Negotiation is Power.
Power, Ownership, and Choice are fundamental for justice, and much needed in grant agreements.
By Rakiba Kibria, Kimberly Izar, Oscar A. Rodriguez Cruz, and Mark Casillas
Common Future is a Black-led, multiracial organization. We are audacious, expansive, and unapologetic thinkers and doers, who bring lived experience to the problems we tackle. We, the revenue team — the fundraising arm of Common Future — are a largely BIPOC team, who hail from immigrant and working-class backgrounds. As a result, our fundraisers approach the systems, practices, and philosophies that undergird the dominant fundraising and philanthropic culture through a lens of interrogation and justice.
With such a diverse team, it’s easy to see why, when we reflect on our collective experiences in the field, we often lament the inequities that seem baked into the system, no matter where you sit, how experienced you are, or what you’re fundraising for.
At Common Future, we fundraise in radically different ways including advocating for a just funder culture and modeling a different way to fund leaders of color — both as the recipients of grants, and for those who receive grants from us. And yet, we are operating in a system that was by design, built to exacerbate dominant systems that have extracted from, exploited and harmed the very communities we represent and work in. And that rears its ugly head, even in relationships with donors built on trust and community-centered fundraising principles.
Does the bias end after dollars come in? Are relationships magically equitable once funding is disbursed? Our decades of combined professional experiences tell us: no.
Even when funder-grantee relationships are built on mutual trust, the process of grant management is built in a one way power imbalance. Ultimately, the said nonprofit is served an agreement to finalize the grant for payments to be disbursed.
Beyond One-Way Grant Agreements
Grant agreements are documents signed by two or more parties for the transfer of funds as gifts to nonprofit entities and serve as legally binding guarantees to funders. They set forth the expectations for how to use funds, what to submit and communicate in terms of reporting for monies utilized, and even lay out recourse if obligations aren’t met. They’re the end result of a months- or years-long process of funders deciding they trust nonprofit organizations enough to financially support their work.
In our experience, a nonprofit’s expectations are often communicated to funders informally through trust-based relationships with specific program officers and/or decision makers. Even when a fundraiser has an amazing relationship with a program officer at a given foundation, that one-on-one relationship does not scale or translate to equity once legal, PR, or any of the many other departments at a large foundation step in. Business as usual means that grant agreements are signed as a matter of course, without a second look.
What’s more, annual audit processes at nonprofits prioritize the terms of grant agreements. In practice, this means that nonprofits’ financial and organizational health is often viewed through a strict rubric that measures, above all, if the nonprofit complied with the terms set forth in grant agreements they never helped shape.
In short, these partnerships are both inequitable by default, and utterly normalized in philanthropy. One side has the power to establish terms of consideration for the exchange, and the other doesn’t have the power to even negotiate.
As we started to see these power dynamics at play, we decided to make some changes to the kind of funding we’d accept given the terms of the grant agreement. In one notable instance, we had the enormous privilege of declining a seven figure funding opportunity. The funder was known to us and had contributed unrestricted general operating support previously, but the new funding opportunity was contingent on Common Future’s community partners engaging in a PR roadshow to showcase the funder’s commitment towards entrepreneurship. The grant agreement gave us no choice in opting in or out of the PR campaign.
That donation would have been meaningful for our organization, but it came at the cost of tokenizing our community partners. As an organization committed to equitable and non-extractive relationships we felt like we would be doing a disservice to our own values and trust-based relationships if we accepted the funding. So we decided to do something: we asked, “what if we charted a new model that balances the power dynamic between funders and grantees? What if we started to repair the harm done by philanthropy by changing a practice within philanthropy?”
Over the last year, we set out to learn how we can better steep the funder-grantee relationship equity, testing out an Equity Commitment we developed alongside some of the brightest and most brilliant peer nonprofits and funders.
The Equity Commitment is a tool to help set expectations on what grantees might ask of their funding partners. We see it as the first step for continuing an equitable relationship once a grant has been approved and the funds are received. It begins the conversation with our institutional funders about OUR expectations for mutual, reciprocal, dignified relationships.
The tool is adaptable and iterative by nature. Not all of it will be appropriate for every scenario. Take what you want, and leave what doesn’t serve you. Our hope is that you are able to adapt the tool in a way that feels right for you and your nonprofit, and share how you did it so we can learn out loud together. Funders, we hope you explore the tool and see ways to encourage your grantee partners to adopt the terms or create new ones for your funding partnership.
How to Use our Equity Commitment
At first when we wrote the Equity Commitment, it was a lot of legalese — exactly how a typical grant agreement reads. But we realized that wasn’t what our sector needed more of, so we pivoted to create something to help grantmakers and funders provide a more actionable way to live up to their commitments and practice their trust-based philanthropy values — including those nearly $1.8 billion summer 2020 racial justice commitments they were so eager to publicize.
The Equity Commitment was developed to be open-source and adaptable to a wide range of nonprofit organizations. We didn’t even put our brand on it — a purposeful decision so that nonprofits can freely use what works for them and leave what doesn’t.
We created a document with seven sections composed of Core Commitments and and Terms of Consideration that nonprofits can offer as addenda to future grant agreements:
- Financial Transparency
- Trust-based and Right-sized Funding
- Reporting & Collaboration
- Communication
- Reporting & Impact
- Climate Crisis, Disaster, and Pandemics
- Non-partisan Political Activity and Lobbying.
These areas draw upon our past experiences where we have felt stifled and powerless, and succumbed to funder demand simply because they were giving us money we needed.
Ultimately, this document draws on our expertise and lived experiences to outline areas where funders can do better and cede power to nonprofits in voicing their terms ahead of a partnership. We think the areas can be amended and expanded depending on a nonprofit’s fundraising source.
While we recognize that there is always risk in challenging the status quo, we also know that what we’re proposing isn’t rocket science. At Common Future, we see ourselves as the ice-breaking ship that can chart a new path in funder/grantee relationships for others to follow. Inviting philanthropy to be better partners should not feel like a big ask. We’ve developed a handy FAQ to help you navigate the tool in finer detail. We encourage you to take a glance if you’re interested in diving in further.
We want to emphasize that this tool is iterative by design. We see nonprofits requesting funders to sign on to elements of it or to use it in discussions with funders on how they can show up as better partners. Furthermore, we hope to embed the tool into our grantmaking initiatives. A future iteration of the tool may also include how we can amend it for our investee and lending partners.
We want to hear from our nonprofit peers to let us know how you used it, what was challenging, or what’s resonating with you. We encourage you to reach out if you’ve learned something valuable from the tool — or if it didn’t work for you — that’s fine, too! We envision iterations of this tool as we receive feedback from community partners and funders.
This tool is our experiment of learning out loud. It’s something we think we need to do more of, and we hope that philanthropy will join us.
