A time for benevolent funds to shine

When I worked at Citizens Advice in the 1990s, there were three key questions to be asked when anyone came through the door in need of help:

1.       Are you in a union? – sadly not common even then, but if they were then they would have access to free legal advice and all kinds of support

2.       Have you ever served in the armed forces? – because if they did then you could direct them to help from the Legion and SSAFA, who still help today alongside newcomers Help4Heroes.

3.       What is your trade or profession?

Question three, could identify valuable sources of help for individuals. In the office we had a very well-thumbed copy of the Directory of Social Change’s ‘The Guide to Grants for Individuals in Need’ that listed funds for all kinds of jobs: teachers, nurses, electrical engineers, sailors, people working with leather, dentists and bus drivers. In Bristol, people often had a connection to either the Fry’s or Cadbury’s factories, which meant you could apply to the brilliantly named ‘Sweet Charity’ (now GroceryAid) for financial help.

These benevolent funds and other individual grant makers who give money and goods to people in need get far less attention than funders of organisations. They have a very long history which you can tell from the old fashioned language of some of them such as my favourites the Distressed Gentlefolk's Aid Association (now Turn2Us, the trading name of Elizbeth Finn Care) and Society for the Assistance of Ladies in Reduced Circumstances (now Smallwood Trust). Many date back to the guilds of the 12th century which supported their members in sickness and old age such as The Goldsmiths’ Company which supported “poor members of the goldsmiths’ trade”. Together they make a significant difference – the latest Directory of Social Change guide lists 1,800 grant-making charities giving £297 million in funds to individuals.

The Guardian published an article in January this year which highlighted the rise in demand to benevolent funds due to “collapsing living standards and static wages, and the pressures of precarious and stressful working lives, against a backdrop of cuts to the NHS, care services and welfare benefits”. With the coronavirus pandemic upon us, this demand is likely to increase further. Many are being proactive in responding such as Hospitality Action who are giving out grants of £250 to people who have worked as chefs, bartenders and receptionists and Help Musicians who have created a fund of £5 million to help musicians with household expenses.

To find help, Turn2Us has a searchable database. Be patient and extend some kindness, if you are getting in touch with any of these benevolent funds – most of them have small teams and will be processing high volumes of applications.

Coronavirus- the philanthropic response

In these strange times, I have been watching the way funders and philanthropists are responding to the coronavirus pandemic. It is one way to keep some focus on more positive activities amongst the gloom. So, below I have gathered some of what I have seen along with some of the questions this raises as we prepare for the coming months.

UK funders respond collectively and individually

142 funders (to date) have signed up to the funders pledge co-ordinated by London funders. The pledge commits them to:

·       Maintaining grant payments if charities have difficulties achieving the outputs or outcomes agreed.

·       Being flexible about reporting deadlines.

·       Allowing charities to redirect funding such as to help cover sickness, purchase equipment, or deliver services differently, and

·       Listening to charities if they want to talk.

Many have issued their separate messages such as The Blagrave Trust: “We’ve written to all our partners to reassure them that we will do what we can to support them at this time. This includes understanding they may need to vary their activities and use our funding in a different way. Our funding is flexible to allow for this. We’re also very willing to flex our timescales around reporting.” And the Clothworkers’ Foundation: “As a capital funder, we wish to be as flexible and supportive as possible during this period. We also understand that your capital project may now face delays, and/or you may not be able to submit reports on time.”

It is great to hear that many funders are contacting their grant holders directly but, where that has not happened, charities should not worry about getting in touch directly and explaining their situation and any specific needs.

Responses are numerous and varied

There are other philanthropic acts happening that address some of the big-picture issues as well as some of the specific daily needs –

·       covering the costs of online meeting software e.g. Edward W. Hazen Foundation

·       setting up emergency funds e.g. Community Foundation Northern Ireland

·       offering advice e.g. Charity Finance Group on insurance, cashflow etc. And there are good resources gathered by Chronicle of Philanthropy such as tips on deciding when to cancel fundraising events and leading teams in stressful times.

·       providing direct assistance e.g. the Jack Ma Foundation and Alibaba Foundation donating medical masks, test kits and protective suits to 54 African nations

·       collaborating to find and fund treatment e.g. Bill and Melinda Gates Foundation, Wellcome Trust and Mastercard Impact Fund have committed $125million to identifying and rolling out accessible treatments.

There will be many more initiatives to come – just today I have seen Jameson’s donating to the Bartender Emergency Assistance Program.

Think before rushing to give, and reflect on what we can learn

For those new to philanthropy and wondering how best to help, the usual message of “listen to what is needed before you give” applies. So, the Trussell Trust have put out a message asking for money rather than food donations so they can buy what is most needed. Most charities will appreciate unrestricted donations to direct to whatever their priority is right now.

And in the long-term, for those planning their philanthropy who may have been a bit stuck for a focus, this is a great opportunity to understand what you value most. As older people and the vulnerable self-isolate, perhaps you are struck by the importance of social connection? Does getting angry about fake news remind you of the need for independent journalism? The encouraging increase in volunteering and neighbourliness could lead you to wanting to back community hubs such as pubs, libraries and village shops and organisations who support volunteers. Use this time to plan your strategy and then start giving.

Hope for the future

I always look for the silver lining in a crisis, and in this case there is an opportunity to challenge some persistent and unhelpful myths about the voluntary sector – such as overpaid CEOs and ‘wasting’ money on overheads. My hope is that every donor will come through this period understanding why charities need strong leadership, unrestricted reserves and core funding.

Environmental Philanthropy Picks Up Momentum

Jeff Bezos’ announcement of his £10bn Earth Fund is the latest high-profile example of a philanthropist committing new money to environmental causes. It is a trend I highlighted last year in my webinar for Optimy who asked me to identify the top philanthropy trends for 2019. I was by no means the first or only person to spot this shift. The Green Funders Network has long been raising awareness of the woeful under-resourcing of the environmental sector – their 2014 report ‘Where the Green Grants Went’ found environmental philanthropy represented less than 4% of total giving by UK foundations.

The shift toward the environment has been gathering momentum

Large funders such as Oak Foundation (and five others) announced their commitment to the Climate Leadership Initiative in 2019 and together these funders have pledged $4bn over five years. Here in the UK, the Association of Charitable Foundation’s launched their Funder Commitment on Climate Change last November, and to date, 34 funders have signed the pledge which includes “We will commit resources to accelerate work that addresses the causes and impacts of climate change.” It is interesting to see that this includes considering all their assets and so is likely to be a further boost to social impact investing.

Recognition that people and planet are connected

Those who have traditionally funded social causes such as health and education are being urged to see the connection between the climate emergency and their core work. Ten Years Time’s report ‘Climate Change & Social Change: How funders can act on both’ makes a strong case for the links between the environment and social needs. For example, the health issues associated with air pollution or the impact of flooding on preserving heritage.

A new generation – the great wealth transfer

The first driver behind this shift is familiar to all of us. Philanthropists and funders will be seeing the same news footage of fires and floods and listening to the urgent appeals of advocates and activists such as Greta Thunberg and David Attenborough. Whilst our response might be changing how we travel or what we eat, the wealthy are in the position to respond with significant amounts of money. The younger generation are another key driver – predictions range upwards from $15 trillion by 2030 in the ‘great wealth transfer’ that sees wealth moving from baby boomers to the next generation. This generation are ecologically aware, often with children who are pressing for change. You can see this in action in the families I work with who are reviewing their giving strategies and considering drawing down capital to reflect the interests of the younger family members. Lastly, there is a rise in interest in matching giving to the Sustainable Development Goals (SDGs) – which include environmental goals – and provides a useful framework for those seeking to give but without the resources to carry out in depth needs analyses or research. Platforms like SDGPhilanthropy and Maanch help funders align their giving with the goals and this is something I have seen Community Foundations increasingly using.

Meeting the call for urgency

Will this shift keep growing? Will more resources continue to flow into environmental causes? Let’s hope so, because the need is great. The UN’s Intergovernmental Panel on Climate Change estimates that $2.4 trillion is needed each year until 2035 to limit temperature rise to below 1.5 °C from pre-industrial levels and an extra $2 to $4 trillion is needed each year to achieve the SDGs.

More luck than judgment

Although many people think it is simple, giving is no easy task. Philanthropists and funders have to decide how best to allocate resources in a sea of options and pressing demands. The training I deliver to practitioners explores the many dilemmas that arise such as: how do you judge effectiveness and potential impact? how do you compare organisations of different sizes, development stages, reach and depth?

It is no wonder that some funders seek an easy way through to decisions. Here are a couple of recent examples where responsibility has been delegated to the public or to chance timing:

The first example takes the form of a popularity contest. Ecclesiastical Insurance’s 12 Days of Giving asked people to nominate charities to enter a prize draw. 120 UK charities receive £1,000 each. Reading the terms and conditions it seems that the same charity can be nominated many times over.

The second example makes use of a first-come first-served approach. The Fore awards much needed unrestricted funding. To apply for funding, organisations have to register. The number of registrations is capped and so closes when that number is reached. Predictions for the recent funding round were that registration would close within two hours.

Both organisations are transparent about their processes and I am sure take up of both will be very high. However, it is important to understand what will determine success. In the case of Ecclesiastical Insurance, the charities will improve their chances if they have high numbers of supporters who they can mobilise through social media to nominate them. In the case of The Fore, the organisations will have to have spotted the opportunity and have the capacity to come away from their normal delivery to hover over the website ready to register.

As people who read my blogs will know, I am not a fan of these ways of allocating precious resources. When deciding who to fund, neither popularity nor spare capacity should be top choices amongst other important criteria such as the needs of those being served and the organisation’s ability to deliver quality services. Like the other common example where grants are decided by public vote (see my previous blog), we need to question who gains most with these approaches. Is the raised PR profile or time saved by the funder more important when designing the process than the applicant and the steps they need to take to access funding?

Philanthropists and funders are increasingly recognising the power imbalances inherent in philanthropy. I believe one indication that power is really shifting would be a decline in these ‘easy’ approaches where funders can avoid tougher decision processes. Instead I hope to see a rise in approaches that take account of fund seekers and where more careful and thoughtful judgments are made.

An ethical code for philanthropy

Earlier in the year NCVO produced an ethical code that identified four principles that every UK charity should uphold:

beneficiaries first

integrity

openness

right to be safe.

Given the huge number and diversity of charities, it is impressive to have identified such a small set of over-arching principles. It made me consider whether it would be possible to develop such a code for all philanthropic individuals and institutions. It turns out there are a few contenders which I have set out below. As you review these, I invite you to think what your four would be – I have come up with mine at the end.

The Institute for Global Ethics has surveyed thousands of individuals and organisations and concluded that the following five values dominate all the value statements out there:

-      honesty

-      responsibility

-      respect

-      fairness

-      compassion.

As Peter Karoff (see references) says “all philanthropy is personal” so it makes sense to start with values and these five would be a good starting point for anyone’s giving. But is there a set that are more specific to philanthropy?

In “The Spirit of Philanthropy and the Soul of Those Who Manage It” Paul Ylvisaker set out 11 commandments for those who work in philanthropy. These are well worth reading and include:

-      Be ready to speak out and act on your own

-      Assess your own motivation

-      Be compassionate as well as analytical

-      Don’t ever lose your sense of outrage

-      Don’t ever lose your sense of humour

Together they provide a great guide for practitioners in the field to live by but fall short of a universal ethical code.

When it comes to the perspective of those seeking funding, Joel Orosz put forward the following bill of rights for grant seekers:

The right to …

-      Receive a clear statement of the foundation’s funding interests

-      Have all communications answered

-      An explanation of, and timeline for, the foundation’s proposal review process

-      A prompt acknowledgement of receipt of a proposal

-      A timely and unambiguous funding decision

-      Receive an explanation of the reasoning behind funding decisions

-      Have all requirements for the grant relationship clearly spelled out, in writing

-      Have all reports completely read and carefully considered

-      To be informed if continued funding is a possibility.

Written in 2000, this is similar to recent attempts to improve grant making practice such as IVAR and Esmee Fairbairn’s principles of grant reporting. It is depressing to think that getting a response has to be written down as a right. This set is important for good practice, but again it does not work as an ethical code.

A closer fit comes from Social Justice Philanthropy. Their six principles are

-      Focus on root cause

-      Include the people who are impacted

-      Be more accessible and diverse

-      Be accountable, transparent and responsive

-      Contribute knowledge, skills and access (as well as money)

-      Use all assets and investments

And finally, this set comes from the Federal Association of German Foundations:

Foundations should:

-      Incorporate diverse and participatory organisational structures

-      Listen

-      Share their power

-      Be transparent

-      Work together in partnership and networks

-      Promote innovation

-      Acknowledge and learn from mistakes

-      Take a long-term view

-      Give more than just money

I don’t agree with supporting innovation as a fundamental principle, as sometimes funding good, existing work is what is needed. But if the others in this list were followed, it would help with current efforts to shift power from funders to those they fund.

With all these examples in mind, if I take on NCVO’s challenge of coming up with just four principles, mine would be:

-      Act with Integrity – being fair, proportionate, responsive, and speaking out

-      Share Power

-      Be Open – to listen, to learn, to doing things differently and be transparent

-      Be Humble – you can only do so much yourself, you need to work with others

How do these compare with your four?

 References:

https://www.ncvo.org.uk/policy-and-research/ethics/ethical-principles

https://www.globalethics.org/What-We-Do/Consulting/Code-of-Ethics.aspx

Karoff, H. Peter (2005) The public and private persona of philanthropy: The donor challenge. New Directions in Philanthropic Fundraising, no.47

Ylvisaker, P. (2008) ‘The Spirit of Philanthropy and the Soul of those who manage it’ in Kass, A. (ed) Giving Well, Doing Good, Indiana University Press

https://www.ivar.org.uk/publication/new-principles-for-grant-reporting/

https://resourcegeneration.org/social-justice-philanthropy-and-giving/#targetText=Social%20justice%20philanthropy%20focuses%20on,those%20injustices%20as%20decision%2Dmakers.&targetText=In%20social%20justice%20philanthropy%2C%20foundations,and%20responsive%20in%20their%20grantmaking.

https://www.vertrauen-macht-wirkung.de/neun-thesen-fuer-die-stiftung-der-zukunft/

Giving feedback to funders

It is difficult to give honest feedback to funders about their application processes. Nobody wants to risk criticising them – wouldn’t that be biting the hand that feeds you?

But funders need feedback and they have some options to hear what applicants have to say. The Centre for Effective Philanthropy carry out applicant and grantee perception surveys and help funders to benchmark their results. And I was pleased to see that GrantAdvisor has come over from California to the UK. Described as TripAdvisor for funders, applicants can now rate and review funders and the public-nature of the scores should help drive change through transparency. They are currently running a pilot in the UK so do join in if you have applied to any of these funders:

• Esmee Fairbairn Foundation

• Two Ridings Community Foundation

• Paul Hamlyn Foundation

• Corra Foundation

• Joseph Rowntree Charitable Trust

• Indigo Trust

• National Lottery Community Fund

• Lloyds Bank Foundation

• Bishop Radford Trust

• Devon Community Foundation

• City Bridge Trust

Probably not surprisingly, these early adopters are getting favourable reviews. I think the value will come when more funders are included, and any unhelpful practice is called out.

In the meantime, grant seekers may need to find other ways to tell it like it is. At an event this summer I asked the 50 fundraisers present what annoyed them most about application processes. So, whilst we are still waiting for full, open exchanges here is a summary of what they said …

What annoys me most is …

Word counts – this was the most frequent response e.g. “word restrictions along with wanting complex answers”

A lack of response – whether this was a lack of feedback, not being available to discuss bids or not hearing back e.g. “not getting a ‘no’ just hearing nothing”

The sheer length, complexity and diversity of information requested e.g. “the large amount of information you have to give e.g. 3 references”

Being asked for unnecessary information – bugbears were being asked to submit documents available online via charity commission website and being asked financial questions that are covered in the accounts

Poor design of the process - e.g. “unwieldy application forms”, “badly formatted word documents”, “saying they fund core costs but the application form is geared for projects”, “repetitive questions” and “when the IT doesn’t work”

Lack of clarity – e.g. “when a funder gives you very little information about what they like to fund” which is made worse when they won’t talk to you to clarify their criteria and requirements

Funders – do take heed. They may not say it to your face, but this is what some of your applicants are thinking. One particularly blunt comment was: “What annoys me most is their prejudices and preconceptions – they are stuck in a rut.” Which raises the question: when did you last revise your process? The list above shows there is still some way to go to remove unnecessary steps and constraints in application processes. If funders listen, there are lots of great suggestions as to how application processes can be fairer and simpler.

Will we choose to fund the planet?

I have been listening to the excellent BBC World Service podcast, 13 Minutes to the Moon, which tells the story of the Apollo 11 moon landing. In John F Kennedy’s speech in 1962 announcing America’s mission, the words he uses are: “we choose to go the moon”. Not ‘we will’, ‘we want to’, ‘we aim to’, but “we choose”.  This decision mobilised huge effort and resources to make the moon landing happen. What is important for those of us in philanthropy is to remember that it all started with that choice.

Philanthropy is all about choices. A donor must first choose to give, but then can become quickly overwhelmed by the array of subsequent choices about the causes and organisations in front of them. Paralysis is a common response, and the role of a philanthropy advisor is often about navigating a path through the various options. This is not an easy task, as expressed in Wilbur and Setterberg’s book ‘Giving with Confidence: A Guide to Savvy Philanthropy’:

“Given all the urgent causes and excellent organisations striving to prod the world into better shape, it’s damn hard to decide where to place your bet.”

Helping a donor to find a clear focus drives their efforts forward. It means donors can develop expertise, find reward and add value. This creates the foundation for setting targeted goals. JFK did not say the US was generally headed into space, but specifically that they were going to land a man on the moon and return him safely to earth.

A significant global focus for this century is not so much on the moon, but here at home on planet Earth. The climate crisis is our challenge that we have limited time to address (the moon mission had less than 10 years). Tackling it needs major mobilisation of effort and resources. It is drawing-in attention, such as Environment Rebellion’s protests and Greta Thunberg’s speeches. However, there also needs to be a movement of funds to environmental causes.

In the UK less than 4% of Foundation’s funding goes to the environment (see links below). The money is not matching the rise in public profile and concern, or the size of the problem. There are, of course, a number of funders in this space already, such as Calouste Gulbenkian Foundation’s Valuing the Ocean Programme and the Oak Foundation’s Climate Resilience Justice Fund. In the US, 29 philanthropists pledged four billion dollars at the San Francisco Global Climate Action Summit last September, which included the Hewlett Foundation and the Bodiversity Funders Group. And there are signs that others are stepping-up: from large funders, such as the National Lottery’s Biodiversity Challenge Fund; corporates, such as Sky’s Ocean Plastic Innovation Challenge; small funders, such as Jersey Evening Post’s new environment fund; and individuals, such as Extinction Rebellion funded through crowdfunding. ACF announced the theme for their 2019 conference: ‘Funding on a Finite Planet’ and hopefully this signals a move by Foundations to re-direct their resources to the planet as the environment moves from being seen as a niche issue to being understood as integral to issues of social justice and social needs.

The successful achievement of the moon landing shows us that when we make the bold choice to act and set clear goals, we can face the difficult and expensive challenges. Will funders make the choice to direct their resources to tackling the climate crisis with a similar ambitious and committed voice?

https://www.greenfunders.org/wp-content/uploads/WTGGW6-for-website.pdf

https://www.cafonline.org/about-us/publications/2019-publications/uk-giving-2019

Image: Wikimedia Commons https://images.app.goo.gl/t9ipciFiTqihHXZu9

The rise of gaming philanthropy

Gaming is a booming industry. Its global worth was estimated as $138 billion in 2018. According to Ukie (UK Interactive Entertainment – an industry trade body), as the 6th largest video game market the UK claims £5.7 billion of that global revenue, with around 37 million of us playing games.

Not surprisingly, gaming has attracted fundraisers who are looking for new income streams and seeking to engage with a younger audience. Amnesty International, Unicef UK and Macmillan all provide support for people raising funds through playing, streaming and competing. JustGiving has a hub, Gaming for Social Good, to help people raising money through gaming. Level Up for Shelter is a 135 minute gaming challenge (which is one minute for each family that becomes homeless every day in Britain) where gamers are sponsored to play for 135 minutes. 

Gamers themselves are interested in philanthropy. CAF conducted a survey in 2017 and found that 58% were interested in donating while playing and 59% would be more likely to pay to remove adverts if some of the cost went to charity. For anyone, say over 30, who feels an outsider in this world of gaming, you can be reassured that the philanthropic initiatives that look to tap into this potential generosity are familiar. For example:

• Donated goods - Get Well Gamers UK takes donated video games and consoles for young people to play when in hospital.

• Charitable trading – when buying games from Humble Bundle, you can donate part of the price to charity.
  Sponsored events – such as GameBlast – an annual charity gaming marathon. GameBlast19 raised £100,000 for charity.  As with many things philanthropic, America is ahead of the game. It has well established events such as the Fortnite Tournament, where 50 top players and 50 celebrities battled it out for a £3m prize for the charity of their choice. Others include Zeldathon, Games Done Quick and the Overwatch game from Blizzard Entertainment which raises money for Breast Cancer Research Foundation from the purchase of ‘skins’ (that change the look of items in games) and merchandise.

• Direct delivery – HopeLab’s Re-mission game helps young people to cope with cancer. SpecialEffect helps disabled people to play games.

• Major donors - High earning players such as Ninja have raised money when streaming but also have given major donations themselves. Markus Personn (Minecraft founder) is a major donor for Doctors Without Borders.

• Foundations - Activision has a Call of Duty Endowment which gives grants to organisations supporting veterans. In the UK it has awarded grants to RFEA - The Forces Employment Charity and Walking with The Wounded. And Ma Huateng (CEO of Tencent which owns or has a stake in loads of top game brands including Activision Blizzard, Ubisoft, Epic Games, Riot Games) has his Ma Huateng Global Foundation which supports medical, education and environmental causes in China.

Alongside all these examples is of course the darker side of gaming. Just last year, ‘gaming disorder’ was classified by the World Health Organisation and like other addictions, treatment is now available through the NHS or specialist centres like Computer Game Rehab from Rehab4Addiction. As the gaming industry grows and evolves these and other issues will need to be monitored. But as those within this relatively new industry gain more wealth, it is a trend to watch in philanthropy. If you haven’t already done so, it is worth investigating as part of a fundraising strategy.

Other links:

https://www.gamesindustry.biz/articles/2018-12-18-global-games-market-value-rose-to-usd134-9bn-in-2018

https://www.bbc.co.uk/news/technology-46746593

https://www.telegraph.co.uk/technology/2018/10/08/games-industry-contributes-nearly-3bn-uk-economy/

Who's looking at you?

There is a rise of ‘proactive philanthropy’ - where donors and grant makers seek out the organisations they want to fund (see my blog). For charities and other voluntary sector organisations this means that rather than having the control of presenting yourself in an application form, you could be externally reviewed at any time. When did you last make sure that your public-facing, digital-self is in order in case a potential donor or funder is checking you out? Here are my top tips for being ready:

Check your Charity Commission details

Make sure your Charity Commission and Companies House pages show that you are up to date with your reporting. Having the red text that says you submitted your accounts late will be a red flag – it suggests that you are not well organised or that you may not be reliable when reporting back on any grant. On the Charity Commission page, I have noticed lately that several charities have had their accounts marked as ‘qualified’ when they are not, so do check your entry and contact the Charity Commission if they have got that wrong.

Use your annual report to tell your whole story

Use your annual report and accounts for more than just the legal basics. Think about a funder being a potential reader and make sure you acknowledge your donors. Use the narrative section to explain anything odd or unusual or problematic in your accounts; include details of the difference you make, and include your future plans.

Don’t forget the basics on your website

This is often the first point of contact and is your chance to show what it is you do, how you work and the impact your work has. Even when I am actively searching for organisations to back, I can struggle to work out exactly what it is that an organisation does. Imagine what that could mean to a hurried donor coming to you in a flush of motivation? You don’t need to have a fancy Theory of Change or animation, just a simple statement somewhere that says ‘this is what we do and why it matters’. Consider having a short summary document for funders and donors – though you will need to keep it up to date. Also helpful is having details of your Trustees and Senior Managers, easy access to your latest annual report and any strategy document, details of your outcomes and impact. If you can, have case studies and films that bring your work to life. And make sure it is easy to make a donation or contact you.

Does Google contradict you?

Google yourself. What comes up when you run a general search on your organisation. It might be all positive, but is there anything else: a complaint, a threat of closure story, bad reviews on glassdoor? If so (and depending how recent and accurate it is), is there anything you can do to tackle this head on and explain how it has been dealt with?

Take the donor perspective

Without wanting to add another task to your long list, I recommend that you imagine being a potential donor or funder and look again at your digital presence through fresh eyes. Spending time making sure your information is current and clear could get you selected by a proactive philanthropist.

On being proactive

Is it better to be responsive or proactive in your philanthropy? Being responsive means being open to receiving proposals from a range of organisations and so, to some extent, letting grantees set the agenda. It acknowledges that those delivering interventions are more likely to understand the issues and know what is needed. On the other hand, taking a proactive stance means deciding what change you want to support and then seeking out those who can help achieve it.

There are downsides to both: being responsive can mean efforts are dispersed and impact diluted, whereas being proactive risks a funder driving the agenda without full knowledge and therefore missing opportunities. Sophocles, the great Greek tragedy playwright, articulated this dilemma: “Look and you will find it - what is unsought will go undetected”. Many funders mix both approaches but being proactive (aka ‘strategic’) has gained traction as the way to manage demand and maximise impact. (links below for further pro/con reading)

How does it work in practice?

One of the cheerful things I get to do in my consultancy work for grant makers, is contact organisations out-of-the-blue to tell them a funder would like to discuss giving them some money. As you can imagine, the reactions I get are ones of being very pleasantly surprised. They will of course still have to submit a proposal and take the time to have conversations, but I have just saved them time in identifying a funder to approach, deciding if the potential reward is worth the effort and completing more onerous and uncertain application forms. This approach also reaffirms that their external profile is working: they are getting their message across about what they do and how they do it well – whether that is through their website, reports, awards, social media or by word of mouth.

Being proactive works well for funders that have a clear area of focus and know where best to apply resources (both internal costs and funding) to achieve positive change. It saves time in comparison to processing high volumes of applications that can be generated using a responsive approach. However, it still needs time commitment in researching the issues so that funders are well informed. And, to mitigate the power dynamics at play, time also needs to be spent in dialogue with the selected organisations, making sure they can make the case for what they really need, and challenge any wrong assumptions that might be held by the potential funder.

The biggest downside of being proactive is the one Sophocles highlighted: what have you missed? What about all the excellent work that is under the radar; still new; too complex or holistic to fit neatly into a narrow search; or where groups are too busy on the frontline to spend time on their profile? If all funders took a proactive approach then ‘what is being missed’ could be felt significantly at a sector level. There remains an important role for responsive funding. At the same time, proactive funders must not become complacent. Keep researching, networking and reflecting to keep up with any chosen area of focus - and be open to the unexpected.

https://www.alliancemagazine.org/feature/proactive-vs-responsive-philanthropy/

https://www.tpi.org/blog/responsive-vs-proactive-grantmaking-lessons-from-leaders

https://www.ncfp.org/blog/2016/oct-strategic-responsive-both.html