Can Flexible Funding Lead to Better and Longer Lasting Results When it Comes to Water, Sanitation, and Hygiene Interventions?

On June 7th, a rather rainy day at the Philanthropy House in Brussels, Belgium, Improve International convened a group of 14 people for the 3rd gathering of the Funder Collective for More Effective Partnerships. Over coffee, they met or got re-acquainted. Then representatives of three different types of funders – the Stone Family Foundation, Vitol Foundation, and Viva con Agua — talked about their take on a similar topic: Can flexible funding lead to better and longer lasting results when it comes to water, sanitation, and hygiene interventions? 

By Susan Davis

An active discussion led to the following key takeaways:

“Do we want organizations who are good at pitching and writing proposals, or organizations who are good at achieving results?”  

One foundation’s golden rules for funding are: tenacious management; a compelling service or product; and potential for breakthrough. Once they find an organization they believe in, they fund towards its business plans or annual plans, even through challenging times.

“Pilots never fail. But they never scale.” 

Thus, flexible funding is less about supporting projects, and more about supporting people to achieve impacts.

Flexible funders are patient. 

They don’t require rapid results or a high number of beneficiaries.

Flexibility is great but adds complexity.

Establishing clear goals at the beginning makes it harder to hide failures. Funders would like their grantees to share what has worked and what hasn’t more openly and to talk about what they would change for the next time [The pre-mortem is a good tool for this.]  Not all organizations are willing or able to do this because of concerns for their brand or implications on future fundraising.

Flexible funding tries to position grantee as a partner.

Funders can support non-profits and entrepreneurs beyond finance, for example by connecting them with other groups working on governance or management issues or making available the expertise of the company staff in developing revenue streams, legal, human resources, analytics, supply chain, or logistics.

To contribute to learning and communication, funders should invest in robust, yet efficient monitoring and evaluation.

Because approaches are so varied, some funders ask the grantee / enterprise to define the most relevant impact indicators.

The role of philanthropy is to influence “big funding” (e.g., national governments, multi-laterals, bilaterals).

Funders with flexibility and openness to risk, like foundations, can support and document results of innovation should be around systems and processes, and ideally influence the institutional funders. One foundation seeks activities that are others find hard to fund, where their funding can make the most difference.

There are formal and informal collaborations of funders.

Advantages of funders connecting to each other include:

  • Better supporting the enabling environment or systems strengthening, streamlining processes for grantees, and increasing efficiency for funders themselves.  For example, once trust has been established, funders can share due diligence, which eases the burden on grantees / social enterprises.
  • Reducing duplication of effort for grantees, such as sharing reporting requirements.
  • Increasing efficiency by sharing ways to measure social return on investment.
  • Spreading risk by co-funding untested activities, those in unstable environments, or with low profitability.

As the gathering concluded, the sun came out, new connections were made, and the attendees left with new insights.

Resources

Three golden rules: Our starting point for considering successful partnerships by Paul Gunstensen, Stone Family Foundation
Why Transparency of Philanthropic Funding Matters by Michael Jarvis, Transparency and Accountability Initiative
Opinion: Want to improve development outcomes? Anticipate the failures. Here’s how. by Susan Davis, Improve International
The Power of Incentives: Lessons Learned from Designing and Implementing Results-Based WASH Programs by Elynn Walter, Guy Howard, Jan Willem Rosenboom, Jeff Albert, Susan Davis, Yi Wei

Next event

Will likely focus on financing for water.  New York, NY, USA:  September 2018 during UN General Assembly (September 26 or 27)

Susan Davis is founder and Executive Director of Improve International.