Last week we hosted an event—in partnership with the Bulldog Trust—scrutinising the power imbalance between funders and grantees. No time was wasted arguing if this power imbalance exists—it does—or whether it can be reversed—it can’t. Instead we examined how funders can use this position in the best way possible.

So if you’re a grant-making staff member, trustee or philanthropic individual, how can you recognise the role that power plays in your activities? And how can you harness this power in a more effective way?

Start by considering the following:

Do you make charities jump through hoops?

A funder has the power to set any restriction it desires on what it wishes to fund, adding layer upon layer—including location, type of intervention and even the kind of funding available. The problem—as speaker Jenny North, Director of Policy and Strategy at Impetus-PEF explained—is that charities will twist what they do to fit the bill. This may mean having to shift their priorities, as they chase the money instead of responding to the greatest need.

Furthermore, the fear of losing this funding can make grant-holders reluctant to admit any failures, which means missing out on learning opportunities.

Funders need to think very closely about their funding offer. Informed targeting is good, but think carefully about whether your criteria is out-dated, and no longer reflects the world that we live in today.

Are you guilty of false humility?

A real ‘light bulb’ moment for me at the event was when NPC’s Rob Abercrombie spoke about the false humility of funders. Funders are often uniquely placed—with years of experience and the ability to convene and influence—but many belittle their own expertise and confine themselves to providing only financial support.

This humbleness tends to be based on good intentions: being hyper-aware of interfering or because they have decided to operate on a shoestring budget. But it can get in the way of working effectively and fully supporting grantees to get closer to solving the problems that both parties care about.

The Robin Hood Foundation and Blue Shield are two good examples of funders that use their power to take the initiative. Both fund independent research into their grantees’ fields, building a strong evidence base that can influence and improve their work.

Can you do more to break down the barriers?

Another way that the power imbalance manifests itself is funders keeping grantees at an arm’s length, hiding behind complex, intimidating processes and forms.

This lack of trust is something that the final speaker Danny Kruger, from West London Zone, explained can go both ways. The power imbalance can lead to charities presenting funders with polished versions of reality, where they appear to hold the silver bullet that can solve the problem. This simplification can only lead to misunderstandings.

If funders expect charities to perform miracles, they are likely to walk away when these miracles (inevitably) don’t happen. But solutions to social problems don’t come easily or quickly. Jenny North reminded us: ‘It’s hard, it’s day-to-day graft, and it takes a long time, but that’s the work. Funders need to stick around, to work through those issues, and not walk away when they don’t see immediate results.’

Mutual trust is key to transforming the traditional, power-wielding funder into the critical friend—one who understands the value of learning and challenges grantees to make a greater impact. For this to happen, funders should leave their ivory towers, work hard to become more approachable and hold honest conversations with grantees.

If you want to further explore issues around effective grant-making, join us at our annual conference NPC Ignites on 12 October. We’ve got a breakout session on innovations in funding.

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