#134 Mar/Apr 2004

Power of (Ex)change

An organization dedicated to “youth empowerment” sends a proposal to a sympathetic funder. The proposal contains this sentence: “We seek nothing short of revolutionary social change.” They then describe their […]

An organization dedicated to “youth empowerment” sends a proposal to a sympathetic funder. The proposal contains this sentence: “We seek nothing short of revolutionary social change.” They then describe their program which is an after-school “school” that engages teenagers in community improvement projects, and uses that as a way of getting teenagers to think about the root causes of poverty and racism. The program officer advises them to take out the sentence I quoted, as well as any language about root cause. “Our board will like the community improvement projects, but the other stuff will make them nervous.” The development director agrees to the changes. The proposal is funded.

Two years (and two grants from this foundation) later, a teenage participant is invited to address the board of directors of the foundation. He begins his speech, “We seek nothing short of revolutionary social change. From my involvement in the program, I learned how to think about the root causes of poverty and racism.” Although they are polite to this young person, afterwards several board members are upset with the program officer for not telling them that this group is “so radical.” She in turn is upset with the development director for not “helping” (censoring) this young person with his speech.

This story raises interesting and difficult ethical issues in the grantor/grantee relationship. The root cause of the problems between grantseekers and grantmakers is the failure to insist that the relationship be recognized as one involving an exchange. All successful fundraising is built on this premise – your organization is being paid to do something that a person, a foundation, a service club, the government or a corporation could not do on its own. Your organization exchanges its work for funding. When organizations need money, they begin to see funding sources as more powerful than they are, and they compromise the exchange. Imagine the scenario above if the power relationship were reversed. The foundation gives the grant and the youth empowerment organization insists that the grant agreement say, “We are funding a social change revolution” or they won’t be able to accept the money. No, that will never happen, but the fact that we can hardly imagine it without laughing is a problem.

In our work, we far too often see funders as having more power than we have because they have money and we need it. When we can, we conspire with friendly program officers to write something that will “get past” the board. Some have advised getting out of this trap by thinking of funders as partners or investors. The idea may be helpful, but it does not solve the problem – which is not how we see funders, but how we see ourselves. We must believe that our work, as we define it, has value and we take that work into our “marketplace” and offer it to donors. Some of them buy and some of them don’t. There are always more buyers, but there are few other organizations doing our work.

When we approach our work from the viewpoint of exchange, we affirm our power to negotiate with funders, rather than just agree with what they ask us to do. The premise of the exchange is that funders need the organizations they fund as much as the organizations need their funding. When a nonprofit does excellent work with a grant, credit accrues to the funder for choosing the organization wisely. A good organization makes a funder look good.

In the example above, the development director could have agreed to take out the somewhat hyperbolic statement, “We seek nothing short of revolutionary social change” without changing the project. It is when he agreed to take out references to their “root cause analysis” that he compromised the work of the organization. This youth group uses their projects to help their participants develop a social justice worldview. In taking that out, the organization essentially lied to the board of the foundation. What if they had insisted on leaving in “root cause analysis” and had not gotten their funding? They could exchange their work with someone else, or perhaps they could ask the program officer to talk to the board, or perhaps they could offer for their teenage participants to make a presentation to the board. We assume that, with consciousness-raising or popular education, we can change or our constituents can change, but not foundation board members. But if we are to change the world we will have to try to change them as well.

By staying in the metaphor of exchange, we don’t risk “getting caught” because we haven’t done anything deceptive. True financial health comes from a diversity of sources. No one source should ever be so important to us that we would change what we do to please that source. Focus on what you have to exchange and it will be clear what can be compromised and what cannot. Have confidence in the quality of the work you do, and you will be able to seek those who really wish to “buy” what you really wish to “sell.”


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