Grantmakers may increase the impact of philanthropic investments by diversifying their pool of grantees and partners

Having spent the last 10 years working in the philanthropic sector, I am inspired by the emergence of many new private philanthropies, which are expanding the pool of resources available to tackle persistent social problems that plague the poor and disadvantaged globally. While there is an increase in philanthropic dollars, there is also a noticeable tendency for new and old grantmakers to work consistently with a limited, and well-known set of organizations to develop and implement programs and interventions. This dynamic highlights a lack of diversity among the circumscribed set of grantees and partners with whom grantmakers work, and stands out as a particularly vexing issue. This lack of diversity in the grantee and partner pool is particularly acute in the international development arena, where most of the grantees and implementation partners are large international NGOs and contractors concentrated in the Global North, with headquarters primarily in Europe and the United States.

Program design and implementation partners that are founded, owned, and headquartered in the Global South are not well represented among the pool of grantees and partners to grantmakers in international development.  Why is there such lack of diversity among the grantees and partners to grantmakers?  What difference does a diverse pool of grantees and partners make to the outcomes and impact that grantmakers seek? What can grantmakers do todiversify their pool of grantees and partners? These are important questions that grantmaking organizations must explore.

The current uneven representation of organizations that make up the pool of grantee and partner organizations is the results of a complex set of factors, including the relatively benign, such as language fluency requirements, proximity of organizations to grantmakers, the benefits of social networking, certain organization’s visibility in the sector, historical experience and track record of key organizational players in the sector, and differential access to information and technology.  In addition, there are also more pernicious influences, including implicit biases, systemic racism and stereotyping. Overtime, regardless of intent, such malicious elements can become embedded in the systems and processes that grantmakers use to identify and select their grantees and partners. This can happen even among grantmakers that have an expressed commitment to reducing inequalities and supporting non-traditional grantees and partners. Therefore, it is not surprising that even grantmakers who desire to work with and support non-traditional grantees and partners seldom achieve this goal without deliberate and sustained efforts to cultivate the desired non-traditional grantees through investing in their capacity strengthening.

At face value, the lack of diversity in grantees and partners may not seem to be an issue. Often there may appear to be perfectly valid explanations for why grantmakers repeatedly select the same set of organizational partners and grantees. The reasons include, the desire to “find and work with the best” and most capable organizations given the scope and complexity of the projects/programs, and the need for strong management and accountability for grant/contract funds.  Also, program officers and staff of grantmaking organizations sometimes argue that while they may select a traditional, “usual suspect” organization as the lead partner or primary grantee, they have included non-traditional organizations as sub-grantees/sub-contractors. While these explanations may, in part, be true, they can obscure potential underlying biases in grantmaking systems and processes. Moreover, they may fail to recognize the opportunity cost to the mission, of not having a diverse pool of thought partners and grantees.

What are those opportunity costs to grantmakers outcomes and impacts of the lack of diversity in the grantee and partner pool? There is an emerging body of literature, in support of workplace and team diversity, that provides convincing evidence that diversity in teams, organizations, and individuals working together are smarter, more innovative, and produce better results. A Harvard Business Review study, “Why Diverse Team are Smarter,” systematically reviewed a body of evidence that supports the conclusions that, “In a nutshell, enriching your employee pool with representatives of different genders, races, and nationalities is key to boosting your company’s joint intellectual potential” (HBR, Nov 04, 2016). A similar synthesis, “How Diversity Makes Us Smarter,” concluded that, “The fact is if you want to build teams or organizations capable of innovating, you need diversity. It encourages the search for novel information and perspectives leading to better decision-making and problem-solving” (Katherine W. Phillips, Oct, 2014Scientific American). While this body of work is primarily focused on making the case for diversity among teams working within organizations, it is also relevant to making the case for diversifying the grantee and partners that grantmakers depend on to develop and implement their programs and interventions to solve complex social problems facing the poor and marginalized.

What implications does this have for the philanthropic sector? Diversifying the grantee and partner organizations, may yield dividends in terms of producing new and innovative solutions to complex social and economic problems. To achieve a diverse pool of grantees and partners, grantmakers must examine where and how their systems and processes for identifying and selecting grantees, may be imbued with biases and barriers that are unintentionally excluding groups of potential organizations from the selection process. Such systemic factors may be undermining the search for innovative solutions that could increase the potential impact of their investments.

Therefore, grantmakers need to be more intentional about eliminating biases in how grantmaking and management systems and processes are structured and operated.  Specifically, they need to examine the requirements for grant recipients, and interrogate them for elements that may discourage traditionally marginalized organizations, much the same way in which job descriptions, in how they are written, may weed out potential job applicants from certain demographic backgrounds, academic profile and work histories. 

Broadening the pool of grantee organizations by eliminating factors that exclude potential non-traditional grantees and partners may be key to maximizing impact and increasing stewardship of resources. Below are some possible steps that grantmakers can take to enhance the diversity of their grantee and partners pool:

  •  Articulate a clear business case for diversity of grantee/partner pool;
  • Conduct a systematic review of grant application requirements, paying careful attention to those requirement that are exclusionary, and perhaps unnecessary to get the job done;
  • Diversify the grantmaking and grant management staff and managers to be more reflective of intended beneficiaries;
  • Provide training for program officers on unconscious bias, and support their increased knowledge of how culture, history and context are important factors in finding solutions to inequalities or challenges;
  •  Invest strategically to support capacity building for emerging organizations, to create a pipeline of potential grantee and partner organizations;
  • Examine grantee/partner performance rating criteria to ensure they are fair and unbiased; and
  • Incentivize and support program officers to develop and work with grantees who are non-traditional, and as such may require more effort to ensure they are able to submit competitive grant applications.

Intervening and disrupting the existing grantmaking systems and processes, by taking some of the steps noted above, are important interventions that can reduce inequalities in which organizations are selected as grantees and partners. While such changes are valuable in themselves, they are even more important as they will increase grantmakers’ ability to achieve their external equity outcomes and impact.