As grant makers seek to do more to advance equity, many have yet to revise one element of their due diligence processes that often inadvertently steers money away from the very people and organizations most likely to bring about meaningful change.
The problem comes from the way foundations guard against conflict of interest.
We all understand the need for conflict of interest in policies: In government, we want to ensure decision makers don’t award government contracts to companies they financially profit from. In the corporate sphere, we don’t want financial advisers steering clients to options that benefit their own bottom line.
And in the nonprofit world, we all understand why traditional rules about conflict of interest could make sense: You shouldn’t hire your best friend as a consultant without an open recruitment process, for example.
Yet we often see grant makers applying conflict-of-interest restrictions without thinking. In so doing, they forget that the networks of relationships are often what strengthens the effectiveness of their grant seekers.
The legal documents and rounds of reviews grant makers pursue to avoid conflicts of interest are cumbersome for grantees and seem mainly designed to avoid risk, not to advance the social good. These legal processes are designed to reassure everyone that the foundation has a transparent and accountable process. But in reality, they don’t guard against wrongdoing – and they often undermine core values that are essential in philanthropy: trust, care, and true accountability.
But the real reason to worry about the damage done by conflict-of-interest policies is that they have become an excuse (either conscious or unconscious) not to engage with more innovative, power-shifting forms of philanthropy, such as participatory grant making.
In participatory grant making, people who have faced poverty or gentrification or whatever problem a grant maker seeks to tackle are the ones who make the decisions about how a grant maker awards its money. Traditional grant makers sometimes raise concerns about potential conflicts of interest in this approach: “What if the grant-making panelists have connections to the organizations they’re supposed to be reviewing?”
A Question of Objectivity
Asking that question means we assume that traditional grant makers (such as trustees or staff) are objective in their decision making, and that others are not. However, the notion of objectivity when it comes to creating social change is complex. For instance: Can a woman with a disability be “objective” about work that seeks to protect or enhance her rights? Or would her subjectivity — her knowledge and her expertise — mean that she is more likely to understand what rights are needed? In participatory grant making, this subjectivity (her day-to-day experience) is considered a feature, not a bug.
In our own work as participatory grant makers, we support efforts to build movements because we believe that transformative social movements pave the way toward justice and equality. We know that these movements are frequently led by people who experience various forms of discrimination. We owe a debt of gratitude to those marginalized people who are often at the forefront of social change, such as queer activists Marsha P. Johnson, who in the late 1960s helped lead the Stonewall uprising in the United States, a major milestone in the struggle for LGBTQ rights, and Margot Szutowicz in Poland, whose arrest sparked massive demonstrations there last summer.
Social movements like those led by Johnson and Szutowicz are effective because they are grounded in communities that form around solidarity, shared values, and interpersonal ties. Love and friendship are important drivers of social change. Communities are built on relationships, and this should be recognized as something to be nurtured rather than something that clouds our ability to be objective.
Traditional concepts of conflict of interest did not prove useful to Poland’s FemFund, which was created in 2018 by a collective of feminists to become a community-led and participatory grant maker, including one of us (Pocheć ). The fund found that neither we nor applicants feel comfortable with the term conflict of interest and the politics it implies. What’s more, we learned that the conflict concept created a lot of confusion for grassroots activists and undermined efforts to build trust. FemFund learned from the evaluation of its first grant round that participants appreciated the sense of solidarity the approach encourages. One activist shared: “We were very happy to be able to see other groups’ projects. We consider them sisters in our fight for women’s rights.”
After experimenting with different approaches, FemFund now works to manage any discomfort connected to someone’s position and power and to openly reflect on interpersonal relationships. It also encourages discussion about privilege, fairness, and justice and the conflicts these may raise. It does not use a standardized conflict-of-interest template to facilitate such important conversations.
Power Shift
If we are committed to transforming power in philanthropy, we are required to re-examine our tools, practices. and perceptions. Grant makers certainly should ensure that funding programs are transparent, consistent, and accountable, including considering ways of avoiding anyone taking advantage of their position in the decision-making process. However if we value the expertise of the people we serve, we must evolve our approach to conflict of interest. This involves re-examining the power dynamics that underpin engagement and supporting decision makers to openly acknowledge the power they hold.
As Ramatu Bangura, executive director of the Child Rights Innovation Fund, told us, her organization rejected the use of the term conflict of interest and now asks grant seekers about their “relationships of value and interest.”
This approach acknowledges that the relationships we hold are not necessarily a bad thing that should be taboo. Rather, by enlisting people who have direct experience with a challenge or problem as part of the decision-making process, we are unlocking extensive expertise and knowledge. In fact, our relationships, networks, and subjective knowledge are useful, an expertise that helps guide evidenced-based decision-making.
It’s time for all grant makers to acknowledge that our family, financial, and other personal or professional interests may not be suspicious but may actually be valuable. Grant makers should not begin with the assumption that people cannot be trusted but should instead start with the assumption that people participate because they believe in the cause.
Grant makers must have a consistent and transparent processes to protect individuals, organizations, and movements from risk or harm. However, this doesn’t require adopting practices from the corporate sphere, where distrust is codified. Instead, grant makers could urge proposal reviewers to speak up when they are involved in a group that has applied for funding and discuss openly what their ties to an organization may mean. This creates a culture of active transparency, an enabling environment in which people feel safe to explore all types of potential conflicts.
While conversations about mutual aid, solidarity, and trust are growing, particularly in the wake of a pandemic that demands new ways of working, outdated notions of conflict of interest remain. We must have courage to interrogate our assumptions and to question whether the tools we inherit serve a purpose.
Rather than using blunt conflict-of-interest processes to guard against the possibility that a grant may go to the “wrong” group, we should consider a more salient danger: If care is not taken, conversations don’t take place, and suspicion grows as a result, we’ll undermine the movements for change we seek to strengthen. If we can build the trust needed to conduct honest conversations about conflict, risk, and power, we will be better able to navigate these conflicts when they arise.