5 ways social enterprise funders can act differently in 2021

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Lior Ipp, Chief Executive Officer, Roddenberry Foundation

• The COVID-19 crisis has exposed the fragility of global systems and created a new awareness around glaring inequities;
• Many organizations, including the World Economic Forum’s COVID Response Alliance for Social Entrepreneurs, are calling for a more urgent and intentional focus on “building back better”;
• Funders have an opportunity and a duty to reimagine their roles in order to make grantmaking more equitable and move us towards the new normal.

The profound economic and social devastation caused by COVID-19 has placed the world in uncharted territory. The fragility and inequality of our core societal systems have come into sharp relief and the tools we use to bolster them have been tested in unprecedented ways.

With recovery efforts in full swing, many organizations including the World Economic Forum’s COVID Response Alliance for Social Entrepreneurs are calling for a more urgent and intentional focus on “building back better”.

Amidst these efforts, many philanthropic institutions have revisited their funding strategies and priorities, committing billions of dollars and pledging to streamline and improve their funding processes. Indeed, the Alliance has highlighted five important actions that funders can take, including more collaborative, expedited and innovative models, that will move us towards a new normal.

In our own work at The Roddenberry Foundation and through feedback from hundreds of social entrepreneurs involved in our +1 Global Fund, we’ve heard an appeal for funders to do things differently. As social entrepreneurs shift from survival to resilience, their priorities and obligations are changing. Mahila Housing Sewa Trust in India, a recent recipient of +1 funding, used its vast networks in 14 cities to help women and girls survive during the pandemic. As this organization looks ahead, the reality facing its constituents – lost wages, homelessness and long-term poverty – amidst weakened and broken systems is as daunting as the crisis itself.

The question now is less about how funders operated pre-COVID-19 or even our response in 2020, it’s about what’s next. In the past year, five important themes have emerged from our work that are worth considering as we all reimagine our roles beyond the pandemic:

1. Lean into trust
For too long, we have accepted the trust deficit between grantors and grantees. We see it in risk-averse funding strategies, over-reliance on reporting, top-down decision-making and unnecessary demands on grantees. As we look ahead, the easiest way to (re)establish trust is to make the time-consuming mechanisms funders typically use – applications, interviews, deadlines and lengthy reports – more user-friendly or, better still, just eliminate them. If we intend to work alongside and in partnership with grantees, we need to take an honest look at the tools we use to identify, vet and select them.

2. Build an inclusive framework
Access to funding is too often a result of social capital, access to information, and fundraising skills that are unavailable to many. Gender, race, geography and education all play a role in influencing who has access, so we need more democratic and transparent funding models that focus on reaching a more diverse pool of organizations and individuals. Without such adjustments, these grantees would be difficult to find, let alone fund. To make grant-making more equitable, it’s critical we consider alternatives for how and from where potential grantees are identified and selected.

3. Don’t reinvent the wheel
We must recognize and take advantage of existing networks, efforts, and strategies – particularly those of our grantees – in support of new funding models. The year 2020 was a powerful reminder of the speed and creativity with which social entrepreneurs can pivot, amplify their work and use their networks to meet the challenges of a crisis. We should tap into and further support these new networks (such as Catalyst2030), collaborative frameworks (such as @Alliance4Socent) and adaptive strategies that have emerged in recent months.

4. Shift the locus of power
Confronting the underlying issues of inequality in our societal systems that have come to light in 2020 will require the expertise and insights of those who have a stake in seeing them dismantled or altered. One way we’ve done this is by placing social entrepreneurs at the centre of the funding process – by creating a space for genuine partnership that enables shared decision-making and accountability, promotes flexibility and transparency, and accepts experimentation and failure. This needs to become a standard approach for funders.

5. Make it local
The hyper-local nature of the pandemic has meant that most interventions must account for variances in geographic, economic, political and public health systems across and within different countries and cities. The greatest need and opportunity to combat the long-term impact of the crisis is at the community level. It is crucial that we work hand-in-hand with our communities to understand their specific needs and priorities. as well as how we can jointly benefit from collaboration for years to come.

The call for more creative and efficient ways to fund social entrepreneurs is certainly not new; what is new is an awareness of the glaring inequities that have been brought to light and worsened by the pandemic.

As we’ve come to realize and reckon with the fragility of our systems and understand the magnitude of the crisis, so too must we consider what role we as funders want to play shaping and embracing a ‘new normal’. We have an opportunity and an obligation to do things differently; ensuring that we “build back better” will depend on it.