Participatory Grantmaking: a way forward to fund the future?
What does participatory grantmaking look like and when is it a good idea for foundations to embrace it?
To achieve system change - a large-scale change that will affect everyone - funding the social innovation process itself effectively is key. Such an innovation process requires cross-sector collaborations that shift the focus from fighting the symptoms to addressing the root causes. Given the urgency for systemic change, foundations have been exploring new effective funding mechanisms that support system change. As Dr. Lukas von Orelli, President of Swiss Foundations said at Swiss Foundations’ 2020 Stiftungsgespräch on the topic “Foundation for Future”: “If we dare to push the boundaries of what we thought possible together, we can foster systemic change”. In that light, foundations deemed the theme Adapted and innovative funding mechanisms for systemic change projects the highest priority in the Funding the Future research phase.
When seeking new solutions to a complex issue, foundations need to support innovation processes rather than focus on defining outputs. This requires a structural and mindset shift within many foundations. “Foundations need to review some of their assumptions in order to support system change projects and be ready to take risks. Failure is a part of the learning process and crucial for innovation” - Katia Weibel, Deputy Managing Director of Mercator Stiftung
Participatory grantmaking is an innovative funding mechanism that cedes decision-making authority to the very communities affected by funding decisions. In times of transformation, participatory grantmaking could present a way to tackle effectively the goal social entrepreneurs and foundations have in common: to bring about systemic interventions in a most effective manner where they are most needed.
The theme of participatory grantmaking was explored by over 20 participants from large and small foundations and associations in an online workshop hosted by collaboratio helvetica on May 3, 2021. Diving into participatory grantmaking first from a theoretical perspective, followed by two concrete practice examples, helped participants gain a deeper understanding of the benefits and challenges of such an approach and create the first prototype of their own participatory process. The co-hosts of the workshop were Nora Wilhelm, Boryana Milova, and Violette Ruppanner.
As a start, Inga Ingulfsen (Research Manager with the Global Partnerships team, Candid) introduced participatory grantmaking, its benefits, and challenges, by drawing upon world-class research and practices. For example, participatory grantmaking allows for a more thoughtful and informed decision-making process, strengthens trust and credibility between actors, and promotes equity and inclusion; yet it can be costly, and can pose challenges around safety, representativeness, and bias.
After the introductory input, Katalin Hausel, (Nova Helvetia Co-budgeting prototype and funding allocation process) and Eva Isberg ("Kultur Komitee" for the SKKG foundation for art, culture, and history) brought about a Swiss practice example of a participatory process: one completed and one in planning. The practice examples showcased the importance of community building and trust in participatory grantmaking. Especially the question "who should be involved in the decision-making" was highlighted: individuals who are willing to inform themselves (time commitment) and/or have base knowledge on the topic (base expertise). These grantee “investments” yield important process learning, identified as a key benefit from the Nova Helvetia prototype.
Illustration: Core elements of participatory grantmaking. Source: Candid
In break-out rooms the participants discussed challenges and opportunities, which resulted in four key insights:
1. Trust and long-term relationships are key
The speakers shared their belief that funding is more effective if grantees are approached based on trust. This fundamental attitude encompasses leading with trust, nurturing longer-term relationships with grantees, fostering a community, and collaborating with humility and respect.
2. Legitimacy vs. quality of decision making: difference in aims of the process has an effect
Participants agreed that the aim of the process - whether to raise the legitimacy of a decision or to enhance its quality - could lead to different levels of participation. Typically in a local development project individuals who are directly affected are competent, invested, and can benefit the collective intelligence, while in larger, abstract systemic change projects (e.g. democracy focus), an expert opinion could provide more insight. Some recognized this as a tension between expert knowledge and collective intelligence, while others saw the opportunity for those to work in symbiosis.
3. Community building, learning, and collaboration as an output
The process seems to be particularly effective in the cases when the participants are aware of each other and their own projects, which only fosters community-building amongst grantees but also raises the chances for collaboration. Thus, the participatory grantmaking process can be seen as a strategy and tool for learning and capacity building, while fostering a sense of community.
4. Start with a “safe enough to try” prototype
A recognized challenge for foundations is the topic of control and legal framework limitations: if grant-giving is participatory, it begs the question of legal accountability in the case of funding going astray from the foundation's purpose. A feasible strategy to diminish the worry can be to control the initial project selection and continue with a “safe enough to try” prototype of a small funding amount. Through that funders can test the ground, gain experience, and once the relationship with the grantees is strengthened, and the method is proven, a higher percentage of participatory grantmaking can be introduced.
In conclusion, participatory grantmaking, just as traditional funding, is not straightforward. It might not be relevant for all funders. However, for those who decide to embrace it in the longer run, it can contribute to deeper trust with grantees, foster collaboration in the community of social innovators, raise legitimacy and collective decision-making - all of which provide a fruitful soil to drive systemic change.
Further literature on the topic
Funding the Future: the crucial role of foundations (blog post, 3 min. read)
Deciding Together Shifting Power and Resources Through Participatory Grantmaking (by GrantCraft, guide)
Blogpost written by Boryana Milova, social entrepreneur and catalyst for systemic change
Boryana is a catalyst for systemic change on the topic of waste and circular economy. With a University of St. Gallen (HSG) business background, she is a proponent of purpose-driven business and its alignment with people and the natural world. Currently, she is investigating the limitations of the single-use and linear economy and is exploring ways to catalyze a transition towards more regenerative regional practices with the initiative Future of Waste, which she co-founded after collaboratio helvetica’s Catalyst Lab.
