Disruption Isn’t Always the Answer: Why We Embraced Traditional Grant Cycles

How are we transforming philanthropy? This question and its many answers have become an increasingly popular topic of conversation among progressive funders in the past few years.

Embedded within this question is a clear desire on the part of funders to be doing something new and radical. In a field that has existed for a century, many newer funders in particular, like Kataly, seek to innovate with the goal of making our work more transparent, understandable and respectful to the communities we serve.

When the Kataly Foundation was founded in 2018, we committed ourselves to applying thoughtful, intentional, justice-centered values in both our programmatic and operational work. Part of that commitment means we do our best to question the assumptions that undergird many philanthropic practices that are often seen as unchangeable. Instead of turning to de facto systems and processes, we experiment with different approaches in order to see whether certain practices are in fact “best” or whether they are merely more convenient for funders.

What we’ve uncovered over the past few years is that the answer is not as simple as we initially thought. The reality of wealth redistribution is complicated in ways we had not previously understood. One example can be found within the seemingly mundane world of grants management: grant cycles.

Oftentimes, we may think that grantees are not interested in the ins and outs of our grantmaking administrative processes, and how and why we decide to make changes, but the truth is that these decisions have a significant impact on grantee organizations. Grants management platforms, grant agreement letters, payment schedules — on their face, these are not the parts of philanthropy that typically inspire people. But it is these very systems that can actually transform the relationship between a grantee and a foundation.

This year, Kataly made a change in our grants management process by implementing grant cycles rather than rolling grants throughout the year. Initially, we chose to make grants on a rolling basis to be as responsive to the needs of social movement groups as possible.

However, as our grantee pool grew, it became unsustainable for our grants management team to constantly process grants. As a spend-out foundation that will only exist for a finite amount of time, we want to be lean and nimble without creating an unnecessarily large structure and bureaucracy. Part of that means having a relatively small team, which means we make choices that create sustainable conditions for our workload.

When we were processing grants on a rolling basis, an existing or prospective grantee could come to us at any point during the year with a funding request, and with the expectation that we were not bound by a particular grantmaking timeline. Moving to a grant cycle process means in some ways that we are putting up more boundaries around our grantmaking, which is not something we take lightly.

Our change to grant cycles is relatively new, so we are still learning the benefits and harms of this decision. But thus far, we have been surprised by the realization that implementing grant cycles has actually improved our ability to do trust-based grantmaking.

For example, as we move closer to redistributing all of our resources, we need to have a process of reconciling what remains of our assets. Grant cycles allow us to have better financial reconciliation protocols and a tighter process for tracking money in and money out. One component of building trust is being able to share information quickly and accurately, and setting expectations that we can meet. Knowing the amount of funding that we still have to redistribute impacts how we can efficiently and transparently forecast future grant commitments to grantee partners.

One of the reflections we are sitting with is that as we endeavor to “transform philanthropy” and do things differently, there are moments when we realize that there are certain conventional practices, like grant cycles, that are actually helpful for us. We’ve learned that disruption and creating new systems is not always the answer.

Kataly is a team made up of practitioner-funders, meaning many of our staff have worked within the movements that we now fund. Before working at a foundation, we had frustrations with the bureaucracies of philanthropy. Who set these arbitrary deadlines? Why are the same questions asked multiple times? How do funders actually use all of the information they insist grantees share with them?

Coming out of social movements, it is easy to see the entire field of philanthropy as unnecessarily bureaucratic and needlessly slow-moving. And in many cases, that is the reality. But it’s taken a sometimes painful process of becoming more self-aware to understand the limitations that foundations, no matter how well-intentioned, come up against.

Understanding our limitations is essential, both for funders and for the organizations seeking funding from us. One of the ways funders can create distrust and harm in relationships with grantee partners is by making commitments they can’t keep and setting expectations they can’t fulfill.

For grantee partners, understanding how and why foundations operate the way they do can support their self-advocacy in relationships with funders. Grantees can be empowered to push back on unrealistic deadlines and ask questions about why certain information is necessary to provide. Sharing information from our perch as funders can also create ways for grantee partners to understand why we have certain systems and practices in place. This knowledge gives grantees the full context of our decisions, at which point they can decide for themselves whether it’s a practice they want to push back on or support.

Lack of information fosters a relationship built on silent acceptance of what is unclear and unknown based on the problematic power dynamic experienced between funders and grantees. If we are truly committed to building trust and building power with grantee partners, we must embrace transparency and information sharing, not just in our grantmaking, but across all areas of our work.

As funders, our desire to be transformative may be well intentioned, but it is often tied to our own self-interest in shaping our legacy, wielding influence and burnishing our reputation. Transformation should be in service of systemic change, and is facilitated by genuine human connection. Rather than attempting to transform the field of philanthropy for the sake of appearing “disruptive,” we should interrogate why we are focused on changing existing systems, and for whom. If we conceive of ourselves as transformative, it can feel uncomfortable when we do something that is decidedly status quo. But with that self-awareness, we are able to be honest about the constraints we face within philanthropy, allowing us to be in more genuine relationship with the organizations we fund.

Danielle Royston-Lopez is the Grants Officer at the Kataly Foundation. In her work, Danielle seeks to bring the principles and values of trust-based, relational philanthropy to the realm of grants management.

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