While grantmaking unifies most foundations, the approaches each takes to fulfilling their mission can vary greatly. Is a strategic or responsive methodology right for you?
At a time when so many communities need help, grantmakers are understandably feeling pressure to make the most of their financial gifts. Luckily, they can tap into a range of tried and true approaches to disburse funds effectively. But which approach — or combination of approaches — will work best for your foundation?
To get started, here are common grantmaking models that your foundation may already use or has used in the past:
- Proactive grantmaking: This model works best when your foundation has chosen a particular cause or social issue to support. You can contact organizations directly or offer a request for proposal (RFP) to organizations doing the type of work that you want to support. Grants will then be issued for multi-year periods and plan for a specific outcome.
- Initiative grantmaking: This model builds on proactive grantmaking to fund an aspirational, team-based approach to a particular issue. Your grants might be used to fund a collaborative initiative across a variety of stakeholders that seeks to solve a broad social problem, such as hunger, health disparities, or housing insecurity.
- Collaborative grantmaking: This model unites your foundation with other funders, so that you can jointly focus your resources on a common interest. Collaborative grantmaking relies on clear communication strategies, as your foundation will need to collaborate with others during the grant review and selection process.
Next, let’s look at two grantmaking approaches that use these models to meet their goals: strategic grantmaking and responsive grantmaking.
What is strategic vs. responsive grantmaking?
Simply put, strategic grantmaking is focused on creating a particular outcome, which is decided upon by the foundation’s board. The grant can be designed using any of the models described above, as long as the goal is the agreed-upon end result.
For example, a foundation may decide to focus on the issue of infectious disease prevention in a community. In a strategic grantmaking approach, the board would engage community leaders and local experts to understand the breadth of the problem and then create grants to fund organizations or media campaigns to increase vaccination rates.
On the other hand, responsive grantmaking responds to the stated needs of the community and how those may change over time. When using a responsive grantmaking approach, a foundation will reach out to local organizations and encourage them to submit a funding request. The foundation’s board will then review the requests and award grants to their organizations of choice. Note that this is not a free-for-all: Organizations’ proposals must align with the foundation’s mission.
For example, a foundation with a mission of health equity might issue an RFP to community organizations, who will then prioritize areas of concern and share their own ideas for solutions.
Balancing the benefits of strategic vs responsive grantmaking
Strategic and responsive approaches to grantmaking can both be extremely effective ways to create impact, but they can both have drawbacks.
Strategic grantmaking pros and cons
- Greater chance for impact on your chosen social issue
- Opportunity for collaboration with other funders
- Ability to increase awareness of a social issue
- Limited focus
- Increased time spent researching the social issue
- Decreased ability to respond to emerging needs
Responsive grantmaking pros and cons
- Ability to respond to emerging needs
- Enhanced relationship with community
- Greater breadth of issues to address
- Widely dispersed funding can decrease impact
- Increased administrative work
Determining the right fit for your organization
Seems like a lot of choice? Don’t worry: No one foundation needs to take a single approach to grantmaking. Many employ a few different models at once. You can also start with one approach and evolve to another as lessons are learned and the needs of a community change.
- Just getting started with a particular issue? Choose responsive grantmaking, so that you can learn more about the problem, possible solutions, and the target community.
- After spending some time with a responsive approach, you may see a particular way that your foundation can make an impact. When that happens, switch to strategic grantmaking, informed by what you learned during your responsive approach.
- When you create strategic grants, stick with it for a while, to see the effects. A grant cycle of three to five years is recommended.
- No matter what you approach, keep collaborating with stakeholders and other funders: This will keep your foundation exposed to new ideas.