Participatory Funder Model - A brave new world.

On occasion, I am asked how I approached the funding model at the foundation that I was heading up for over a decade.

In this job, I had the fortunate position to search for and reach out to organizations that worked with prevention efforts, or already had programs helping children and young people who had been sexually abused and exploited. With the support of my board, I was tasked with directing funding to entities that (often, but not only) looked around in the communities and neighborhoods, and followed the signs in order to develop models that would help children in new and innovative ways.

I was often asked if this wasn’t a horrible area to work in, seeing unimaginable anguish and horrific behavior that was harming children.

My reply was, and is, that it was not. Rather, I was in the fortunate position to be able to direct funding and support individuals who worked hard every day to make a difference in children’s lives. That was not an unhappy or horrifying place to be. Quite the opposite.

In reality, this job was the happiest and most rewarding I have ever had. To that end, I came up with a name for how I worked with the grantees and how we together sought for solutions; they had the expertise, and I would bring the funds. Together, we participated in a model that would enhance the odds of less children being exploited, and many being assisted after the fact. How is that not something to be positive about?!

I named how this work was conducted ‘the participatory funder model.’ To me, this approach consisted of when donors listen to nonprofits on how to manage funding, create models, and together come up with the right path forward. Collaborative as a founding premise, and communication as the vehicle to success. This approach also entailed the funder’s commitment to several years of sometimes non-restricted funding, allowing nonprofits to stay agile, maintain scale, and respond to new risks and fresh opportunities. But above all, to trust and rely on the partnership, striving towards a solution that wasn’t abandoned mid-stream. A constant dialogue was part of the model, and communication was ongoing, seeing obstacles as opportunities, and view risks as challenges.

Yes, the money was a major part of this relationship. It greased the wheels of accomplishment and was the communicative language of success.

Some define this kind of language as dirty-talk, linking actions and objectives while explicitly framing it to money.

It is perhaps not an accepted fact that nonprofits are acutely aware of the power of money. As anybody dealing with this universal tool of communication, nonprofit entities are involved in seeking support for the mission and actions of their organizations on a daily basis. Money matters tremendously in the sector, and how to obtain it is a constant bother. Many claim that in this sector, money is supposed to be subordinate other reasons why something should be done, some assistance extended and some of the work being performed. Nothing could be further from the truth.

Like in so many other instances, money is driving the work. It pays for staff, it provides funds for rent, it makes events happen and campaigns rolled out. Money pays for internet connections, travel for project visit, conferences and many other administrative costs, along with the outpouring of funds that go to fulfill the raison d’etre of the organization itself.

In this context, my work was framed around the participatory funder model, meaning that as a funder, I facilitated funding to support those who did the work; learning, listening, and contributing when necessary and called for.

During and in the aftermath of the covid pandemic, when nonprofit were called upon to stretch their resources and increase their impact, trust-based philanthropy swore up and down the they had changed. Instead of attaching restrictions and rules to the funds they provided, many foundations said that they wold loosen their controlling grip. But despite the talk, a wide swath of foundations never adopted new approaches, and it is not clear whether those that did during the pandemic and racial reckoning, will revert to their old ways of doing business.

The effects of a less top-down relationship with nonprofits are still not known, since this is still not common practice. In a recent post, Vu Le is stating that funders are not changing their ways. They are still holding on to the funds, are not interested in distributing their resources, and perhaps most damning, are continuing to be “patronizing and condescending.”

Still, the movement of trust-based philanthropy succeeded in getting grant makers long resistant to change to rethink how they wield power over the nonprofits they support. Responses to advocates for the old ways, who were fearful of changes to the grantor-grantee relationship, put forward that “trust-based philanthropy advocates for and contributes to greater accountability between grant makers and grantees. When grant makers break down transactional walls and replace them with trusting relationships, they become partners rather than auditors. This both demands and enables accountability that goes both ways.” Perhaps the fear was more that, in line with the decolonizing wealth movement, an approach that has the power to revolutionize the sector, a trust-based partnership model would diminish the power of money and equalize and modernize an outdated system, maintained based on old traditions.

It is clear that adopting a new model requires courage, and bravery is needed to develop genuine trust. It’s about stopping the habit of perpetuating old power structures that have not moved the needle one iota. If it had, we would not be in an environment where donor-advised funds (DAF) are growing exponentially, taking in donated dollars but not required to be distributed, but still generate tax relief, to those who are in most need. More on DAFs in another post.

At the very least, grant-making strategies and goals should be informed by those working in the field, and have direct experience of the issues at hand. As I had a brief stint in direct services, I support this view. And to be brave in the face of adversity.

It is never too late to help.