UNIQUE APPROACH HELPS SMALL FOUNDATION MAKE A BIG DIFFERENCE

A White Paper Published by the Nokomis Foundation

April 1999

Written by Polly Hewitt

Entire Women's Community Benefits from Capacity-building Grants

The face of American philanthropy is changing, probably forever. As the baby boomer generation ages and accumulates wealth, both professional and nonprofessional givers are looking for new, more effective ways to influence social change in communities across the country. Variously called "capacity building", "venture philanthropy" and "strategic philanthropy," this emerging wave of giving involves a much different relationship between grantor and grantee. In the case of the Nokomis Foundation, a small private foundation located in Grand Rapids, Michigan, innovative grantmaking has virtually sustained an important, but neglected segment of the local community: organizations that focus on women's economic development and empowerment.

Nokomis' mission is to make a difference in the lives of women and girls, primarily in the West Michigan area. Founded in 1991 by Twink Frey, a Grand Rapids philanthropist and activist, the foundation focuses exclusively on advocacy for women. In 1998, under the leadership of Executive Director Kym Mulhern, Nokomis dispensed approximately $200,000 - a small amount by some philanthropic standards, but definitely large enough to impact a struggling nonprofit. Almost 25% of these funds were allocated to capacity-building grants. Mulhern sees these grants as "strategic investments" to further the Nokomis mission; without assistance from Nokomis, these organizations might have remained on the margins of the local nonprofit community.

Bold Agenda Requires More Strategic Giving

Because of its bold agenda but limited resources, Nokomis realized early that it needed to make highly strategic grants. The traditional grantmaking model, which usually provides existing program support on a one-year basis, simply couldn't bring about the degree of social change Frey had envisioned. To make a real difference in women's lives, Mulhern believes Nokomis has to make a real difference in women's organizations. This belief has increasingly led the foundation to pursue depth, rather than breadth, in its grantmaking relationships. Instead of making many, small program support grants, the foundation has committed significant, long-term resources to sustain a few key organizations. As a result, Nokomis has become a true agent for change in the local women's community, and a national leader in women's philanthropy.

The Western Michigan women's community is small, and as could be expected in a conservative Midwestern area, significantly underfunded. Since 1991, Nokomis has established a working relationship with virtually every local women's organization; in particular, it has made significant capacity-building grants to the YWCA, Grand Rapids Opportunities for Women (GROW) and the Women's Resource Center (WRC). It has also provided ongoing funding to strengthen two sister philanthropic organizations: the Michigan Women's Foundation and the Women's Funding Network. In 1993, the foundation even initiated its own public policy project - Women Matter - to advocate statewide on a number of key issues concerning women and families. Women Matter is now an independent organization and hopes to become self-sustaining within the next few years.

Early Grants Help Nonprofits Fund "Unfundable" Projects

Nokomis' first venture into capacity building was early in its history. In 1993, it provided a $21,761, two-year grant to the YWCA of Grand Rapids. The grant funded a feasibility study to determine if, and how, the organization should proceed with developing a Nurse Examiner program for rape victims. With the Nokomis funds, the YWCA was able to convene a multi-disciplinary Coordinating Council for the project; tour a model site in Memphis; and develop a comprehensive plan for staffing, equipping and funding a Y-based program. According to YWCA Executive Director, Carla Blinkhorn, the implementation plan was so well conceived that the Michigan Department of Public Health immediately committed to support the program. "Everyone knew what they were supposed to do long before we opened our doors." The program has consistently received top evaluations, in large part because of its solid foundation in community needs and resources.

The YWCA grant represented the first of many "leaps of faith" for the foundation, particularly because its funds might have revealed that the project was ultimately not viable. But to Kym Mulhern, this would still have been money well spent. She sees that too many nonprofits have programs on financial "life support," simply because they don't have the time or resources to make them truly effective.

In 1996, Nokomis embarked on an intense, multi-year relationship with Grand Rapids Opportunities for Women (GROW), a small nonprofit that provides opportunities for low-income women to achieve economic freedom. Over a four-year period, GROW has received $110,000 to strengthen its management information and fund development systems. Specifically, the organization has created a sophisticated MIS system, developed a fundraising database, and hired a part-time Development Associate to target corporate and individual donors. The organization's hope is that the Development position will eventually become self-supporting - a daunting proposition in Grand Rapids' increasingly competitive market for donor dollars.

Inger Giuffrida, past Executive Director of GROW, says that the Nokomis grants enabled the organization to "be flexible and think creatively." For instance, when its original MIS vendors came up short, GROW was able to switch, instead of being locked into a long-term contract with an unsatisfactory supplier. She also expresses tremendous gratitude to Nokomis, who had enough faith in her organization and her leadership to take risks - something more traditional funders are usually reluctant to do.

Grants Have Grown in Amounts and Sophistication

By far, the largest single investment Nokomis has ever made is in the Women's Resource Center, located in downtown Grand Rapids. The center provides comprehensive employment services and advocates for women's economic and workplace equality. Founded in 1973, it has struggled to maintain a presence in the crowded local nonprofit community. With the exception of the Nokomis grants, virtually all of the center's ongoing funding is tied to specific programs. Like GROW and many other small nonprofits, the center had few resources to devote to operational issues, particularly in the critical area of fund development.

The Women's Resource Center has received three capacity-building grants from Nokomis. The first was a three-year gift of $53,000, awarded in declining amounts, to create a Development function. For both the center and Nokomis, this first grant was a somewhat painful learning experience. While Kym Mulhern was actively involved in crafting the final proposal, this first grant was unnecessarily cumbersome for both grantor and grantee. It required extensive administration on both sides, including benchmarking and outcome management. In addition, after the first year, it was obvious that the annual grant amounts declined too precipitously, leaving the center to contend with several incomplete and unfunded activities. As a result, in 1997, the foundation granted a one-year extension to continue the center's fledgling Development project and a variety of much-needed technology improvements.

In 1998, Nokomis made its largest, most comprehensive grant to the Women's Resource Center: $125,000 over three years. This time, the amounts did not decline so precipitously: in fact, they actually increased in the third year. The funds will be used to implement the center's new strategic plan, which includes these capacity-building initiatives:

• Technology enhancements, including computer networking for the center's 21 employees
• Seed money for new programs, to enable the center to approach more traditional foundations for ongoing support
• Organizational development consulting to develop a more efficient operating structure
• Advocacy efforts with legislators and local corporations on workplace issues affecting women

Sharon Caldwell Newton, Women's Resource Center Executive Director, says the Nokomis grants have affected every aspect of her organization. "Unlike traditional grants, they gave us the flexibility and freedom to address critical operational issues - issues we never had time to look at before." Nokomis has truly entered into a long-term partnership with the WRC - providing money, time, technical expertise, and even, credibility. Newton admits, " Because Nokomis has believed in us, our status in the community has been elevated."

In 1999, the Women's Resource Center will depend on Nokomis for almost a tenth of its total funding, and fully 75% of its nonprogram support. Still, Newton is optimistic about her organization's post-Nokomis future, "Just like for the women we serve, I'm confident that some day, we will be weaned from Nokomis, or from any outside support." By working now to strengthen the center, the foundation is ensuring its future as a powerful advocate for West Michigan women.

Two Sisters in Philanthropy Also Benefit

In addition to investing in local women's organizations, Nokomis has given similar grants to two partners in philanthropy: the Michigan Women's Foundation (MWF), based in Southfield, Michigan, and the Women's Funding Network (WFN) in St. Paul, Minnesota.

The Michigan Women's Foundation is a small statewide funder of programs to promote economic self-sufficiency and personal well-being in women and girls. In 1997, a one-year, $12,000 Nokomis grant for strategic planning enabled the MWF to hire a consultant to assess its strengths and weaknesses, and refine its mission statement. At the time, the organization was in transition after the untimely death of its Executive Director; the unrestricted Nokomis grants enabled it to refocus priorities without interrupting its ongoing obligations to grantees.

The Women's Funding Network is a global partnership of women's funds, donors and allies. Nokomis is both a member and funder of the WFN, and Kym Mulhern serves as a committee volunteer. In 1998, the Women's Funding Network received a $15,000 grant to implement its new strategic plan, and to dedicate staff time toward making the organizational changes required by the plan. As with the other Nokomis grantees, the network's need was particularly acute in the fund development area.

Because of its mission and structure, the Women's Funding Network has been in a position to receive several capacity-building grants from its members. WFN Executive Director Carol Mollner sees the potential of nontraditional grants: "They're really important. Most individuals and foundations don't want to make them, because they're not for things that are glitzy or heart-warming … but you can't make good programs happen without capacity."

Nokomis Gives Organizations Freedom to Innovate

In all of these cases, the final grant proposals evolved out of a frank and sustained dialogue between Nokomis and the grantee. Says Kym Mulhern, "No one ever comes in asking for this type of grant. They usually want program funding, and our conversation just leads us into looking at capacity." During the proposal development process, the foundation encourages applicants to discuss their organization's weaknesses, as well as their strengths. By contrast, traditional grantmaking often forces applicants to represent themselves in the best-possible light to "win" funding. Unfortunately, nonprofits often view organizational issues as secondary to their core competencies; capacity-building grants enable them to address these issues without jeopardizing programs and services. In fact, such grants can actually strengthen core competencies by funding the development of more innovative, potentially riskier programs.

According to Inger Giuffrida of GROW, it helps to have someone at a high level in the organization with a big-picture vision: "Most nonprofits are tactical and outcome oriented; capacity building requires a nontraditional mindset." Many nonprofit executives and volunteer boards are simply not trained to look strategically at their organizations' futures. Kym Mulhern sees quality leadership development as an excellent application for capacity building grants. She says, "Most nonprofits just can't afford to work on leadership skills." For instance, over the course of its relationship with Nokomis, GROW has weathered the turnover of two top executives. Without the structural changes funded by the capacity-building grants, the organization might have been mortally wounded. Instead, it continues to grow, and has recently expanded services.

Long-Term Partnerships Between Grantmaker and Grantee

When asked about how Nokomis measures the effectiveness of capacity-building grants, Kym Mulhern is philosophical. "We can't really claim credit for anything. It's just too difficult to evaluate an open-ended grant. In the end, you have to have a realistic understanding of the organizations you're funding, set a few realistic benchmarks, and have faith." And Mulhern is very aware that Nokomis has committed to a long-term partnership with its grantees - long-term, but not permanent. In her vision, the foundation helps struggling nonprofits grow strong enough to attract program funding from more traditional sources.

Because she funds or networks with so many members of the West Michigan women's community, Kym Mulhern has a unique perspective on their issues. Despite the fact that these organizations often compete for funding, she sees a number of ways they could benefit from more collaboration. This is especially true in areas outside their core competencies, like facility management, building maintenance, leadership development, and even, fundraising. At some point, Mulhern envisions providing capacity-building grants to explore joint initiatives to strengthen not only individual organizations, but the entire women's community.

Is there a downside to capacity-building grants? According to Kym Mulhern, it is possible to give struggling organizations too much, too quickly. "Sometimes we can overwhelm them. We're now trying to pay out in smaller increments and set more interim benchmarks. That way, there's a plan in place to accomplish the objectives outlined in the grant proposal." When asked about the possibility of an organization becoming too dependant on Nokomis funding, Mulhern expresses faith in the foundation's core belief that capacity building makes nonprofits more self-sufficient, not less. If anything, the foundation's commitment to such grants grows stronger every year, despite the fact that it remains unique in the Grand Rapids community. One of Mulhern's colleagues in local philanthropy, Marcia Rapp of the much-larger Grand Rapids Foundation, says, "Nokomis depends on organizations like the Women's Resource Center to further its mission and goals. It's important to build up those organizations. There aren't many places that will provide the dollars to do that. Nokomis is really cutting edge."

back to Top