Andreas Ulfsax works for IM (www.imsweden.org/en). IM is a Swedish member-based development organization supporting civil society organizations in 10 countries. As a Change Developer, he focuses on getting everyone to experiment more. For contacts andreas.ulfsax@imsweden.org
This blog post describes how IM experimented with Power Funding, a new funding modality, and the surprising results.
Can we fund better than Core/Institutional funding?
As an organization keen on supporting civil society, we have always been interested in our funding methods. Historically, we mostly provided our partners with project and program funding. But in recent years, we shifted, and now most of IM’s 70+ civil society organizations receive core/institutional funding. We see the effect; Core Funding builds civil society.
However, we have not seen the more transformational effects that we had hoped for. We therefore decided to dig deeper together with our partners in Palestine to get a more nuanced picture.
“Core funding still comes with a lot of demands that push us to be like other organizations.”
“We employ English-speaking persons for writing plans and reports, instead of the one best suited for the job.”
Not really the power shift stories we wanted…
Core funding, it seems, comes with a lot of assumptions. One assumption is that civil society actors need to be professionalized (with INGOs serving as the standard) and another is that the quality of services increases under the guidance/control of an INGO.
We also discovered that we love our documents. I do, and maybe you reading this as well? When partners’ documents are safely uploaded on our servers, we feel safe. And the organizations we support respond to this by investing in plans, reports, and organizational policies.
Power Funding; a better way to fund?
Together with our partners in Palestine, we innovated a new funding modality: Power Funding. Why that name? We hoped that the funding would shift power from us towards our partners.
So, what is Power Funding? In a nutshell, there are no proposals, budgets, and reports. The only compliance demands are a contract and an audit. Assessment is still done prior to the contract, and as always, we work closely with our partners.
Utilizing our own funds, IM supported two Palestinian civil society organizations during 2023. One was a new partner to us, a brilliant human rights organization. And we gave Power Funding to an informal/unregistered network that we have supported for several years. While these organizations are very different, they had two similarities. Both organizations are passionate change-makers, and both had previously received core funding. To capture what happened, we carried out an external evaluation.
Give it a go and guess, what was the result of the evaluation?
My own guess, when we planned this in 2022, was that partners would invest in building their organizational capacity (I was wrong…).
In the external evaluation, we compared Core funding with Power funding. The results were clear, consistent, and surprising.
Power Funding led to increased responsiveness towards the communities partners work with.
“Power Funding are intertwined between shifting power from the donor to the partner, in parallel to sharing power between the partner and the rights holders.” /Evaluation
“for the first time, youth volunteers approached us not the other way around, it’s because we were representing the street truly” /IM Power Funding partner
Why was that?
These results may seem surprising at first glance. The compliance demands are not that different between Power Funding and Core/Institutional Funding. How could the lack of reports/proposals/budgets to a single donor make any difference?
The difference was that we took less space. Without having pre-arranged results to deliver on or budgets to spend, partners looked outward. They were able to use the funds to quickly respond to emerging needs that they did not know about in 2022. The Palestinian civil society faces extreme pressure, and Power Funding was a way to handle that pressure.
Why is this important?
Core funding makes our partner more flexible. Power Funding takes this a step further by enabling partners to redistribute power to the constituencies they engage with. We will use these insights to fund our partners in a better way.
I would like to close this with a gentle encouragement to experiment more in this sector. It’s how we learn in a complex world.