Grants:APG/Funds Dissemination Committee/Benchmarking analysis

Date Updated: May 24, 2012

The topic of funds dissemination has important implications on the operations of the Wikimedia movement. As such, the Wikimedia Foundation charged The Bridgespan Group with conducting benchmarking interviews on external organizations to understand their best practices and lessons learned in the area of funds allocation.

A note on the usefulness of benchmarking: While exploring the examples and learnings of other organization can provide a starting point for identifying options and highlight the strengths and weaknesses of different approaches, no extermal example will be a perfect point of comparison for Wikimedia to emulate. This is particularly true for the funds dissemination process where we have found it very difficult to find even marginally similar examples of what Wikimedia is trying to create with the FDC. The Wikimedia community is so unique and its approach to deep, decentralized, community-led efforts is a model for others in the field. As such, please read the examples below as a collection of insights and examples that will help us understand what others do, but not likely a prescription of what Wikimedia should do for its own unique community.

Past Benchmark Analysis

Through the 2010 Strategy project case studies and the Movement Roles Benchmarking analysis, leaders from a number of non-profits were interviewed to understand their organization's structure, strategic planning process, and potential implications for the Wikimedia movement. Some of the insights from these interviews have been used to develop our funds dissemination lessons for the Wikimedia movement.

Current Benchmark Analysis

Key Questions

We interviewed representatives from a number of organizations in the months of April and May 2012, asking the following discussion questions:

What is the process for distributing funds across the organization?
- Is it a centralized or decentralized process?
- Who are the key decision-makers? How do they make decisions?
- What role do various entities in the organization play? (e.g., Board of Directors, staff, etc.)
How are funding decisions tied to your organization’s and your grantee’s/chapter’s strategic planning?
What due diligence process is done on funding requests?
How are tradeoffs made between different funding requests?
What monitoring/evaluation process is done after grants have been distributed?

Benchmark Interviews

We have interviewed six organizations to date:

We also had the opportunity to speak to Advisory Group member Kathy Reich, about her grant-making experience at the David and Lucile Packard Foundation and her insights into the FDC process.

Interview with Kathy Reich

There are a number of areas where we have drawn insights and best practices from Wikimedia's own Arbitration Committees:

Wikimedia Arbitration Committee

Lessons from External Organizations

Overall insights:

Many of the organizations we spoke to are grappling with similar challenges as the Wikimedia movement:
- How to get funds where they are needed most
- How to navigate the power dynamic between more established entities and those that are trying to grow (this is often a Global North vs. Global South issue at other organizations as well)
- How to strike a balance between localized action and centralized fund-raising

Despite facing similar challenges, none of the organizations we have had the opportunity to interview have a funds dissemination model similar to the one Wikimedia is proposing with the FDC.

Funds dissemination decision making in these organizations is:
- Largely centralized, although most take care to garner input from local stakeholders
- Iterative, meaning that they involve top-down and bottoms-up approaches to determining how funds should be disseminated to meet local needs
- Managed by full-time, professional employees with expertise in the field of grantmaking

We have identified a few lessons from these examples which are relevant to the design and implementation of the FDC:

Lesson 1: Funding decisions should be tied closely to a defined set of criteria and strategic priorities

Developing a strong set of criteria allows organizations to effectively make trade-offs between projects and invest in projects that are most closely aligned with their mission
- Central American Women's Fund (FCAM) emphasized the importance of having criteria for grantee selection that are closely linked to their strategy.
- IDEX has a very strong set of partnership criteria co-created with input from key stakeholders that is highly linked to their strategy
- The American Red Cross Sacramento chapter developed their own strategic plan against which they make budgeting decisions; this strategic plan is explicitly tied to the National organization's priorities
- As the Global Fund for Women has evolved over time, it has shifted from being responsive to grant requests from the field to actively seeking proposals from groups that meet their internal strategic priorities as set out in annual planning processes

Lesson 2: Effective fund allocation processes consistently engage grantees/local groups or chapters to incorporate their input in decision-making

Organizations interviewed developed strong formal and informal processes that allow them to get input from those who are closest to the ground where funds will be used and who, therefore, have the strongest insight into the needs of their community
- IDEX emphasized that funding from the Global North to the Global South can be idiosyncratic because those making decisisons are not always aware of the greatest needs or best strategies to address them. To combat this, IDEX has built meaningful local engagement by empowering their grassroots grantee organizations to make decisions about what is needed within their own communities.
- At the American Red Cross, Chapters have a President’s Advisory Council that serves as their formal voice with the CEO, but they also engage, interact, and collaborate in more informal ways with their Division/National offices

Lesson 3: While uncomfortable and unproductive power dynamics can exist between grantors and grantees (and among different grantees within a network), one way effective organizations have managed this is by articulating the value of partnership and mutual responsibility to a shared mission

There is a constant power dynamic between the areas that raise the funds vs. those that receive funds
- World Vision emphasized how challenging the dynamic between offices that raise funds vs. those that receive funds can be. World Vision works to manage this dynamic through a partnership covenant and a principle that states all offices are equal regardless of budget or revenue size
- The American Red Cross has developed a budgeting process that prioritizes dispersing resources to the places of greatest need, regardless of where money is raised.

Lesson 4: Funds allocation requires that key-decision makers have the right skill and expertise

Making effective grant and funds allocation decisions does require skill and expertise; all of the organizations we interviewed have professional, trained staff that serve in this role, even in organizations that draw heavily on community and local stakeholder input
- According to IDEX’s experience, it can be challenging to garner this expertise with a volunteer group - pointing to the importance of having full-time staff support the funds dissemination process
- According to the Center for Effective Philanthropy, the typical Case Officer in their data set:
  - Manages 39 applications per year and 49 active grants per year
  - Awards 30 new grants per year
  - Awards $3.6MM in grants each year
- Kathy Reich from the Advisory Group suggested that FDC staff members could play an important role between review cycles in providing in-kind support and capacity building assistance to those requesting funds. Staff could also play a role in monitoring and evaluation - ensuring standards of excellence and strategic alignment.

Lesson 5: Personal biases can influence funds allocation decisions

In engaging their local stakeholders in grantmaking decisions, organizations we interviewed were careful to guard against personal bias which might interfere with funds flowing to where they could do the most good.
- To ensure the best grant-making decisions are made through their Peer Review Process (in which former grantees have the opportunity to vote on and select future grantees), FCAM removes the name and location of the organization requesting funds from each proposal. This has been essential to ensure the selection process is not a popularity contest. In addition, FCAM staff reserve the right to make a few grants themselves to organizations that are not selected through the Peer Review process (about two or three of the twelve to fifteen organizations they fund are selected by staff rather than through the Peer process). This is to ensure that groups that are working with populations that are a high priority for FCAM (e.g., the transgender community, sex workers) but against whom there is strong cultural bias or discrimination can receive funding to carry out their work.

Lesson 6: Due-diligence and monitoring processes can be designed to improve the effectiveness of both the grantee and the grantmaking organization

Monitoring and evaluation in its traditional form can often feel like a one-way street. Some organizations we had the opportunity to interview have interesting practices that deviate from this norm:
- World Vision ensures quality control throughout their network through a peer review process in which every office receives a visit from another office once every three years. These peer-to-peer site visits are an opportunity for one office to provide an assessment of whether another office is aligned with World Vision’s core values and practices. This makes the responsibility for alignment and accountability more shared across the network rather than just the responsiblity of the central office.
- IDEX continually seeks insight from their grantees through surveys and interviews to ensure that they are meeting their grantees' capacity building needs effectively

Lesson 7: Other organizations minimally compensate their volunteer grant advisors for some communications and/or travel expenses.

Both Global Greengrants Fund and Global Fund for Women rely upon an international network of advisors (who are experts within their respective fields) to provide insight into grant-making. In both cases, advisors are minimally compensated for the expenses they incur in the course of their role. However, advisors are not compensated for their time invested.