October 05, 2026
This piece draws on their Devex Pro conversation on responsible funder exits, available in full to Devex Pro subscribers.
When a funder changes its priorities, leaves a country, ends a program, or fully restructures, the consequences can be serious for the grantees or entire thematic portfolios. Organizations may lose staff, close important programs, or even shut down. Communities can lose services they have been receiving (legal, technical, organizational) and advocacy that took years to build.
Yet a funder’s exit does not have to become an unavoidable crisis. In a recent conversation with Devex, we discussed what happens when funding relationships end, why the current approach often falls short, learnings for funders and practitioners, and some emerging good practices.
Too often, organizations are left to guess when a funder relationship is nearing its end. Early warning signs can include a program officer becoming less responsive; a new strategy that no longer references an organization’s issue area or country; grant amounts staying flat even as costs rise; or a funder announcing a broad organizational review without clarifying what it means for specific partners. But organizations shouldn’t have to become crystal-ball readers.
A responsible exit is based on trust and care
A responsible exit starts long before the final grant ends. Ideally, the funder explains the expected length of the relationship at the start and revisits that expectation as circumstances change. This does not mean every relationship must last a fixed number of years. It means organizations should not be surprised by a decision that has been developing inside the foundation for months or years.
The most valuable support is often straightforward:
Regular, honest communication
A clear timeline and decision points
Funding that allows the organization to plan rather than react
Introductions to potential funders
Help with financial planning, strategy, advocacy, digital security, or staff well-being
Flexibility around reporting and grant closeout
Creating or supporting spaces for peer collaboration and planning (support but do not dominate these spaces)
A responsible exit also recognizes that grantees are not all affected in the same way. A small grassroots organization with little unrestricted funding may face an immediate threat to its existence. A larger organization may have more options, but it may still be highly exposed if several funders withdraw at once. Funders should consider the role an organization plays in its field, its financial position, the importance of the work, and the availability of alternative funding.
There are examples of some promising practices:
In Mexico, the MacArthur Foundation reportedly met or spoke with approximately 80 grantees before making a public announcement about its departure. It also helped establish Acento, a multiyear vehicle intended to support the field after the foundation’s exit.
Other funders have used multiyear grants, financial-health support, and proactive introductions to other donors. At the time of its institutional restructuring, the Open Society Foundations created structures to provide flexible closing grants, strategy advice, networking, digital security, and mental health support. OSF recognizes, though, that best practice would be to offer this support from the start, not only during exits. The Ford Foundation's BUILD grants were originally designed as flexible, long-term institutional support rather than as an exit strategy. Yet, as Ford prepared to leave the tax and budget transparency field, these grants became a key part of its transition approach. Grantees described them as genuinely game-changing, providing critical support at a time when this major funder was exiting the space.
If you are curious to learn more, Laura Bacon, former Director of Partner Support at Luminate, wrote about how to shift philanthropic practices toward care and deeper partnership.
These examples offer a caution. Support provided only at the end of a relationship can feel like emergency assistance. Similarly, reaching out for co-funders when exiting a relationship is hard. It is easier to get peer funders interested when a relationship is starting, and the funder feels excited.
Financial resilience, connections, and planning support are more useful when they are built into grantmaking from the beginning.
There is no perfect time to leave, but timing can make a difference
An organization is more likely to manage a funder exit well when it is financially stable, has strong leadership and governance, and is not already facing several other funding losses.
Exits are especially difficult when they happen in the middle of a program cycle, without warning, in a field that depends heavily on one or two donors. Linking an exit to a leadership change can also create unintended harm. It may suggest that the incoming leader is less trusted than their predecessor.
A funder’s departure may be easier to absorb at a natural transition point, such as the end of a multiyear strategy or after a planned evaluation. But timing alone is not enough. Organizations need information early enough to make decisions.
On the other hand, organizations should not wait for formal notice before considering what they would do if a major grant ended. Scenario planning can include questions such as:
Which programs are essential to our mission?
How much would it cost to maintain, reduce, or close each program?
What commitments would remain if funding ended?
What decision would we make if replacement funding had not been secured after six months?
What support would staff, partners, and communities need during a transition?
Planning for closure does not mean expecting failure. It means protecting the organization’s ability to make thoughtful decisions under pressure.
What grantees should ask for from funders?
When a funder signals that support may change, organizations should feel able to ask direct questions. They should not have to apologize for needing information.
Useful questions include:
When was the decision made, and what is still under discussion?
When will the current grant end?
Is a final grant or a bridge grant possible?
How much funding might be available, and for how long?
Can the support decline gradually rather than end abruptly?
Will the funder introduce us to other donors and actively recommend our work?
Can the funder support convenings with peers?
Can the funder support transition costs, not only ongoing program costs?
Can reporting requirements be simplified?
What support is available for financial planning, legal matters, staff care, or digital security?
What we know about bridge or tie-off grants
A bridge or “tie-off” grant can be helpful, especially when it lasts at least two years and is structured as a step-down rather than a sudden cut. However, without follow-up, we don’t know how helpful a tie-off grant is, whether it helps the transition or simply postpones the crisis. Funders rarely go back and systematically assess the impact of their own exits on grantees or on a field after two or five years. Did bridge funding create a sustainable transition, or did it only delay a crisis? Did the field retain local leadership and capacity? Which forms of support made the greatest difference? We don’t know, and it is a missed opportunity, because without that kind of follow-up, we're mostly relying on anecdotes rather than factual and verifiable evidence.
In any case, transition funding should include the real cost of closing or changing a program. Severance, leases, final reporting, legal obligations, and responsible handoffs to communities can continue after program funding ends. These costs should be discussed openly and, where possible, funded separately from the money needed to continue the work.
Introductions to other funders can be especially valuable. A departing funder’s endorsement does more than open a door. It can reassure a potential donor that the organization is losing support because of a portfolio decision, not because of poor performance. It also saves time by transferring some of the previous funder’s due diligence.
Diversification of funding is good advice—but not enough
Local and grassroots organizations are often hit hardest by funder exits. They may have fewer reserves, less access to international donor networks, and limited opportunities for local giving, especially when they work on politically sensitive issues.
The usual advice is to “diversify funding.” That is sensible in principle, but it can be unrealistic in practice. Building several funder relationships requires staff time, proposal-writing capacity, financial systems, and access to decision-makers. Many smaller organizations do not have these resources. Another idea some funders like to push with partners is to explore revenue-generating activities; however, not all issues lend themselves to being “sellable,” and it also requires very different skills and institutional structure.
Diversification can also be misleading. An organization may have several donors but still depend heavily on one large grant. It may have a long list of funders, but most of them may cover only restricted project costs, leaving little support for salaries, rent, technology, and other basic expenses.
This is why field-level cooperation matters. Instead of expecting every organization to build a dozen individual donor relationships, an intermediary or funder collaborative can coordinate outreach, develop a shared case for support, and connect several organizations with donors in related fields.
Some funders and funder collaboratives – like TAI – help organize a coordinated push for grantees working on specific fields (e.g., corruption) and losing multiple funders at once. These spaces build shared cases for support, message-testing, and outreach to funders in adjacent fields. That kind of field-level fundraising is likely a more realistic form of "diversification" for smaller, specialized organizations than expecting each one to build a dozen individual funder relationships on their own.
This approach is not a replacement for organizational fundraising. It is a way to recognize that some risks are shared and cannot be solved by individual organizations acting alone.
Funders should also coordinate their own decisions. We have seen cases in which two or more major donors leave the same organization at roughly the same time. This can happen even to a large international nonprofit and may make closure unavoidable.
Before withdrawing, funders should understand who else supports the organization, whether other donors are also reducing their grants, and what the combined effect will be on the organization and the wider field.
Resilience requires more than discipline
Most civil society organizations do not have large unrestricted reserves. This is not a failure of financial management, but the result of a funding system that favors short-term, project-based grants and often fails to cover the full cost of the work (including costs of staff, administration, technology, learning, safety, and leadership).
Flexible, multiyear funding gives organizations a better chance to plan, adapt, and prepare for change. However, the reality is that this sort of support was always rare and is becoming even rarer nowadays.
What can funders do?
Provide unrestricted or genuinely flexible support. If that is not possible, then at least build a generous percentage of core costs into the grant
Cover the full cost of delivering the work
Offer multiyear grants
Support reserves and financial planning
Fund collaboration rather than encouraging unnecessary competition – for instance, don’t only call for collaborative proposals, which might just produce proposals prepared by partners who have already known each other and force their ideas into a joint proposal to get access to funding. It would be more constructive to provide space (not a one-time event but a sustained space over some period of time) for diversity of partners to convene, build collaboration, and eventually develop joint proposals
Pay for transition and closure costs when needed
Approach learning from exits with the same rigor applied to grantmaking.
You can learn more about civil society activists' perspectives on resilience in this TAI Blog and this Podcast on Resilience co-hosted by TAI and the European Center for Non-for-Profit Law (ECNL).
Choosing the path that protects the mission
The current funding environment is dire for human rights, equity, and democracy work, and competition for funding is likely to remain intense.
Organizations that navigate funder exits well often begin planning before the crisis arrives. They monitor risk, build funder relationships beyond their current donors, and have boards willing to consider difficult options.
Adaptation does not always mean keeping every program open. It may involve narrowing the mission, transferring work to another organization, merging, or winding down responsibly. The goal should not be organizational survival at any cost.
The goal should be to protect the work and the people the organization exists to serve.
That requires a clear understanding of the organization’s purpose and a willingness to evaluate every option against it.
Civic Strength Partners exists specifically to help organizations through this kind of transition, with funder support covering the cost of consultants and legal support that organizations couldn't otherwise afford.
Building a resilient civil society
As we look ahead, some developments deserve attention.
The push for independent financial architecture for civil society—infrastructure that outlasts any single foundation’s strategy cycle.
Funder support for the legal and political conditions that enable local giving.
And finally, a shift from competition to collaboration: when resources are scarce, the public interest is best served by preserving shared knowledge, relationships, local leadership, and the capacity to act. Funders can support such collaborative spaces.
Together, these choices can help ensure that civil society not only survives uncertainty, but emerges stronger.
See full interview here.
We also invite you to listen to the Devex interview with MacArthur Foundation experience exiting its OnNigeria Program. 6 lessons from the MacArthur Foundation for a new world of aid funding | Devex