A foundation’s standard grant agreement language indicated that the funder had the unilateral right to terminate the agreement and cut off funding to the grantee. However, one grantee raised issues with how the funder approached ownership of the work product and also its termination provisions.

Through extensive dialogue between the grantmaker and grantee, they restructured the language (see excerpt below) to present the agreement as an equitable partnership rather than a top-down relationship between the funder and the grantee, as well as to protect the grantee’s ownership rights over the work product.

This Grant Agreement may be terminated, in whole or in part, prior to the completion of the contract project activities when both parties agree that continuation is not feasible or would not produce beneficial results commensurate with the further expenditure of funds. The parties must agree on the termination conditions, including effective date and the portion to be terminated. The Organization shall not incur new obligations for the terminated portion after the effective date, and shall cancel as many outstanding obligations as possible. The Foundation shall make funds available to the Organization to pay for allowable expenses incurred before the effective date of termination.

This story shows how being willing to be collaborative and positive with grantees, approaching them from a posture of seeking to understand their context and needs, led to the best outcome for all.

We hope this will be helpful to you in your work.