by Dr. Kevin Dean, President & CEO, Tennessee Nonprofit Network
As the President & CEO of Tennessee Nonprofit Network, my relationship with funders is always going to be complicated. On one hand, I have immense respect for the crucial role they play in our ecosystem, providing the resources that power our work across the state. On the other hand, I feel a powerful, often compelling, responsibility to speak the truth on behalf of our member organizations, even when that truth might sting a little. I have said things on behalf of nonprofits to funders that, ahem, didn’t go over so well. I’m fine with that. I’d rather be the one doing it than someone else who has more to lose.
Over the years, though, I’ve learned to recognize the different types of funders in this delicate dance: the true partners who are genuinely open to feedback, the skeptical but curious ones who can be won over with data and dialogue, and those who believe they know everything and view nonprofits as mere extensions of their will, expecting us to simply “know our place.” This last group is where the dance becomes less a waltz and more of a clumsy stumble, and it’s where the most damage is done. Many funders work hard to build equitable relationships, but those that do not undermine the great work and trusted partnerships that many of us (and foundations) have worked so hard to create.
An Honest Look at Funder Fragility and the “Know Your Place” Trap
There is a delicate, often absurd, dance that happens between nonprofits and foundations. It’s a waltz of intentions, a tango of tax forms, and sometimes, a full-on, slapstick chase scene set to the tune of a looming grant deadline. This dance is complicated by something my friend Vu Le coined: “Funder Fragility”—a condition where foundation staff can’t and won’t hear feedback and get prickly and angry when someone isn’t happy with them. Many foundations have a different tolerance for conflict, whereas many nonprofits have to sit in it everyday because of the work that they do. When you’re fighting for something like immigrant rights or LGBTQ+ rights on the ground, conflict is unavoidable. When you are an immigrant or LGBTQ+, conflict is unavoidable. This often unintentionally exacerbates power imbalances because the foundations hold the purse strings, and nonprofits get punished for saying what needs to be said. It’s the “we are the foundation and we know all” syndrome, a quiet, sometimes deafening, echo in the hallowed halls of philanthropy. Don’t rock the boat, or you’ll be pushed out into the cold ocean water!
It’s a phenomenon born from what I like to call the “Funder Bubble.” Imagine a life where almost everyone you meet treats you like royalty. Your email responses are instant, your suggestions are considered gospel, and your every decision is lauded as a stroke of righteous genius. You walk into a room, and a hush falls over it, not of reverence, but of nervous anticipation. That’s the Funder Bubble. Nonprofits, in their desperate need for funding, become unwitting enablers of this bubble. We bend, we smile, we nod, and we polish our grant applications until they gleam with the kind of respectful deference that suggests we’d happily kiss a ring if it meant a three-year general operating support grant.
Yes, this might be hyperbole and an exaggeration, but the experience as a nonprofit employee is far less glamourous no matter how you frame it. No, foundation folks aren’t sitting around eating bon bons, but their conference rooms sure are nicer!
In this bubble, a foundation’s staff or trustees’ decision to pivot from funding arts education to funding a program that teaches squirrels to knit is met with a chorus of “Brilliant! What a paradigm shift!” even when we’re all quietly thinking, “Who is going to fund our after-school theater program now?” The problem arises when this carefully constructed reality meets the harsh glare of honest, authentic feedback.
It’s a moment of reckoning, a tiny pinprick that threatens to burst the bubble. A nonprofit, emboldened by a long-standing relationship or a moment of sheer desperation, offers a piece of constructive feedback. Maybe it’s a gentle suggestion that the foundation’s new reporting template is a Kafkaesque nightmare of redundant data entry. Maybe it’s a polite observation that the foundation’s new “impact metric” for community gardens—”number of earthworms observed per square foot”—is perhaps not the most relevant measure of success.
And that’s when it happens. The puffing up. The tensing of the shoulders. The polite smile vanishes, replaced by a steely gaze. The air grows thick with unspoken power. The foundation, so used to being lauded, recoils. The fragility sets in, and the unspoken rule of the dance is suddenly, loudly, and aggressively (or, because we are in the South, passive aggressively) enforced: “Know your place!”
Obviously, I’ve experienced this firsthand. 🙂
This reaction isn’t just about bruised egos. This becomes a defensive maneuver that guards against a reality check. It’s a way of saying, “Your reality is not our reality, and our reality is the one that matters because we have the money.”
Now, to be fair, nonprofits are not always a font of flawless feedback. Let’s be real here. Sometimes we are indeed misguided. And who likes receiving criticism about how you do your job when they fundamentally don’t understand the nuance, complexity, or reality of your job? We are on the front lines, fighting fires, juggling a dozen different roles, and sometimes, our requests and critiques are born from a place of exhaustion and frustration.
For example, we might ask a foundation to cover the cost of a federal grant that we lost due to a clerical error on our end. And the foundation, understandably, has to say no. Their role isn’t to be a safety net for every administrative stumble. We might pitch a foundation on sponsoring our annual gala—the “Dancing for Donations” spectacular—and get a polite, and perfectly valid, refusal. Foundations often have specific funding priorities that might not include your organization’s work. How they formed their giving priorities was probably an incredibly detailed process. And of course, there’s the inevitable, “But we do such important work, why can’t you fund everyone?” and the foundation has to patiently, and repeatedly, explain the concept of a finite budget.
This is all part of the dance. It’s the give and take, the push and pull. A good nonprofit leader understands these boundaries. A healthy relationship is one where a foundation can say no to a gala sponsorship, and the nonprofit can accept that decision without feeling like their entire existence has been dismissed.
The problem is not when a foundation says no. The problem is when they stop listening.
When Funder Fragility takes over, and the “Know your place!” reflex kicks in, foundations lose something invaluable: context. They lose the on-the-ground expertise of their nonprofit grantees. They miss out on the nuanced, messy, and often contradictory information about the communities their funding is meant to serve.
Imagine a foundation that funds a literacy program in a low-income neighborhood. The program is a huge success, with children learning to read at a faster rate than ever before. The foundation is thrilled. The numbers are amazing. But a nonprofit leader, who is in that community every day, might mention that while the kids are reading better, they are also struggling with food insecurity, and their families are being displaced by gentrification. The foundation’s metric of “books read” is a wonderful success story, but it’s only a small part of a much larger, more complex narrative.
If the foundation dismisses this feedback as “not our lane” or worse, “stay in your lane,” they are operating with a dangerously incomplete picture. They are funding a beautiful program in a community that is crumbling around it. They are celebrating a victory while ignoring the larger war.
When foundations shut down honest feedback, they are actively working against their own mission. They are creating a vacuum of information where their own strategies and assumptions go unchallenged. They are building a philanthropic house on a foundation of unverified theories and anecdotal evidence.
This isn’t to say that foundations need to bend to every whim of every nonprofit. They don’t. They have their own boards, their own strategic plans, and their own fiduciary responsibilities. But a truly effective foundation, one that is genuinely committed to creating lasting, meaningful change, is one that understands the difference between a misguided request and invaluable constructive feedback.
The most powerful and effective foundations are the ones that are secure enough in their mission and their identity to welcome critical feedback. They are the ones that can hear a grantee say, “Your new reporting system is genuinely unworkable for small nonprofits,” and instead of puffing up and saying, “Know your place!” they say, “Tell me more. How can we make this better?”
These are the foundations that break out of the Funder Bubble. They are the ones that understand that the nonprofit is not just a recipient of a check; they are the eyes, ears, and hands of the foundation in the community. They are the ones that understand that the partnership isn’t about one entity giving orders and the other following them. It’s about a collaborative effort to solve complex problems, and that requires an open, honest, and sometimes uncomfortable conversation.
2025: A New Blueprint for Funder-Nonprofit Partnerships
In 2025, a new blueprint for philanthropy is emerging, one that actively works to dismantle the power dynamics and mitigate funder fragility. This new approach is rooted in trust-based principles and a recognition that the most effective solutions are co-created, not dictated. Here are some specific things funders can be doing right now to build more dynamic and equitable partnerships.
1. Embrace Trust and Transparency
Trust is the bedrock of any healthy partnership. In 2025, foundations are moving beyond a “prove your worth” mentality to a “we trust you” approach.
- Move to multi-year, unrestricted funding: This is perhaps the single most impactful change a funder can make. Multi-year grants free up nonprofit staff from the constant scramble of grant cycles, allowing them to focus on the mission. Unrestricted funding is the ultimate expression of trust, empowering nonprofits to allocate resources where they are most needed, whether that’s for a new program, staff raises, or a much-needed server upgrade. This approach recognizes that nonprofits are the experts on their own needs. And yes, foundations, we understand this doesn’t work for all of you, but it’s a consideration and a conversation we hope you revisit year after year.
- Simplify reporting: The days of a 50-page impact report filled with hyper-specific metrics are fading. In 2025, funders are working with nonprofits to create streamlined reporting that focuses on learning and storytelling, not just numbers. This might involve a simple narrative report, a short video update, or a quick conversation. The focus is on what was learned, what changed, and what’s next, not on checking off boxes.
- Establish a “trust agreement”: This is a simple, one-page document that outlines mutual expectations. It’s not a legal contract, but a shared understanding of how communication, reporting, and feedback will be handled. This helps to set a foundation of transparency and respect from the very beginning of the relationship.
2. Prioritize Authentic Listening and Learning
The Funder Bubble can only be burst by intentional, active listening. Funders who are truly committed to mitigating fragility in 2025 are doing the following:
- Create dedicated listening sessions: Beyond the standard check-in calls, foundations are hosting formal and informal listening sessions with grantees. These are spaces where nonprofits can share their challenges, successes, and insights without fear of retribution. The foundation’s role is not to offer solutions but to listen, learn, and absorb the on-the-ground reality.
- Conduct and fund field research: Instead of relying solely on internal assumptions, funders are investing in research to better understand the communities they serve. They are also funding nonprofits to conduct their own community-based research, recognizing that the best data comes from those who are closest to the problems.
- Provide feedback on grant applications: The “black hole” of grant applications is a major source of frustration for nonprofits. In 2025, leading funders are committed to providing constructive feedback on proposals, even if they aren’t able to fund the project. This helps nonprofits strengthen their future applications and shows a respect for the time and effort they invested.
3. Build a Collaborative Culture
Dynamic partnerships are a two-way street. Funders can actively foster this by moving from a transactional to a truly collaborative model.
- Convene and connect: Funders have a unique position to bring people together. In 2025, foundations are acting as connectors, hosting convenings where grantees can meet each other, share best practices, and even explore collaborative projects. This helps to build a stronger, more resilient network of organizations working toward similar goals.
- Advocate for their grantees: Funders can use their platform and influence to advocate for the policy changes that their grantees are working on. This goes beyond a simple grant check; it’s using their power to amplify the voices of the communities they serve.
- Support organizational well-being: A nonprofit is only as strong as its people. Funders in 2025 are recognizing this by funding initiatives that support staff well-being, such as sabbaticals, professional development opportunities, and even stipends for mental health support. This shows that the foundation values the human beings behind the mission.
The Funder Bubble can be a comfortable place, but it’s also a place of isolation and limited impact. Foundations can break free from the “know your place” mentality and build partnerships that are not only more equitable but also far more effective at creating lasting, meaningful change.
So, the next time a nonprofit leader offers a piece of feedback that feels a little too direct, a little too honest, a little too “outside the bubble,” let’s hope the foundation resists the urge to shout, “Know your place!” Let’s hope they take a deep breath and listen. Because in that moment of tension lies an opportunity—an opportunity to transform a delicate, absurd dance into a true, meaningful partnership. It’s an opportunity to move beyond a transactional relationship to a truly collaborative one, where both partners are respected for their unique expertise, and together, they can do a better job of serving the communities that depend on them.
This video provides an overview of 11 trends in philanthropy for 2025. https://www.youtube.com/watch?v=K9SKsS1Lo5o
(Ps. The article’s intent is to create a discussion and push for change, which requires a certain level of directness. For a funder who is ready for that conversation, the article could be a valuable, albeit uncomfortable, read. The effectiveness of the piece will depend on the audience’s willingness to engage with its core message about power dynamics and the need for change in philanthropy.)