How to fund radically this year: moving promises to action
How to fund radically this year: moving promises to action
by Dr Riva Kantowitz and Lauren Bradford, Founder and Founding Partner of the Radical Flexibility Fund
Ten Radical Actions embodies the work of Radical Flexible Fund (RFF), which focuses on bringing together leaders and innovators from different parts of the donor and social change fields to demonstrate that there are more effective alternatives to the current system of funding.
RFF is an organisation which invests in new finance mechanisms that empower local organisations and increase their sustainability and impact. The below actions are based on the pillars of the Fund’s mission: Using funding tools that are more flexible, more inclusive, and more sustainable than grants; deciding on the allocation of resources in participatory ways with a focus on innovative technologies; supporting communities to create their own priorities and define for themselves the impact of their work; and, encouraging funders to be accountable to the communities they serve. Here we offer a sample of the 10 Radical Actions that both donors and civil society can reflect on to try radically localising their work.
Facilitate local priority setting
Who gets to decide on how resources are spent? Local leaders and organisations understand the needs and the context of their communities and are in the best position to set priorities. Yet typically the priority setting of funding is donor-driven based on institutional funding interests and strategic plans created by funders.
Instead of this default top-down approach, funders should instead ask communities and organisations what would transform the lives of their residents and stakeholders, the challenges they face in achieving that vision, and how donors could offer resources, skills, and capacities to create such change. Donors should then fund local organisations and experts who have these skills to implement local solutions and mobilise the community and train others – thus creating opportunities for long term sustainable progress on societal challenges.
Community-led and inclusive approaches also lead to better outcomes. By bringing together people from a variety of groups in stratified and divided societies, participatory funding – where many people get to decide what to spend money on – strengthens relationships between individuals, within communities, and with institutions.
Invest in a broader range of financial instruments beyond grants
How can donors increase sustainability? Most donor support to local civil society organisations comes in the form of grants, but as currently structured, they are akin to analogue technology to support change in a digital world. To achieve more sustainable and impactful social change, we must re-envision the “donor industrial complex” and current system of “piping” restricted project funds through international non-governmental organisations (NGO) and multilateral recipient organisations. Such reforms must include increasing general operating support grants, but it is even more important to use and develop new financing solutions that shift power to locally-led initiatives.
Impact investing and innovative finance approaches such as outcomes funds are exciting models because they have the potential to bring in new sources of funding, provide a financial return and focus on impact versus onerous reporting.
Other promising approaches include giving seed funding to community foundations and supporting giving circles or community philanthropy in places where such approaches do not exist or are informal. Increasing attention is being drawn to regional philanthropy and foundations and the role of the national private sector in funding social change; these trends offer opportunities to attract new funders who understand the cultural context and have a stake in the well-being of their own societies.
Grants are not our only funding tools – we must invest in and scale new and better tools.
Fund people and partnerships, not projects
Why is it that the narrative about funding focuses on projects? Social change funding is most often viewed as the provision of money to an organisation to implement a project or deliver a service. However, these funds, in fact, are going to people with ideas and enabling partnerships.
The international “donor industrial complex” has systematically underinvested in people and organisations working in their own communities. Between 2011 and 2015 the largest 1,000 US-based foundations made $35 billion in international grants, only 12% of which went directly to organisations working in their own communities. Yet, research has demonstrated that supporting civil society to create its own solutions can be the most constructive path toward sustainable social change. A 2019 report examining more than 70 external evaluations found that local peacebuilders demonstrated significant impact in preventing, reducing or stopping violence; improving relationships among citizens (ie horizontal relationships); and improving relationships between citizens and those who govern them (ie vertical relationships).
Interventions focused at the project level which may be more transactional in nature are not necessarily bad. However, in order to contribute strategically to social change, they need to be understood as part of a larger transformative set of goals. In funding people and networks instead of projects, donors can support a “movement mindset”; that is, they can work in partnership with civil society to achieve larger transformational goals such as combatting global trends that run counter to human rights, peacebuilding, and humanitarian work.
Funding groups or networks across sectors builds bridges and enhances collaboration. It also strengthens civic trust, which is both one of the most essential qualities for stable societies. Finally, donors that extend funding to groups of individuals or organisations have taken the
time to build trust in and understanding of existing networks, which allows them to build more authentic partnerships.
Only through recognising the interconnectivity of people will we create safe, healthy, and just communities and societies.
Measure what communities think matters
Who decides what constitutes impact and success? Donors and intermediaries often define priorities and metrics. While identifying and being accountable to priorities helps donors justify grant-making decisions and that money is spent as promised, this process is not designed to measure impact from the perspective of the community itself.
Instead, this top-down measurement process often puts a great burden on the implementing organisations’ capacities, siphoning off scarce resources to respond to donor-imposed requirements. Donors also use significant resources to monitor grants and it is common that they can neither keep up with vast piles of traditional quarterly reports nor use their findings.
Local organisations need to be able to define their own metrics, share them with donors and their communities, and have the resources to track them. One idea of participatory goal setting is to change the evaluation methodology to community reporting, whereby the effectiveness of an intervention would be judged not by a donor-designed metric but by the community’s view of it. By putting communities and implementing organisations at the centre of priority setting, those communities can define their own outcomes, needs and what impact means, which will also ensure the donor achieves its outcomes.
Donors tend to think about accountability first in terms of the people who contribute the funds that they disburse – that is, taxpayers for government donors, trustees, and boards of directors for private funders. In order to effectively and ethically support social change efforts, donors should also think of themselves as being accountable to the local communities they seek to assist.
Be accountable to local communities, not only to donors and their administrative bodies
Do donors regularly ask, did we help communities engage and solve their own problems? If not, why not? Donors could improve accountability by incorporating more regular internal evaluations of their assumptions committing to community-led evaluation of impact and
regular assessing international donors’ effects on a certain context. In 2020, the UN Peacebuilding Fund published a guide on “community-based monitoring and perception” that could help donors incorporate this type of regular assessment.
Finally, donors could improve accountability by using different criteria for judging success. Boards, donors, and governments are unlikely to surrender either the control they have over how and by whom their funding is used, or the associated need for reporting, but this focus on
control and accountability could be redirected to more beneficial ends. When a donor that has adopted community-defined metrics to gauge project success requires reporting and accountability from a recipient organisation, that accountability serves both the donor and the affected community. When the community has the power to identify the goals of an intervention, donors become charged with enforcing the rules and standards of the community rather than imposing their own standards.
Dedicated changemakers around the world are engaged in courageous and inspiring efforts to advance safe, healthy, and just communities. The ‘localisation’ agenda has been on the radar of the international community for several decades now, without significant results for financing local actors. It is time to focus on more effective solutions – community-led philanthropy, radically flexible grant making and investing in innovative finance for social change – all of which require the risk capacity, imagination and flexibility of private donors. As you begin 2022, commit to creating actionable roadmaps as to how, including from operational, risk- management and procurement perspectives, it is possible for donors to implement these 10 Radical Actions.