As an employee of a private grantmaking foundation, my job is to review grant applicants' financial reports and ask questions. One of our regular applicants couldn't answer our financial questions for a few weeks because their volunteer treasurer was on vacation. Nobody else in the organization, on staff or volunteer, had information on the organization's bank account. Their financial statements did not raise any red flags. As a funder, this brings up concerns about lack of control and poor governance. Are we right in our concern, and, should we voice that concern to the applicant?
You don’t say what information the staff or volunteers couldn’t provide, but the situation certainly raises the issue of whether the organization is too dependent on a single person, not only because of the potential for abuse, but also because of the apparent lack of financial depth if the treasurer gets hit by the proverbial truck.
Whether you should raise the concern with the applicant probably depends on what type of relationship you have in general with your applicants and what type of relationship you want. Some grantmakers are pretty standoffish and would never think of intervening in their grantees’ management. Others talk more about “partnership” with grantees, implying a joint interest in accomplishing an overriding goal. Some tell grantees to “do it our way or the highway.”
Since you say this is a “regular” applicant, I assume your foundation has some sort of continuing relationship with them and generally think they do a good job. I personally think it would be evidence of your respect for their organization to raise your concern as a question, not as an accusation and not as a condition of a grant.
You may find out that they have more protection than you perceive. Or you might tell them something they haven’t thought about. You both have an interest their being as well managed as possible. If you remain totally silent, you will never know how near or far you are from that ideal.
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