When making grants, it is critical to ask who benefits, being explicit about who reforms are meant to reach and design pathways that are accessible to communities most in need. Without this, equity can remain trapped in process; the radical promise of equity is flattened, and underserved communities left underserved.”
Equity is now a key strategic priority across the voluntary sector, with long-standing structural inequality and marginalisation sharpened by the crises of the past decade. Paired with the growing recognition that philanthropy, in its origins and by its nature, is underpinned by inequality, funders increasingly strive to shift towards more equitable practice, seeking to address existing imbalances in who receives funding and whose perspectives shape funding decisions.
But how much can funders’ best intentions achieve if the structural inequalities underlying their practices remain untouched?
This question prompted us at IVAR to take a closer look at how equity plays out in funding practice. Building on the work of others across the sector we conducted a desk review of around 120 recent sources spanning research and learning reports, funder publications, evaluations and reflective pieces across racial justice, women and girls, LGBTQ+ communities, migrants and asylum seekers, and disability justice.
Within this wider equity landscape, we chose to focus on by-and-for organisations. These organisations, led by and working for one same communities – bring unmatched value in often underserved areas, offering a particularly clear lens on how funding systems interact with structural inequality. We wanted to better understand their distinctive strengths and experiences, and the challenges they face in accessing funding, as a starting point for understanding what it takes to produce more equitable funding outcomes.
Our review found that good grant-making – of the type advocated by IVAR’s Open and Trusting principles – shapes organisations’ experience in profound ways, setting a foundation for more equitable engagement. But this alone is not enough. Ultimately, funding practice is only as equitable as its outcomes. When making grants, it is critical to ask who benefits, being explicit about who reforms are meant to reach and design pathways that are accessible to communities most in need.
Without this, equity can remain trapped in process; the radical promise of equity is flattened, and underserved communities left underserved.
What we learned from the review:
- By-and-for organisations bring unmatched value to often underserved communities. Lived experience and community embeddedness foster trust, solidarity and care, and help create spaces where people feel seen, supported and empowered.
- Demand is rising while support is shrinking, and competition is intensifying. Crises disproportionately affect marginalised communities, increasing pressure on the organisations serving them, even as resourcing lessens. In competitive grant processes, limited size and capacity can disadvantage by-and-for organisations, where burdensome requirements and exclusionary criteria often privilege larger, generalist organisations.
- Decision-making and risk assessment frameworks are not neutral. Implicit biases can shape what funders look for in a ‘good grantee’ and how they perceive organisations. Homogeneity across decision-makers can shape assumptions about who is seen as low-risk and fundable, and who isn’t.
- By-and-for organisations need more flexible funding practices. They called for relational long-term funding, straightforward processes, targeted initiatives and organisational development support beyond the grant.
The full review sets out these themes in more depth, including sector examples, statistics and the needs organisations expressed in response.
These dynamics shape who gets through the door. They influence who sits at the table, who is treated as credible, and where money ultimately lands, with real consequences for who is funded and who remains left out.”
What this means for our work – and yours:
The dynamics outlined above shape who gets through the door. They influence who sits at the table, who is treated as credible, and where money ultimately lands, with real consequences for who is funded and who remains left out.
At IVAR, we have been grappling with how equity sits within our work, particularly within our Open and Trusting (O&T) grant-making community. Open and Trusting envisions a shift towards mutuality and interdependence, reshaping funding relationships around the needs of funded organisations. While equity is not named as one of the eight commitments that O&T funders sign up to, equity is conceptualised as a ‘golden thread’ running through the commitments, unifying them in a shared focus on power-sharing and relationality.
The Open and Trusting commitments align closely with what by-and-for organisations say they need and, taken together, can create conditions for more equitable engagement. Commitments to not waste time, ask relevant questions and be proportionate can ease the process burden that most disadvantages small, capacity-limited organisations. The commitment to be flexible speaks directly to consistent calls for unrestricted, multi-year funding that enables by-and-for organisations to weather uncertainty and build organisational stability. The commitment to accept risk complements calls to shift funding relationships away from excessive caution and towards greater trust, recognising that uncertainty often attach more readily to organisations seen as unfamiliar or different. Commitments to be open and communicate with purpose align with the need for clearer transparency, feedback and accountability.
However, gaps remain in fully reconciling Open and Trusting with the needs expressed by by-and-for organisations. The review highlighted the importance of funders being transparent around who is and isn’t being funded and willingness to shift practice accordingly. It also challenges IVAR to strengthen mutual accountability and create clearer routes for organisations to feed back to funders about the equitability of their practice.
More broadly, the review has brought to light the urgency of ongoing conversations we’ve been having about whether Open and Trusting, as it stands, is enough to shift equity outcomes, not only improve funding experience. Open and Trusting is designed to make funding more proportionate, flexible and relational across the board. This review has pushed us to hold that alongside a harder question: if organisations have very different levels of power, visibility and access to funders, can general improvements in practice – in isolation – change who funding reaches?
Structural inequality and historic marginalisation can often mean that their vital work of by-and –for organisations and the pressing community needs they service may be less visible, or less legible to funders.
The needs of by-and-for organisations are not unique: they echo calls for more relational, flexible and sustained funding heard from organisations across the sector. However, funded organisations don’t operate on an even playing field. There are stark disparities in the level of visibility and resource distributed across organisations. Structural inequality and historic marginalisation can often mean that their vital work of by-and –for organisations and the pressing community needs they service may be less visible, or less legible to funders. This is why the question of who is funded is so vital.
Equity can’t just mean better processes for everyone. Without an explicit focus on who is funded and who holds decision-making power, an ‘Open and Trusting’ approach may be implemented in ways that make funding processes seem more accessible for organisations, but leave structures of inequality intact and patterns of distribution largely unchanged, reproducing inequity.
As we continue to grapple with how equity currently sits within Open and Trusting, and how it should be strengthened, the review is helping us think more deeply about:
- Who benefits, and how to ensure funding reaches communities most in need. This could involve more robust EDI-specific measurement within the eight commitments, and thinking about how ringfenced and targeted funding might relate to Open and Trusting.
- Who is in the room, and whose knowledge shapes funding agendas, including what dedicated mechanisms to diversify decision-making and integrate lived experience within the commitments might look like.
In this spirit, we are continuing to reflect on how we can fulfil our vision of equity as a golden thread, ensuring that it stands out and shines across the commitments. The review has helped us sharpen a test for our own practice: do the conditions we create through Open and Trusting actually change who funding reaches?
Equity can’t just mean better processes for everyone. Without an explicit focus on who is funded and who holds decision-making power, an ‘Open and Trusting’ approach may be implemented in ways that make funding processes seem more accessible for organisations, but leave structures of inequality intact and patterns of distribution largely unchanged”
Get involved with this work
Open and Trusting is already being used by over 180 organisations. We now want to understand what it takes for open, trusting practice to translate into more equitable funding outcomes and where we may need to go further. This review is the starting point.
Our next step is to work with by-and-for organisations and funders to test assumptions, learn from what’s already working, and develop practical resources that can be used. If this resonates with your experience or practice and you’d like to shape what comes next, we’d really welcome your input. If you have sector knowledge and lived experience of the issues highlighted in the report (either as a by-and-for organisation or a funder), please get in touch to share insights, examples, or to take part. This information sheet tells you more about what we’re looking for.
Please read the full report for more information on how by-and-for organisations experience funding, what they need, and how some funders are responding.
What do by-and-for organisations need from funders?
The table below summarises how these dynamics manifest in funding relationships and what by-and-for organisations say they need from funders in response.
| How by-and-for organisations experience funding: | What by-and-for organisations need from funders: |
|---|---|
| Rising demand + shrinking or stagnant funding. Communities rely on charities for essentials; by-and-for orgs carry high-stakes delivery from a weaker financial base. Short-term, restricted, trend-driven funding. Constant re-application cycles, strategic drift, limited infrastructure investment, “grant to grant” survival. | Longer-term (multi-year), flexible funding, including unrestricted and continuity funding to stabilise services, plan ahead, and respond to changing need. |
| Funding doesn’t reach community-led groups consistently. Resources concentrate among larger, generalist organisations even within the same issue area. | Targeted and ringfenced approaches that protect funding for by-and-for organisations (not only broad themes), reducing diversion to larger providers. |
| Competitive, burdensome grant-making. Repeated bidding, heavy reporting, procurement norms and “scale bias” drain capacity and privilege established organisations. | More straightforward, accessible, proportionate processes (lighter applications/reporting; funder assumes more assessment burden; accessible comms; requirements scaled to grant size). |
| Distance and misunderstanding. Limited funder familiarity with communities can deepen gaps in understanding and shape the funding relationship. | Relational grant-making: transparent, responsive communication; feedback loops; mutual learning; culturally competent and trauma-informed practice. |
| Undervaluation and narrow definitions of by-and-for expertise. “Good grantee” assumptions and default professionalism/evidence norms can undervalue lived experience and community-rooted ways of working. | Recognise lived experience as expertise (not anecdote). Shift from consultation to partnership/co-leadership in design and learning; value community-defined outcomes and contribution. |
| Risk and trust dynamics. Concerns recur about where risk sits in funding relationships; mistrust can flow both ways when organisations feel overlooked or misunderstood. | Reframe risk toward impact missed (harm/needs unmet when funding doesn’t reach those closest to communities) and share risk rather than pushing it onto small organisations. |
| Capacity strain, infrastructure gaps, burnout. Core systems unfunded; emotional labour/trauma load; higher support needs (including accessibility) without resourcing. | Support beyond the grant (funder-plus): capacity-building, infrastructure, monitoring, learning and evaluation support, leadership development, peer learning, and funded wellbeing/collective care and accessibility costs. |
| Moving forward: embed equity and learning across the grant-making cycle: explicit equity goals, adapted outreach/criteria, equitable evaluation and data collection, transparency on outcomes and success rates, continuous reflection and accountability. | |
