The power of the chequebook

David Gold

‘Over the last three or four years,’ says David Gold of A Glimmer of Hope, ‘I’ve become more and more aware of the power we have just because we have a chequebook.’ Many funders will be familiar with this, but for A Glimmer of Hope it creates a particular difficulty since, for many of the organizations they fund, they are, as Gold puts it, ‘maybe the only game in town …

In many cases, we are the first and only funder.’ Alliance asked him about the difficulties this poses in their relationship with grantees and how they try to overcome them. The short answer is simpler than might be supposed – talk to them. But it’s also important to have the right sort of conversation.

One of the consequences of this distortion of power for grantees – or investees, as he prefers to call them – is that ‘rather than talking about their whole organization they just focus on the one thing that they think you’re interested in because they think that’s where the money is’.

Even before the initial approach, this process is under way. ‘They’ve done a bit of research, they think they know what you want, and they’ve already probably written some sort of application on the basis of satisfying our requirements, which in many cases means that they have moved the organization to fit the funder, rather than asking the funder to fit the organization.’

A cautionary tale

By way of illustration, he tells the following story: ‘A really terrific organization came to us for funding. Their work was absolutely fantastic, and one of my colleagues saw the work they’d done and saw the opportunity to roll it out beyond this one organization in London, and said, “My goodness, that could be sold on, it could almost be formed as a social enterprise, ensuring the organization is truly sustainable.” It completely changed the conversation we had. In the first instance, they wanted to get their heads around how they as a voluntary organization could charge another voluntary organization, so we were having a completely unsuitable conversation. But what was more disturbing was that, about three weeks later, we got a revised application on the basis of being a social enterprise. They’d put a lot of work into it because they thought that was the sort of thing we liked to fund. As a funder, you can create a huge amount of work for organizations, without even considering the impact you’re having.’

Meeting grantees on their own ground

So how does he get around this power imbalance? The distorting power of money never completely goes away, he admits, but there are ways to mitigate it. ‘I think the first thing is, if you want to have a more comfortable conversation, go to their place and see them where you are their guest. If you invite them up to your lovely office, then it can be like an interview. You change the power imbalance by going along to them. It’s a very important step, I’m coming to visit you, rather than making you come out to visit us.’

He acknowledges that this is not always possible, but where it is, he believes, it is in any case worth its weight in gold. ‘Frankly, a 45-minute visit, especially if the project’s up and running, is worth ten times what’s in a report. Reports don’t really let you know what’s going on, they don’t show you how people really connect and communicate.’

Keeping the conversation open

The second thing is to keep the conversation open. ‘Though we would like to think we only ask questions and we’re only supportive and we’re only helpful, we must bear in mind what the other people, the potential investees, pick up from the questions we ask.’

It’s important, says Gold, to avoid what he calls ‘closed questions’. ‘Instead of saying “how do you plan”, or “what’s your vision for the organization over the next three years”, which keep the conversation open, you might say, “so with this particular part of what you do, how do you anticipate expanding it?’ The danger here, he says, is that ‘you’re already giving focus to something, and they assume that’s what you’re interested in. So if you ask a question that’s quite narrow, it closes down the real opportunities almost from the word go.’

Rather than talking to potential grantees about projects, he suggests talking to them about themselves: ‘Try to find out what their motivations and passions are, what makes them get up every day, what they hope to achieve.’ Any investment, he thinks, is an investment in people. ‘They’re what makes it work, so if you can just talk about them, and why they do it, you’re in their comfort area. It also allows you that opportunity to see how good they are, and how much you can believe, frankly, in what they say they want to do and can do.’

The crucial thing here is that ‘rather than shutting things down from the moment you meet them, you’re actually having a wider conversation. Once you’re having what feels like a conversation, then you can start to drill down to the project that they’re interested in, or even the project that you’re interested in. If you can do something about the power imbalance, then you’ve got a great opportunity to improve things for both sides.’

Measurement and trust

Another important aspect of the power of money, he feels – ‘and this is one that I really don’t think we’ve got an answer for’ – relates to measuring performance. ‘We want to know that they’ve been performing well, and we’d like to be able to prove that with some sort of easy statistics. However, we don’t really want to get them to produce statistics just to make us happy.’

In the meantime, he feels, ‘because of the relationships we have with these organizations, we can actually trust them to do well. By talking to them you often know whether you’ve been successful or not. For example, one project we funded was working with young women sex workers in Kings Cross. Few funders would go near a project like that for all sorts of reasons;, it was too far up the risk curve. We funded it, and they proved that it could work. And when we finished our funding a big funder came in at ten times our rate of funding. So I’d say that that is a massive success.’

For obvious reasons grantees are often reluctant to tell their funders that things are going wrong. Because of this, David Gold sets little store by grantees’ written reports. ‘We learned very early that written reports are of limited value.’ Again, the important thing, he feels, is to have a face-to-face meeting.

And what about finding the time to do it? ‘If I can get on my scooter and be somewhere in half an hour and spend 45 minutes with them and half an hour coming back, that’s much shorter than the amount of time it would probably take to read the report. More importantly, a much, much shorter than it would take them to write a report!’

Applying this approach to international funding

Transferring this type of intimate relationship to international funding is not as much of a problem as it might at first sight appear, says David Gold. The way A Glimmer of Hope works in Ethiopia, for instance, is very similar, and again it involves ‘a lot of trust. We have an office in Addis of five people who are all Ethiopians. We allocate the money from the States, and we build partnerships and relationships with community, district, regional development associations. We work out what they want us to spend the money on. They understand their own hierarchy of needs, they determine what those needs are, and then we work with trusted partners to deliver that. Over time, you get to work out which are the good partners and which ones are not so good. It’s a very, very simple model. Because we’re not flying lots of consultants out to Ethiopia all the time, it’s incredibly cost-effective.’

‘The only difference is that the way you measure success is actually quite easy,’ he argues. ‘If you have a village that doesn’t have water and then you spend $3,000 and 500 people have water, it’s a doddle to measure that. The things that are difficult to measure are the improvements in healthcare, education – all the stuff like that which are a result of the water, and of course that’s where the real impact is. But we can say that on average it costs us $6 to deliver water to people for the rest of their lives, which is extraordinarily cheap.’

And while they might not be strictly measurable, ‘actually,’ he argues, ‘it’s not worth our while measuring them, because we are reasonably average intelligent adults who can work out that having clean water is good for people.’

David Gold is CEO of A Glimmer of Hope. Email

A Glimmer of Hope
A Glimmer of Hope is a family foundation which operates in the UK, Austin Texas, USA, and Ethiopia. In Ethiopia, its efforts are focused mainly on making a sustainable difference in the lives of the rural poor through a direct aid, self-help approach. It has supported projects to provide clean, accessible water, schools, healthcare facilities and agricultural support. In the UK and the USA, it helps socially excluded young people by supporting projects that build self-esteem, offer positive choices and develop life skills.

In 2006, the foundation is funding more than 550 small to medium-sized projects throughout the world, though Ethiopia remains its primary focus. Funding is usually for three years. Grants range from a maximum of £47,000 a year for three years to a one-off few thousand pounds for a video project.

Funds come from the foundation’s endowment and from other donors. All donor funds are directed to its project partners and the communities in need. This is made possible by the income arising from the foundation’s endowment being used to cover all operating overheads.

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