We define “trauma” as what happens when an experience overwhelms a person’s natural capacity to cope and recover. The focus is not on the external event, but on the wounding or pain people experience individually and collectively as a result of it. Trauma pervades every aspect of the social sector, including the people and institutions that comprise it.

[T]his understanding motivates us as funders to leave behind familiar but limited, single-point perspectives and work from a more whole and systemic picture. It helps us recognize interconnections between individuals, families, communities, and systems; between past, present, and future; between physical, emotional, intellectual, spiritual, and ecosystem well-being; and between the work we do within ourselves and our own organizations and the issues we seek to change. It shifts what we fund, how we fund it, and the impact that funding has.

Yet the newly visible opportunities that emerge from this approach often do not align with traditional funding models, which can lead to frustration. Thus, an important aspect of integrating new understanding is to examine how existing processes constrain our thinking and ways of working. Here we outline five practical shifts funders can make to expand their perspectives, do less harm, and have a greater impact.

1. Widen the Funding Perspective

The first shift is to actively engage a wider perspective. Widening perspective is more than appending new language to requests for proposals, and requires more from funders than a one-time listening tour or hiring someone with a particular identity. It is a practice that requires funders to work in new ways to recognize value in the unfamiliar. It embraces whole human beings within the broader social context, including individual and collective assets, strengths, and challenges; stops the search for a single solution; and provides a more accurate picture of problems and opportunities from which to strategically fund.

2. Expand Institutional Knowledge and Metrics

The social sector is missing data, including data on how to foster individual and community well-being, and data from people heavily impacted by traumas. This is due in part to power dynamics between funders, researchers, community organizations, and communities, which can distort data access, validity, and value. Indeed, the ways the sector gathers and deploys data can generate harm. Overfocusing on what can be easily monitored from a distance often wastes money, time, and energy, and leads service providers to contort their strategies to fit.

3. Fit Funding Processes and Terms to Purpose

Funding processes often require that communities seeking support document and recount trauma as a precondition to funding; the reward for telling the “best worst story” is resources. Historically, when reporting on the outcomes of social impact funding, funders have focused on individuals who succeeded despite overwhelming odds, emphasizing the role of the funder. This neglects to consider the kind of information—including systemic and generational traumas, and contributions and connections within the individual’s community that have fostered healing—that sets the stage for recognizing holistic solutions to the challenges a community faces. It also skews the frame by which funders measure success.

4. Make Risk Analysis Whole

Unconscious patterns in human decision-making can lead funders to perceive greater risk in ideas, people, and organizational capabilities they are less familiar with. Often, funders also have the power to decide who bears risk and unconsciously shift risk away from themselves to their grantees—those with the least institutional power. This has the perverse result of increasing the stability of funding institutions while decreasing the stability of the people and organizations expected to deliver results.

5. Learn and Be Accountable

Funders tend to ask the questions and hold others accountable, which is why impact reports and metrics customarily focus on what nonprofits did or did not do. But as with other instances of limited institutional knowledge, this approach overlooks information funders need to assess and innovate. This includes ways funders inadvertently contribute to harm through internal processes and participation in an economic system that produces inequity and sustains trauma—the fact that funders are part of the social system that needs fixing.

The fifth shift is therefore for funders to use their institutional power and voice to acknowledge harm, and develop cultures of learning and mutual accountability within their own institutions.

Read the full article about philanthropy and systems change by Shruti Jayaraman at Stanford Social Innovation Review.