Aligning Grantmaking with Partnership (Issues Study)

Why Partnership Now?

Foundations are increasingly espousing partnership goals with the recipients of their grants. As MacArthur Foundation President Adele Simmons puts it "A grantmaking foundation can pursue its mission only through partnership." Effective examples range from the MacArthur's support for Public/Private Ventures, an initiative in five U.S. cities help the urban poor find jobs to the cooperation fostered by South Africa's Social Change Assistance Trust's Northern Cape Partnership Programme which involves local businesses, government, community groups and the U.S. Agency for International Development.

There are numerous reasons for this interest in partnership. One is growing recognition that partnerships can achieve more sustainable results that other types of initiatives. Another is the widespread conviction that people in need must be central actors in solving the problems they face and finding ways to advance their own development.

At a pragmatic level, foundations recognize that their resources alone are insufficient to achieve the tasks they wish to see accomplished, so collaboration and partnership are essential. In the US foundations provide only 2% of total funding for the nonprofit sector. The sector devotes about 10% of its total expenditures to social services. Foundations provide only 4% of this.

By way of comparison, government grants and contracts provide 51% of funding for nonprofit social services, in addition to financing programs that governments administer themselves. Clearly, to have a meaningful impact on the broad range of problems the world faces today, foundations must leverage their limited funding with the actions and financial resources of other actors.

Yet despite the pervasive rhetoric of partnership, foundations' grantmaking practices have often been criticized for their insensitivity to the perspectives and needs of recipients.

Unfortunately, the very nature of the philanthropic relationship tends toward donor dominance. Unlike other relationships, such as commerce or electoral systems, which are more demand-led in the sense that the buyer or voter can directly influence the seller or candidate with money or votes, the currency of philanthropy is an appeal for support by a "grantseeker". Such appeals are much less compelling than money or votes -- they can be refused by grantmakers with no "direct negative material consequence for the grantmakers."

All too-often grantmaking institutions display a dominant stance with their recipient, which undermines the building of genuine and effective partnerships between the foundations and their grantees. In order to reach their partnership objectives, foundations need to review their grantmaking approaches and adopt practices that fully support building partnerships.

The fundamental challenge is to replace practices that create dependency and clientism with those that enable an equitable relationship between essentially unequal actors, in this case, a donor and a recipient. Grantmaking and recipients collaborating in a mutually respectful and equitable relationship is the goal of most contemporary philanthropy. Put what is real partership?

Some Basic Elements of Partnerships

1. Voluntary participation
Partners can not be forced to engage in or remain in a partnership. Each party must be free to enter or leave a partnership without coercion. This condition implies that each partner has a choice of whom they want to do business with or of choosing not to do business. This, in turn, requires the presence of a marketplace of nonprofit goods and services that permit actors to find alternative sources of financing. If an actor's continued existence is at stake if they reject participation in the partnership, their choice is essentially forced, and genuine partnership is not feasible under such conditions.

2. Mutual respect
Partnership is undergirded by the conviction that all the parties are essential to a successful solution to the problem being addressed -- otherwise, why engage in a partnership? In other words, partnership is predicated on an acceptance of the principle that every actor's perspective has value and is needed to develop effective outcomes.

This, in turn, requires that each partner fully understand and respect the strengths, capacities and constraints of the other actors in the partnership. Colin Campbell, President of the Rockefeller Brothers Fund states:

A worthy feature of partnership is that it is based on strengths, rather than weaknesses or deficits...When strength is defined this broadly, it becomes clear that the partner who happens to have the money is not the only strong one, and that all parties to a partnership are in need of something another party provides.

3. Common goals
Partners may differ in their perspectives and self-interests and even in their values, but they need to share common goals that form the essential "glue" for their working together. Often, this is not as straightforward as it seems; the partners need to share common definitions of what constitutes success in reaching these goals. But this step is essential and partnerships work best when the goals are built around well-defined

4. Transparency
In partnerships between actors with unequal power, the parties must be careful to avoid behavior that might lead other parties to think they are being exploited. For this reason, open, transparent relationships between the partners is crucial. Such transparency requires explicit communication between the parties about their motives, interests, objectives, strategies, plans and relationships with other actors both within and outside the partnership. It also requires individual participants -- such as foundation program officers and nonprofit leaders -- to be frank about the extent of their power to make decisions for their organizations.

5. Trust
Partnership is useful because it permits the attainment of goals that the parties could not reach on their own. Partners who distrust each other are very unlikely to achieve such synergy, especially on complex or long-term mutual undertakings because their capacity to work effectively together will be undermined. For partners to trust each other, they need to respect each other, share deeply held goals, relate openly to each other, and to build first-hand experience that they can rely on the word and deed of the other.

6. Acceptance of conflict
Parties with differing interests are likely sometimes to find themselves in conflict about the attainment of objectives. When the open expression of such underlying conflict is suppressed, it is very difficult to come to effective resolution of these conflicts. This undermines the successful implementation of the partnership. The parties in a partnership need to agree at the outset to accept their differences and to accept disagreement and conflict as healthy, often inevitable elements of their partnership. They need to agree to use such conflict to deepen their mutual understanding. Conflict can be an effective tool to find new solutions that will enable collaboration to continue and not be derailed by differences. Partners need to establish at the outset norms and procedures for handling conflicts when they do arise.

7. Equality & consensus
While the parties may be unequal outside the partnership, within it they must act as equals. No single party can control or be in charge of the partnership. Even more fundamentally, no partner or group of partners can control the decision-making. Decisions need to be jointly agreed upon in a partnership. If one party possess veto power, all must possess this power. In the end, while any group can take leadership, decisions need to be taken consenscally. Procedures for this need to be spelled out and agreed upon at the outset of a partnership.

8. Partnership processes
All the elements of partnership are built out of an ongoing enactment of partnership behavior of the part of each of the parties. Since this is often different than the customary behavior of the various actors, it is helpful, perhaps even essential, to specify partnership processes and procedures at the outset. This is particularly important with regard to the areas of decision making, conflict management, resource allocation, and evaluation, but it is also extremely helpful in such operational areas as procedures for conduct of meetings and publicity and the taking of credit and relations with external actors. One particularly crucial area for agreed-upon processes is the establishment of end-points. Each of the parties needs to be able to exit the partnership with dignity, and the procedures and mutually acceptable endpoints within the life of the partnership should be agreed to explicitly in advance.