The goal of grantmaking is to power positive change in the world by improving the plight of people dealing with poverty, climate crises and other unpleasant life situations. However, this noble ambition can sometimes be thwarted – due to a deep-rooted imbalance in traditional philanthropy.
There are various risk factors to consider in grantmaking. Usually, when assessing the risk associated with any philanthropic gesture, attention is solely on how it might negatively affect the funding organisation. This compels the funding organisation to adopt self-protecting grantmaking patterns favouring mainly established nonprofits with proven track records, inadvertently maintaining any existing bias.
Grantmakers can successfully reduce any prejudice and ingrain diversity, equity and inclusion into their grantmaking by looking through a different lens—by reframing risk.
What does it mean to reframe risk in grantmaking?
Reframing risk in grantmaking means changing how risk is perceived and approached in the grantmaking process. It involves viewing risk from a different perspective, weighing more factors and modifying the rules of risk assessment and management.
This adoption of an expansive outlook has the positive effect of nudging grantmakers to concern themselves with more than just the record, popularity and stability of grant applicants. It sensitises them to both the possible dangers of overlooking applicants who don’t otherwise meet their criteria and the potential for a positive impact of seemingly uncertain projects on marginalised communities.
By encouraging grantmakers to venture into projects that may have been otherwise neglected due to ingrained grantmaking practices, this holistic risk assessment model fosters DEI in grantmaking instead of continuing any prejudiced patterns. With diversity, equity and inclusion in grantmaking, philanthropy’s ultimate aim of attending to underserved and underrepresented communities can be achieved in word and in deed!
Steps to reframe risk to build DEI into your grantmaking
Here are different ways to reframe risk to embed diversity, equity and inclusion in grantmaking.
1. Broaden your understanding of risk
It’s important for grantmakers to expand their appreciation of risk. Instead of limiting your understanding to the potential loss of resources when funding lesser-known nonprofits, focus on the dangers of dismissing any applications dedicated to underserved communities. Such organisations have been overlooked over time and it might prove challenging for them to meet the conventional requirements.
By recognising how neglecting such applicants hampers your chances of improving the predicament of communities in pressing need of your support, you’d be driven to make the necessary changes to embed diversity, equity and inclusion in your grantmaking.
2. Ensure your organisation understands and prioritises DEI
The next step is to make sure your funding organisation has a thorough understanding of diversity, equity and inclusion. It’s helpful for your team to be mindful of the various ways bias can creep into the grantmaking process; with such insight, they can make concerted efforts to combat the prejudices.
A good way to advocate for DEI in your organisation is by starting with a diversity, equity and inclusion statement. Such a policy typically outlines rules that will help curb systemic inequities in grantmaking and demonstrates your commitment.
To effectively raise awareness of DEI, consider implementing different types of DEI training at your organisation.
3. Implement fairer funding models
Traditional philanthropy is inherently flawed; its funding practices tend to favour established nonprofits. To contribute to diversity, equity and inclusion in your grantmaking, consider switching to grantmaking models that better address these inequities and power dynamics.
One such model is trust-based philanthropy. This funding model focuses on building an equitable nonprofit sector by systematically redistributing power. It emphasises a relationship based on trust, accountability, respect and partnership between the grantmakers and grantseekers.
Another flexible and more effective funding model is participatory grantmaking. This grantmaking model puts the affected community members and constituencies in the driver’s seat when it comes to grantmaking. With community representatives on the funding panel, you’ll have expert guidance when assessing the applications from affected communities.
These models emphasise integrating community stakeholders into the decision-making process and amplifying the voices that have been historically drowned out.
4. Build DEI into your grantmaking process
Prejudice can surface in every aspect of the grantmaking lifecycle. The key is to lace your entire grantmaking process with practices that enhance diversity, equity and inclusion. So, examine your process to ensure that it gives all grantseekers a fair chance.
Take calculated steps to build relationships in the community. Match such relationship-building gestures with outreach programs to ensure a larger and more diverse pool of applicants; responsive grantmaking can help you achieve this. Adjust your grantmaking process to identify elements that keep competent organisations at a disadvantage.
Take adequate steps for such nonprofits to receive the adequate funding they need to embark on their impactful projects.
Prioritise accessibility and efficiency during application. Replace complex application processes and turgid language with informative sessions, troubleshooting and materials in simple multiple languages spoken in the community. Leverage grants management software to create an equitable grantseeker experience and grant review process.
Have your team ready to support applicants. Also, provide an offline option for applicants who might not have access to the Internet or a computer. That’s DEI in action.
Additionally, you can help unsuccessful applicants improve. Set up a capacity-building program to boost their chances of receiving funds in subsequent applications. If you have the budget, consider giving them stipends as a form of encouragement.
Also, request feedback from all applicants, successful and otherwise, about your grantmaking process. Invite them to share their ideas on how it can be enhanced for them. This is a good way to prove that you recognise them, regardless of their size or financial status.
In closing, the regular perception of risk forces funding organisations to prioritise failure avoidance over impact potential. By changing how to view risk, grantmakers can better embed DEI into grantmaking for underfunded organisations and underrepresented communities for maximum successful impact.
