Trusting funders are not letting go of impact

Back in April 2020, hundreds of UK funders pledged to “stand with the sector” and make changes to the way they fund in response to the Covid-19 pandemic. At Esmée we dropped grant restrictions, had conversations instead of asking for reports, and released payments more quickly. As we all struggle to get back to “normal”, some funders might be feeling the pressure to move back to their old funding habits. We want to question this move, and make the case for open and trusting grant-making. We believe that redefining funders’ relationships with the organisations we fund – and basing them on trust – will not just improve those relationships, it will also have an effect on the difference we can make together.

Open and trusting grantmakers are letting go of some of the restrictions and demands around funding – but they are not letting go of impact. They – and we – are deeply committed to understanding impact, and working out how to increase it. No one goes into social action not caring whether they are making a difference or not. But understanding what ‘making a difference’ looks like, and who gets to decide what good looks like, is far from straightforward.

How can funders be high trust and light-touch, while also building a picture of the difference they – and the organisations they support – are making? For us, the answer is not necessarily ‘impact measurement’. We are sceptical of this approach for two, inter-connected reasons.

First, a principle that sits at the heart of the open and trusting movement is – funders don’t know best. Foundations must let go of the idea that they are best positioned to decide how change should happen, who is best positioned to lead that change, and perhaps even which outcomes are most important to prioritise.

Second, we believe that impact measurement alone is too simplistic an answer to complex questions about how best to decide what to do next (as a charity) or how to deploy future funds (as a funder).

Impact measurement is not the same as evidence of progress – and, for funders, certainly not proof of the impact of our specific support. We sit within a complex environment of factors, people and influences – all of which affect change. At Esmée, what we look for are indicators of what has helped or hindered progress, and understanding of how that happened. In line with our commitment to the 2019 Better Reporting principles (co-produced by IVAR and Esmée with foundations and funded organisations) we encourage the organisations we fund to share impact or board reports they’ve already written, rather than using our template.

Funders can collect a whole basket of intelligence – a mix of formal evaluations with conversations and reflections, research, statistics, qualitative and quantitative outcome data, case studies, structured surveys, beneficiary views and many more – that will help us to make decisions about the best contribution we can make to support positive outcomes. In other words a ‘strategic learning approach’, where good learning leads to action. An approach that is deeply interested in ‘impact’, but which does not privilege metrics over expertise and lived experience in the complexity of social change.

In open and trusting grant-making, it is no longer in the gift of funders to dictate outcomes or prescribe methods. Expert organisations, initiatives and collaborations can be trusted to know best, and can be freed to adapt and adjust as things change. They can also be trusted to be thoughtful and reflective, to collect useful data, and to share it as part of their own commitment to improve the quality of what they do. And funders can then be trusted to apply the principles of strategic learning to their own judgements about what, where and how to fund.

Let’s move together towards learning systems that are genuinely useful and, most importantly, don’t set funders up as auditors of social progress.

Join our community of open and trusting grantmakers, working towards more flexible funding practice.