Avoiding the Minefields in Government Partnerships

What do grantmakers who’ve worked with government worry about the most? Here’s a cheat sheet of things to watch out for — and, with luck and careful planning, avoid.

• Loss of commitment. “There is a real risk that a partnership can crash and burn,” said a grantmaker in a healthcare reform initiative that died in the state legislature after extensive work by four foundations and the governor, “or at least leave some scars.” A partnership can be derailed or its importance eclipsed because the political winds change or a committed partner leaves office. Sometimes a partner seems to have the authority to move an agenda — but doesn’t. Experienced grantmakers mitigate the risk by paying attention to what one called “the life cycle of an elected official.” Ideally, new practices are introduced early in an official’s tenure and institutionalized prior to a change in leadership.
• Power struggles. As in any collaborative, the parties may struggle with power imbalances and disagreements about who makes decisions. A government official who works with foundations admitted that “this is implicit in almost every conversation. For instance, we had one foundation basically laying down an ultimatum with us. They gave us the commitment of money, but when we were negotiating the details of the program and they didn’t like some of the details, they said, ‘unless you do this, we’re not giving you the money.’ What you want to do is negotiate to a place that everybody feels comfortable. I know that if they hadn’t made some concessions to their initial demands in that conversation, we would have said goodbye to them and their money.”
• Roadblocks and rigidity. Government is riddled with more rules and regulations than private foundations, which can lead to roadblocks during a partnership process. Grantmakers, therefore, are well-advised to “remain patient” and “understand that this will happen,” one foundation director remarked....The complex regulations and rules surrounding public financing can also be challenging for private funders to incorporate into their efforts. As a former foundation officer noted, “Government is a steward of the public dollar and has all sorts of statutory regulations to meet. So anytime the allegedly ‘flexible’ philanthropic sector gets involved with that kind of entity at any level — local, state, national — they’re going to end up dealing with a lot of regulations. The dollars are going to be spent in ways that are more constrained than they would be if foundations were able to operate on their own.”
• Perceptions of impropriety. Despite the best intentions, foundations that are well within the legal limits of working with government still sometimes run up against the perception that they’re engaged in activity that is questionable or unethical. As one foundation president with a long history of working with government asserted, “This is a real and present issue because a lot of times, public perception of what we’re doing creates more problems than the law. Perception is critical to keep in mind because it’s reality for many people.”
• Loss of independence. One of the most prevalent concerns among foundations is the threat of losing their ability to criticize government — a role that has historically been one of philanthropy’s most important. “It’s tough to be both a good partner and an outspoken critic at the same time,” said one funder, but that’s precisely the line that a grantmaker needs to be prepared to walk. Another grantmaker offered this reminder: “Government officials may not be willing to work with a foundation that has been an outspoken critic. Consequently, you might need to choose which role you want to play: critic or partner.”