I’m done. I’ve spent 10 years working in the charity sector and my conclusion is that the organisations that finance it are so bad at their jobs, that they make the rest of us bad at ours.
I’ve been working for too long with people trying to achieve great things for the world and watching them degrade themselves at the feet of foundations whose structures turn brilliant thinkers into fundraisers and who reduce a highly complex world into amateur box-ticking. I’m done.
It’s soul destroying, wasteful, embarrassing and I’ve been a part of it for too long. I’m part of the problem.
Imagine a world where service users, charities, foundations, researchers, academics, frontline workers, public sector experts, commissioners and regulators were aligned and working together effectively as partners. After 10 years I’ve realised how far we are from actually achieving this.
We need a new model for funding charities that is better than Victorian style philanthropy excused by reductionist, unbenchmarked and often corrupted ‘impact assessments’. I know it’s possible because there are some brilliant grant-makers out there – people who have transformed society with funding because they were brave, educated, understood the communities they wished to serve and were prepared to take responsibility and risks. Because they cared enough not to let great potential fail.
Truth to Power: The Ten Things Foundations Do That They Shouldn’t.
Or, more accurately, ‘the 19 things that some (not all) foundations do some (not all) of the time that I don’t think they should do (but what do I know?)’:
- Hoard power within a group of people who don’t give enough time (and don’t always have the expertise) to be effective – foundations should either hire staff who are able enough to make good grant decisions and delegate them power to make those decisions, and then judge performance based on those decisions, or give proper time and access for charity leaders to skilled grants committees/trustee boards;
- Only care about ‘their’ money – when you meet a foundation that won’t write references because they only want to spend time on ‘their’ money rather than leveraging other people’s, you realise that the commitment is not to social change but to ‘their’ social change. The fact that so many foundations have no reporting or monitoring of what happens to an organisation, beneficiary or field in the years after a grant period ends because they only care what happens within it is further proof of this. Foundations working together more wouldn’t hurt either;
- Base grant-making processes around their own convenience with little respect for social need or the organisations they are funding. Social need is less important than committee dates – trustees are happy to pay for frontline workers to work over their Christmases but heaven forbid a charity needs urgent support over a summer during holiday season.
- Embrace a ‘ticking’ culture – if we give a gift to an organisation, they are ‘ticked’ until the moon has rotated the earth twelve times. Should that funding prove insufficient for a specific need or opportunity during that period, nothing can be done. They cannot be considered for additional grants. If they come across some incredible new insight or opportunity to create social change this should not be backed as they have already been ‘ticked’. Ticking should stop;
- Set up funding in a way that encourages charities to compete rather than collaborate – an end to ticking would help this. Rather than ‘picking’ between charities why not use money to finance cooperation in a non-punitive way: ‘we can fund an experimental joint programme and us doing so does not make you less likely to get core programmes funded’;
- Procure programmes. Outside a few big international development funders, foundations don’t have enough money to go round buying enough impact for everyone so why not stop trying. Instead they should start fulfilling purpose by investing in real innovation to create new tools and transform systems rather than trying to mimic government, just without the bankroll;
- Procure everything through applications. Imagine a world where foundations were humble enough to seek out people doing great things, allocate budget to them, then work together on implementation plans;
- Distrust charities with money. A good business looking to grow might run on a 25% cost of sale, 75% gross margin, 25% net margin. Charities cannot be trusted and so are commissioned to run programmes at 75% cost of sale. No money is left to think. This hamstrings innovation, partnerships, advocacy and dissemination, and encourages competitive isolation amongst charities. It has permeated the sector so badly that now when a charity gets a big unrestricted grant, they worry it might harm their rations. They invest it in subsidising programmes so that other foundations won’t be put off. Failing to fund even a few things properly by preferring to funds lots of things badly, makes us all losers;
- Build decision making committees out of people without expertise to make decisions. It’s great to involve people from the financial sector in charity, the best ones have as big a contribution to make as anyone else. But when you get told that grant decisions are made by ‘the finest minds in investment banking/private equity’ without any engagement of people who have run small organisations, worked in the public sector or come from the communities they wish to serve, it just doesn’t make sense. Let’s stop assuming that being able to make money necessarily makes you uniquely gifted at giving it away;
- Make charities jump. Imagine a world where a 5-year grant was standard but foundations could use shorter grants where appropriate. They would, of course, have the right to cancel long grants if they did not see any progress or had reason to doubt the leadership or the value of the grant. In such a world foundations would have to actually be able to intelligently analyse performance rather than simply pick a pretty new partner for the next 12 moons. Maybe if they observed Point 19, this would be different;
- Turn innovators into operators. Imagine if people who came up with insights and new models of doing things were paid to keep doing that while other people were paid to operate models at scale. Innovation should not be confused with novelty; it isn’t a one off act that can then be ticked then rolled out, it should be an ongoing evolution. It requires unrestricted time, space and money;
- Turn social leaders into perpetual beggars. Short term finance + not enough finance = consignment to fundraising rather than working.
- Rely on grantees to do all the work. Imagine you have an idea that has the potential to change the world. Foundations will have no interest in it until you have sweated your guts out to prove the model, pilot, test, impact assess. To register as a charity you now need £5k in a bank account. If you are poor you are unlikely to have £5k to put in the bank account. Most foundations won’t back you before you are registered. Such processes are a kick in the teeth to diversity. Imagine if foundations backed people who needed it most, when they most needed it;
- Think in binary (apologies for grammar). Proposals tend to get ‘yes’s or ‘no’s because (see point 3) there are inflexible and infrequent opportunities to engage with the people who actually make decisions. Very rarely is there a ‘yes if…’ or ‘how about we do this together instead as it’s a better fit…’. Foundation granting structures are generally set up to judge rather than provide intelligent input;
- Fail to share insight. Foundations know so much more than they ever let on. Foundation teams should be calling new charity CEOs and saying ‘I love your proposal but I’ve seen 100 of these over the past 10 years and you are likely to need 5 times as much as you’ve asked for and if you change your model to a more intensive version, we’d love to fund that as that’s what we’ve seen work. Can I share some sample budgets and programmes of comparative organisations and see if you want to re-assess as if you do, we’ll fund it.’ Suffice to say, they tend not to do this. It’s even ok for foundations to disagree with and criticise strategy. That would be better than quietly judging people and leaving them to underperform. Expert honesty may lead to active disagreement, but we need that;
- Define sustainability as the growth of an organisation through revenue rather than the dissemination of an idea, concept or approach into the mainstream beyond the organisation. Defining goals as organisational/programmatic growth may be an easy way to showcase success but it’s a far less important metric than broader market penetration of a solution against a problem or widespread improvement in existing practice and whether the problem has actually been impacted. It also discourages sharing between charities. In international development they learned this one a while ago but most domestic foundations are miles off;
- Make loads of money out of porn, arms, tobacco, gambling and killing the environment via their endowments* (*they don’t necessarily make that much profit out of these things despite spending a lot of time and money trying). Many people – charity CEOs and service users alike – don’t realise that foundations are perpetuating themselves not insignificantly through investments in the world’s most harmful industries. I’m not talking about where the money came from originally before it was donated, I’m talking about where the money, once donated and officially ‘charitable’ sits. Some foundations are making concerted efforts at using investments in companies that should be doing better, to influence them to do so. Most however either simply don’t care or have started excusing profiteering as ‘engagement’ regardless of whether or not they actually ‘engage’ or how effectively they do so. The non-engaging ‘engagers’ should be particularly ashamed of themselves. As should those hiding behind a purposeful misinterpretation of ‘fiduciary duty’ (see Point 18);
- Hire conservative lawyers and financial managers in order to excuse risk aversion – foundations excuse away poor practice through referencing fear of that aggressively interventionist body (this is sarcastic), the Charities Commission. Please someone make them stop;
- Exclude service users and front-line workers. There are many circumstances where those with the closest proximity to a problem (as frontline workers or service users) are best placed to provide insight into useful solutions, but may not be best placed, inclined or, given Point 13 feel unable to lead a social sector organisation. Imagine if foundations found space to back them through backing their ideas, without relying on them as organisation-builders.
And one thing they don’t do that they should:
- Try to achieve something. Imagine if foundations tried to achieve something. To end social problems. Not to ‘do’ lots of things (evenly distributed round the country) and not to have a vision or mission disconnected from reality, but to set some concrete, stretching objectives about the change they wanted to see in society within a firm timescale on which they judged themselves. In such a mad world they might even hire staff, trustees and leadership with relevant capabilities and replace them if they did not perform.
My personal view after a decade sweating in this sector is that the foundation world is not fit for purpose and that the relationships between the various stakeholders is not an effective one. In many cases and indeed in my experience, it is completely false and based on an incentive structure that does not best serve our communal mission.
I’d love to see foundations become less risk averse, share power, share learning, show flexibility and take a systems approach. I’d love to see them come to hate the disadvantages they engage with. To lead the fight against them not just to hang around them. This is a plea to the foundation world to step up.
There is already some amazing practice out there – and many foundations who rightly won’t recognise themselves in the points above. I’ve worked and still work with some brilliant grant givers. Indeed, all the blame should not lie with foundations – charities have been complicit in this too. I’ve been guilty as anyone both in my grant giving roles and my charity leadership roles. We all have.
This won’t be fixed by foundations getting some service users on boards and having a more flexible grants policy – we are where we are because of a historical context rather than foundation fault or individual malice. The system has to change more fundamentally.
While the above represents only my insight, none of it is original. Indeed the Panaphur Foundation published their brilliant ‘End of Charity’ report 4 years ago to smiles, nods and inaction. Tris Lumley’s ‘anti-social sector’ speeches sum up many of the ideas above better than I ever could.
Today there are a number of people more intelligent and by now more popular than me who want to do some serious research and constructive work around what a great service user-charity-foundation-public sector-government relationship looks like. I hope foundation leaders seek them out to work with as peers, and don’t make them jump through any soul destroying hoops.
I’d like to thank Adam O’Boyle for his support in making this more intelligent and constructive and hopefully therefore, slightly less likely to be career-suicide for me personally; and indeed less harmful to the organisations I’m involved with that need foundation funding today and in the future.
I’d welcome any responses, either by comments below or by you taking a couple of minutes to register your agreement/disagreement with the ideas above on this short survey: https://www.surveymonkey.com/s/foundationarticle
Jake Hayman
The Brookfield Group 
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Great stuff Jake. Love the analysis and your courage to share it. Much, if not all, resonates with me. I’ll do the survey to give you proper feedback. And I’m going to use your analysis to see how we can better support the organisations we work with. In this way, your analysis is acting as a set of standards for being an exceptional funder, which is super helpful. Thank you!
Hollow laugh whilst nodding with agreement. I think that much of this comes from the conflict of two things: the people who make the money and the people who are appointed to manage the money. The first are allocated way too much prestige (and often have a particularl mindset), the second are administrators and, in the main, if you appoint an administartor, they will er, administrate (not innovate, collaborate, cogitate etc.)
An interesting piece Jake.
Some very powerful and provocative points, strongly informed by your own experience. We very much welcome the debate. In our experience, ACF members do not shy away from challenge and in that spirit we hope that your work stimulates further discussion.
You rightly acknowledge the range of ‘amazing practice’ undertaken by foundations, and the fact that many would not recognise themselves in the criticisms you raise. This is something we at ACF would echo. We believe strongly that UK foundations collectively constitute an irreplaceable asset, essential to the health and diversity of civil society; mobilising funding, resources and expertise in the service of supporting others.
It is worth noting however, that the sheer range and diversity of the foundation ‘sector’, makes it difficult to generalise about the practice and behaviour of ‘foundations’ as a whole.
Keiran Goddard, Head of Communications, ACF
Nicely put Jake. It agrees with much of my experience (much more limited than yours). A big part of the problem, it seems to me, is people handling other people’s money. You can be bold with your own (you only have to account to your conscience) but you worry about being blamed if you are managing on behalf of others. Inevitably perhaps, this ends up with ultra-conservatism and no-one being happy.
It seems to me it will take something radical for most foundations to change – people have too much to lose by taking risks and are not dissatisfied enough with the status quo.
Having said that I hope that there are some shining example out there of people trying different ways – Ashden for example giving “awards” not grants, and making the effort to find worthy recipients.
My own interest is in governance. I would hope that some bold foundations are willing to start experimenting with more radical forms of governance, where those who are on the ground get some real say in how money is allocated. I am hoping that programme-related investment will become more widely accepted too. But as long as the “great and the good” are still in control, for most foundations the reality is that little will change, despite well-meaning and articulate outbursts from some…
Not too many punches pulled there Jake: would expect nothing less 🙂
I’d echo most of the points made in the 3 comments above: your 19 points resonate to a greater or lesser degree as with Michael and quite timely checklist as we undertake our ‘5 years in’ Funding review (promise not to tick any boxes in the process though – don’t want to be thought of as a ticker!!)
A couple of observations:
1 It is easier to meet the aspirational Foundation model you highlight when you are smaller and/or newer and I don’t think that is exclusive to the Foundation or broader Third Sector
2 There are a number of charities who would actually prefer that Foundations didn’t get too engaged, innovative and collaborative and would prefer to preserve the status quo dynamic!! So I’m not 100% convinced that the blame for the current perceived flaws in the foundation-charity dynamic lie solely at the door of the Foundations (and I appreciate you were not trying to claim that they were Jake!)
Jake, my feeling has always been that many foundations might often not be efficient and their philanthropic activities might not be effective. Hence my choice to plunge into impact investing…And the paradox you describe in point 17 (harmful investing of the corpus) is a very bitter pill.
All in all, a great article, thanks for sharing your views and experiences with us, in a frank, candid way. I truly hope your words will change the status quo!
Susanne
Hi Jake, well, interesting reading! Wish I could say I disagree with your post, and whilst I think I might be a tad more hopeful – I’m not done, well I might be after posting this! – I have most definitely encountered quite a number of the 19 ‘shouldn’ts’ throughout my career, working initially as a fundraiser and now running my own charity. Whilst I do agree, there are most definitely some great funders and funding relationships, there are just as definitely issues in how the voluntary sector is funded. And this can result in the knowledge, experience, passion, enthusiasm, entrepreneurialism and drive that exists in this sector to be stifled, overlooked or ignored.
The rather parental relationship that currently exists can and should evolve into a more collaborative partner based approach. Just as the voluntary sector needs to be more user led and collaborative in its approach, this should be mirrored by funders. And there are a number of ways this could be supported, which I know (having hit my head quite a few times against some proverbial funder brick walls!) are not easy and represent a radical shift in how things are done. But, as we are all surely working to similar ends, they should not be discounted. For just one example, how much time and therefore money would be saved, if there was one standard application form?! There’s amazing lessons (in what works as much as what doesn’t) that could and should be shared.
A big problem, and this harks back to the unbalanced nature of the relationship, is that the voluntary sector is indeed complicit in maintaining this status quo. And not because they don’t recognise the problems, because I assure you they all do. But when you’re reliant on someone for your very existence, are you really likely to or are you indeed in any position to point out these problems?
Hi Jake,
So, I gulped at your first few lines and then got in to the flow of things. I also decided to take your survey before commenting , which has helped me reflect on what you wrote.
As is echoed by the comments above from funders, foundation leaders, investors and charity employees, and I am sure will be again by others to come below, much of what you write rings true. Not for all, not all the time, but enough for there to be a problem. While I may have chosen a different writing style or approach, I applaud you for putting these questions/challenges out there so publically, openly and honestly. You’ve taken a brave step which may come at a personal/professional cost. I hope, however, that we can all be a bit more mature than that (as you could have been perhaps with some of your language/tone) and take this with the intention with which you wrote it.
Sometimes things need to be shaken up, prodded, exposed. Sometimes people need to be made uncomfortable for a shift in behaviour to occur. Hopefully you’ve started that.
I agree with your criticism that the charity sector themselves have been complicit in this, even if they (we/I) do so from a feeling of lack of power. Charities should take more responsibility for challenging the funding world and, more positively, inviting them in to a more equitable and generative relationship.
I also think that you leave out the public sector and let them too much off the hook. Government is horribly risk averse, demeans charities, ignore evidence, drafts policy on a whim, engages in even more onerous contracting/commissioning practice which rewards bigger players (including private sector contractors who have defrauded the government!) and is often shown to take the generosity of the independant funding sector for granted. They need to be brought to task just as much – if not more so.
If I had a magic wand, I’d fix 5, 6, 7, 10, 14 and 15. If those were done, the rest would follow.
And as Khulisa is always about collaborative problem solving, I’m offering here – publically – to host your first round-table of charities, funders and other interested parties to start that proces!
I look forward to hearing from everyone and serving up the coffee.
Thanks Jake. Brave. Honourable. And now probably needing a drink! I’m buying.
Having worked in foundations, raised funds and probably happiest working somewhere in between. My personal favourite foundations that only care about their ‘impact’ ‘commitment is not to social change but to ‘their’ social change’ and as a result don’t collaborate with others effectively and enable the orgs and people they work with to collaborate/use resource alongside other resources in the best way possible. Which goes cap in hand with the whole defining growth as growth in an organisation and the bottom line. Income for incomes sake, which creates churn, lack of viability in orgs and a strange distancing from social value/change in both funders and charities.
On the funding side I’ve very often seen confusion between compliance (legal stuff) over relationship building so compliance and tick boxing (as one example) take precedence over philosophy and fit. This compliance driven model often comes about when people mis-trust (as you suggest), have little knowledge of the power/ethos of the gift (grant) & its importance in the funding world, lack of knowledge of the legal implications of doing this and finally a fear of risk/forgetting that they are they to take that risk.
Unfortunately perceptive list of issues ..
Excellent post – well done.
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I liked this article although we are not really operating at the level this refers to. We have have more or less given up applying for grants because of the time taken to fill in forms and the lack of feedback as to why we are refused despite ticking all the boxes. A clue to the attitude referred to in the article came when one organisation that had refused to fund us or give us any feedback as to why this was the case, sent us an email asking for comments on their process. It also feels like many want to fund something shiny and new that has measurable impact but have no interest in sustaining that once it is off the ground. I agree that limiting the meaning of sustainability to financial sustainability is double-speak – often being financially sustainable undermines the original purpose and is environmentally unsustainable.
Jake
An interesting piece that I can identify with though I do not work for a foundation/charity. The similarities with the public sector are striking though marginally better in recent years in response to patient safety scandals which helped to focus on patients.
Bureaucracy & due diligence with others money is important but ineffective if it gets in the way of innovation.
Jake:
I am deeply disappointed at your disparaging litany of philanthropic offenses.
Seriously…10 years in the field and the most you can come up with is nineteen?
Most nonprofit leaders can dash off at least 50 classic foibles of funders on back of their Starbucks cups in a matter of minutes.
I even know this Cuban dude in New Orleans that can do it in rhyming couplets!
That being said, you do have some juicy ones on the list.
My favorites of the week if I had to pick:
1) Hoarding Power
2) Grantmaking by Convenience
4) Embracing the “Ticking” Culture
Sad to see you go, man. We need this kind of candor — and anger.
I have worked at one foundation and been a trustee at another, and been guilty of a lot of these. I have also raised money from foundations and know it can be a soul destroying experience. Foundations could definitely benefit from more informed criticism like this. However, some things are not quite as simple as some of the above implies – e.g. abandoning application processes and just going out and finding great people / groups to back (a popular trend in foundations) can simply end up favouring the most networked, elite NGOs; identifying a particular social problem to solve (another popular foundation trend) can also exacerbate the risks of foundations wanting ownership of impact, and the risk of foundations directing and interfering in the operational detail of NGOs that have far greater skills and expertise than them. I have seen both these unintended consequences in action.
Hi Jake, I’m Leland Sinclaire, Founder & Philanthropologist-in-Chief at Philanthrope Internationale, a newly formed NGO dedicated to Building the Business of Benevolence. You are on my radar.
After two decades in the third sector, like you, I grew frustrated with the inner-workings of the philanthropic industry- not only with foundations, but with the “Oliver Twist” fundraising in charitable organizations, and the “siloed” thinking and mission ownership that plagues collaboration, best practices and knowledge share.
I founded [PI] and its holdings as a means to completely disrupt the philanthropic sector. We’re taking on everything from cultivating youth philanthropy to professional networking and development, and breaking down barriers to funding collaborative research, while crowd-sourcing/crowd-funding multidisciplinary approaches to solving real world problems (solutions-based funding). We’re also working on developing and implementing a universal taxonomy, lexicon, and standardized charity rating system for the industry, in addition to collective bargaining for insurance, advertising, capital outlay, travel and socially responsible venture cap investing in the global philanthropic community.
Clearly, you have your hands full- you’re kind of all over the map, which I can relate to and respect. Give me a few weeks to familiarize myself with what you’re doing. Then, I’ll reach out to you with ideas about how we can combine forces or collaborate on initiatives to achieve shared goals.
I like where your head is at. You are a courageous voice among a growing yet quietly frustrated community of dissenters. You and I definitely need to connect, converse, and strategize.
I’ll be in touch.
Best regards,
Leland Sinclaire,
Philanthrope Internationale
@LelandSinclaire
leland.sinclaire@gmail.com
1+424-442-0462
@PIHQtweets
philanthropeinternationale@gmail.com
1+408-548-7447 (PIHQ)
Philanthropologist
Philanthropy International Network & Professional Journal of Philanthropy
@PhilanthroTrust
philanthropologist@gmail.com
In conversation with a leading thinker in the foundation world we spotted a quote from Joel Fleishman and Tom Tierney in ‘Give Smart’ that is also in line with Jake’s arguments – in their claim that the “natural state of philanthropy is one of underperformance. Excellence must be self-imposed in philanthropy. There are no built-in systemic forces to motivate continuous improvement.”
“Self-imposed accountability is not a natural act. It requires extraordinary determination and discipline to pursue outstanding results year after year when nothing in the surrounding environment requires you to do so.”
Brilliant article, Jake. My reflection is that whilst i agree with each of your points without reservation, i do not know a single person in the foundation world who is wanting it to be this way. It is the system that is broken, and the people working within foundations, whilst imperfect like the rest of us, are as much a victim of this as anyone. Rather, the dynamic you describe is like Karpman’s Drama Triangle designed into a system. There is the Perpetrator (the original source of funds), the Rescuer (the foundation) and the Victim (the charity). The beneficiary of the charity does not feature at all (as Tris Lumley has so eloquently pointed out when describing the “anti-social sector”. I do not see any solution other than a more fundamental re-think of the system design. All three need to change. And the change that all three need to consider is not modest. So it is a good job you are such a young man. All power to you!
Amazing.
Since change from the inside is so slow, it seems like change is more likely to come from the outside (on a systems level).
That begs the question: What models do you think are most likely to outpace foundations for supporting purpose-driven work?
Impact investing was mentioned, donations, social enterprise, crowdfunding, community public offering (excuse the jargon, that’s what we call them in Oregon, USA http://hatchoregon.com/im-seeking-funding/raise-capital-public-offerings/), others?
Ouch! I work for a charitable trust and recognise some of the hard hitting points. Everyone seems to love your article so anything I say will seem like self justification, although I know that what we do and how we do it suffers from some of the shortcomings you cite. Neverthless, your argument is pretty one sided and doesn’t take into account what is going on in foundations. Some examples of what we have to deal with show that it is not nearly as clear cut as you imply:
There are 180k charities – how do we know which ones are good, innovative, sustainable (not in revenue growth terms but just going concerns judging by their accounts), which one of the many operating in the same field are exemplars, how much money they take simply to run after they’ve paid all their employees and therefore their cost effectiveness in getting money to the point of need – not so easy now is it?
We have a decent pot but give money to over 300 charities a year and consider many more. All this with one dedicated employee and a committee of volunteer members who meet 10 times a year, read all the paperwork and give it their best shot from an informed position. They report to the Directors of the charity who have personal responsibilities to the Charity Commission. The endowment has been built over 100s of years and the aim is to keep this growing to benefit future generations – a quaint notion perhaps these days as we saddle our children with future debt. It is not surprising that we tend not to want to take too much risk, back unproven innovators and charities which, while they can point to an area of need can’t explain how our money will benefit those in need. So yes, we do care about our money for good reason but we care about a lot of other things as well.
Sort out social problems and put maximum effort into solving them? Which one do we choose of the million and one out there? And if we do, how much will it take (£££s) and which smaller charities will miss out completely as money is thrown into a proverbial black hole?
There are many more points. Don’t get me wrong. What you have written is very thought provoking and I’ll consider this as we reassess our charitable giving, as we are doing at the moment anyway. It would just have been more balanced if there was some appreciation of the view from the ‘other side’
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I have just done your survey and recognise all your points, to some degree, if you want to create vibrant communities don’t start from here!
New approaches to complexity and multiple agency collaboration make leadership easier and should provide the key to greater effectiveness and citizen impact – readers might like to explore OpenStrategies of New Zealand.
OpenStrategies embodies principles and an approach that identifies the ‘simplest amount of information to define complex situations, across multiple stakeholders’. This holistic approach provides a common language and focuses organisations on the Benefits to be achieved, while maintaining organisational sovereignty and governance.
I look froward to your comments.
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Great! and from the reply posts there is clearly a lot of support either for your comments or what you are hoping to achieve. I won’t add any further agreement but instead suggest ….. what now? It seems like from what you say there is a sense that, apart from the practicalities of attending to any or all of the points, there is a need to pull together some key thinkers to do some radical thinking on how to re-engineer the current situation. It looks to me like you have done what many are not in a position to do in terms of sitting back and taking a sort of high level perspective on what is happening. Most of us are too tied up in the processes, head down, on the delivery treadmill (I mean here funder staff as much as charity staff), too much a part of the process to be able to contemplate what’s the process achieving.
Davos is (theoretically) a meeting of global political and business elites, where the attendees get the chance to sit back and contemplate the bigger picture. What is needed here is a ‘world of foundation funding’ Davos. As you mentioned, “imagine a world where foundations were humble enough to seek out people doing great things, allocate budget to them, then work together on implementation plans”. What about seeking out people doing great things and get them into a room to contemplate the bigger picture, identify change drivers and provide a realistic vision for moving forward. Even better if there was a foundation prepared to fund such an event actually in Davos.
You’ve spelled out the problems for us all, now what are we all going to do about it.
PS I didn’t do the questionnaire yet – maybe you covered the above in it?
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Dear Jake,
Thank you for a very, very direct and heartfelt dissection. Possibly a little vitriolic but legitimacy of message should not be ignored because of bad delivery! As someone who is relatively new to the foundation world there was a great deal that resonated in terms of systems and processes but I do not recognise the motivations and behaviours that you imply in the people that I now work closely with.
So, I would like to try and describe some of these issues in a different way and begin a conversation on what we can do about them:
Just say no – foundation resources are tiny in the face of rising inequality and environmental devastation. We turn down 85% to 90% of applications; not because they are bad but because we only have so much money to go round. Turning good people down day after day is a dispiriting pastime and so it is not surprising that a process is built up that seems defensive.
Horses for courses – not all foundations see themselves as agents of change. And as a foundation that does, we are profoundly grateful for those that don’t. They provide the bread and butter funding that is currently about the only thing preserving the very survival of many ordinary communities around the country. Without this, the more innovative initiatives would not have the ground upon which to stand and flourish.
Long in the tooth – foundations sometimes have very long perspectives and time-frames. And whilst this is very frustrating in the world of entrepreneurship and innovation, it is essential for campaigning work. An example is the issue of FGM; steadily and patiently funded by foundations for the last 7 years and which will continue to be funded until real progress is made.
These are not going to change and nor should they. But as many people have already said, our processes need improving. What we can do better is to:
1. be clearer and more transparent about our funding priorities, what we look for in organisations, give better feedback and be more open about how we engage with the sector.
2. develop new flexible and trusting ways of funding
3. be better co-ordinated and provide better aggregated information such as through open data.
4. rebuild our grant making processes with applicants considered as our valued partners and key deliverers of the impact we are collectively trying to achieve.
At Esmee we are working on all of these and I know that we are not alone. So, once we have a better idea of what will change in reality, (rather than just words) maybe you would be kind enough to come to Esmee and take a look at our plans. We would welcome your feedback.
Caroline
I am energised by the many comments in response to Jake’s blog which gives voice to the many thoughtful people who want to see change in how we do business. Having worked in the charity sector for 20 odd years and now sitting on the other side of the fence, I feel I have some experience of the impact of funder practice, and all of Jake’s comments to a greater or lesser extent resonate. I don’t agree that foundations are also victims of the ‘system’; but I do believe that charity leaders need to stick their heads above the parapet and help us improve. As funders we have to create the environment in which that can happen. Nothing can change without that partnership.
Here’s an idea. As funders we invest in tools for charities like Measuring Up? (enables delivery orgs to self-assess on their impact practice). How about turning the tables on ourselves – a Measuring Up? specifically for funders?!
I’m usually the first to stifle a yawn when tools are mentioned, but there are some great examples of ones that work …
For example, there is a wealth of interesting experience and debate in the humanitarian sector on the issue of accountability – this is my background. For example, The Disasters Emergency Committee accountability framework established in 2007. Briefly, accountability was defined as responsible use of power. ‘Ways of working’ – were collectively agreed amongst major organisations to measure various elements of accountability. DEC agencies annually self-assess against the ‘ways of working’ on a traffic light system – green (we have policy/procedure, evidence of systematic application and so on), amber and red. The tool is a way of taking stock of how you are measuring up and where you need to improve. An external validator then looks at a selection of annual assessments producing a summary report of key learning / challenges etc. Trustees meet for facilitated peer learning. The benefit of this tool is that it developed consensus on key elements of accountability, enables you to track progress year on year and clearly demonstrates commitment to the public regarding the responsible use of money.
Perhaps the UK Trust and Foundation world could benefit from translating some of this rich learning across? If we were able to get some sector wide consensus on the basics of what constitutes ‘good funder practice’, and then develop some indicators to support that (based on existing research) and a basic tool to enable us to measure our progress surely this would be a start?
Finally, I wrote a blog a while back aimed at the partners we fund on what makes a good funder fyi http://www.blagravetrust.org/principles-good-funding/ for anyone interested.
Jo
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What a great (and brave) piece. Thank you, Jake.
In response to @benmetz’s quote above: is Jake’s piece also not a statement about natural human incentives, and the effective problems of non-market driven unregulated systems (with relatively few checks and balances)? For me it kind of goes back to some overarching statement (and I don’t know what exactly that statement should be) about the human behaviour that flows from competition in a private sector / capitalist paradigm, which while imperfect does still exhibit traits of fear at non-compliance due to consequences…. vs. that ‘responsibility’ which seems to evaporate if you put the human being in the grand social experiment called ‘give or get free money’. Self-regulation is a messy game in the best of scenarios, whether in the context of international trade, environmental policy or in basic inter-personal relations. This piece by Jake is more than a statement about the flaws and dynamics of a bunch of institutions that could do more and better; I take James’ point above about the fact that few people actually ‘want’ it this way. The piece actually has repercussions on a whole school of thought about political economy and the systems and silos we take for granted as our status quo. To be sure, it’s no shocker that money is out there being wasted “in processes” and that the small amount that in the end does actually get to those who can do something good with it is infinitesimal relative to the scope of the social problems it is allocated to “solve”. ([Tick box]… and then refer to the brilliant Arthur Wood and his calculations about the %age of the $1 trillion of un-leveraged philanthropic assets sitting in global endowments around the world that actually GETS to its intended destination, the stuff is seriously depressing enough to induce morning sickness in a MAN)….
So the question is: how does one hard code the imperative of collaboration? How do we inject it into the DNA of an entire sector that anything BUT information exchange, explicit transparency, shared due diligence, and collaboration is basically beyond the borders of the ethical? And btw, our impact investor communities are not necessarily doing that much better … but that’s a topic for another day. Bravo Jake.
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Love this.
For me, the key is that we allow people with money and power to make decisions about the lives of people without it. This applies to both badly-run charities and most philanthropic endeavours.
As you state in point 9, the ability to make money doesn’t make you gifted at giving it away. And yet we allow people who have no lived experience of issues to proclaim what marginalised people need.
The Edge Fund is an example of a foundation that puts the decision-making power into the hands of those affected by the issues, as well as a broader collective that includes other applicants (reducing the ‘competition’ element.)
I would encourage anyone interested in alternative approaches to grant-making to look into our approach to trust, participation and grassroots social justice.
http://edgefund.org.uk/
I agree with those who point out that the dysfunction that Jake describes is a systems issue, especially at the level of larger foundations. Additionally, many new donors adopt the attitudes and regulations of the sector, I imagine because they are looking for guidelines as they enter an unfamiliar world. Fundamentally, donors and non-profits need to be partners, not givers and beggars.
There are some steps that both sides could take that would alleviate a few of the issues. These are not meant to be system changers, but small points that would help around the edges.
1. Donors need to be clear about risk and what could go wrong at the beginning of the project. Typically, the question about problems is asked at the end of the project, instead of the beginning. Then, a contingency plan could be worked out in advance.
2. Foundations should have a fast-acting committee that could respond immediately when a non-profit runs into a problem or has a better, but more costly, idea.
3. Donors need to have a pot of money that they hold in reserve for emergencies.
4. Both non-profits and donors need to be clear about costs that are necessary expenses but often not included in the budget. An example would be paying for travel so that non-profits could vet and perhaps build capacity in organizations that they will partner with in the target country.
5. So money is power and it warps the donor/non-profit relationship. However, whenever possible, the non-profits need to speak up about the kind of money they really need to achieve the impact the donor is pursuing.
The world is unpredictable, and it’s actually pretty ridiculous that donors expect a non-profit to deliver on time and on budget almost any project, much less one that takes place in areas with poor infrastructure, insufficient police enforcement, etc.
Think about it: no one can remodel their kitchen on time and on budget.
I am a donor. You can find me at openroadalliance.org
As a grant maker of more than 10 years experience, a few pointers to people applying for funds…
Read the guidance – stop wasting everyone’s time
Answer the questions, which means you have to read them first – I really put quite a lot of effort into writing them because that’s what I need to know
Quit with the flannel and marketing, it reeks and can be smelt miles off
Provide evidence, and numbers. Unsubstantiated statements, like we have consulted with people are as clearly defined as saying you have a length of string, how many people, when, for how long, how has this influenced you. I.e. how long is said string and what is it made of and why should I care?
Talk to other people before you apply – especially the people you aim to support – otherwise you’re probably going to do the wrong thing
If you’re not sure call and find out, and even if you are pretty sure never ask for more than 50k without trying to have a conversation first and if they won’t talk to you, think twice about applying…
Finally remember it’s the funders job to give away money, don’t be embarrassed by asking and by demanding good service, if you think they are going wrong then start a conversation…
Hope you still find it useful for future articles…I find your topics relevant and your approach, questioning status quo, determinant for the future innovation in the social sector around the globe.
I can only talk about the Foundations based in Portugal, but I completely share some of your concerns based on your experience.
One of the main problems I find with foundations is that they usually don’t address a particular problem in the society (your point 20.). I do not want to go through the political and fiscal reasons why some of them are created at first place, but the fact is that both these issues contribute for the lack of purpose, or the absence of a “core business”. Just like you said, “Imagine if foundations tried to achieve something. (…). Not to “do” lots of things (…).”. What is puzzling about this lack of orientation is that one of the main rules for financing a good social project is exactly a clear definition of a social need … We could hardly see a successful application based on “areas of intervention”! In Portugal we have a popular saying for such behavior, which is “Do as I say, don’t do what I do”…
Another big problem I would like to emphasize, which you mention in the beginning of your article, is foundations’ contribution to a wrong balance between all the stakeholders aiming to implement a solid change. This bureaucratic application-based approach to financing is in fact turning good ideas into box-ticking amateur projects. I would rather have a committed partner than a referee encouraging charities to compete rather than collaborate. This current approach to financing (not exclusive to foundations) leads financing organizations to neglect any reporting or monitoring after a grant period ends, which is completely wrong in permanently changing communities. But again, this stakeholder hardly understands the ultimate beneficiary of their money, the local populations.
Having in mind the future I shall say that appreciated some of the guidelines in your article. I would highlight your suggestion in your point 7. Great people with great ideas should be helped to build up strong cases, solid projects. Foundations should share accumulated experience on evaluating good social business plans to help these people on their social business development.
Keep up the good work! Good questions will always deliver better outcomes.
Long live the innovators!
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Late to the party here but……thanks Jake for putting yourself out there with strong and important points to address.
I know you acknowledged it, but I’ve had such vastly different experiences with different funders that it’s hard to believe that they’re part of the same “sector”. I feel delighted that you’ve pinpointed some serious problems, while wanting to hold up some of the great ones out there. I jumped for joy recently in receiving a response to an annual grant report which said “that’s an interesting strategy you’re thinking about, one of our other grantees did something similar, do you want to go and talk to x and y to hear their experience?”, and the funder promptly made useful introductions to people who have shared their experience and really helped our organisation as a result, for minimal cost and effort. Wonderful. On the other hand, I recognise almost all of what you’re saying and am frequently groaning in agony at yet another idiosyncratic, effort-duplicating and badly designed application process which seems to push more on my ability to communicate within a word limit than my / our ability to make a difference in the community we serve. I’m a CEO of an organisation and I’ve genuinely spent hours and hours and HOURS re-writing sentences to be 5% shorter because the box cuts off. We’ll do it because we have to, but I don’t feel like a very good CEO while I’m doing it. Meanwhile, I can count on one hand the number of institutional funders who have seen our work in action. Of course funders need to see a written rationale for work and can’t just judge work on a visit, but in our case it certainly feels like it’s a vital part of the process, especially if funders are going to hear the voices of the other people involved in the service and not just the voice of the application-writer. I know that “seeing work in action” might not be relevant to a lot of the great social change work that goes on. But in our case, I think it should be an essential part of any selection process – I just don’t think funders can judge the quality of our work based entirely on a written application / speaking to the Director. There does need to be some flex to see different types of work on their own terms.
Maybe those of us in charities can help by really shouting about the “bright spots”. It’s interesting that many of the funders who offer the the most intelligent contribution to our organisation’s ability to have a positive impact are the ones most likely to tell us “we don’t want our support acknowledged / don’t mention us all over the place” (which is why I haven’t done it here, but I hope those funders recognise themselves). Maybe we can encourage those foundations to allow us to shout louder and prouder about their approach, through the organisations that they fund.
Several funders do ask for feedback on their process (which is great) – but there could be a lot more of this, and a lot more “comparative feedback”, rating practice across different funders. That would give the funded organisations a chance to say what they think is great from what they’ve seen elsewhere, and where something falls short. Again, I have seen some of that already – more would be great.
I’m really interested to hear more funder reactions to your blog, Jake. If I worked for a funder and I read it, I would probably feel pretty attacked, and it’s worth noting that most people trying to do a good job don’t feel inclined to reflect on what they could do better when they feel attacked. I suppose that a lot of the pent up frustration often expressed on the charity side comes from the power dynamic which means we just do not feel able to express views on funders because the work we do depends on those good relationships. Jake’s taken the nuclear approach which I respect him for and he’s therefore doing a service to many others who feel less confident. There are many who will have softer voice, both critical and constructive, which it would be great to have a more equal and confident platform for hearing.
Joining the party late here, but I really enjoyed this article. As a foundation executive, I resonate strongly with many of your points and have seen them from the funder side and from the grant seeker side. I am partial to open application processes because it provides grant seekers with access to the money. In the US, 60% of foundations do not accept unsolicited applications and 77% of family foundations are closed to applications. This leaves billions of dollars behind iron gates that one can only access if they know the right person/people. Yet application processes need to be accountable, transparent and empowering vs. robotic and transactional, or you just perpetuate more of the same power dynamics. A great perspective on this from Vu Le is here: http://nonprofitwithballs.com/2015/08/funders-your-grant-application-process-may-be-perpetuating-inequity/. At our foundation, we have instituted an applicant bill of rights to govern how we treat our 3000 + applicants each year: http://thepollinationproject.org/applicant Thanks for being so honest and floating these great ideas for us to check ourselves on!
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