Principles of Grant-making: Balancing innovation, accountability and Equity

Principles of Grantmaking: Balancing Innovation, Accountability, and Equity

Grantmaking plays a pivotal role in driving social change, funding initiatives that aim to address complex and entrenched societal issues. However, the success of these initiatives often depends not only on the availability of funds but also on the nature of the relationship between the grantmaking organisation and the implementing partner. This relationship is influenced by leadership dynamics, internal cultures, and the implicit power differentials that exist between funders and the organisations seeking grants. This article explores key principles of grantmaking, drawing on real-world case studies to illustrate how leadership styles, decision-making processes, and power dynamics shape the success or failure of social impact initiatives.

1. The Risk of Conservatism in Leadership: Stifling Innovation

Grantmaking organisations are often faced with a dilemma: should they fund experimental and exploratory projects, or should they stick to tried-and-tested methods? While caution can be valuable, when leadership and management in a grantmaking organisation are overly conservative and anxious, all proposals that challenge the status quo or push the boundaries of what is possible can be prematurely shot down.

The Lost Opportunity for Innovation

A foundation that had historically supported traditional education programmes was approached with a proposal for a new, experimental model of education designed to integrate technology into rural schools in India. The proposal, though well-researched, was turned down by the foundation’s leadership, who felt that it carried too much risk. The managers were anxious about how funders would react if the programme failed, and their discomfort with new methodologies led them to reject it in favour of conventional programmes.

The result? The innovative education model, which could have transformed learning experiences for thousands of rural children, was never implemented. This case demonstrates that when leadership is driven by anxiety and conservatism, it often stifles creativity and prevents necessary experimentation that could lead to breakthrough solutions.

2. Overly Relaxed Grantmaking: Missing the Critical Lens

On the other end of the spectrum, when a grantmaking organisation is too open and relaxed, there is a risk that the designers and writers of proposals are not challenged to critically reflect on their strategies. A lack of scrutiny can lead to projects that are poorly thought-out or that fail to address key challenges.

The Unquestioned Proposal

A grantmaking organisation with a relaxed approach to reviewing proposals funded an environmental conservation project in South America. The project, which aimed to introduce community-led reforestation, received minimal feedback from the funder during the review phase. While the project appeared promising, it was later discovered that the communities were not adequately consulted during the planning phase, and the local ecosystem was not thoroughly studied to assess the suitability of the tree species.

Had the grantmaker asked more critical questions during the proposal stage, these issues could have been addressed before implementation. The relaxed attitude of the funder ultimately led to wasted resources, as the project had to be restructured midway. This case highlights the importance of maintaining a critical, yet supportive, stance during the review process to ensure that projects are robust and grounded in thorough reflection.

3. The Implicit Pressure of Suggestions: Unintentional Compromise

Even when grantmakers believe that their feedback is merely suggestive, there is a power dynamic at play that can lead implementing organisations to treat these suggestions as non-negotiable demands. This can result in the project being compromised from the start, as the implementing organisation adjusts its approach to align with the funder’s perceived expectations, even when these adjustments are not in the best interest of the initiative.

The Shifting Focus

An organisation working on gender-based violence in Africa submitted a proposal focused on trauma-informed care for survivors. During the review process, the grantmaker suggested adding a livelihood component to the programme, stating that it could help the women become more self-sufficient. Although the suggestion was not a demand, the implementing organisation felt pressured to adjust its focus in order to secure the funding.

As a result, resources were diverted from trauma care to livelihood training, weakening the original aim of the programme. While the grantmaker may not have intended to steer the project in this direction, the implicit power differential led the organisation to compromise on its core objectives, diminishing the overall impact of the initiative.

4. The Power Differential in Grantmaking: A Hierarchy Unaddressed

There is an inherent power differential between grantmaking organisations and the social impact organisations they fund. This power imbalance is rarely examined in depth, but it plays a significant role in shaping the dynamics of the partnership. Often, the funder’s authority over the project leads to an unspoken hierarchy that can hinder open communication and mutual learning.

The Silent Hierarchy

A small NGO in Southeast Asia received a grant from a large international foundation to work on disaster relief. Throughout the implementation, the NGO struggled with logistical challenges but hesitated to voice its concerns to the foundation, fearing that doing so might jeopardise future funding. The power imbalance created a one-sided relationship, where the funder was perceived as an authority figure whose directives could not be questioned.

The lack of open communication ultimately led to delays in the project and missed opportunities for collaborative problem-solving. This case illustrates the need for grantmaking organisations to be conscious of the power they hold and to actively foster relationships that encourage transparency and dialogue.

5. Equity in Partnerships: Navigating Inequality in Power and Resources

Achieving equity in partnerships between grantmakers and implementing organisations is an ongoing challenge. While grantmakers hold financial power and often have more resources, it is essential to recognise and address these inequalities in a way that fosters true collaboration and mutual respect.

Working Towards Equity

An indigenous rights organisation in Australia partnered with an international grantmaker to develop a land reclamation project. Recognising the imbalance in power and resources, the grantmaker took deliberate steps to create an equitable partnership. They ensured that the indigenous community led the design and decision-making process, with the grantmaker providing support only where needed. This approach empowered the community to take ownership of the project, ensuring that the solutions were culturally relevant and sustainable.

The project’s success lies in the grantmaker’s willingness to work through the inequalities inherent in the partnership and to place the community at the centre of the initiative. It demonstrates that equity is possible when both sides are committed to addressing power imbalances and working collaboratively towards shared goals.

Towards Thoughtful and Equitable Grant-making

Grant-making is more than just providing financial resources—it is about fostering partnerships that are grounded in mutual respect, open communication, and a commitment to shared learning. Whether through leadership dynamics, proposal reviews, or the ways in which power differentials are navigated, grantmakers have a responsibility to create an environment that supports innovation, reflection, and equity. By acknowledging and addressing the complexities that come with these relationships, grantmakers can ensure that the initiatives they support are not only successful but also transformative for all involved.