Trust, Transparency, and Resilience: How a Multiyear Grants Budget Benefits Grantees and Foundation Staff

Four years ago, the Sewall Foundation decided to tackle an incongruence in our practice of trust-based philanthropy: how to make multiyear grants within a structure of single-year grants budgets. The deep belief that structures manifest and reinforce our culture and values led our internal spending plan team to tackle this structural issue and work on an approach that aligns our values with our processes.

As a result, in December 2021, our board adopted our first multiyear grants budget, providing a set dollar amount (equivalent to approximately 8.5 percent of our assets at the time it was set) per year for 2022 to 2024.

As we launched our second multiyear grants budget at the start of 2025, we understood that we were heading into a socio-economic political context of high uncertainty and vulnerability for our nonprofit partners and the communities they serve. We considered that overall giving has decreased, in part due to changes in tax-deductible giving, and in part because some foundations and donors are preemptively retrenching their support for racial and social justice, environmental justice, and other essential community efforts.

Nonprofits are experiencing unprecedented challenges (as documented in the CEP Research Snapshot, “Challenging Times: How U.S. Nonprofit Leaders Are Experiencing the Political Context”) on top of the fact that most have not recovered from the pandemic, inflation, and the burnout that so many of our nonprofit leaders have been and are experiencing.

We are sanguine about the enormity and uncertainty of what is coming and know that the best way to be prepared is to lean into our values to create internal flexibility, be in close communication with our partners, deepen collaboration and coordination with peer funders, and support policy and advocacy efforts, particularly those that are grassroots and community-led. 

Benefits and Impact of Multiyear Grants Budget

Since 2021 we’ve learned a lot about the positive impact that structuring flexibility and abundance into our grantmaking through a multiyear grants budget has on our partners and on us. It infuses mutual accountability and mutual flexibility, giving us all more time for strategic thinking and work. Some of the key lessons learned through partner feedback and internal experience and reflections include:

1. Transparency in available funding builds trust with partners and influences other funders.
2. Foundation staff have more time to support partners beyond the grant and to coordinate with peer funders.
3. At times, Sewall’s multiyear grant is the only multiyear funding for some of our partners

We’ve also seen reinforced the many documented benefits of multiyear funding, including that it provides stability for grantee partners, signals trust they can use to leverage funding from others, supports their ability to do strategic planning, enables them to use more of their time for mission-focused work and less on logistics and grant-seeking, and opens the door for greater trust between us and our grantee partners through conversations that are not funding-related. What’s more, it contributes to buffering against irreparable harm: what we invest now acts as prevention.

Multiyear Grants Spending Plan 2.0

The Sewall Foundation’s second multiyear spending plan, adopted in December 2024, calls for us to distribute grants each year over the five-year period from 2025 through 2029 of approximately $14.5 million annually, and overall spending estimated at approximately 11 percent of the organization’s current asset value. This level of spending and multiyear commitment is the result of close collaboration across the organization. Looking back, it was achieved thanks to a few key approaches and decisions.

Start Planning Early

We began formal meetings on our next multiyear spending plan in May of 2024, eight months before it would go into effect, and had been planning and sharing ideas much earlier. Recognizing the magnitude of the decision that would need to be made as well as the likelihood of unforeseen challenges, questions, and implications, staff and board began discussing the multiyear spending plan together when it was in a very early draft stage. This created room for authentic collaboration and curiosity removed from the pressure of needing to adopt next year’s budget immediately.

Address Discomfort Head On

While we do not develop our budget from a starting place grounded in asset values and financial returns of our portfolio, one of the first things our team did when sharing the first draft of the budget was to prepare various scenarios (with the help of our investment advisor) with projections of what the proposed level of spending would mean for the future value of our assets. We did so openly and with clear and realistic expectations. The purpose of these projections was not to persuade or paint a rosy picture of what could happen but rather to address directly that we were proposing to spend a meaningful portion of our assets — and have a conversation about why that was an approach grounded in the Sewall Foundation’s values.

Build-in Flexibility and Visibility

One of the most common and persistent sources of discomfort about expanded multiyear grants budgeting was the worry that we would be unable to respond to emerging situations. Several specific features of our multiyear budget structure build in opportunities for visibility into progress and uncommitted funds that can be reallocated if necessary:

• Ten Percent Unallocated Funds Target: Recognizing that committing all funding in advance leaves us unable to respond to new developments, our goal is to have at least 10 percent of budgeted funds available each year for new grants.
• Strategic Discretionary Fund: To ensure availability of funding for substantial opportunities, we have established a new Strategic Discretionary Fund, set at up to $5 million across the five-year budget period. This funding would be allocated at the discretion of the Sewall Foundation’s board and is not tied to any one year but instead can be allocated (or not) at any time during the five-year cycle through a process grounded in Sewall’s values and desired long-term impacts.
• Operating Budget: Our operating budget will continue to be approved by our board on an annual basis, providing the ability to be flexible in our staffing and other spending as needed.
• Clear Reporting Commitments: We committed to enhancing our annual grants reporting to the board to include more stories and data that track the course of the multiyear budget, how it is holding the commitment to flexibility and adaptability, and most importantly, whether it is achieving our goals of being supportive and responsive to partners and community needs.

Lean on Shared Values

As mentioned above, our budgeting did not start from a place of financial returns and what our assets can support given constraints. Instead, we started from a place of shared values. The Sewall Foundation has spent several years developing a set of beliefs and ways of operating that collectively guide us. Mostly recently, we adopted the Sewall approach and we looked to it for guidance and inspiration when starting our multiyear budget journey over a year ago. It called for us to act boldly in a spirit of abundance and it gave the individuals that make up the Sewall Foundation the shared foundation to come to agreement. Our internal definition of fiduciary responsibility, which is values-first, was also supportive.

On a practical level, the first thing we did in developing the budget was request input from staff on what funding needs they see based on conversations with grantee partners and in communities. This was the starting point from which developing a comprehensive budget began. Concurrently, we continue to refine our focus — winding down a legacy program area that no longer aligned with our adopted Sewall Approach and establishing a new pool of funding under our rapid response program to support specific needs around land return to Wabanaki Tribes and Indigenous-led organizations and land access for food systems efforts.

Reframe the Discussion

At several points along the way, we found the need to challenge traditional thinking by reframing the discussion in terms that better represent the Sewall approach. For example, when discussing risk, we considered the risk of taking a specific action and equally considered the risk of inaction. When fears about having the resources to respond, “if something happens” arose, we asked ourselves: what if grantee partners and communities we support had been resourced all along such that they had the resilience to respond themselves?

The Time Is Now

Preventing the radical erosion of the safety net and of community-based nonprofits and efforts is an essential task for all of us now. As we witness government services and programs being cut or significantly curtailed and see members of our communities excluded from essential programs and supports, philanthropy must step up where we can, especially for those most vulnerable. Our current five-year grants budget allows us to navigate the unfolding uncertainty without interruption to develop a new grants budget or requiring our grantee partners to repeatedly submit grant applications while they are busy meeting the growing needs of communities.

In the current scenes playing out on the national and global stage, philanthropy must embrace its supporting role and bring to bear all our tools and strategies to our maximum capacity if we are to have any credibility in speaking about our values and missions. We understand that this is a long game, and that what we invest in now will help us all build a brighter future. By having a multiyear, flexible spending approach with significantly increased payout, and offering support beyond the grant, we can be true allies to our nonprofit partners and community-based groups and contribute to our collective resilience.

Gabriela Alcalde is executive director of the Elmina B. Sewall Foundation. Thomas Mitchell is finance and community investment partner at the Sewall Foundation.