by Rachel Ayotte | Mar 19, 2024 | Article
One of the best practices of an effective funder is the ability to view philanthropy through an innovative lens. Meaning, great funders — who are successful in their efforts to make long-lasting impact tend to think outside the box when it comes to the typical funder-grantee relationship. Their ability to adapt to changing needs in their communities and within the industry often proves advantageous for everyone: funders, grantees and the communities they serve.
A great, innovative way for funders to go beyond the typical relationship — which can often be restrictive and inflexible — and amplify their impact, is through regranting, also known as cascade funding.
In this blog, we’ll cover all the basics, including a closer look at the meaning of regranting, why it’s impactful and how you can streamline your regranting in five easy steps.
It’s important to first understand the definition of regranting. Unlike more traditional grantmaking, which typically includes one funder and one grantee, regranting reimagines the funding process in multiple stages, with multiple stakeholders — much like a domino effect.
In essence, regranting refers to the process by which a grantmaker distributes funds to other organisations, often smaller nonprofits or community groups, to carry out specific projects or initiatives. And sometimes, the recipients of the funds then become funders themselves, using their resources to aid other smaller, on-the-ground organisations.
Often called cascade funding in the European Union and describes how funds trickle like a river that flows into a series of interconnected waterfalls, regranting is about taking a central source of funding and letting it cascade through various levels to reach different recipients or projects.
Some organisations use regranting out of necessity, while others use the process for strategic reasons.
Organisations often use regranting because it can extend their reach to smaller nonprofits or grassroots initiatives, allowing them to increase impact. In essence, it allows the funder’s dollars to reach further into the community, empowering smaller organisations to make an impact without having to directly implement programs or projects themselves.
Aside from reach, funders may lack the local knowledge or capacity to implement programs effectively in certain communities. By enabling regranting, they allow on-the-ground organisations with expertise in their communities to make strategic decisions, often leading to better outcomes and more impact.
In an industry-wide effort to make grantmaking more equitable and impactful, regranting provides a unique opportunity to allow local nonprofits the freedom and autonomy to make decisions about their communities how they see fit — a fundamental pillar of trust-based philanthropy.
Instead of approaching grantmaking with a traditional top-down approach, regranting empowers grantees, and even sub-grantees, to implement change in their communities.
Beyond grantmaking dollars, regranting encourages collaboration and partnerships among organisations working towards similar goals. By pooling resources and expertise, grantees can leverage each other’s strengths and experiences to achieve greater collective impact than they might be able to individually.
Regranting can be a big undertaking, especially if your organisation is new to implementing the practice. However, with a few tips and strategies, you can make regranting an effective part of your operations.
If regranting is new for your organisation, be sure that everyone understands the mission and goal of regranting and how it aligns with your long-term objectives. To help build unified support for regranting, try answering a few questions with your team. For example:
Gathering with your team and considering these answers should help create a cohesive understanding of why regranting can be a solid, mission-aligned next step for your organisation.
Regranting requires lots of organisation. In order to ensure that all stakeholders — including the ones on your team — are on the same page, it’s crucial to create clear and concise regranting guidelines that focus on:
This will help you, your team and your grantees avoid miscommunication and misunderstandings and create a smoother and more efficient process for everyone.
Grant reporting can be an administrative burden for grantees. With so many stakeholders involved in the regranting process — including small, grassroots initiatives with limited resources— it’s imperative that funders make reporting as simple as possible.
When considering your reporting processes be sure to:
A fundamental part of regranting includes involving multiple stakeholders in the process and relying on them as equal partners to ensure that objectives are met.
Instead of reviewing applications in a silo, invite stakeholders to vote on their favorite grant applications through crowd voting. Not only will this allow for more diverse opinions, and new perspectives — leading to better outcomes — but it supports and encourages participatory grantmaking.
Just like in trust-based philanthropy, regranting can only be successful if funders operate with the knowledge that grantees are the trusted experts in their communities — and not the other way around.
Because part of regranting’s purpose is to empower on-the-ground nonprofits, funders need to instill confidence in their grantees and trust them to make decisions. That means not overstepping or over-monitoring them.
If done well, regranting or cascade funding can be an effective strategic method for creating more impact, developing more equity in funding, supporting trust-based philanthropy practices and building a robust community of funders and grantees who all work together to make the world a better place.
With Good Grants, funders can take the administrative burden out of regranting by building accessible forms, inviting multiple reviewers, simplifying the application process and so much more.
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