Foundation funding practices: Triggering change from within

 

Karsten Timmer

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Criticism of inflexible and unfair funding practices of foundations is not limited to the US and the UK. On the contrary: Just recently, a call organized by the Berlin-based consulting firm Phineo gave room for many stories from the German NGO field, which vividly underlined the session’s title ‘Nightmares of Foundation Funding’.

However, there are many good examples of German and Swiss foundations that implement trust-based approaches in their funding and try to lessen the bureaucratic burdens for their grantees. So, the question is: How can we get more foundations to rethink their traditional processes and to open up to new ways of doing business? This is not a trivial question given that the German-speaking foundation world comprises 40,000 endowed charitable foundations in Germany, Switzerland, Austria, and Lichtenstein and is thus by far the biggest sector in Europe.

If European foundations have one thing in common with all other foundations worldwide, it’s the fact that they don’t like to be lectured. For this reason, guidelines or academic research propagating new approaches find deplorably little resonance within the foundation world and seldom trigger change. As a consequence, it seems more promising to focus on good examples from the field and to make these accessible to other foundations. This is what the initiative weniger ist mehr (i.e. ‘less is more’) is all about.

‘Weniger ist mehr’ (less is more)

Less is more is the title of a 40-page online-publication that was released in September 2022. As per its subtitle, it is a ‘toolbox for modern grantmakers’ (and we owe Gemma Bull and Tom Steinberg for the title). It features a wealth of advice and practical examples of how foundations can alleviate restrictions on their grants without compromising their own reporting requirements – true to the guiding principle that less is (often) more: less restrictions, less control lead to more impact and better results.

In fact, less is more is all but just another publication.

First of all, less is more has been created in a collaborative effort. The initiative crowd-sourced the content by assembling a group of 30 foundation professionals from German and Swiss foundations who contributed ideas, recommendations, and examples. Given that one single expert can hardly capture the complexity of the field, this has proven to be an appropriate way to capitalize on the wealth of experience that exists in the foundation world. In addition, the diversity of the group, which is made up of small and big grant-makers of very different backgrounds, makes the content more accessible and certainly adds credibility.

Second, less is more does not aspire to stipulate how foundations should organize their funding and does not teach the one right way of grantmaking. Instead, it provides inspirations and real-life guidance for foundations that wish to redesign their funding processes.

To make the toolbox more user-friendly, it is organized in five compartments, covering the application process, reporting requirements, unrestricted funding, grant agreements and capacity building. Each chapter features dos and don’ts as well as a range of practical examples from German or Swiss foundations. For example, the section on reporting requirements presents the initiative of the Swiss-based SKKG foundation which has replaced written reports from grantees by oral reporting – which generates better results while consuming less time and effort. The chapter on application processes features examples of foundations that have adopted a ‘do no harm’ approach to make the process less time-consuming and more transparent, e.g. by establishing formal and informal feedback-loops. As far as unrestricted funding is concerned, a range of examples demonstrate the vast spectrum of tools available to foundations – from allowing more flexibility in program-related grants to unrestricted funding.

Each chapter also features a section on the minimal legal requirements in order to reassure foundation boards that there are only very few – if any – limitations so that they can use the freedom they enjoy to implement a ‘less is more’-approach in their foundation’s grantmaking.

Thirdly, less is more is work in progress. Even if the group behind the project is large and diverse, it can certainly not grasp the wealth of ideas and approaches that exist in the field. The publication is thus only a starting point that provides a framework and invites colleagues from other foundations to contribute examples and learnings form their own practice. The toolbox is available as an online edition which is updated and amended on a constant basis: http://www.weniger-ist-mehr.org

We believe that the collective, peer-to-peer approach of less is more is a suitable way of triggering change in the foundation world – and lends itself for replication in other countries. Our hope is that weniger ist mehr will become a marketplace for good funding practice and a reference for all German-speaking foundations that are looking for new ideas to make their grantmaking more flexible and trust-based. 2,000 downloads within the first three months are a promising sign for change.

P.S.: You can find an English version of weniger ist mehr at http://www.weniger-ist-mehr.org/LessIsMore

Karsten Timmer is the founder and director of panta rhei, a philanthropic family office, which assists families of wealth in organizing and implementing their philanthropic activities. He is the co-chair of the interest group ‘grantmaking foundations’ in the German Association of Foundations.

Tagged in: Funding practice


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