Project by Projects

Over the past few years, I have spent a fair amount of time thinking about funding from different sides of the table. I have worked within organisations seeking resources, supported programmes financed by major foundations, advised institutions on strategy, and, during my time at the Wikimedia Foundation, sat squarely in the seat on funder side of the relationship. That work involved helping people across a global movement translate a broad strategy into projects that could actually move particular recommendations forward.

One major lesson I have taken from that experience was simply that the quality of the conversation before the application often shaped the quality of the funding opportunity that followed. When people reached out before submitting a Movement Strategy grant, we could talk through what they were actually trying to change, where the idea connected to the wider strategy, what a realistic outcome might look like, and whether the proposed scope made sense. Almost without exception, those conversations produced stronger applications because the thinking had already been tested before it was committed to paper.

I have had several reasons to return to that experience of late, because the funding environment around global development work is particularly constrained. Organisations are closing, programmes are being cut, teams are shrinking, and many funders are receiving dramatically more applications than they can possibly support. At precisely the moment when there is less money and greater competition for it, both funders and organisations are spending enormous amounts of time trying to find one another, understand one another, and determine whether there is a realistic basis for a funding relationship.

That has led me to this learning and hypothesis. I have now come to believe that the funding ecosystem should work on redesigning itself into something closer to: building the impact community around the change you are trying to achieve, before building the portfolio.

When I was supporting Wikimedia Movement Strategy implementation, the funding challenge was not initially a shortage of resources. In the early period, there was more funding available than there were developed proposals ready to use it. 

The Free Knowledge movement is full of highly skilled and specialised people working across languages, countries and thematic areas, but it is also a complex and relatively insulated ecosystem. Simply publishing a grant opportunity did not mean that people would automatically understand how their work connected to one of ten Movement Strategy recommendations and 47 initiatives, or how to translate an interesting idea into an intervention that would move one of those initiatives forward.

I therefore spent a good amount of time letting people know the funding existed. I wrote posts, approached people already active within the movement, and worked alongside a multilingual team of global facilitators who were closely connected to different communities and regions. That outreach was important because people first have to understand that an opportunity exists, recognise themselves as someone who could plausibly access it, and see how the work they care about might connect to the funder’s broader ambition.

My approach gradually became: if you are interested, let us talk first.

Those conversations were not primarily about budgets or proposal language. They were about the strategic logic of the idea. What are you actually trying to change? Which part of the Movement Strategy does this advance? What would be different if this project worked? Is the scope realistic for the time and people available? What is the smallest useful thing that could be tested before building something larger?

Applicants who used those conversations well generally arrived at the review stage with much clearer proposals. Those who received similar guidance but did not address fundamental questions about scope, outcomes or strategic fit were more likely to encounter the same concerns from the broader review process. I was not deciding grants alone, so this was not a matter of applicants learning how to give me the answer I wanted. The conversation simply allowed them to test their thinking before asking others to assess it formally.

That experience, as well as the experience supporting successful proposal applications, taught me that a proposal does not have to be the first meaningful conversation between a funder and the people doing the work.

Anyone who has spent time fundraising will recognise the standard advice. 

Research the donor. Understand their strategy. Learn what they have funded before. Study the language on their website. Find out what they mean when they say they are interested in systems change, equity, resilience, innovation or locally led development. Build the relationship before you submit anything.

Most of this is sensible. Organisations should know who they are seeking to work with and why. But I have increasingly wondered why so much of the work of creating that understanding sits with the tightly resourced (time, funding and capacity) organisation.

A foundation may have programme teams, communications staff, research capacity and considerably more institutional stability than many of the organisations trying to access its resources. Yet an organisation can still find itself searching through dozens of pages, archived strategies, previous grant announcements and staff biographies trying to answer a fairly basic question: what exactly are you trying to fund, and what are you hoping will be different because of it?

In a tighter funding environment, clarity becomes even more important. Organisations need to know much earlier whether a potential opportunity is realistic. A team deciding whether to retain staff, reduce its programmes, rethink its revenue model or close a project entirely cannot afford to spend weeks developing applications for funding that was never genuinely within reach.

Funders also benefit from that clarity. If hundreds or even thousands of organisations are competing for a small number of awards, anything that allows people to self-select more intelligently before entering the process reduces unnecessary work on both sides.

I know there are already funders that invest deeply in relationships before making grants. For some in fact, that is essentially the funding model: they build relationships, identify organisations they want to support and do not run open calls at all. The practice of relationship-based funding is therefore not new.

What I am suggesting is that relationship-building and meaningful conversation before an application, should become the norm across the funding ecosystem, without simply creating another closed system accessible only to organisations already known to the funder.

When funders talk about their portfolio, they are usually referring to the organisations they currently fund. That is a smart way of managing investments, but it is not the same as understanding the ecosystem through which they hope to create change.

If a funding organization wants to improve public health, strengthen democratic participation, advance gender justice, build safer technology or improve education, its current grantees are only some of the actors influencing that outcome. There may also be organisations doing highly relevant work that have never been funded, prospective grantees, researchers, technical experts, informal networks, affected communities, local groups and even other funders working on the same problem.

Together, I think of these actors as an impact community.

A grant portfolio would sit inside that community, but it should not define its boundaries. From a strategic standpoint, this means instead of beginning with the question, “Which organisations should we fund?”, a funder can begin by asking;

• Who is already part of the system through which this change could happen?
• What are they doing? 
• What are they seeing? 
• Where are the gaps? 
• Where is work being duplicated? 
• Which relationships already exist, and which ones are missing? 

These kinds of questions are not likely to be answered through desk research alone.

Large funders often have substantial research capacity, and when they need more information they can commission excellent researchers, consultants and evaluators to engage the field and return with findings. The value of that work is immeasurable really, especially when the process requires independence, specialist expertise or synthesis across a large body of evidence. But I have come to believe that there is a category of listening that funding teams themselves need to do.

They need to sit in some of the conversations. They need to go to places where the work is happening. They need to hear disagreement without having it completely cleaned up first. They need opportunities to encounter people who do not already know how to speak the funder’s institutional language. You see, a consultant can facilitate that conversation. They can help identify the right people and create conditions in which people can speak more candidly. But the funder should still be present for enough of the listening to develop its own relationship with the field.

There is a difference between receiving a report that says, “Local organisations are struggling with X,” and sitting with several organisations while they explain what X is doing to their work, why previous interventions have failed, and what they think would actually help.

Research gives you information. Relationships give you context, memory and the ability to continue the conversation when circumstances change.

If I were designing a global funding programme today, I would begin building that impact community before making the first grant. I would identify actors already working in the field across different levels and geographies. I would intentionally include people who operate locally, nationally and regionally rather than assuming that the largest organisations provide a complete picture of the ecosystem. I would bring researchers and practitioners into the same conversations and, where relevant, include communities directly affected by the issue.

A funder would also need to show up honestly (in plain clothes) to explain what they are trying to achieve, what they understand, where they remain uncertain, what they are unlikely to fund and what constraints shape decision-making. Then they should allow the people in the field to challenge those assumptions. Why do this? Because, from those conversations, the programme team can begin to see who is already doing what, where duplication exists, where important work is missing, where collaboration could be strengthened and where funding might make the greatest difference. Only then does the smart portfolio begin to take shape.

That does not mean every priority must be crowdsourced or that the funder gives up its own strategy. Foundations have missions, boards, fiduciary responsibilities and particular expertise. They still have to make choices. But those choices can be made from inside a much richer understanding of the system the funder is trying to influence.

An impact community can also make visible the actors that conventional funding systems frequently overlook. For many obvious reasons, large organizations/institutions often seek national or regional impact, so it makes sense that they look for constructs capable of operating at that scale. But scale is usually aggregated from somewhere smaller. The national organisation does not automatically have meaningful reach into every community. Its impact may depend on local organisations, informal networks, community leaders, researchers or activists whose work never appears directly in the grant agreement.

To dismiss those local actors because they do not yet have the institutional structure required for a large international grant is to miss part of the system through which scale is actually produced. This is where having an impact-community gives the more options. Perhaps a small organisation is doing important work but is not yet ready to receive a large grant directly. Could an established partner subgrant to them? Could they join a consortium? Could a fiscal sponsor help? Could a smaller institutional-strengthening grant help them develop the systems they need? Could their knowledge be incorporated into the work of a larger programme even if they never become a direct grantee?

Instead of seeing organisations simply as fundable or unfundable, the funder begins to see pathways. This approach is important for equity. If only organisations that already look like mature grantees are visible, then the funding system will naturally continue rewarding the organisations that have already learned how to operate within it.

One of the key reasons I would recommend this model is that an impact-community gives funders a way to see across their work that conventional grant reporting rarely provides.

Individual reports are designed to tell you how a particular grant is performing. Did the organisation deliver the activities? What changed? What did it learn? What difficulties did it encounter? These questions remain necessary. Yet a portfolio of individual reports can still miss what is happening across the wider system. If you have spent time and money on impact learning, you understand what I mean.

What is often missed is that when actors working on related issues are in ongoing conversation, patterns start to emerge quickly. Several organisations may be facing the same political or regulatory barrier. Two grantees may unknowingly be building almost identical tools. A geography may have been consistently overlooked. Local actors may be seeing a shift that national organisations have not yet recognised. A strategy that looked compelling eighteen months earlier may no longer match the operating environment.

The community can also surface actors that might otherwise never be seen. Someone may be doing work that strongly advances the programme’s goals but lacks the organisational structure the funder usually requires. Because that person or group is connected to organisations already trusted within the ecosystem, there may be ways to support the work indirectly or help it mature. Therefore, an impact-community becomes more than a relationship-building exercise. It becomes a strategic sensing system.

So instead of waiting until the end of a multi-year programme for an evaluation to reveal how the landscape changed, the funder has a way of hearing and responding to change while the strategy is still being implemented.

The community I am describing is not an annual grantee convening, and it is not office hours attached to an open call. I think of it more like a continuous stream that people can enter, contribute to, learn from and return to.

For instance, a former grantee might facilitate a conversation about what they learned from implementation. A researcher might present new evidence. A community-based organisation might explain a shift that larger institutions are not seeing yet. Another funder might join a discussion about an emerging gap. Organisations that were unsuccessful in one funding round should still be able to remain part of the community because their knowledge did not become irrelevant simply because they did not receive a grant.

Additionally, facilitation should not always sit with the funder. It could rotate across organisations and actors within the community, with the funder providing the resources necessary to sustain the infrastructure without owning every conversation.

The aim is not to create another compulsory community of practice that adds six meetings to everyone’s calendar. That would simply transfer even more administrative burden onto already stretched organisations. The space should be useful enough that people choose to return because they can see what the funder is thinking, understand what opportunities might be emerging, meet others doing related work, find capabilities they need and contribute their own knowledge to the wider field.

Sometimes they participate actively. Sometimes they simply listen. The point is that the relationship does not appear only when somebody needs to submit a proposal.

If this is done, and a relationship is already built with the ecosystem, the application no longer needs to carry the entire burden of introducing an organisation and proving the relevance of its work. The programme team may already know who the organisation is. It may understand the context in which it operates and where it sits within the wider network. The organisation may already have discussed its idea with the funder and other actors in the field. Then the formal proposal can focus on the actual investment under consideration: what the organisation wants to do, what outcome it expects, how it intends to use the resources and what accountability is required.

That does not mean eliminating due diligence. Funders still need to understand financial systems, governance, risk and the capacity to manage funds responsibly. But we can stop confusing administrative complexity with rigour.

A thirty-page proposal is not necessarily more rigorous than a strong conversation followed by a clear five-page plan. The question is whether the funder has enough information to make a responsible decision and whether the organisation has had enough space to think honestly about what it can deliver.

Fundraising consumes organisational capacity. You know this, but I must reiterate in light of this learning recommendation. 

Imagine one organisation working with ten funders. It may have ten sets of reporting requirements, ten approaches to monitoring, ten relationships to cultivate, ten vocabularies to learn and ten different systems through which it must continually translate essentially the same organisation and the same mission. All of that happening while also delivering the work. Not forgetting, the organisation still has staff to manage, programmes to run, communities to engage, budgets to administer and partnerships to maintain. Yet the funding system can add substantial additional work without necessarily recognising it as part of the cost of achieving impact.

This is where the conversation about indirect costs matters comes to mind. I appreciate the direction reflected in the MacArthur Foundation’s indirect-cost policy. Currently it provides a 29 per cent indirect-cost recovery rate on eligible project grants to nonprofit organisations and explicitly recognises the institutional costs that allow organisations to deliver programme work. The exact funding mechanisms will differ across foundations, but the principle is important: the organisation itself is part of the infrastructure through which impact is produced.

Staffing – finance, management, technology, governance, fundraising, organisational learning – matters. And as such, if funders want strong projects, they have to care about whether the institutions carrying those projects are able to survive. But funding organizations too far removed from the impact-community would find it difficult to understand this intrinsically.

Now I translate my own learning into a recommendation for the funding ecosystem.

I know many funders already build deep relationships with organisations before awarding grants. I also know some foundations deliberately avoid open calls because they prefer to identify partners through their existing networks and field relationships. There is a lot to learn from those approaches, but there is also a risk that purely relationship-based funding becomes a closed loop in which the organisations already known to the funder remain the organisations most likely to receive support.

What I would like to see become standard is something slightly different: open relationship-building around the impact itself.

Create spaces where people doing relevant work can become visible before they need to apply. Be much more explicit about what you are trying to achieve. Invite questions and challenge. Make room for organisations that are not currently grantees. Keep unsuccessful applicants connected where the relationship remains useful. Allow people to understand the funding direction early enough to make informed choices about whether an application is worth pursuing.

Given the urgency of the current funding landscape, this seems even more important to think about today. When resources are abundant, organisations can perhaps absorb the cost of pursuing opportunities that do not work out. When funding is severely constrained, the consequences are much more serious. People are deciding whether to lay off staff, shut down programmes, change strategy, merge, diversify revenue or close organisations entirely. 

Earlier and more honest conversations can give both sides better information. Funders can identify where their money is most likely to make a difference without processing enormous volumes of poorly aligned applications. Organisations can make more realistic decisions before spending weeks trying to decode an opportunity that was never a strong fit. In this environment, clarity is not simply good relationship management. I am increasingly starting to think it is part of responsible funding practice.

What I would recommend 

If I were translating these lessons into practice today, I would start by treating relationship-building as part of programme design rather than something that happens after grants have been awarded. The people doing the work should help a funder understand the landscape before the portfolio is finalised, and that relationship should continue throughout implementation. 

• Make the thinking more visible. Organisations should not need specialist fundraising expertise simply to understand what a foundation wants to achieve, where it has flexibility and where it does not.
• Conversation before the application wherever possible. A short strategic conversation can save both sides weeks of unnecessary work and often produces a much stronger proposal when there is genuine alignment.
• Build mechanisms for seeing beyond current grantees. Local actors, emerging organisations, researchers and affected communities can reveal parts of the system that established partners may not reach. They may not all become direct grantees, but their knowledge can still shape better funding decisions.
• Treat the community itself as a source of ongoing strategic intelligence. When patterns begin emerging across organisations, the funder should be able to notice them, discuss them openly and adapt rather than waiting for the end of the portfolio cycle.
• Pay closer attention to the institutional burden created by the funding relationship itself. If organisations are expected to convene, report, learn, coordinate and maintain complex partnerships in addition to delivering programmes, those costs need to be acknowledged and, where appropriate, funded.

None of this eliminates the need for difficult funding decisions. There will still be more good work than money available to support it. But scarcity makes better relationships more important, not less.

The impact should be the organising principle

The more I reflect on this, the less convinced I am that the individual grant should be the primary unit around which a funder’s relationships are organised. Rather the impact should be. If you are trying to strengthen democratic institutions, improve health outcomes, expand economic opportunity, support safer technology or build stronger communities, begin with the ecosystem through which that change could happen.

Find the people already carrying pieces of the work. Understand what they see. Help them see one another. Make your own thinking visible. Allow your assumptions to be challenged. Pay attention to the actors who sit outside the usual funding networks. Then decide where resources can help move the system. Sometimes that will mean a major grant to an established organisation. Sometimes it will mean strengthening a smaller actor. Sometimes it will mean investing in research, coordination or shared infrastructure before another project is funded. Sometimes the most valuable thing the funder can do is connect organisations that should already know one another.

Those choices become easier to see when the community exists first.

In conclusion, this recommendation is: stop treating relationship-building as an optional layer around grantmaking. Bake it into the design and delivery of the portfolio itself. Build the impact community before the grant portfolio is complete, and let that community become part of how you listen, learn, allocate resources and adapt your strategy.

Because the organisations receiving your grants are not simply a collection of transactions. Alongside many others who may never appear on your grant list, they are the people and institutions through which the change you want to see in the world will actually happen.

At Project by Projects, I work with funders, foundations and institutions to think beyond individual grants and design the relationships, learning systems and strategic structures that help a portfolio create greater collective impact. If you are shaping a new funding strategy, rethinking an existing portfolio, or asking how to build stronger connections between your goals and the people doing the work, PxP can help you listen across the field, see the wider system and make more intentional funding choices.