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Systems Change Funding: Lessons from Funders in Brazil

7 March 2023 | Catalyst News

5 Lessons from Brazil

On 16 December 2022, IDIS and Catalyst 2030 co-hosted the third in a series of global conversations for funders, on the future of funding systems change (read about the first salon and second salon). This series brings together funders within a country or region to share context-specific feedback on the ten principles in the Urgent NGO Letter. The Letter, led by Catalyst 2030 members, gained over 1,100 signatures from 80+ countries and marks a significant call from the social sector to shift funding practices globally. It outlines ten key calls for funders to consider in their grantmaking practices, including: giving multi-year, unrestricted funding, investing in capacity building and creating transformative rather than transactional relationships. Read the full list of principles in the letter here. This Salon assembled Brazilian philanthropists and funding organisations to discuss how these principles could work in practice and the impact they would have on Brazilian philanthropy and civil society. We are hugely appreciative of all of those that participated in this discussion and who are leading the way in open and inclusive dialogue to improve philanthropy for all.

Here are five key takeaways from the conversation:

1. Recognise the impact of national context

Grantmakers usually have specific guidelines for their social investment. While it could be read as a sign of transparency, it also limits Brazilian funders’ ability to provide unrestricted and flexible funding. This restriction affects both funders and grantee-partners’ ability to embrace this principle as the sector is not currently set up to enable such flexible practices. This inflexibility also impacts funders’ ability to fund institutional needs or networks, as statutory restrictions require grantee-partners to follow traditional due diligence and accreditation processes.

2. Foster collaboration across the sector

Although this challenge is not unique to Brazil, the group discussed the need for greater collaboration among funders and civil society actors within the country. This requires both a behaviour and mindset shift across the sector; a move away from siloed work and towards funders and grantee-partners working in true partnership; collaborating with other funders, grantees and cross-sector stakeholders to achieve systemic change.

3. Offer philanthropists multiple entry points which recognise their variety

Embracing these ten principles will be a different journey for every organisation. It is important to respect the difference in maturity of philanthropies, their different investment strategies and different statutory and operational arrangements which may impact this journey. The group suggested taking into account the different entry points of each funder and evaluating them accordingly, in order to ensure that a funder response recognises the need and strength of each funder’s progress and individuality.

4. Consider other tools (such as a rating) to help funders improve their practices

It is crucial to consider which tools and resources we are able to provide in order to better improve funders’ abilities to embrace these principles. This could include incentivising funders in new captivating ways by, for example, using a rating and grading system to indicate their progress towards embracing these principles. This way funders would not only obtain a grade but also understand which areas need improving. We must acknowledge the fact that making a donation goes beyond its social value. Creating a public ranking in which companies will be acknowledged for their contributions and their “legacy” can mobilise other funders to join the movement, positioning these principles as a Brazilian innovation in the sector.

5. Recognise that this journey might take time and support funders along the way

Philanthropy as a sector is relatively new to Brazil. It is important to recognise this and the time it will take to bring funders on this learning journey before they are able to fully adopt these principles. Therefore, the group discussed the importance of respecting each funder’s journey and celebrating progress along the way. Documenting this progress and creating a community of practice whereby funders can learn from best practices in the field, could provide the long-term support funders need to make this shift. This requires establishing strong ecosystems of funders who can turn to one another, share learnings and grow as a sector.

Where do we go next?

We are continuing to host Donor Salons to gather feedback from funders in different country and regional contexts. Our next stop in this journey is with funders in Africa. Stay tuned to hear the key takeaways from this conversation.

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