Partnerships of equals? 
The relationship between funders
and their grantees

Notes from the Field #2/2017

Download Notes from the Field #2/2017

Partnerships of equals?
 The relationship between funders and their grantees

Notes from the Field“ in less than 100 Words:

• A partnership of equals between funders and their grantees offers the opportunity of increasing the efficiency of funded projects and creating sustainable social impact.

• A successful partnership is based on an organisational culture founded in mutual respect and appreciation as well as clearly defined responsibilities and transparent processes.

• Instruments such as regular meetings and conference calls, anonymous feedback mechanisms, partner surveys or including the grantees into the funders’ governance structures provide opportunities for actively shaping such a partnership.

Our thanks go to Felix Dresewski, managing director of the HIT-Stiftung, for his many helpful suggestions for this issue of our “Notes from the Field".

"Partnerships of equals? The relationship between funders and their grantees" was written by Lea Buck and Eva Schneider, Beyond Philanthropy intern from March 2017 to May 2017.

Funders and grantees

This edition of our “Notes from the Field” deals with the relationship between funders and their grantees. As part of the day-to-day work of Beyond Philanthropy, situations arise where this relationship is perceived as, or actually is, strained or characterised by a mutual lack of understanding. The following quote by the philanthropy advisor Richard Marker encapsulates the causes quite well: “[T]ypically, funders really do mean well and violate ethical standards more out of naiveté or innocence.” (1) Or to put it another way: Many funders do not know better. That is why it is important to actively take part in this debate, which, by the way, is not a recent one. And there are good reasons
for doing so: A cooperation of equals entails an opportunity of increasing the efficiency of the funded programmes and creating sustainable social impact. The current edition of our “Notes from the Field” presents a variety of instruments that help funders and their grantees to make their partnership more participatory. We thereby address an aspect within the wider field of ‘participatory funding approaches’ and concentrate on the relationship between funders and
their recipient institutions.(2)


At first, the relationship between funders and recipient institutions is further qualified, in order to then explain the preconditions that need to be met to create a positive relationship. We will also present concrete tools that strengthen the participation of recipient organisations at the operative level.

A partnership of equals?

In the day-to-day business of the philanthropic sector, the idea of an equal partnership is a desired ideal, albeit one which reality often falls short of. The relationship between the funding institutions and the grantee is often characterised by suspicion and conflicts of interest. Some funders plan without getting their partners involved. Grantees on the other hand feel patronised for always having to account for their activities or they question why they have to provide complex impact assessments that get in the way of their daily activities and might be written simply to be filed away. On the part of the recipient organisations, there also is a great deal of insecurity: Will the funding continue? How do we communicate what is happening? In order not to jeopardise the funding, problems and challenges are often not explicitly stated.

Shared success

A study by Grantmakers for Effective Organizations (GEO) has shown that a transparent relationship between funders and their grantees is a contributing factor to the success of their shared projects. Feedback mechanisms can foster such a positive relationship. Nevertheless, according to a 2014 survey, only 53% of funders asked for feedback from their recipient organisations (still: in 2008, it was only 36%).(3)
 
Funders and grantees are pursuing a common goal: Their actions are intended to initiate societal change or create solutions to social inequality and ecological challenges. Ideally, both sides cooperate within a partnership that, despite the structural inequality (one side allocates funds, while the other side needs them), is based on openness and mutual trust. It is in the interest of both parties to give life to the practical aspects of this partnership. The values and structures that such a relationship can be based on are laid out in the following paragraphs.

 Mutual respect

Every funder should be aware that the central role of civil society organisations is to work towards resolving societal challenges. It is not their main task to make the funders happy. That does not mean that funding institutions cannot make demands on their recipients. They should, however, point out why certain aspects are particularly important to them. For instance, a proper impact assessment can take up much of the funded organisation’s time. Employed correctly, however, it does provide great added value: It can show ways of improving the funded programmes and increase the internal as well as external legitimacy of their work.
 
A relationship based on mutual respect entails many small and fundamental steps, starting with taking grantees and agreements seriously. Any readers wondering why such seemingly self-evident statements are necessary, are advised to read the publication „Best of the Worst Practices“ published by the Council on Foundations.(4)

Clarification – and humility…

To make an open exchange possible, the contact persons need to be clearly determined and transparent processes need to be defined. This begins even before any support is given. It takes little effort to plainly show whether and how an application can be submitted, and that simplifies matters for both parties. Applying organisations benefit from having the grantmaker give them clear feedback – even if no funding is granted.(5) Future recipients should be involved in the projects that they will eventually implement at the planning stage.

The responsible contact persons should not only be clearly defined, but well-trained in interacting with grantees. A publication by the Center for Effective Philanthropy (CEP) illustrates how recipient institutions primarily judge their funders based on the personal interaction with the responsible contact person. The funders’ areas of activity in general, their approaches and reputation tend not to be a deciding factor.(6)

Another precondition for a successful partnership of equals is the general outlook within the funding organisations: The best-conceived processes for mutual exchange become useless if openness (to criticism) and the ability to admit to mistakes are not valued.

Open and direct communication allows funders to signal their willingness to provide support. We know of funders who mean well and are open to the institutions that they support, but insufficiently communicate their motivation to get involved beyond their necessary tasks. Grantees are thus often unaware to what extent their funders are willing to cooperate with them. The funder remains locked away, and the organisation remains unable to find the key. The worst case results in both sides being disappointed: The funder is surprised that there are no updates and the grantee is confused because no questions are being asked.

Instruments for realising the partnership

An attitude of respect, clearly defined responsibilities, transparent processes and open organisational culture are what a level-playing-field relationship between funders and their recipient institutions is based on. An attitude of respect, clearly defined responsibilities, transparent processes and open organisational culture are what a level-playing-field relationship between funders and their recipient institutions is based on. They represent the foundation that the following
selected instruments need to be built on. The three dimensions of grantee engagement are:

  • the actual project level
  • expertise on issues
  • overarching questions of strategy

Figure 1 shows that most instruments are relevant to all relevant areas.

Fig. 1 Preconditions and selected instruments for a levelplaying-field relationship between funder and grantee

Meetings and conference calls:

Some funders organise meetings or conference calls for their grantees. That way, they can address their questions to the funder but also engage in mutual exchange. Some formats allow all recipients to come
together, regardless of programme, and others focus just on a particular issue.

We at Beyond Philanthropy have had positive experience with grantee meetings where recipient organisations that work on a common issue get together with the funder. This has facilitated the exchange among
the funded organisations, and even occasionally resulted in joint projects. Other funders and grantees have told us on the other hand that sometimes the ideological rift can be so pronounced that they see no added benefit in such meetings.

Practical example: Equitable Growth

ANONYMOUS FEEDBACK TOOLS:

Some foundations offer the opportunity to anonymously
give feedback at any time. The websites of
some funders have a ‘comment section’. The functionality
can vary depending on the tool.

Practical examples: Peery Foundation (see box), Effective Altruism Foundation

 

SYSTEMATIC ANONYMOUS SURVEYS:

Again, there is a variety of formats: The CEP puts together Grantee Perception Reports, and has already conducted anonymous surveys with 50,000 grantees of 190 foundations. In Germany, the Centrum für soziale Investitionen und Innovationen (CSI) has to date conducted a similar survey among partner organisations on two occasions. It is a systematic anonymous survey, which allows a comparison to other foundations. We at Beyond Philanthropy also conduct anonymous partner surveys focussing on concrete issues and future strategic decisions of our customers.

Funders benefit the most from a systematic partner survey, if their portfolio is large enough to ensure both the anonymity of the recipient institution and a certain statistical validity. The point in time is also a factor: The formats offered by Beyond Philanthropy are particularly relevant to funders involved in or initiating a strategy process.

Practical example: HIT-Stiftung (see box), William and Flora Hewlett Foundation

GOVERNANCE:

While it is more common for funders to be represented in the boards of grantees, the reverse case or the appointment of an advisory committee from among a group of grantees is rare. On the one hand, integrating (former) grantees into governing bodies gives them a strong voice, e.g. when it comes to questions of strategy. On the other hand, this bears the risk of conflicts of interest.

Practical example: Bewegungsstiftung

No hard and fast rules

Establishing a partnership of equals requires action from both sides. However, because of the structural power imbalance, it is important for the funders to make the first move towards actively levelling the playing field.

Not all of the instruments presented here may be useful at every stage of the cooperation. Whether and at what point they actually facilitate the relationship between funders and grantees depends on the context of the funding scheme as well as on the profiles and needs of the actors concerned.

As there is only limited data for Germany, an extensive and data-based assessment of the German situation is currently not possible. Both the figures from the US and our own practical experience indicate that a sense of the significance of an equal relationship has generally been increasing in recent years. But much still needs to be done. And so it is important that these views continue to be disseminated.

We would like to encourage all funders to consider whether they can identify areas where the dialogue between them and their grantees could be improved.

If you are interested in finding out about how you can make your work or funding activities more participatory, we look forward to hearing from you. Beyond Philanthropy has already supported a variety of clients, both in creating what is needed for a partnership of equals and in applying the concrete instruments. This includes e.g. setting up processes, organising and facilitating formats for exchange and networking as well as systematic anonymous surveys.

1: Richard Marker (2015): Becoming a Philanthro-Ethicist. In: Wise Philanthropy (http://wisephilanthropy.com/becoming-a-philanthro-ethicist/1367).

2: It would be interesting to discuss elsewhere, what the benefi ts are of getting the target group involved in philanthropic work. A study published in 2013, which was realised in cooperation between Active Philanthropy and Children for a better World e.V., addresses this question as exemplified by children’s councils within founda­tions. The study can be accessed online at: http://www.children.de/fileadmin/ user_upload/JH__Download-Bereich/Studie_Kinderbeiraete_in_Stiftungen_2013.pdf (German).

3: McCray, J. (2014): Better Relationships, Better Results. In: Stanford Social Innovation Review (https://ssir.org/articles/entry/better_relationships_better_re­sults). Unfortunately, no current and comparable data is available for the German sector. According to our own experience, however, it is safe to assume that in Germany, the proportion of funding institutions that solicit feedback from their recipient organisations is significantly smaller.

4: The publication Best of the Worst Practices by Active Philanthropy (2011) contains further practical examples from the area of philanthropy when it comes to the often fraught relationship between funding institutions and their recipient organisations. Accessible at: http://activelibrary.org/cms/front_content.php?idcat=3&idart=53.

5: The children segment of Children for a better World e.V.’s Jugend hilft! programme uses this feedback format to get comprehensive feedback on the submitted proposals of all applicants. The format is rated very favourably: 89 % of applicants see the feedback as helpful to their subsequent project work. C hildren for a better World e.V. (2016): Wirkungsorientierter Bericht 2015 – Jugend hilft! (http://www. children.de/fileadmin/user_upload/JH__Download-Bereich/JugendHilft_WOB_2015. pdf, German).

6: The Center for Effective Philanthropy (2013): Working Well With Grantees (http:// effectivephilanthropy.org/wp-content/uploads/2014/01/TheGuide.pdf).