Rebalancing the relationship between grant-makers and grantees

How do we define the grant-maker–grantee relationship?

The grant-maker–grantee dynamic is a tricky thing, and is often unbalanced. In the purest of terms, the grant-maker is trying to buy impact, or social good, with their money. This means they are often treated as a customer: and ‘the customer is always right’—right?

Perhaps unsurprisingly, I’d argue that there isn’t actually much mileage in trying to transpose a market relationship onto these partners. The grant-maker always being ‘right’ leads to an unhealthy dynamic of deference and dishonesty. And it forgets that funders need charities: they have few others ways to make a positive social impact with their money.

Far better that we recognise that nobody can walk away from the deal altogether—that it’s a symbiotic relationship. Funders are only as good as the charities they fund, and charities rely on funders’ decisions to survive, thrive, and transform the lives of those they serve.

Central to the relationship should be trust, not of funds

We’ve a way to go though. Currently the funder-grantee relationship too often looks like funders zealously guarding resources via complex funding applications and time-consuming grant reports. Meanwhile, charities insist that what they do fits the money on offer exactly—even when it doesn’t—and that it has all gone terribly well—even when it hasn’t. The end result is a lack of trust between funders and charities

This is one of the reasons that, at Impetus-PEF, funding is the least prominent part of what we provide to charities. The most important element of our offer is intensive support for the CEO on their impact and sustainability. To make this support effective, we have to build trust—but we know it’s not easy. As one of our Investment Directors says:

‘Building trust is hard work; it has to be earned and it can take time. Such is the sector legacy of “dressing up the story” for funders—most CEOs will not be comfortable for a while sharing the things about which they are anxious or failing’.

Better relationships are crucial to greater impact

Trust genuinely dismantles hierarchies between partners. With it, funders are well placed to take on the role of a critical friend—one who asks the tough questions about impact, helps find the answers, and sticks around when they’re not all that pretty. Because out of trust comes an ability to challenge and push one another, and out of this comes stronger organisations and greater impact. To quote my colleague again:

‘Trust is key because it provides the platform for us to challenge them [our charity partners] at every stage. Ask the CEOs what they value most and they often say it is the monthly meeting where they get rigorous and constructive challenge and questioning that they don’t get elsewhere.’

The problems that affect beneficiaries can be shouldered by both grant-makers and charities—and neither is off the hook until the impact they make is for everyone they serve.

Find out more about NPC’s work to push the boundaries of funding