Principles of Equitable Grantmaking

Let's be real. Philanthropy is inherently an inequitable institution. Some people have wealth, and some don't. And while the notion that those who have give to those who don't sounds like a great idea, in practice, it can be deeply fraught with power imbalances, implicit and explicit bias, outdated thinking steeped in white-dominant cultural norms, and burdensome systems and processes that put unnecessary demands on already over-worked and often under-paid people trying to make a difference in the world.

It is also not lost on those seeking funding that much of the wealth that drives philanthropy has been ill-gotten and self-perpetuating. Still, if we want to make change in this world, the social sector must rely on philanthropy to help resource its work. Philanthropists, whether private individuals or private foundations, have an opportunity and a responsibility to be good actors and do their part to reduce the inequities in the system. While there is a plethora of literature out there on how to be a better philanthropist, at Equitable Resources for Change, we boil it down to ten basic principles.

Support organizational health and wellness. While projects and programs are where the rubber often meets the road, real, durable impact is not possible without strong, healthy organizations to achieve it. It’s enticing to support a discrete piece of work, but providing unrestricted funding (a.k.a. general operating support), at least in part, allows groups to care for, sufficiently compensate, and retain talented staff, build enough capacity to plan and grow strategically, and allocate funding to programmatic work that is otherwise underfunded. Fund people, not projects.

Trust the experts. There are all kinds of funders out there, from the individual who recently came into wealth to established endowed foundations with large numbers of staff. In some cases those staff are substantive experts in the issues the foundation is funding. Regardless of where they fall on the spectrum, too often funders want to reinvent the wheel or prescribe a grantee's work based on their own 'bright ideas.' That is not to say that funders can't be helpful thought partners; with humility and trusting relationships, they absolutely can. However, it is critical to remember that almost always the groups being funded are the true experts, with the day-to-day lived experience in the work they are doing on the ground. Trust that they know what's needed. Even better, fund them sufficiently to do good work and to strategize and innovate based on what they are learning in the field.

Simplify the process. Funders have absolutely no idea how much time it takes across multiple staff members to secure the average grant, let alone those with more complicated application processes. Consider what you really need to know about the group or project you are funding, and ask for as little material as possible. Even better, accept a proposal that was written for another funder as is. Don’t create hoops for the sake of seeing them jumped. Don't require multiple cumbersome written reports--a phone call is a perfectly good way to learn how the work is going. And whatever you do, don’t impose character or word limitations; that only creates more work for those trying to figure out how to demonstrate the value of their work in 500 words or less.

Clarify motives and expectations. The best funders are those who are clear about intentions and communicate expectations early and often, particularly with regard to what funding is available and the likelihood that a group will actually be funded. While open calls and requests for proposals (RFPs) can sometimes bring more grantees to a funder’s attention, they can also waste precious time and capacity for already strapped organizations who will ultimately not receive funding, particularly if the number of applicants far outstrips the number and significance of the grants being awarded. Don’t dangle the carrot, unless you intend to feed the horse.

Metrics aren't everything. Don’t get me wrong, measurement, evaluation, and learning are important tools for knowing that we are on the path to real change (and who doesn't like meeting a benchmark?). Still, many funders seem to think that documenting and reporting on KPIs (key performance indicators) is the only way to know if something is successful. Sure, if the goal is to deliver 5,000 meals to home-bound individuals in the next month, ask for the receipts (metaphorically, don't actually ask for receipts). Some progress, however, such as movement building, is less quantifiable. Consider what you really need to know to feel good about what you are funding. Don't make people make things up for your sake. Trust that they, too, want to make progress on the issues that they care about. Be willing to take a little risk, and give them space to report on that progress the way they see fit to do so.

Don't nickel and dime. If I had a nickel, for every time a funder asked me about 'overhead costs...' Seriously, though, lean overhead is a myth. There is no organization that can do good work without sufficient administrative and fundraising capacity, and almost every non-profit out there is understaffed and overworked because funders either don't want to fund, or put strict limitations on funding for, that part of the work. To paraphrase Vu Le at Nonprofit AF, it's like the house is on fire and funders want to pay for the water, but not the hose to deliver it. If you are going to fund a particular program or project, make sure you're providing enough resources to cover everything it takes to be sure that program or project it successful, whether it's communications capacity, IT support, finance staff to manage and report on your grant, or the grant writer who just sent you a proposal. Even better, give general operating support, so that everyone in the organization can breathe a little easier.

Check your assumptions. You know what they say about those who assume. The same is true when it comes to grantmaking. Funder assumptions about size, readiness, and organizational need are particularly harmful. E.g. 'They are not ready for a big grant.' Smaller, grassroots or community-based groups are never going to be ready if someone doesn't bet on them. Rather than withholding support, ask them what they need to build capacity, staff up, and put the necessary systems in place to be able to absorb more funding sustainably. Relatedly, seemingly well-funded groups are sometimes overlooked for 'not needing the money,' an assumption that is almost always lacking in any real due diligence. If you want to know what a group needs, just ask them.

Commit to long-term change. We all want to see near-term progress. It's what motivates us to keep going toward a larger goal on the horizon. But transformational change really is a marathon, not a sprint, and funding groups only for short-term wins is like giving an ultra-runner just enough calories to get to the next mile. Whether it's climate change or racial justice, most issues are not won or lost in one year, one decade, or even one generation. To be real partners in change, funders have to be willing to stick it out beyond one-year grants or three-year strategic plans. Be willing to fund the long game even if you're not winning in the moment. And give multi-year support. Particularly with groups you already know, there is really no good reason to do otherwise.

Relationships are everything. Grantmaking is inherently transactional. Money is changing hands, after all. However, the relationships between funders and grantees do not have to be. The best funders and program officers know that they will get the best out of their grantees if they take the time to build real, authentic relationships with them. It leads to better, more generative partnerships and ultimately to grantees who are happy to work with you. Lead with trust, humility, respect, and compassion, and those things will come back in spades.

Be open to honest feedback. The power dynamic in philanthropy and the grantmaking process is very, very real. Funders, especially foundations, love to survey grantees about their experiences but are very rarely willing to hear honest feedback or to change behaviors based on responses. And there is always the fact that funding, and sometimes livelihoods, are at stake if a grantee were to upset a funder. This disincentivizes non-profits from being honest about what they need, most of whom, if asked, would likely offer you many of the same principles I have outlined here. If you are a funder and are not already doing these things or advocating for these practices within your organization, ask yourself why, and do better.