Many of us have heard about trust-based philanthropy and participatory grantmaking. There is however less talk about open philanthropy, even though it is aligned with both of the previously mentioned grantmaking styles. So, what exactly is open philanthropy and why should you and your foundation adopt this practice?
Open Philanthropy – the “What” and the “Why”
Open philanthropy is a model where foundations and donors operate with a high degree of transparency, sharing information about funding decisions, strategies, and outcomes. It involves actively including grantees and other stakeholders in decision-making processes (for example researchers, think tanks or other sector experts related to your foundation’s mission). By fostering a collaborative environment, this approach is particularly beneficial in addressing power imbalances that often exist in traditional philanthropy, where funders have typically held most of the decision-making power.
There is increasing criticism of the traditional “top-down” approach used by many foundations. This type of philanthropy can be characterized by:
The inner workings and decisions of foundations remaining opaque to the charities applying,
Donations are restricted to what the foundation dictates as the best solution (often project based), and,
Charities are forced to adjust their programming to “fit” the foundations requirements as opposed implementing programs and actions that are best suited to respond to their public’s needs; based on direct, on the ground experiences.
Open philanthropy is a direct response to changing what can justifiably be considered a broken system. Along with trust-based philanthropy (unrestricted funding, limited reporting requirements), participatory grantmaking (where representatives of the public concerned are included in the grantmaking decision process, albeit not those directly concerned with the funding to avoid conflicts of interest), open philanthropy is a further step towards reducing inequalities that have traditionally been inherent in the foundation/charity relationship. Whereas the first two are forms of grantmaking, open philanthropy is a wider base of action, impacting the management structure of the foundation or fonds de dotation.
Open philanthropy can Bring Solid Long-Term Benefits…:
As a foundation or fonds de dotation adopting open philanthropy can provide several key benefits, for example:
Enhanced trust and engagement: transparency builds trust between funders and grantees. When grantees understand the criteria and processes behind funding decisions, collaboration is easier. And when both funders and charities work in tandem, it is easier to identify strategic goals and funding needs.
Improved innovation and effectiveness: inclusive decision-making processes incorporate diverse perspectives, leading to more innovative and effective solutions. This approach is especially useful when addressing complex social issues that require multifaceted strategies.
Grantee empowerment: by involving grantees in the decision-making process, foundations not only empower their organisations but also ensure that the initiatives funded are closely aligned with the needs and realities of the communities they serve.
… but also Presents Some Challenges:
The foundation world is traditionally a private world. Even more so in cultures where discussing wealth can be difficult. While in many countries the publishing of financial accounts and budgeting information is increasingly required by law, detailed grantmaking information isn’t always made publicly available. Open philanthropy aims to render visible all of a foundation's or fonds de dotation's processes and asks that you bring in outside stakeholders to ensure multiple viewpoints are considered for grantmaking decisions. This is a big change in traditional management:
Operational complexity: implementing open philanthropy requires resources and a shift in organizational culture (new procedures and lines of communication between staff, board/founders and stakeholders such as beneficiaries).
A longer decision time window: Inclusive decision-making means including different stakeholders with different lived experiences. This can lead to conflicting opinions, the need for further discussions, expert consultations. All of which can delay grantmaking decisions. But taking the time during the evaluation and decision process to view the problem from all angles can ensure a more focused grant with a more impactful end-result.
Open Philanthropy – Who is Putting it into Practice?
Several European foundations have successfully integrated open philanthropy methods into their operations, for example:
The Wellcome Trust: This UK-based foundation has embraced open access policies for research, promoting transparency in its funding processes. This approach has fostered collaboration and accelerated scientific progress, showcasing how open philanthropy can enhance outcomes in specialized fields.
Robert Bosch Stiftung: In Germany, this foundation emphasizes stakeholder engagement and transparency, particularly in the fields of education and health. By involving grantees in shaping programs, the foundation ensures that its initiatives are responsive and effective.
Fondation de France: invites outside experts share their knowledge and life experience to enrich their funding programs (for example the handicap sector).
New Philanthropy Capital (NPC): also based in the UK, has been a pioneer in promoting open philanthropy. NPC's work emphasizes the importance of involving individuals with lived experiences in funding decisions, thus ensuring that the voices of those directly impacted by charitable activities are heard and valued. They share all learnings and have even offer a free a toolkit based on their experience.
Can I try an open philanthropy approach for my Foundation or Fonds de Dotation?
Open philanthropy represents a shift towards a more democratic and effective approach to charitable giving. By prioritizing transparency, inclusivity, and collaboration, this model addresses the power imbalances in traditional philanthropy and enhances the impact of philanthropic efforts.
If you are interested in learning more or discussing how you can look at implementing an open philanthropy approach, or trust-based philanthropy or participatory grantmaking strategies, don’t hesitate to reach out.
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