By Holger Schmid, Director, Switzerland / Sustainable Economy Programmes, MAVA Foundation

Looking back over a decade of working in philanthropy, I have observed, and have been part in, many ways foundations engage (or not) with their potential or ongoing grantees. In the most traditional way of philanthropy, there is no direct interaction, only the submission of project ideas, fully developed and left to the mercy of the ruling of the foundation’s board and its expertise. The board’s role is to see the strengths and weaknesses of the project and judge on its alignment with the foundation’s priorities. The applicant on its side tries, based on its interpretation of the foundation’s mission, to present a project idea with an approach and wording that might influence the board’s decision favourably. Both sides work in their own bubble with their own view and knowledge and, somehow, try to be smarter than the other. Despite much goodwill on both sides, such an ‘outsmarting each other’ model doesn’t necessarily lead to the best results for the cause.

Unfortunately, much grant making, is still done in this way. But at least, mainly the bigger foundations who can afford dedicated staff, have invested in building their own understanding and expertise in areas of their focus, allowing for better dialogue and enhanced understanding between funder and grantee. Despite this, most foundation staff remain often generalist lacking specialised knowledge and time to delve into issues and understand them sufficiently to formulate recommendations or make a judgement based on deep insight.  This is particularly true in fast-changing areas, such as in MAVA’s Sustainable Economy programme. This lack of deep knowledge is generally compensated by an outside expertise that is limited in scope and often disconnected from foundation philosophy and its wider funding portfolio.  While this is a big step forward and a great improvement in the funder grantee relationship and eventually on the quality of the projects and the decisions taken, it continues to leave funder and grantee opposed to each other.

Wouldn’t it make most sense to try to eliminate any such friction and bring grantee and funder together where each party can play to its strength? A space where funders move beyond financing to become conveners and facilitators, and grantees, being closest to the issues, are the source of expertise?

In our latest iteration of strategy development and implementation, we have done exactly this. We have invited our partners to co-develop our programmes. We convened partners to develop strategies for funding, and multi-organisational steering groups to guide the implementation of the programmes and projects. In our Sustainable Economy programme, we have gone even a step further and created longer term collaboration agreements with key partners to provide us specific thematic expertise and access to expert networks for programme development and implementation. So, comparing to the traditional philanthropic model of ‘out-smarting’ each other we have moved to a partially distributed foundation secretariat with technical tasks outsourced to partners and grantees. In terms of operational resources, we have brought in expertise equivalent to 1 FTE split across five different partners, coming from think tanks, NGOs and networks.

What we have learnt so far:

  • We think that we have continuous access to deep technical understanding
  • Operational expenditure in relation to gained expertise is very favourable
  • All partners have very different characteristics and they need individual management/coaching to understand the needs of philanthropy
  • Even organisations working on the issues daily don’t have the complete overview, and they need encouragement to reach beyond their usual suspects.

For good governance of such a structure, it takes accompanying advisory board. More on our lessons on these boards in the next blog.