To shift power, fund entire ecosystems


Clare Gibson Nangle and Devon Kearney


It’s a classic tale of the trajectory of a nongovernmental organization (NGO): a well-meaning organization grows rapidly, crafts a beautiful strategy, and has all the right subject-matter expertise in place, only to realize late in the game that it neglected to build the systems and processes necessary to support its mission and vision.

Today, a similar phenomenon is evident in the philanthropic and international development sectors as they too evolve and mature.

In recent years, these sectors have begun to sharpen their politics to tackle problematic power dynamics within civil society and philanthropy itself. ‘Trust-based philanthropy,’ ‘localization,’ and ‘big bets’ dominate the conversation. But, just like the NGO that overlooks the importance of systems and processes, we are not talking enough about the way we operationalize grant funding and foreign aid. Lack of infrastructure hinders the ability to reach a goal. If we do not operationalize funding in a way that aligns with our politics, we will fail in our mission to shift power.

Shifting power means that grantee organizations drive the agenda through donor-grantee relationships based on trust, support, and solidarity. But that should also translate to thriving ecosystems and stronger movements, organizations that are not suffocated by administrative burdens, and activists who can focus on the important work at hand and not be forced to constantly chase the funding. Right now, even as ideals like shifting power and localization dominate the debate in our sector, too many funding opportunities are concentrating rather than decentralizing power, are opaque, or come with administrative hurdles or other demands that are out of reach of the organizations whose voices are needed most.

Localizing without a local lens

There is perhaps no better example than ‘localization’: efforts to move more funding directly to local groups. This is an important component of shifting power from international organizations to local ones. The international development sector in particular has embraced it in recent years. USAID, through its massive reach, has made localization one of its top priorities and hallmark of foreign policy aid under President Joe Biden’s administration. USAID Administrator Samantha Power has set out to ensure that 25 per cent of the agency’s foreign assistance go directly to local partners by 2025. Others are following suit: at the December 2022 Effective Development Cooperation Summit, fourteen donor governments announced a commitment to localizing development funding. 

This is a noteworthy step, and one that should be applauded. But to be effective, the mechanics of localization must be considered with care and intention. Without an overhaul of how these major government provide funding to local groups, it is unlikely to enable local organizations and movements to flourish.

First, the stringent requirements and administrative burdens associated with applying for, managing, and reporting on funding are too much for many local organizations to absorb. Often, those that are closest to stakeholders and the issues are least able to manage these complex grants. This alone will deter many highly capable and creative local leaders and organizations from pursuing funding. Too often, the remedy to this problem seems to focus on improving the capacity of organizations to manage complex and burdensome grants. In other words, applicants must change, not the donor agencies, which seems to run counter to the spirit of shifting power.

Second, project-based funding remains far too prevalent. If local organizations have to shift their priorities and strategies to align with funding opportunities, they are not driving their own agendas – and, therefore, are not holding the power.

Finally, the hoops that still must be jumped through will ultimately privilege a few, well-positioned groups, which will receive the lion’s share of localized funding. Large infusions of funding that only a few local organizations have the capacity to absorb will have a destabilizing impact on the wider civil society ecosystem, introducing tension into movements, and concentrating rather than decentralizing power.

Betting big on the few over the many

While aid agencies localize, more and more large foundations are focused on big bets-style grantmaking: identifying a problem and making huge grants to organizations who propose a solution. There seems to be a continuous stream of press releases announcing the next ‘big bet.’ But despite the tendency to celebrate this news, huge amounts of money are going to a very small number of organizations. It’s hard not to wonder how many organizations have been rejected. After all, big bets produce a few big winners – and many, many losers. 

This style of grantmaking doesn’t just have a negative impact on the wider ecosystem, it is also a questionable approach to shifting power. Big bets create mega-institutions that operate in a constellation of smaller civil society groups, inevitably leading to new and disorienting power dynamics in local activist politics and civil society networks.

Without continuity, groups that receive such large infusions can face a crisis: the looming cliff when the grant ends. This is doubly risky when it comes to big bets. On one hand, not only do they produce just a few strong leaders within a movement, but these leaders themselves are not sustainable. On the other hand, when renewed funding is a possibility, these overextended grantees are under great pressure to remain aligned with the funders’ interests and strategy, perhaps at the expense of locally determined alternatives. Either way, problematic power dynamics persist – or even deepen. 

Moreover, big bets are often awarded through non-transparent processes. This further strips an organization of the agency to determine whether or not available funding represents a good opportunity for them. It also has the potential to interfere with both programmatic and fundraising priorities, as organizations begin to chase the hope that they will be the next big winner without clear guidelines on how to do so.

A better way forward

To foster ambitious change – and truly shift power while doing so – funders must focus not on organizations but on systems. As donors localize and place big bets, they should ask themselves if their funding will help sustain the ecosystem, if it will generate conflict between organizations, if it will help democratize funding, or if, perversely, it will serve to concentrate power or leave grantees overly dependent and ‘donor driven.’ Perhaps funders could begin to think about how widely they are able to spread their funding and how doing so can support positive inter-organizational dynamics, rather than how large they can make a singular grant.

Making it easy for grantees to manage the funds and understand commitments is likewise essential. Groups must have the means to decide whether or not to accept a grant. Transparent, streamlined processes of disbursement, reporting, and evaluation is a vital way to make sure not only that the funds make it into the hands of those who can use it most effectively, but also that accepting the grant does not create undue burdens especially for smaller community-based organizations. 

To achieve this, donors should invest in their own ability to better meet the needs of applicants and grantees. Increased staffing to build strong relationships with local groups and a solid understanding of the context would increase trust, enable less burdensome forms of due diligence, and allow for ongoing conversation and feedback loops. Stronger relationships and higher levels of trust would facilitate more unrestricted funding, ensuring that grantees are able to drive their own agendas and have the ability to respond to emerging threats and opportunities.

Truly shifting power by aligning the operations and politics of grant funding and foreign aid is not only the right thing to do, it’s also a more effective way to achieve donors’ ends. As with any complex problem, it is impossible to guarantee that there is one best solution to any given problem in any given space. Donors can hedge their bets by supporting not one but many of the different actors who can contribute to the solution. No one organization is able to tackle a problem from all angles; several groups, using a range of complementary strategies to achieve the same objective, have a greater chance at success. By funding different approaches, experts, and organizations – all with different affinities and stakeholders – donors are more likely to succeed as well.

The result of this strategy in action would be a community galvanized, with more resources spread across its civil society sector to raise important issues, advocate for effective responses, and provide essential services. It would also be an economically stronger community, helping to achieve the aims of USAID and other development agencies. A sustained ecosystem approach to funding would create good jobs in lower-income nations, while pumping money from overseas into the local economy. It would add diversity to local industry, creating jobs in new sectors that encourage and provide support for the development of new skills.

In short, the importance of ecosystems – civil society sectors and movements – must not be overlooked in efforts to shift power. The best way to use money to achieve social change is to put grantees, their knowledge, and their strategic vision at the heart of things. Instead of identifying one grantee, support many; instead of imposing tricky power dynamics on the local level, support and strength whole sectors.

Many funders are already doing this – notably human rights and feminist funds such as the Global Fund for Women and the Fund for Global Human Rights (where one of us works). These smaller grantmakers are a lifeline to local activists, reaching grantees that others cannot, and doing so with an understanding of the challenges that grantees face. Large foundations making big bets and government agencies seeking to localize their funding would do well to follow their example. If we all put a big bet on this ecosystem approach, we are confident that positive change would follow. 

Clare Gibson Nangle is director of strategic partnerships at the Fund for Global Human Rights. And Devon Kearney has worked with human rights and social justice nonprofits around the world for more than 20 years.

Tagged in: Funding practice

Comments (1)

Chip Fay

I would like to comment but it seems to me Henry has pretty much summed it up. Remarkably articulate contribution.

Henry Karanja

While this debate on aid localisation is important and timely, I still have questions on what is the end game and how practical is it to fully localised aid? First; what does localisation mean: is it only about shifting funding from development NGOs, consultancies etc based in aid giving countries to civil society organisations based in what is colloquially referred to as global south? If, for example, USAID achieves its ambition of providing 25% of its funding to civil society organisations based in 'global south', and this funding can only be accessed through responding to calls for proposals, requests for applications, etc designed in Washington, Brussels, London, etc., would localisation have been achieved in such as case? If funding to civil society organisations that meet the definition of local organisations (and this debate is yet to be settled) is to be truly 'localised', then it would need to be de-linked from the foreign policy objectives of the aid giving counties/donors. So long as it remains tied to the foreign policy objectives of the OECD and other donor countries, it cannot be said to be localised, the amounts that are provided to local organisations notwithstanding. The trend of merging international development agencies of aid providing countries with the ministries/departments of foreign affairs (such as the subsuming of CIDA to DFATD, AusAid to DFAT, DFID into FCDO) cast doubt about the commitment to localisation. In this regard, this seems to be a case of donors speaking from both ends of their mouths. True localisation can only happen where donors provide resources to address development priorities identified by the communities that are to benefit from the aid; this (needs identification and prioritisation) should be done preferably with as little input/interference by the donors as possible. When needs assessment are done on behalf, and at the behest, of donors, there is the tendency to manipulate the process and the results so that these align with some pre-determined priorities. Such an approach will not only empower the recipients of the development assistance but also creates ownership which in turn contributes to sustainability of development interventions. But to what extent are the donor/aid providing countries willing to de-link aid from the foreign policy objectives of their countries and to support initiatives that are truly owned and led by communities in aid receiving countries? Is there truly an incentive for the donors to let go of the control and live up to the ideals that they routinely tout such as empowering local communities; what would they get in return? These are difficult questions but which must nevertheless be candidly discussed if true localisation is to happen. Aid providing/donor countries should align their objectives to those of the communities that are supposed to benefit from the aid - and not the other way round. Unfortunately, but it is not likely in the foreseeable future for donors to let go of their power and control, the development discourse needs to shift from aid and charity to justice. This includes ensuring (natural) resource rich low and middle income countries get fair price for their resources; it means addressing profit shifting by multinationals corporations and requiring them to pay their fair amount of taxes in countries where they are trading; it means repatriating resources stolen from poor countries/LMIC that are stashed away in tax havens in British Isles, Luxembourg, Cayman Islands, etc; it requires having difficult conversations about reparations for slavery and colonialism; it means western government reining in on corporations in their jurisdictions that foment civil strife and corruption in resource rich countries so as to extract those resources; it requires countries to improve their governance and increase accountability of the leaders to the people. Aid/charitable giving and justice can go hand in hand; but to expect that truly localisation which shifts power to local communities (and that donors will to a significant extent let go of their paternalistic tendencies) is somewhat wishful thinking.

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