Radical Flexibility: Strategic Funding for the Age of Local Activism

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Executive Summary

Violent conflict is at a 30-year high. Building peace in any country requires local leadership, broad participation, and unwavering effort. Yet, the people, communities, and organizations best equipped to prevent violence and sustain peace are not receiving the recognition, respect, or resources they need from the international community. This is a situation that funders – including traditional government and private funders as well as new donors interested in social impact and solving big global problems - can and should change. Doing so offers the potential of ushering in a new era of more effective, locally led peacebuilding and conflict transformation. To achieve this, a radical reevaluation of the current system of donor funding is needed, as well as meaningful investment in new approaches supporting locally led efforts.

Peacebuilding is dedicated to resolving conflict non-violently, rebuilding lives after violence and ensuring local communities have the skills and resources to make peace a reality. This may be realized through a wide range of efforts, including directly mediating local conflicts, helping gang members and child soldiers adapt to civilian life, and empowering women in all realms, including business and politics. Despite violence prevention and resilience-building being key to any effective intervention, current funding is largely directed at reacting to, rather than preventing, conflict. Prevention or transformation includes activities that address the potential root causes of violence, such as human rights abuses, the inequitable distribution of land and other resources, and the marginalization of communities from democratic processes.

Local organizations on the frontlines of conflict are often the actors best equipped for peacebuilding and conflict transformation. Yet, they are systematically neglected and marginalized from the international peace and security funding ecosystem. As the Foundation Center’s – now Candid – State of Global Giving report reveals, of the $4.1 billion that US foundations gave overseas between 2011 and 2015, just 12% went directly to local organizations based in the country where programming occurred. Peacebuilding in general is already underfinanced, with private donors spending less than 1% of the almost $26 billion in global giving on peace and security writ large, including peacebuilding and conflict prevention.
Pathways for Peace states that targeting resources toward just four countries at high risk of conflict each year could save $34 billion in foreign aid budgets. In comparison, spending on responses to violent conflict through peacekeeping and humanitarian crisis response operations in 2016 was $8.2 billion and $22.1 billion, respectively.

The United Nations, along with many others, has noted that successful strategies to address violence and conflict should place local actors at the forefront. Furthermore, research has demonstrated that in complex operating environments, supporting civil society to create their own solutions is often the most constructive path toward sustainable social change.A2019 report examining more than 70 external evaluations found that local peacebuilders demonstrated significant impact in preventing, reducing or stopping violence; improving relationships among citizens (i.e. horizontal relationships); and improving relationships between citizens and those who govern them (i.e. vertical relationships).

Grants are the backbone of donor support to civil society organizations, yet they are akin to using analog technology to support social change in a digital world. Grants are an outdated and ineffective tool if the funds they provide are not used with great flexibility. Indeed, this report argues that the prevailing foreign assistance paradigm has led to three interrelated problems: 1) an antiquated and calcified global funding system; 2) inadequate funding for local actors; and 3) funding that is poorly structured for the purposes of effective action and impact. In short, the current approach constitutes a bad business model. Lack of investment in local efforts undermines the billions of dollars spent on other types of intervention, creating competition instead of collaboration and forcing small organizations to waste valuable resources on constant fundraising based on immediate-term success. Through applied experience, prior research on donor financing, 25 qualitative interviews and a three-day online consultation with local actors from all over the world, this project highlights the funding approaches that hold the most promise in assisting local actors to prevent violence.

Donors utilize a range of programmatic models to effectively support local organizations, from participatory grantmaking to seeding community foundations to funding thematic or geographic ‘clusters’ of organizations and they also rely on several key strategies. The seven strategies proposed here explore: 1) promoting more participatory approaches to funding; 2) cultivating authentic partnerships; 3) encouraging funders to support improvement of systems rather than provision of services; 4) letting local partners lead while donors facilitate their work; 5) shifting administrative burdens to funders by eliminating open calls for funding, or by allowing local organizations to submit limited and/or existing organizational documents instead of creating new documents for each donor; 6) providing support to movements and collective action, including within the donor community; and 7) adopting longer-term and “radically flexible” funding approaches, such as creating flexible pots of money that can be allocated rapidly, enabling partners on the ground to change programming plans as circumstances change. Some of these approaches are relatively new (innovative finance tools, such as outcome funds and social impact bonds), others less so (participatory grantmaking, community-led financing). Irrespective of age, none of them have taken hold as standard practice. Moreover, local organizations are forced to waste resources on constant fundraising that is based on an ability to demonstrate immediate-term success. Donors must also use significant resources to monitor grants using traditional approaches and are often not reasonably able to keep up with vast piles of quarterly reports. In effect, we are using analog technology to support social change in a digital world.

This is an important set of practices; yet, it’s not enough to shift the power dynamic in the international funding industry. This report is a call to action, also outlining how a groundbreaking new fund is needed to address the lack of funding for local actors. This proposed new fund combines a number of promising approaches: community-led financing; amplifying the principals of donors that practice partnership and flexibility in grantmaking; and developing innovative finance tools to sustain peace. In doing so, it articulates which strategies are the most viable for supporting local organizations preventing violence. In practice, this means giving local organizations radically flexible tools which will enable local actors to better generate, implement, and scale their own solutions.

There is now a significant body of evidence demonstrating that community-led financing – which includes such methods as supporting community foundations – works. Community-based financing is more sustainable than traditional grant funding, as it allows communities to increase and transfer resources, or find new revenue streams. Local actors and donors who utilize what the author terms “radical flexibility” in grantmaking, including providing core support with limited administrative burdens, conclude that they get a higher return on investment. This is because organizations are neither locked into programs that are not working nor required to spend excessive time preparing supplications, fulfilling project requirements and raising money instead of implementing their to work to prevent violence and conflict. Innovative finance approaches present interesting models because they have the potential to attract new sources of funding not bound up by the old constraints. They also flip the current foreign assistance paradigm. For example, in outcome-based funding donors and investors are only concerned about whether the project achieved an agreed-upon set of objectives. In contrast, rather than depending on rigid monitoring and evaluation plans and intermediary outputs and outcomes, this model provides flexibility for local actors to shift programmatic activities as the original plans evolve and to report on them as they unfold.

In sum, this report argues for an approach to sustainable peace that inverts the current power dynamic between funders and local recipients. This will ensure greater agency and leadership at the community level, while allowing donors to play an effective and sustainable supporting role. A world with less violence is possible. The fundamental question arising, then, is how can the international community and specifically funders help? More resources for local actors is a requisite in an absolute sense; however, money is really a proxy for our values and priorities. What we really need is a movement that amplifies effective donor assistance strategies to local organizations. This movement should ensure greater agency and leadership at the community level, allowing local actors to make decisions about how to address the challenges they face in their own environments and donors to play a more impactful and sustainable supporting role. Money is one piece of that power dynamic.