Pesos and Power - why we must ensure that power is shared in philanthropy

In this blog post, our Chief Executive Bharat Mehta takes some time to reflect on the responsibility and power funders hold, as well as why it is important to make steps towards participative grant-making to ensure that this power is shared.

"He who has the Peso has the say so". So said a prominent philanthropist at a conference of civil society organisation representatives. And despite misgivings that some of us might have about the arrogance of expressing power over the social sector, does he have a point?

There are now more foundations and trusts than ever before. Just last year, more than 1,700 grant-giving charitable trusts were registered with the Charity Commission, the most for eight years. Furthermore, 45% of all grant-making foundations and trusts, 27,863 in total, were established over the past 20 years. Increasingly, rich people are turning their private wealth into public good. This is transforming who wields power in shaping social change. It’s time to improve accountability and power-sharing in the charity sector.

We have seen how rich-turned-philanthropists have shaped health and social agendas. Consider the role that the Bill and Melinda Gates Foundation has played in tackling malaria; or George Soros and his Open Society Foundation with the mission to promote ‘freedom, democracy and human rights’.

All good things. How can one argue that efforts to control malaria or pursuits to promote freedom and human rights are malign forces to be challenged and resisted? And perhaps therein lies the problem. How accountable are foundations, which in essence, are often well-meaning arms of extremely rich individuals? For decades, foundations have made decisions with very little accountability. Boards have been free to make decisions behind closed doors.

This is not an argument against philanthropy. Simply working on the basis that the State will provide all is unrealistic. Everyone has a responsibility to contribute towards the welfare of their fellow human beings to the best of their ability – financially, and in terms of time and effort.

But who wields the power?

No, the point is about how one wields power. There is dictate – ‘the Peso, say so’ perspective; or there is sharing power. The latter requires an understanding that people have the ability to change their lives and circumstances if given the opportunity and the tools, one of which, but not the only one, is money.

One way of doing this is by participative grant-making - letting the potential beneficiaries decide who should get funded against criteria set by the cohort. This is not about washing one’s hands to leave a group to sort out concerns for itself but a process of genuine and meaningful engagement about how limited money can be best used to address the issues of concern.

King Baudouin Foundation based in Brussels uses this technique to great effect to achieve impressive outcomes. At any one time, over a thousand people across Belgium are engaged in decisions about grants allocation. Interestingly, this approach also safeguards this otherwise elite institution from public criticism about making ‘controversial’ grants. I see this as pesos with power-sharing.

How might foundations and funders go about power-sharing?

Trust for London has embarked on the Strengthening Voices, Realising Rights initiative with Deaf and Disabled People's Organisations (DDPOs) where issues of concern are identified, and the sums allocated to DDPOs are decided upon, by the people from DDPOs. We don’t know if the initiative will yield bold results but judging by the positive comments and coverage the initiative has already received, we remain hopeful.

Pesos are clearly important; but letting potential beneficiaries have a say in how those pesos are spent is essential. Foundations that want to play a part in social change must rethink what it means to be accountable.

Of course, transparency is a key element in this, but we must also think about how we can take power-sharing more seriously.

At Trust for London, we would love to hear from other foundations that are pioneering participatory grant-making processes so we can share ideas and learn from others about how power can be shared more effectively.

28 April 2021