situation still has an impact. “My team and I have to be more judicious about what we feel we can expect and go after, and we are even more selective with creating the right pitch for the right prospects,” Sodowsky says. Not a believer in one size fits all, he’s a fan of customization, getting to know funders and their motivations to tailor proposals appropriately. They’ve also been proactive, giving major funders financial updates months before the current downturn. As for diversification, he believes all cultural institutions should follow that approach but some are simply more successful than others. “Some talk the talk and others walk the walk.”

So how does ArtsSmarts steward its relationship with its primary funder of yore? Well, let’s just say they approached that scenario strategically, says Adair. As part of the transition, the VP of McConnell gained a seat on their board, for example. And the newly devised nonprofit is taking full advantage of the foundation’s other assets. “With McConnell, it’s as much about the expertise, advice and connections as it is the funding,” Adair explains. “They’ve been very generous in involving us in conversations and looking at creative ways in which they could help,” she offers, adding that their emphasis on sustainability is impressive. “They’re a leader in that regard.”

Brodhead sums is up this way, “We don’t regard it as simply a funding relationship; we’re committed to the same goals they are.” As for other prospective grantees looking for funding, Brodhead explains the foundation has been pretty forthcoming about their situation so as to avoid any surprises. Once the foundation is in the position to start making commitments, they’ll pick up the phone and resume granting.

Persistence

But McConnell grantee ACORN Canada won’t be waiting for that call. “I’ll still approach them, we’ll keep on talking,” says head organizer Judy Duncan. Championing the interests of Canada’s low-and-moderate-income urban communities on issues of social and economic justice – with a recent focus on financial literacy and justice – the organization is just completing a five-year grant from the foundation. But Duncan says the realities of running a nonprofit, especially one that lacks core funding, means they get used to the ask.

While ACORN is doing alright today, they’re expecting to feel the pinch next year. The pursuit will, thus, continue, whether with McConnell or other funders. “We usually keep on calling, giving them information on how great the program is that we’re trying to fund.” It’s about developing relationships with funders, Duncan says. Relationships help build a supportive ear, making it easier to navigate the intricacies of granting opportunities. Besides, she adds, “I don’t know what else to do aside from be persistent.”

Elisa Birnbaum is a freelance journalist, producer and communications consultant living in Toronto. She is also president of Elle Communications and can be reached at: info@ellecommunications.ca.

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