This year we had a major learning experience related to grant renewals/transitions for grant commitments coming to a close. We determined that there are some ways we can and should improve our policies related to those transitions, so that we are better funding partners in the future. We are grateful to our grantees and peer funders for their support and candid feedback during this time, so that we could be made aware of issues that we didn't even know we were facing. With that being said, RTNF wanted to share the following update to our policies regarding grant renewals. Special steps will be taken to help organizations who are coming to a transition point in 2017-2019.
We are relatively new to the world of strategic philanthropy. We actively seek to learn more about how to improve our operations, portfolio, and impact, and this leads us to new lessons each year. Additionally, our applicants impress us more and more each year (you guys are amazing).
Between these two facts, one major challenge emerges: sometimes a grantee that we felt incredibly aligned with 2-3 years ago no longer feels as aligned as some of our new applicants when renewal requests come around. One thing we've learned in our short history is that we need to handle those transitions clearly and do our best to "do no harm" to organizations we've supported in the past if we decide to transition away from a funding relationship. To that end, in 2018, we created the following policy.
RTNF typically provides multi-year funding, and often that funding is unrestricted. In acknowledgement of (1) the length of time it takes to create meaningful social change and (2) the lead time needed for making grant renewal decisions, we recommend that applicants request grants that are 3 years in duration and that requestors build in risk management strategies in case of the contingency that RTNF cannot renew funding at the completion of the grant period. For example, in some cases, this means that the requestor may taper the annual allocation toward the end of the grant period, to avoid large funding cliffs that could leave an organization vulnerable to major service or strategy disruption. We want to highlight that grantees should not expect that we'll renew funding (we mean it) because as a relatively new strategic funder, we want to continue to be open to learning and changing our portfolio as we do so.
That being said, we are not completely closed to renewal requests, and we wanted to make a clearer process for handling those going forward. Therefore, renewal requests should be submitted in January of the same year RTNF is to make our final grant installment (i.e., if the last installment of your current multi-year grant will come in November 2020, you should reapply for funding in January 2020). RTNF's board will make renewal decisions by April of the respective year (which is eariler than our regular application decisions will be made). This way, renewal decisions will be made with more time for re-applicants to adjust their plans (whether they can expect to continue to receive funds from us, or whether they should plan for our exit at the end of the current grant period). We hope this policy helps our grantees plan for the future and that it reduces the disruption that comes when renewal decisions do not come with sufficient notice.
Lastly, if grant funds are not renewed upon request or if a sunset grant period is indicated, we ask that the applicant wait 2 cycles before reapplying for funding. This means if the final installment of your current grant commitment came in November of 2017, you would be asked not to reapply until the 2020 cycle (thereby skipping the 2018 and 2019 cycles).
We want to reiterate that we made this policy change after receiving constructive, candid feedback from our grantees. We then reached out to each grantee who is currently in transition and asked them for their additional thoughts, feedback, preferences, and wisdom. This all came on the heels of reading this wonderful book about how to create better partnerships between funders and nonprofits, and we highly recommend it. We hope this policy change is the first of many that comes from more open lines of communication between ourselves and our partners.
To that end, we've also recently created a feedback form that partners and applicants can fill out at any time. You can find that by clicking here. We value your insights, ideas, and suggested solutions, so we hope you'll feel comfortable to share them with us!