What’s the Matter with Small Grants?

January 24th, 2023

Written by Ese Emerhi is the project/team lead for TrustAfrica’s Nigeria and West Africa programming

It’s a disappointing fact that after seventy years, civil society and non-profit organizations in the Global South still rely heavily on external aid from the Global North for their survival. There are justifiable arguments that this donor dependency needs to stop or change, and inherent in this argument is the negative power dynamics that this has created within the development sector that has led to competition, mistrust, lack of cooperation, and an overarching objective of donors to prolong the “problem” so they can remain in “business.” If giving aid is ultimately about solving problems and correcting injustice, why are there still so many wicked and toxic problems to solve?

Systemic and transformative social change is a long-term objective that involves many players and factors. One approach to tackling transformative change from donors has been to support new entrants into civil society by giving small grants that address immediate needs. These small local community-based organizations learning on-the-go often lack deep organizational capacity — staff, internal structure, knowledge, and access to decision-makers — and so results and impacts are often muted and focus mostly on outputs rather than sustained impact. For some donors and government actors, the small grants approach have been the response or push back to traditional aid — externally designed explanations and solutions to long-term entrenched problems — by directly involving local actors in the design phase and turning over some power to them to provide solutions to their own problems. This approach certainly has some merits, and, in some instances, it has shown very promising results by ensuring local agency and voice in addressing some of society’s challenges. But it has its limits.

For the past four years, I’ve led a small community foundation in Nigeria whose vision and mission are the empowerment of local communities and the people of Ogoniland. When the foundation began grantmaking in 2017, we focused on supporting local community-based organizations by giving small grants (less than $10,000) in key thematic areas with the aim to improve access, rebuild trust, and improve the livelihoods of local citizens. But we soon discovered that the cost to us, the donor, in giving small grants could not be sustained over the long-term (it was costly, slow, insufficient (the funding was never enough), and distracted by local politics and demands for power and relevance), and that in fact, with small grants comes many small problems. While small grants have been a slight improvement in the way traditional aid has worked for decades by giving access and opportunity to local organizations, it is still traditional aid that comes with strings and limitations and it does very little in promoting systemic and transformative social change at the grassroots level.

So, really, what is the matter with small grants? In a word, technically nothing, if the direct objective is solving an immediate need. However, small grants cannot on their own address root causes of entrenched problems, especially if the players are still the same old players in the game of traditional aid. By their very nature, small grants perpetuate project-cycle-funding which means staff are hired only for the duration of a project, making local capacity building an afterthought rather than intrinsically part of the development process.

According to the Society for Nonprofits, on an average day, over 2,700 grant proposals are submitted, and fewer than 200 receive funding. It is an incredibly competitive space even for seasoned civil society organizations who rely on external aid for survival. Small grants increase this competition in many ways making the odds of getting one even steeper and it leads to deeper divisions and mistrust in the ecosystem of development.

The notion of mission-shift or creep is heightened with small grants, forcing organizations to change course mid-way at the whim of donors who suddenly change the manner or focus of their giving. The short-term, contractual nature of the donor-grantee relationship also hampers the financial sustainability and strategic continuity of local organizations.

Donors who engage solely in giving out small grants with the lofty belief that they are directly funding local initiatives, often take on more than they bargained for in the process. The time commitment needed to increase the capacity of local organizations is often double or triple the normal average time for doling out grants. The due diligence aspect of grantmaking cannot be forsaken solely for the benefit of increasing access and local agency; this work must be done. For instance, midway through a grant with a grantee-partner, it became necessary for me to imbed new financial protocols and structures into the local organization and this undoubtedly increased the timeline for the grant, and surprisingly led to initial resistance from the local organization, exacerbating the trust deficit in the donor-grantee relationship. Navigating this reality only reinforced the power dynamics inherent in grantmaking, and when making decisions with a view of the final overall impact desired for the project, you often find yourself making concessions that would have ordinarily been unheard of.

According to Jon Edwards in an article for Rethinking Poverty, one of the current failures for advancing significant change in the development sector is recognizing the lack of dignity by big donors in their role in development and philanthropy — it is often top-down, undignified, and generally devoid of any recognition of power balances. If small grants is an attempt towards addressing the uneven power balances in traditional aid, then its approach must also work to address or at the very least recognize limitations inherent in grantmaking and seek adjustments to improve. What we know now is that development has been and continues to be something done to people rather than people determining their own development, investing their own assets and resources. While there are small shifts in the new way of thinking about injustice and philanthropic work in the sector, and while small grants can and have played some pivotal role in changing philanthropy for good, what we need now is a tectonic change that disrupts and empowers local giving.


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