Is Grantmaking Getting Smarter?

Grantmaking is the process of allocating a set amount into a coordinated investment dedicated primarily to social improvement. We spoke to different grant makers to understand how grant making has changed over the years. 

Donations vs Grants

Donations and grants are a form of giving resources that differ in many aspects and cannot be used similarly. Donations are usually solicited by simple informal appeals and often come with no strings attached.

Grants are funds given by a specific party, particularly the government, corporations, foundations, educational institutions, businesses, or an individual. To be able to receive a grant, “grant writing,” usually referred to as either an application or proposal is required. Grants are contractual in nature with clear and specific terms, conditions and deliverables.

 

We asked NGOs if they were in favour of donations or grants?

Meljol, is an organisation working on education, child rights and responsibilities. Their CEO Pramod Nigudkar, says, “Having unrestricted financial resources always provide opportunities for their dynamic utilization for attainment of the goals. Donations often give an organization that breathing space. However, as an NGO we also see some advantages of grants. The idea behind the grant is predetermined and hence well thought of. It brings more accountability in terms of time and outcome. The benefit grants sometimes bring along is the expertise of the grant making organization. Donations do not take precedence over grants.”

Arundhati Ghosh, Executive Director of India Foundation for the Arts (IFA) adds, “We don't have a preference because both are manifestations of the desire of the giver to make a difference in our society and their faith in us to do so. In both cases, we must be accountable to that desire and faith they show in us. So we do detailed reporting (albeit different in format in each case) for both for 2 reasons - one of course is so that they know how we are spending their funds and secondly because we believe this makes for more sustainable longer relationships with people who support us.

 

 The Changing Proposal

Modern grantmakers, are passionate about the societal issues they want to solve. Some are willing to take risks, if it means results. And yet others want to do more than make grants - make an impact! Many of today’s grantmakers are more than cheque writers; they are change agents—people who learn by doing - bringing themselves and their grantees to new levels.

Anurag Mishra the Head of CSR at Cipla Ltd who has also worked for USAid, Pragya Foundation and Seva feels this has given him a good insight of NGO needs and the issues they grapple with on a day-to-day basis. “We work directly through NGOs and we worked with some of our partners. We do a baseline study first to determine the needs and issues in the locality we are situated in. In Sikkim we found that drug addiction is a serious problem as well as maternal health, whereas in Raigad District building skills in the youth and awareness of youth related issues is a problem. Once we identify the issue we want to work on, we then identify the non-profits who work on that issue. It is critical that they should demonstrate a local footprint. CIPLA also found that in various areas infrastructure was an issue and we realized that since we managed to put up world-class facilities we could assist by using our own staff or vendors to help us in the local community. In Sikkim therefore we used our engineers and other people to help build school buildings and toilets. 

Non-financial support also translates into grantmakers looking for Return on Investment (RoI) when making a social investment. For an overseas perspective we spoke to Mark Sidel, Doyle-Bascom Professor of Law and Public Affairs at University of Wisconsin-Madison, and who earlier was also program officer at Ford Foundation in India “This differs significantly by donor. It's a very important conversation to have with a potential donor, since this is an area in which donors may have very different understandings from each other.” We also asked if grantmaking how he would differentiate grant-making in the USA to grant-making in India? “What I see is wide diversity in grantmaking in the U.S. and wide diversity in grantmaking in India. And we should celebrate that diversity. While we want donors to make reporting clear and straightforward, at the same time we should also want them to express their values and philanthropic preferences in their grantmaking, celebrating that diversity among them.” 
 

Grantmaking Strategy and Flexibility

Today we also see more a definite strategy to any grantmaking. Is it just a fad, a buzz-word or real? If grant-making is truly strategic, why do we still see the persistence of social injustices in newer and different, often more virulent forms?

Mark explains, “Grantmaking strategy is not a fad -- it's at the core of what makes good donors good. That we continue to see so much injustice and inequality despite more strategic grantmaking is in large part, in my view, due to massive and systematic economic, political and social gaps and inequalities that even strategic giving finds very hard to combat on a sustained basis.” 

Why are some grantmakers not willing to fund causes such as music, arts, sports within their strategy for granting?

IFA supports practice, research and education in the arts in India. We queried Arundhati if there are enough grantmakers willing to support the Arts or is it difficult? How is the gap filled at the moment? “It is very difficult to find support for the arts. Given the diverse areas of inequality and injustice in this country one could say that 'roti, kapda, makaan' becomes the first three things that get support. Then then is health, environment, education etc. So the arts hardly finds a mention even in the support agendas of those who give. So we struggle…and keep struggling. We thank the few foundations, trusts, corporates whose CSR has recognised the arts as a sector for support, and individuals who give to the arts. They are few certainly, but their passion is strong.”  

Grantmakers can provide great benefits to the communities they fund by implementing flexibilty within the grants but many are often bound by the criteria. While most NGOs feel that corporates can be rigid, Anurag Mishra differs. “For our corporate foundation while we do have a structure for reporting it allows for a certain degree of customisation. We also look at how efficiently they respond back but we give leeway to organizations especially when they are small or have not been working for many years since we realize that they may not have sufficient administrative resources initially to manage this aspect. We want to ensure our money reaches the last milepost being the direct beneficiaries. We have a Board who believe that since we run a 5 star company we should also have a 5 star CSR programme.” 

Grantmaking Sustainibilty & Accountability
In grantmaking, is there such a thing as a reasonable time-frame of the cycle or easy exits. Regardless of why the grant cycle ends, there are reasons to invest in managing transitions carefully. Firstly, you want to leave the grantee in a better position than where it was prior to your support. Facilitating a smooth transition can ensure that your previous grants were not in vain. A well-executed and clearly communicated transition can reflect your commitment to sustainable results.

Transparency and accountability is always expected out of the donee. What about grant-maker’s accountability and transparency? ​

Pramod’s experience says, “This is very important consideration that often gets lost in the dynamics of power sharing between Donee and Donor. The donee and donors should be partners in what they have jointly decided to accomplish. In this spirit the donor should be transparent in terms of their commitment to the cause. Hence as the getting in to the partnership is well thought of process, getting out of the partnership also should be well decided and communicated. For some transparency related issues the donors could be governed by the law of the land.” 

From a corporate point of view Anurag discloses, “CIPLA Prior to the CSR legislation coming into place as per SEBI guidelines the top 100 listed companies had to publish a Business responsibility report and our first one was for the year 2013. These are available on our website and for 2014-15 we will be putting up a full CSR report as per the legislation requirements. Our policy is also available on our website”

Arundhati concludes, “This is a very important area that few talk about. I think a grantmaker should have clear, written policies of what they support and why in the public domain. The relationship between a grant maker and a donee should be based on mutual trust, faith and respect for each other as equals in the process of making a difference. Only then can there is true partnership and collaboration.”

 

 (from our Interaction column
 CAP's quarterly newsmagazine 'Philanthropy' Q1 April - Jun 2015 )