Strategies for Impactful Grantmaking During Funding Uncertainty

It’s been a wild few years for the philanthropy sector.

Just as we finally got our footing from a global pandemic and spinning up programs to support communities dealing with extreme weather events, now federal policy shifts have grantmakers and grantees alike scrambling. But organizations have also learned a lot from that instability, and grantmakers can draw from those lessons to respond to the current context.

During the webinar, Navigating Policy Shifts: Strategic Actions for Grantmakers to Support Their Impact Areas, Kristina Wertz, Vice President of External Affairs at Grantmakers for Effective Organizations, and Daniel Albertiis, social impact strategist, explained what these changes mean for grantmakers and provided tips for how funders can support their communities with more than just a check.

Amid times of significant uncertainty, your grantees need to know that you are informed, listening to their needs, and ready to support your communities. Here are three ways funders can support their grantees now and in the future.

1. Stay Informed

“The less you know about something, the riskier it becomes,” Daniel shared. But with education and trusted resources, you can find the line between panic and facts so you can create an intentional plan of action.

When there is a flurry of activity that affect the entire industry, such as policy changes that disrupt current and potential funding for hundreds of organizations, you need to take the time to understand the risks for your organization and your grantees. Identify sources of information that provide the background and how it affects you, such as the National Council of Nonprofits and regional grantmaking associations to stay in the loop with what’s happening locally.

Once you understand the situation, you can use your platform to shield your grantees and possibly deflect some of the attention from the organizations doing important work on the ground.

2. Let Your Grantees Know You Are There

According to the Center for Effective Philanthropy, most nonprofit leaders (more than 75%) want to hear from their funders about what’s happening and the implications of the political climate. They are looking to their grantmaking partners for communication and transparency.

“Funders are really important,” Kristina said on the webinar. “If the people you trust aren’t there, it can be really destabilizing.” Reach out to your grantees to provide guidance, resources, and let them know that you are willing to assume some of the risk.

Where possible, Kristina suggests helping with security and financial best practices. Some organizations may be facing, or preparing for, attacks on their mission and funding shortfalls. Connect organizations to share resources and make introductions where applicable. Don’t forget about wellness support, especially for leaders whose identity might be at risk.

3. Review Your Grant Strategy

Remember, the role of foundations is to move money, Kristina said. “Keep the money flowing in whatever creative way you can.”

Recognize that there may be a gap in what you know and how your grantees are being affected. Instead of relying on internal strategists within your organization, lean on trust-based relationships with your grantees to get an honest answer about what people need.

“Funders need data to analyze to make sure grantees get the capacity they need,” Daniel said. Make sure you are getting information from the people on the ground and pairing that with industry-wide information to help you understand what might need to change with your grant strategy.

Organizations like the MacArthur Foundation and the Freedom Together Fund have announced an increase in their payout above the 5% required by law. This is a good time to discuss with your leadership and board whether it makes sense to do something similar, at least in the short term.

Outside of increasing how much you give, also look for changes you can make to your current grant programs. Can you provide support for capacity building or indirect costs like salaries to help grantees weather the unexpected shortfall without taking lines of credit? You may also look for ways to provide support for your grantee’s well-being, such as by lowering reporting requirements or providing a stipend for a sabbatical.

Uncertainty Is a Call to Adapt

The philanthropy sector is notoriously resilient. Both grantmakers and grantees have made it through pandemics, natural disasters, and economic downturns. By gathering data and intentionally evolving strategies now, funders can ensure their giving remains purposeful and transformative, ready to face any future challenges.

As Kris Putnam-Walkerly wrote on her blog, “Uncertainty isn’t an excuse to retreat—it’s a call to adapt. The most successful philanthropists aren’t waiting for stability to return; they’re evolving their strategies right now to ensure their giving remains impactful, agile, and future-proof.”

Looking for more ways to adapt your grantmaking processes so you can better meet the changing needs of your grantees? Check out our guide, The Qualities of a Modern Grantmaker.