The three-day Grantmakers for Effective Organizations conference (GEO) in San Francisco is on (30 April – 2 May). The 2018 conference marks 20 years of GEO and has brought together 950 people from the grantmaking and philanthropic sector.
Our CE Tony Paine is attending the conference and at the end each day is writing about conference highlights with the New Zealand philanthropic sector in mind.
DAY ONE, 30 April
One of the first resources we were given at the GEO Conference this week was a thought-provoking book written by leaders from US not-for-profits and foundations. At least one theme which struck me as worthy of consideration was: ‘do funders treat grantseekers the same way society treats poor people?’…Of course we don’t! Or do we? Are our expectations:
- ‘sustainability’ (we’ll give you a grant for a few years then expect you to maintain your organisation without it?);
- what it means to be deserving (your balance sheet is too healthy, so we won’t fund you?);
- gratitude (one of the first things I heard in fundraising 101 was “be sure to thank your donors”, yet how often do we send genuine thank-you letters to the organisations we fund for the work they do?);
- trust (is there an equal relationship when our expectations of fundseekers is that they spell out impact, budget, risk management, alternative funding strategy, key staff/board CVs etc in their applications to us, when we provide none of that sort of information about our organisations in return?)
Are these in any way similar to the messages society sends poor people: ‘work hard and save money so you can stop being dependent’?
It’s an easy criticism and I know that there is a lot of nuance and increasing resistance to that sort of approach to grantmaking in Aotearoa New Zealand, but it does resonate with some of our practices and the signals we send grantseekers. Are we perpetuating the sort of unequal relationships we might frown on if we saw them operating between the organisations we fund and the individuals, families and communities they seek to serve? Even if we aren’t operating like that, I meet plenty of grantseekers who behave as if we do. That suggests at the very least we have some relationships to work on. What do you think?
DAY TWO, 1 May
Applying the equity lens to giving
Grantmakers here are engaging deeply with issues of systemic racism and inequality. I’ve heard some powerful presentations and had conversations with funders who are explicitly and publicly saying that they are applying an equity lens to their giving. And while that lens extends across gender, class, age, health, immigration status, income, and ethnicity, it’s the position of people of colour that is at the forefront of much of the work being done.
Here’s some thoughts from the day:
- An equity lens extends beyond grantmaking. Foundations here are applying a concern for racial equality to their investing and their suppliers. For example: “We sacked our investment advisors because they couldn’t help ensure our impact investing reflected our position on race” and “we regularly review our 200 suppliers to make sure we aren’t only dealing with businesses and vendors from one part of our community and that our contracts are equally accessible to businesses run by people of colour”
- Some grantmakers explicitly decline to fund organisations because of things like a lack of diversity on their Board. One philanthrocrat in the room recalled a time when she was a grantseeker and was turned down by one of the funders in the room for that reason, and how helpful that decline was in moving her old organisation towards more diverse governance.
- The power of our public commitments to this issue is huge – “it galvanised staff and the board and was our accountability to the community, even before we had concrete plans in place”
- Related to that were discussions about learning by doing, especially from grass roots community and advocacy organisations. These were often groups who the foundation hadn’t been close to in the past but were now being funded as a result of the intention to move the dial on racial equality.
- Another common theme from presenters included extensive use of training for grantmaking staff and boards on racism, implicit bias, and equity – including from providers like the Center for Social Inclusion and Race Forward, and the thinking of John A. Powell, especially on ‘othering and belonging’
- One presenter made some helpful distinctions between diversity, inclusion and equity – warning against the tokenism that’s possible when we seek to make our organisations more diverse without thinking about power.
- Philanthropy has a unique role to play in re-distribution of wealth and responses to poverty are deeply connected to concerns for equity. “Money and the way it is controlled is a traumatising force in our world”.
- Three good examples of foundations working on this issue in the US are Weingart Foundation, Kresge Foundation and the Schott Foundation for Public Education
There is relevance here for us in Aotearoa New Zealand and, of course, a lot of differences. I know race equity and Māori self-determination is on the agenda of some grantmakers back home, and PNZ looks forward to our continuing conversations about how local philanthropy can contribute to creating a more equal country where things like race are no longer indicators of what sort of education, income, health and life a person will have.
I’d like to close with the words of the most remarkable journalist activist key note speaker Nikole Hanna-Jones whose discussion of her work on school segregation in the New York Times I found as confronting as inspiring (and yes, there is no doubt that we have schools segregated by race and class in New Zealand!). She said “equality requires those with more to give up something”… I suppose that’s one of the origins of philanthropy, although I’m sure Nikole meant something more urgent and disruptive!
High Trust Philanthropy
One of today’s themes was “high-trust” philanthropy. The advocates and practitioners of this approach are quick to point out that there are lots of different ways of responding to the idea that good grantmaking happens in the context of a high-trust relationship with the groups we fund. But at the heart of their approach is the idea that it’s shared goals, with the organisations we fund that provides the common ground on which our relationships are built. That’s led some grantmakers to a position where they want to let the community and those working at the grassroots be the experts in determination of strategy and funding.
I’ve heard some thought-provoking examples of where that position has taken some US foundations, including:
- “why is the support not-for-profits say they need the most (unrestricted funding for operating costs) the thing we do least? Don’t we believe them?”
- Grantmakers taking responsibility for all documentation. “We have set up a grantmaking system where we enter the applicants details into our database. There is no application form, no fields with word limits, no budget templates. We just ask applicants to tell us about what they do and what they need. Reporting is the same – verbal – and we write down what we (the grantmaker) need to record”
- “We have said to the sector we are focussed on (in this case the first 1000 days of a child’s life) that if you are working in this area in our community, we will give you money”
- “We’ve realised that multi-year operating support (as in we’ll give you the money, you know best so you decide what to do with it) is the life blood of the community sector so that’s what we do”.
Challenging stuff, not for the faint-hearted, and certainly not without challenges. But the idea that approaches like project-based funding with high levels of due diligence and accountability are unhelpful forms of power and control are a serious consideration for an increasing number of foundations.
DAY THREE, 2 May
Full Cost Project
A fascinating session today with the leaders of the Full Cost Project. It’s another way of looking at grantmaking practices that make life harder for the organisations we fund, and it’s a recognition of the current market failure in the way we resource social and environmental good. At the moment some of our funding practices can be likened to going into a café and either offering to only pay 50% of the cost of the coffee or paying the full cost of the coffee but stipulating that none of the money we pay for the coffee can be used on R&D, HR, IT or rent. For a more scathing elaboration of this point see the wonderful Vu Le’s blog on what would happen if Apple had to run like a nonprofit.
Paying full cost is a recognition that if we only fund projects, we need to do so in a way that takes into account not just the full costs of delivering the project – including what we have unhelpfully characterised as “overhead”, but also the need for sustainable non-profits to make a surplus.
Behind that is the powerful idea that the most helpful support we can offer is unrestricted funding. Money grantees can use in whatever way they want. That completely resolves the risk that the grantmaking relationship becomes little more than a game about costs, to a much more helpful focus on outcomes. Rather than having to account for what part of the operating budget our grant has specifically paid for (a costly nightmare for most organisations who get multiple sources of funding for multiple and overlapping ‘projects’), we can have a much deeper conversation about what the organisation will achieve with our support – who will be helped? What will change? What have we learned?
Some of the Full Cost Project’s thinking includes suggesting that good grantmakers should actively encourage grantees to budget full costs. Grantseekers have made an art of keeping project budgets as low as possible and looking leaner than they should in the fear that if they reveal true costs they won’t get funded.
Full Cost accepts that for most human service organisations there is no such thing as self-sufficiency. Nonprofits will always need contributed revenue. Asking them what they will do when our funding ends is as patronising as it is unrealistic. We know what they’ll do – reapply to us or someone else!
Full Cost approaches seek to keep transaction costs low. General operating support grants have lower transaction costs for foundations and grantees. Restricted or project-based grants require grantees to spend significant time puzzling how to spend down each restricted grant in relation to one another and develop complex 3D accounting structures to comply with spending restrictions.
Figuring out net contribution is another Full Cost tool. If you grant $5,000 to an organisation that spends 20 hours applying and reporting on the grant at $20 an hour, your grant is only worth $4,200. I’d argue that if that’s the case the funder is only entitled to expect a report on how $4,200 was spent!
This is not a simple issue and it’s one that requires the participation of not-for-profits, grantmakers, government and ultimately the community to make real change. It’s about our perceptions and expectations of charity. It’s about the sustainability and effectiveness of the sector that philanthropy needs. Without strong not-for-profits we can do nothing. We have no other way of making good on our promise to make the world a better place. It’s about the sustainability of a sector characterised by recurring cashflow issues, failure to pay bills, financial struggles, people earning less than market rates, and the need to devote unhelpful amounts of time and money to resource acquisition in ways that detract from a much-needed focus on mission and impact.
I know some of PNZ’s members are grappling with the implications of ‘paying what it takes’. I think this is an important conversation, and the investment in resources and training going into it in the States is impressive. Let’s keep the conversation and the action going as we think about what it really means to support others to achieve the social and environmental changes we want to see.”
POST CONFERENCE EVENT, 3 May
“I took part in an important conversation hosted by Mae Hong and her colleagues from Rockefeller Philanthropy Advisors last night. I joined 20 other CEs and trustees from philanthropics around the US talking about philanthropy’s ‘social compact’. This was essentially a discussion about accountability. Who are we accountable to and how does that accountability play out in an increasingly fractured and inequitable world? A world where the social compact between citizens and governments and consumers and corporates is badly broken. The conversation asked us to think about how the emerging political and socio-economic challenges affect our view of philanthropy’s role in society and legitimacy. We were quickly in the same territory as that canvassed by David Carrington at PNZ’s recent network symposium in Auckland. As David pointed out, no-one external to our work demands or regulates our commitment to excellence and any exercise of accountability – to our communities or grantees – has to be driven by us. The conversation touched on our relationship with grantees (without them we are nothing) the challenges of the size of our grantmaking (tiny when compared to government), our problems with sustainability (we can only fund for so long, and so often the things we fund need ongoing support) and how we develop relationships with grass root’s leadership and put local organisations in the driving seat. I was reminded of Ani Mikaere’s challenge to the Indigenous Funders hui in Otaki last year. She reminded us that the revolution will not be funded. A cautionary tale for those of us who see philanthropy as being a force not just for good but for enlightened and progressive change.
The philanthropic landscape in the US is very different from here. It’s a much more developed sector and per head of population is bigger and contributes more. That’s in no small part a reflection of very different views on the role of government and wealth in both countries. It’s also a reflection of a country confronting an administration that is removing billions of dollars from support for people in need and environmental protection.
But we are united by the some of the questions we face about what it means to be thoughtfully generous, and how we can be most effective in the face of opportunities, community strengths, and the complex wicked problems that threaten our very existence as a species. Problems that see the violence of systemic poverty, racism, sexism and exclusion of the ‘other’ tearing society apart and consigning billions of people to lives of extreme poverty.
These questions include:
What does it mean to use an equity lens to guide our giving? How does that drive our attention to those most in need and most at risk of being left out or left behind?
How do our practices change when we see our contribution as being as much about the health, sustainability and capability of the organisations we support as their social and environmental impacts?
How do we deal with our dominant position in relationships with organisations who seek our support?
In a world where social compacts are failing – where citizens no longer trust governments, where customers don’t trust corporates and where we struggle to trust each other, what is philanthropy’s social compact? What are we responsible for and who are we accountable to?
If we want to help address the causes of social and environmental issues, what’s our role in supporting advocacy, coalitions, change-makers and social movements?
These were all powerful themes at GEO. There are no right answers to questions like these. I’d suggest that our willingness to engage with them is a hallmark of good grantmaking.