What Funders Know But Won’t Say
I’ve had the same conversation several times recently. Each time with someone different: a program officer, a foundation CEO, a philanthropic advisor. Each time in confidence.
Organisations in their portfolio that are no longer viable in their current form. Not because of bad leadership or poor governance, but because the structural conditions have shifted beneath them- funding cuts, post-pandemic audience contraction, cost pressures that have turned tight margins into no margins at all. The funders know. Often they’ve known for quite some time; portfolio-level intelligence gives them visibility across many organisations that individual organisations don’t have about each other (or even themselves).
A funder expressing concern about an organisation’s viability can itself become a self-fulfilling prophecy. Staff hear whispers and start looking. Donors redirect. Board members get nervous. What was a manageable challenge becomes, once a funder names it, an unmanageable crisis.
So the funder stays quiet. And the organisation stays quiet. And both sides perform stability. There is no way of having the conversation that both know needs to be had.
Silence and performance
Last month I published a piece about the policy gap in Australia’s approach to arts sector transition - the absence of any framework for how organisations navigate endings, mergers, or structural change. The response endorsed what I was hearing in my conversations - the silence is structural.
On the organisation side, the dynamics are well documented. Speak publicly about difficulty and you risk triggering the very outcomes you’re trying to manage. The rational response is silence.
On the funder side, the dynamics are less discussed but equally powerful. Most funding frameworks are designed around the assumption of organisational continuity. Grant applications ask about plans for growth, strategic development, increasing impact. They rarely ask about what would constitute a good ending, or what an organisation’s theory of change would look like if its current form were not the vehicle. The entire grammar of the relationship assumes permanence.
Program officers and managers who do recognise early signs of difficulty face a set of impossible choices. Raise it directly and risk precipitating collapse. Stay silent and watch the slow deterioration that the REGENERATE describes: programming becomes cautious, risk-taking disappears, the best staff leave, and the organisation persists technically but is no longer doing the work it exists to do. Or - the most common response - quietly decline to renew the next grant, which achieves the worst of all outcomes: the organisation loses funding without warning, without support, and without any chance to navigate the transition well.
None of these are choices anyone wants to make. They are artefacts of a system that has no other options.
Other options
Internationally, funders are beginning to build that third option. The Decelerator in the UK has worked with dozens of civil society organisations navigating endings, and a significant part of their learning has been about funder behaviour. The insight is disarmingly simple: the most important thing a funder can do is create the conditions for honest conversation before the crisis point. Not to diagnose, not to prescribe, but to make it safe for an organisation to think out loud about its future -including futures that don’t look like the present.
The initiative has reframed the entire language around organisational endings:
· From “it’s a failure” to “it’s generous.”
· From “it’s shameful” to “it’s courageous.”
· From “it’s giving up” to “it’s creating new life.”
That language shift changes what becomes thinkable - for organisations, for communities, and for funders.
At the heart of this is the recognition that funder behaviour is itself a form of infrastructure. The way funders ask questions, structure grants, respond to difficulty, and hold relationships during transition -all of this shapes what becomes possible for organisations navigating change. When that infrastructure is absent, both sides default to performed stability until the situation becomes unmanageable.
What this asks of Australian philanthropy
I’m not asking funders to cut organisations loose with a kind word and a transition grant instead of ongoing support. That is the managed contraction fear, and it is legitimate.
I’m asking for something harder and more generous: that Australian philanthropy invest in its own capacity to be useful when organisations face structural change.
Three things Australian philanthropy could do now
1. Create transition funding streams. Not bridge funding to extend unsustainable operations, but explicit grants for the time, expertise, and process costs of well-managed transitions - including endings. End-of-life grants, merger support, recombination facilitation. Available without requiring public disclosure of difficulties. This is not a new idea internationally. It is simply absent in Australia.
2. Build internal capacity for transition conversations. Train staff to recognise early indicators of structural difficulty, to raise the topic without triggering panic, and to engage as partners in transition rather than funders who withdraw. This requires deliberate investment in skills, revised frameworks for portfolio review, and explicit permission from foundation leadership to have these relationships.
3. A cross-sector funder learning network on transition. Internationally, funder learning labs are developing best practice for transition support - sharing what works, what doesn’t, and how funder behaviour inadvertently makes transitions harder. Australian philanthropy should be part of this conversation. No single foundation needs to solve the problem alone. But someone needs to convene the first honest conversation about it.
Funders I’ve spoken to in the past month have said some version of the same thing: I’ve been wanting to have this conversation but I didn’t know how to start it. That’s not a lack of will. It’s a lack of infrastructure. The will is clearly there. What’s missing is the shared language, the peer support, and the practical frameworks that make honest conversation possible without it becoming destructive.
You know the organisations you fund are navigating the hardest structural moment many of them have faced. Some will come through it. Some will need to change form. A few will need to end - and if they end well, the knowledge, relationships, and community trust they hold can be preserved and passed on rather than lost. Whether any of that happens well or badly depends, in significant part, on what you do next.
Breaking this silence - with care, with skill, with the right infrastructure - is a much needed act of partnership.