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What it takes to invest in responsive grant making

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By Kentse Radebe Deputy CEO, DGMT

The announcement of the USAID funding freeze in January and the subsequent knock-on effects have drastically shifted the funding landscape in South Africa. Globally, the cost of the USAID cuts has totalled approximately R1,4 trillion, and the impact has been felt in other sectors beyond health, including climate change, governance and food security.

A rapid analysis of education focussed organisations funded by USAID illustrated that 30% of organisations had lost funding between R1 – R5 million, and that 26% of organisations had lost funding between R5 million and R50 million. These shifts have precipitated important conversations about access to funding and funding practices in South Africa.

It is important to acknowledge that many of these conversations were catalysed by the shifts that were brought on by the pandemic. The pandemic facilitated a reckoning for funders; the scale of the crisis required a rethink of the status quo on funding practices and questions about how funders could be more collaborative, responsive, flexible and innovative in their grant making process. Examples of this include the acknowledgement that a linear and siloed approach to tackling intractable challenges like education, poverty reduction, and unemployment cannot be solved if there is no recognition of how interconnected these mammoth social challenges are and the related funding implications. To that end, we have seen shifts in funders moving beyond short-term funding agreements and introducing flexible funding mechanisms that support increased levels of agency, responsiveness and innovation.

Another example of these shifts has been the increase in funder collaboratives, where partnership and collaboration are leveraged for greater impact. In South Africa, through the formation of the Solidarity Fund, we saw a whole of society response which saw funders, alongside ordinary citizens and businesses, pooling their resources to support government efforts to reduce the negative socio-economic consequences of COVID-19. These nudges have been critical; however, transformational change can only be maintained if we can prevent the pendulum from swinging back to established norms, patterns and ways of working when it comes to funding and its impact on civil society organisations.

Once again, civil society organisations face an uncertain future as there is increasing pressure to find new funding streams, whilst the important conversation of how we fund has stalled. At DGMT, there are three ways in which we’re trying to think differently about our funding approach.

Acknowledging the power imbalances

As a funder, we understand how our influence can shape the relationship between ourselves and our implementing partners. This often means that we are in a position where we can actively shift funding practices and processes that diminish the agency of implementing partners. Key practices that we
are exploring include right-sizing and simplifying our application process so that applicants are not spending an inordinate amount applying for funding. In addition to this, we’re exploring how we can be clearer about expectations and how we can reduce the reporting and administration burden.

Flexible and responsive funding

Our work in partnership with the Charlize Theron Foundation and the Elizabeth Taylor AIDS Foundation on the Sukuthula! initiative has been an important learning curve. Utilising the practices of trust-based philanthropy to support community responses to gender based violence has highlighted the importance of doing the slow and important work of investing in relationships to facilitate open engagement and allow partners to share feedback on what is and isn’t working.

Incentivising learning and innovation

As a funder, we’re learning with our implementing partners as they figure out what works or needs to be refined. Some of the most important aspects of the learning journey emerge when we discover what did not work or had surprising results. Implementing partners can be reluctant to share these lessons and feedback, as this can be seen as not achieving the intended outcome of a grant. In the funding space, we often don’t encourage talking about failures, but the wicked challenges we’re solving for require experimentation, redesign, and pivoting, and learning is a critical part of the journey. We find ourselves needing to have frank and open conversations with our partners about what didn’t work, and to use that as an opportunity to support the evolution of the work.

There is still more that must be done, and there is a call to action for funders as more organisations face the reality of funding crises. What strikes me is that the golden thread that connects each of these three approaches listed above is trust. Trust is not built overnight. There must be an alignment on shared values and a commitment to a common goal and mission. To do the kind of work that is required to create seismic shifts in reducing inequality and poverty, we must, as funders and civil society organisations, be able to have the difficult conversations about shared power, agency, and accountability.

 

References

 

 This article was first published in Inyathelo's 2025 Annual Report