The never changing world of philanthropy

New approaches to solving old problems is the innovation mantra of more than one philanthropic foundation in Australia. Recently this got me thinking about the different approaches operating within the grantmaking space in Australia. With a few notable exceptions aside I think it is fair to say that most trusts and foundations operate in a pretty similar procedural manner.  So while funders ask grantseekers to innovate in their practices there is little experimentation around grantmaking practices. Can we assume this lack of innovation from funders in their grantmaking approaches is due to the fact that funders have got their processes perfected?  I wonder what grantseekers would say to that?

So what do grantseekers think of Australian funders? Officially we don’t really know but I doubt that is because applicants and grantees don’t have opinions.  The unfortunate reality is that there is little opportunity provided for grantseeker or grantee feedback about a funders approach to their grantmaking. In the United States the Centre for Effective Philanthropy has developed the The Grantee Perception Report® (GPR) which provides grantmakers with comparative and frank feedback on how grantees think they are performing.  Some funders even choose to make their reports publicly available. The GPR allows philanthropic boards to assess their performance as funders, this in turn helps them to work more effectively with grantees in the pursuit of their mission.

If it walks like a duck and talks like a duck…

So is the answer to better practices and diversity in grantmaking approach as simple as the provision of a feedback loop? While comparatively speaking there are greater levels of diversity in philanthropic practices across the United States it could be argued that ‘sameness’ is still the dominant feature of their foundation sector.

In a 2009 post on her philanthropy blog, Stanford University’s Centre on Philanthropy and Civil Society Visiting Fellow, Lucy Bernholz, questioned why, when there is so much that people outside of the foundation field would change about how philanthropy functions, has so little changed in past 100 years. She contends:

It doesn’t seem possible that these practices survive because they work well, please the customers, or even please the board and staff who choose them and re-create them. Institutional isomorphism is one of those graduate school concepts that is… true to life – organizations mimic like organizations, even when it doesn’t necessarily serve their purposes” (2009).

Isomorphism is basically the much flashier way of saying ‘sameness’.  It should also be said that not all about isomorphism is bad. If you look like a duck and talk like a duck chances are other ducks are going to accept you. These behaviors are really evident in the corporate world where organisations that look like each other (in terms of board structure, staffing structure, business philosophies) will more easily attract investors, customers and secure loans.  In short isomorphic behavior gives many organisations legitimacy.

There have been studies that suggest that isomorphism within the nonprofit sector is not as evident as it might be in the corporate world.  I’d contend however that traditional philanthropy is the exception to that nonprofit rule and there are a couple of reasons for that.  Think of the really big Australian philanthropic foundations, even most of the small ones too – they seem to operate and look pretty similar to one another in their grantmaking (e.g. application process, closing dates, reviews, board meeting, results etc). Objectives and priorities might be different, but processes and board structures are fairly similar. Part of this is driven by fiduciary responsibilities.  Trustees of foundations need to concerns themselves first and foremost with management of the assets – the upside is that if they do this well they can give away more money. So with grantmaking merely a by-product, it’s not hard to understand why diversity in grantmaking approach is not as evident as it might be.

Competition in the corporate world drives innovation and new behaviours.  In the nonprofit world, there is competition too for funds as well as the mission driven approach that dictates how NFPs work and the skills sets that they have on their boards and among their staff.  In philanthropy that competition doesn’t exist and compliance is focused almost solely on tax and law. So how do we drive diversity?  How to do celebrate those foundations that invest more in understanding that sometimes what is really important is the way you give? Perhaps a good starting point is to accept some feedback from those we work with most closely, our grantees. We also need to start listening and learning from those funders who are working a little bit outside the box. What have been their experiences, successes and failures? How did they bring their boards on that journey?

So what do people think really good models of philanthropy look like? Can we start to compile some of the features that not only lead to better practices in philanthropy but greater impact on the ground?

You can follow the musings of Caitriona Fay on Twitter via @cat_fay or the blog via @3eggphil

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9 Comments on “The never changing world of philanthropy”

  1. Another great post, Egg1! In my opinion, the sameness of approaches in grantmaking is ultimately about a desire to try to be fair: to allow anyone looking for funding the opportunity to go for it. Obviously the concept of fairness speaks to providing for the majority but unfortunately the “majority” doesn’t exist in the not for profit world and so this “one-size-fits-all” approach to grantmaking falls deficient. But if we introduce a whole suite of different approaches, do we then make it harder for a resource-strapped sector to know who’s who and what information is needed to access funds? Should the emphasis in the process be put back on grantmakers? As always, there are no easy answers. Consultation with those at the coal face seems the obvious place to start, to begin to try to get some answers and new ideas!

    • Caitriona Fay says:

      Thanks Claire. I agree we need to start by asking grant seekers what works and what doesn’t. Perhaps a single approach is best, but is it the approach we are currently using? I can’t say for sure but I suspect not.

      I do think the emphasis does needs to sit with grant makers. The sector needs to evolve and advance its own practice, we have a responsibility as funders to find better ways of working for all the same reasons that we expect the broader NFP sector to innovate.

  2. Lorelle Lake says:

    Interesting topic folks. Particularly in light of the recent work done around developing a standardised small grant form – The Foundation Project. The report about this project suggested that grantseeker feedback was difficult.. “Very few Trusts and Foundations access meaningful feedback from grantseekers about their processes and when grantmakers do seek such feedback, the power dynamic is such that it is difficult to ensure that it is candid. It is therefore difficult to use grantseeker views as a strong driver of change.” I believe its a positive move that funders streamline processes for grantseekers as they all basically want the same info and as grantseekers, we’re often looking for mulitple funders for the same project. However, I do like the exploration of innovation in the way grant makers work. Perhaps we could consider discussing innovative ways to present our project ideas. Passionate people are behind projects. Hearing voices and seeing vision, may help to get the point across rather than a conventional form?

    • Caitriona Fay says:

      Thanks Lorelle – You’ve raised a really great point which builds nicely on Claire’s comments above. The Foundation Project is a great initiative that will certainly assist grant seekers greatly. Duplication of information, despite so many trusts and foundations expecting similar information, is a real problem. The Foundation Project will also potentially help funders work together in better more collaborative ways. I agree that improving how we are currently working as well always looking to find better ways is a great starting point for sectoral improvement.

  3. kidsthrive says:

    Caitriona, so interesting to read this now….

    Kids Thrive was just out teaching Kids Thrive InSchools Philanthropy to grade 5 & 6 at Baringhup Primary School this week and we read the LLEAP report on the obstacles for schools and philanthropy.

    We then had fun drawing up some solutions on a blackboard while we waited for the kids to arrive. (Yes. Blackboard. Chalk.)

    We mapped out how to apply our project development process for kids in philanthropy to a universally replicable project proposal process that would:

    1. Help Activators plan for success by covering all the bases.
    2. Act as an introductory conversation piece that instills confidence with Enablers (in funders, donors etc).
    3. Cut down on the stresses of format adaptation (is this an objective, a goal, and aim…. different language for different organisations).
    4. Help overcome the exclusion of Activators with literacy challenges/form phobias…
    5. Encourage a few more trees to stay in the ground by limiting the practice of equating the capacity to use paper as a measure of the capacity to deliver a project.

    By doing this work on the frontline with kids aged 9 – 16, I now understand the whole principle of ‘kid-friendly’ cities; if it’s good for kids it’s good for everyone. I can see that through simplifying philanthropy for kids it’s transferable: it’s good for everyone for something so valuable to be reachable, doable etc. And in order for that to happen, the process needs to be child-friendly. Scared? Not legal enough? But wait….

    It’s not just about the application form.

    It’s about replacing the function of the form in other ways to ensure transparency, value, thorough planning and genuine partnerships etc.

    It’s about educating/skilling up people in the PROCESS of creating and planning and articulating authentically responsive programmes.

    In our child philanthropy training, we get to see the real impact/obstacles of the cumbersome application process in philanthropy for kids and their teachers. Most people do not understand philanthropy or the availability of funds and assistance. Most would be overwhelmed at the prospect of applying for a grant.

    Much of it has to do with intense ‘bureaucratic form literacy’ required for the application process.

    Which is why we draw and dance and mock up our community partnership projects creatively to help kids plan for success using multiple modalities.

    This week in the Maldon district we’ll even see one class do an imaginative representation of getting their community project into shape by a 9 year old boy ‘whipping it into shape’ with his showcase whip cracking display. (OK, well perhaps not universally replicable!)

    So, there are those of us out there on the frontline, activating communities to crack the codes of support structures. And, yes, innovation is always many conversations over and over to build a shared story.

    A simplified form is just the start. Collaboration is overcoming the blocks to community access to funds and support is another…

    • Caitriona Fay says:

      Thanks so much for these comments. I agree, that good practice in philanthropy is absolutely about more than just a user friendly ‘application form’. Perhaps it is about rethinking how funders and grant seekers connect, how grantees and funders work together and how communities participate in the process of identifying and responding to need. My view is that we need to recognise that we’re all a part of complex ecosystem, influencing and impacting on each other through our behaviours.

      I agree that collaboration is the tool to overcoming blocks to community access, but I often wonder what it is that genuine collaboration actually looks like. I know that Tender Bridge are using the LLEAP work to help nut out some of those questions.

  4. […] and Privacy The never changing world of philanthropy […]

  5. Kate Randall says:

    Great thought provoking stuff, thanks Eggs.

    The results of this survey by AIGM (Our Community) might help paint part of the picture from the grantseekers’ perspective …

    http://www.ourcommunity.com.au/grantsurvey2012

    This post is unfortunately horribly late – the survey closes tomorrow – but perhaps there are a few people out there who are reading this and want to make their opinion of our grantmaking sector known??

    Cheers! K.

  6. Kristi says:

    Hi Eggs, How did I not come across you before? Love your work, and yes Egg1 too much process not enough listening, talking and backing the lleaders in community organisations doing the good work on the ground. I know it’s time consuming for philanthropists to invest in community development skills (we do it ourselves a bit here in Sydney) but we do it because we know there are a great many opportunities lost when we’re not there listening and asking the questions. Innovation in communities can happen when someone is listening, and this role is all the more potent when that role is assumed by someone new, who is outside traditional funding channels…


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