Racism and colonialism are key drivers of mistrust toward local nonprofit organizations, and a reason for burdensome risk management processes and arduous compliance requirements in the social sector, according to a growing body of research. Onerous requirements create barriers for community organizations’ access to vital international funding, and when funding does reach the community, studies show local knowledge, assets, and values continue to be ignored and undervalued, despite continuing evidence showing that aid programmes are more likely to be successful if implementation and decision making is shifted to local actors.

Trust-based philanthropy is not a typical aspect of bilateral funding so we must shift our mindsets and get creative about how we manage risk and compliance requirements whilst ensuring local context is considered. Working with the Center for Disaster Preparedness (CDP) in the Philippines, my team at GlobalGiving learned how to adapt some of these lengthy requirements with the aim of promoting equitable funding partnerships and linking to Filipino values.

In addition to being burdensome, due diligence and compliance processes in grantmaking are often inequitable and require one-way accountability and low-risk tolerance based on the assumption that grassroots and local organizations are more risky. During this program, we strove to reframe ‘risk’ within our partnership with CDP by absorbing and sharing risk and supporting them with compliance policies and procedures.

Following a risk assessment and vetting process, CDP established their ability to manage a local grantmaking facility and meet funder requirements. They used their local knowledge and expertise to design a due diligence process for community organizations that was contextually appropriate and relevant, which they called the “Getting to Know Our Partners” (GTKOP) process. They wanted to ensure they started off on a friendly foot—one that removed judgment and offered partnership, rather than requesting mountains of documentation on the viability, capacity, and financial sustainability of these grassroots partners (some of which were not even registered entities). Instead, one-on-one conversations helped foster a discussion that supported growth and established relationships built on trust. Through this process, CDP captured and documented the capacity and track record of selected partners, and identified any gaps to work on with partners to meet funder requirements.

Read the full article about equitable funding partnerships by Seema Kapoor, Catherine Gordo and Mic Mercado at GlobalGiving.