Philanthropy’s Choices

Hilary Pearson

The conversation about the need for transformation in the practices of philanthropy continues across the philanthropy field. We hear about the what and the how of change. But we don’t hear as much about the reasons why change is so difficult. These often have to do with some of the built-in tensions and need for choices in philanthropic approaches.

In my July blog post, Transforming Philanthropy Step by Step, I highlighted the Philanthropy Transformation Initiative from WINGS, the global philanthropy network. Discussing the need for transformation, a group of experienced funders under the umbrella of WINGS contemplate what they call the “paradoxes” of philanthropy.  Is philanthropy a solution to society’s challenges, or is it part of the problem? Does philanthropy, by its very nature, reflect the existing systems and structures that have allowed wealth and power to be created, and therefore stand in the way of transforming those systems?  

These paradoxes are framed largely around the question of power. The WINGS funders and others suggest that foundations transform themselves by adopting practices that will shift the power, whether through more transparency, more local funding, more partnerships with others or simply more shared decision-making.

But power and what to do with it is not the only dilemma for funders to consider. Of course, money is power.  And so, power may be the most prominent dimension of philanthropy. But there are other dimensions such as time and scale that are on the minds of many funders. In considering how best to achieve impact, thoughtful foundation boards and leaders consider choices such as:

  • Addressing local immediate needs versus advocating for longer term, systemic change
  • Funding the future versus funding the present
  • Sustaining endowment versus increasing the spend
  • Measuring social outcomes versus capturing organizational learning
  • Making decisions internally versus sharing or outsourcing decisions locally

These choices are well described in a recent article in Alliance magazine by Anna Hirsch-Holland of  the UK-based The Partnering Initiative.  She points out that “the transformation agenda” for foundations is more complex and difficult to navigate than implied by WINGS’s set of transformation principles. Much of this turns on how foundations can transform the power imbalance between themselves and grantees or partners.

WINGS and others have called for more long-term, flexible funding to more locally-led actors, and to more actors representing marginalized communities. Hirsh-Holland notes that this can be in tension with a foundation’s ambition for addressing underlying causes rather than symptoms, for greater impact. This can be translated as seeking systems change. And to truly achieve that, key actors in a system need an aligned approach.

As Hirsh-Holland explains (and I quote her at length for those who don’t subscribe to Alliance), “If funder and grantee alike truly want to work together to enable systems change they need to form a trusted partnership: agreeing on shared objectives, with shared accountability for achieving those by combining and integrating complementary resources. This can be at odds with the implicit (or sometime explicit) idea in trust-based funding practices that the grantee knows what is best, and the funder should leave them alone to get on with it. Instead, it requires finding a way to work together that builds trust.”

“In fact, systems change also needs more than a collaborative approach between funder and grantee. It requires multiple stakeholders to be ready to work with others…combining and aligning their resources in pursuit of transformational change. This is why many funders are also recognising their important role in convening and encouraging collaboration between their grantee partners and other key stakeholders.” But, as Hirsh-Holland points out, “this can be a delicate matter as donor-driven collaboration can be another way in which funders embed an unhealthy power dynamic with and among their grantees.”

She also draws attention to the tension between the “trust-based approach” that calls for minimal reporting requirements and the need for funders and partners to know what progress is being made towards systems change or to collect evidence that an approach is working. She suggests that many foundations are finding ways around this tension by “focussing on learning rather than proof and seeking to make this a collaborative effort with their partners”. But the demand for evidence can prevent funders from achieving their ambition to shift power to community organizations with limited capacity for reporting and evidence collection.

One more tension identified by Hirsh-Holland is that between the drive to partner more locally and the trend towards “big-bet, top down philanthropy”, particularly in the area of climate change work. If foundations are partnering with private investor partners to catalyze more capital for the energy transition, profit can supersede justice goals. To deal with this tension, foundations can be those actors that “build critical bridges between the profit-driven motivations of the private sector, the social goals of governments, and the justice goals of civil society actors.”

Hirsh-Holland provides a nuanced way to think through at least some of the tensions inherent in an attempt to juggle more trust-based or more locally-driven and equitable approaches with the ambition of achieving greater impact over time.  She suggests her own questions to apply, along with the tips and ideas from WINGS:

  • How can we work with others to achieve systems change (if that is what we want) while also seeking to use our own power responsibly?
  • What level of evidence do we need to be sure we are achieving our goals, and what is the most equitable way to seek that evidence? 
  • When making big bets how can we also ensure that we are being inclusive and equitable?

Tension is often associated with stress. But tension is not inherently bad. It simply forces more concentration. Philanthropy with impact is not for the faint-hearted. Nor can it be part-time. It requires much thought and care. Luckily, funders such as the group behind the Philanthropy Transformation Initiative and the Partnering Initiative are sharing the questions and ideas that will help along the path to making good philanthropic choices.

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