Grantmaking Practice

Exploring the How and Why of Participatory Grantmaking and Impact Investing

Contributed by Nadia van der Linde, Red Umbrella Fund-

The very first session of the funders’ Working Group on ParticipatoryNadia-van-der-linde-web-300x300 Grantmaking was organised at the International Human Rights Funders Group (IHRFG) meeting in San Francisco on 28 January 2015. While we had prepared to welcome just a handful of interested colleagues from peer foundations, we were instead welcomed by a room filled with around forty grantmakers and philanthropic advisers. Participatory grantmaking seems to be hot and happening on the West Coast of the USA.

The audience represented a diverse spectrum of grantmakers varying from peer-led participatory funds, to grantmakers with some experience involving communities or grantees in some grantmaking processes, to more traditional funds that do not involve communities or grantees in their grantmaking at all. What participants had in common was an interest to learn more about:

  • the why of participatory grantmaking, looking for the arguments to convince managers, boards or trustees to potentially “do something more in that direction” in the future.

The Working Group on Participatory Grantmaking was created in 2014 with two key objectives:

  1. to build a community of practice to share and increase effectiveness of participatory grantmaking models; and
  2. to encourage other grantmakers to increase the involvement of the community the intend to reach in their practices.

The session at the IHRFG meeting was organised by three distinct participatory and peer-led funders:

An important catalyst for these participatory grantmakers to come together to set up this Working Group was the report by The Lafayette Practice in 2014 comparing the operations of eight international participatory grantmakers. The report finds that the funds, regardless of the focus of their specific missions, share a belief that people impacted by the fund’s programme should be involved in decision making on allocation of grants. Not only because there is a common belief that it will actually lead to better results but also because that involvement in itself is believed to be important to achieve the social change the respective funds seek to achieve. The researchers encourage additional research on the effectiveness of participatory grantmaking and the possibilities for reproduction and moving existing models to scale.

In his paper called “Beauty and the Beast,” Michael Edwards explores a diversity of funding models – not limited to philanthropy – and experiments that have the potential to not only fund local activists and groups but also change the power relations that surround money. That is an essential ingredient to tackle the root causes of poverty and discrimination and contribute to lasting social change.

Andrea Armeni, Executive Director of Transform Finance, added his experiences with participatory or community-led impact investing and how that relates to participatory grantmaking. Impact investing is about giving not a grant but a loan or investment (which is expected to have also financial returns) with the explicit intention of reaching social or environmental impact. Transform Finance fosters a social justice approach to impact investing that rests on deep community engagement around co-design and shared ownership that creates more value than it extracts from communities.  By sharing our experiences and evidence that community involvement works, we can benefit from and support each other across the philanthropic and investment sectors. Andrea even argued that exploring hybrid models of grantmaking instead of considering them in isolation may be the most effective strategy for change: in some cases, a combination of a grant and a loan or investment might actually be most relevant and effective.

Concretely, Andrea recommended funders to:

  • Embrace the “nothing about us without us” principle in all you do;
  • Consider participation an investment in the success of a project, not a cost, and push for a view of participation that goes beyond mere consultation;
  • Improve transparency of decisions and provide feedback to groups that are declined for funding;
  • Consider including community members on investment committees of your board (for large foundations that have capital to invest);
  • Appreciate that participatory grantmaking and participatory investing represent continuums along which you can select what fits best for you at a certain period of time.

It’s clearly time to invest more in participatory grantmaking.

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