Reinventing the humble funding agreement

May 8, 2020


Kate Frykberg is a Philanthropy and Community Advisor, chair of Te Muka Rau and board member of the Innovation Unit Australia New Zealand.  In her most recent blog she discusses the need for funding relationship agreements to be seen in a new light.

Funding agreements – those dry, unexciting documents which funders generally require to be signed before they will pay a grant, are badly in need of a rethink.  This blog proposes that funders should instead adopt a Relationship Agreement approach, based on mutual responsibility and accountability.

To get straight to the point:

You are welcome to use and adapt this as you see fit.

And, for context, here is the back story of how a small group of funders and a kaupapa Māori community organisation came up with this alternative approach, as well as a discussion on what is wrong with traditional Funding Agreements.

How did this alternative approach come about?  

In 2018 and 2019, a small group of funders including Todd FoundationTindall FoundationJ R McKenzie TrustTe Muka RauTrust Tairawihti  and Vodafone Foundation spent time building relationships and learning with Ngāti Porou and Te Whānau-ā-Āpanui  communities near East Cape.  The aim was to take a ‘relationships before resources’ approach and to ensure that funding was a result of deep listening and co-creation.  And everything went well through the marae visits, the kōrero, the shaping up of a community-led project to support whānau-led businesses, and the decision to collaboratively fund this mahi for three years.

But then – wham – each funder produced their separate funding agreements.  Each agreement was different, most were sternly worded, and none were in keeping with the reciprocity we had been trying so carefully to develop.

And so we initiated a project to compare and contrast the different approaches to funding agreements, to strip requirements back to their essential components, and, most importantly, to transform the Funding Agreement into a reciprocal, two-way Relationship Agreement.  The document was also designed to be flexible enough to work with collaborative projects and collaborative funding.  So, as above,  here is the Funding Relationship Agreement template.

Thanks go to Ani Pahuru-Huriwai, Haimona Waititi, Marcus Akuhata-Brown, Helen Anderson, Steven Moe, Philanthropy NZ and others for their support in this process.

What’s so wrong with Funding Agreements anyway?   Whether we are funder or funded, most of us tend to ignore Funding Agreements, treating them much like license agreements from Apple and Google – an annoying prerequisite to getting where we want to be.  But these agreements explicitly define, then bake in, the power imbalance between funders and the organisations they fund.  Furthermore, few funding agreements even acknowledge the need for a funder to act in good faith, let alone provide any kind of recourse if a funder behaves badly.

Many funders talk about partnerships with the organisations they fund, but this talk rings hollow if the documents underpinning this ‘partnership’ are one-sided.

Will you be part of this?  We’d love to see funders having a go at using this template, and we welcome feedback and suggestions for improvement.  Please feel free to comment below, or contact me directly.

Thank you for sharing your blog with us Kate, and read more from her site here.