The Double Whammy When a key co-funder leaves the field

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.

The group hired a consultant to map the array of small grassroots and policy organizations that made up the field and make recommendations for how the remaining funders should respond. What she and the other funders were afraid of, she recalled, was that “everyone would decide to make $50,000 or $100,000 grants to [a lot of ] organizations, and all of them would end up just limping along, nobody with enough money to do anything other than try to raise money.”

When the report was done, the funders convened a large meeting, including leaders from a wide range of grantee organizations, to discuss the findings. When the delicate issue of merging some organizations was raised, “one crucial person basically said, ‘I hate this, I don’t like it, but I think we have to do it.’” By “functioning together as equals at the table,” the grantmaker explained, everyone was exposed to the concerns of “a much wider array of organizations” than would normally be the case. They were therefore much better able to deliberate the tough choices facing the field and its component organizations.

Takeaways are critical, bite-sized resources either excerpted from our guides or written by GrantCraft using the guide's research data or themes post-publication. Attribution is given if the takeaway is a quotation.

This takeaway was derived from The Effective Exit.