Caroline Hartnell

On 21 September I attended an event in London to launch Beyond money: A study of funding plus in the UK. The study, written by the Institute for Voluntary Action Research and commissioned by Barrow Cadbury Trust, the Diana, Princess of Wales Memorial Fund and Trust for London, aims to ‘identify and analyse the core characteristics of different approaches to funding plus used by UK charitable foundations’, and to identify the ‘principal benefits, challenges and risks of these approaches’. The ‘approaches’ looked at mainly fall into the categories of advocacy and capacity building.

As the authors of the report note, the practice of supporting grantees above and beyond the provision of grants – what the report terms funding plus – has a long history. The practice has also had many labels, including high engagement philanthropy, venture philanthropy, more than money, grants plus – and now funding plus. But, the report also notes, this topic has received sustained interest from researchers only in the last decade, spurred on by the growing emphasis on creating impact and the increase of so-called ‘new philanthropists’, who are generally deemed to be more hands-on and more focused on results than ‘traditional’ philanthropists. With scarcer resources and greater needs owing to the financial crisis and ensuing recession, the call for greater impact will only grow further.

The event started with a debate on the motion ‘Funders should stick to making grants’. Alastair Wilson of the School for Social Entrepreneurs had the unenviable task of arguing for the motion, which an initial show of hands demonstrated that no one among the 100 people in the room supported!

For me this straw poll was the most telling point of the afternoon. Go back in time say ten years, probably less, and you could go to a meeting where people were making a clear distinction between venture philanthropy and ‘traditional’ philanthropy. Granted the ‘traditional’ people would all say that they had always done lots of the things the venture philanthropists were doing – but there was a distinction to be made. Now it seems there isn’t. We’re all venture philanthropists now!

Alastair Wilson did a sterling job of defending his unpopular corner. His main argument was that funding plus changes the power dynamic and represents a consolidation of the power of the funder. He particularly questioned whether funders are the best people to provide capacity-building support to their grantees: will non-profits feel able to discuss their problems openly with their funders? Will they be able to evaluate the capacity building honestly? Wouldn’t foundations do better to offer funding so their grantees could buy in independent consultants to do this?

Stephen Dunmore of the Diana, Princess of Wales Memorial Fund made a strong case for funding plus: the core of his position was that if foundations want to achieve impact, they must deploy all the resources they have.

When the vote was taken, 13 people changed sides and voted for the motion. I don’t believe for a moment that they had become convinced that ‘Funders should stick to making grants’. The foundations represented at the meeting all practise funding plus. Rather, I think they were expressing reservations about the direction of travel towards funders becoming more interventionist – this is what Alastair was really talking about. When we find 100 people in a room unanimous that funders should now be practising ‘funding plus’, we should be wary. We need to keep asking questions – such as these, raised by event participants:

• Does the possession of wealth entitle you to a seat at the table?
• Are funders the best people to deliver capacity building?
• Is grantmaking without ‘funding plus’ necessarily unstrategic – whatever that really means?
• What about ‘good funding’ (provision of core funding, etc)?

Finally, one thing that wasn’t raised in the discussion: mission-related investment, or use of foundation assets to further mission. In a discussion about using all a foundation’s assets to achieve impact, it seems odd that this wasn’t mentioned. However, to quote the report: ‘The field of funding plus is both emergent and ambiguous. Its boundaries are not fixed, nor is its meaning.’ Where funding plus is seen as a direct expression of a foundation’s values and mission, mission-related investment would seem to be a logical next step.

Caroline Hartnell is editor of Alliance magazine