Let’s talk about invitation-only grants. Actually, let's not.
Hi everyone, I’ve been doing a lot of travel lately in promotion of my book, Reimagining Nonprofits and Philanthropy. It’s been exhausting, but also fun, as I get to meet with really cool people who remind me just how brilliant, creative, and badass our sector can be. Plus, I get free swag chapsticks and sometimes socks.
At one of these events, I was on stage with the amazing Jennifer Nguyen of the Stupski Foundation. We both wore white wigs—think Marie Antoinette—as a visual reminder for how old-fashioned so many grant practices are. (If you’re still giving restricted funds, refusing to support advocacy work, or pausing giving for a year to do a strategic plan, your board and staff might as well wear one of these wigs, because your foundation is old-fashioned as hell and looks ridiculous).
During our conversation, the question of invitation-only grants (IOG) came up. IOGs are grants where the funder must invite applicants to apply. Without that often-coveted invitation, nonprofits are not qualified, and their proposals would not be considered. They remain the unwashed masses, peasants, hoi polloi, staring from outside the windows while those with invitations get to cavort in the inner circles, where there are cake and ponies.
These types of grants have been causing consternation across the sector. For many nonprofits, it seems unfair, steeped in favoritism, arbitrary, and undemocratic that some organizations are allowed an opportunity to get funding while others are locked out from even getting a chance to compete and present their case. And inequitable, as often the excluded organizations are ones led by and serving marginalized communities, as these nonprofits are least likely to have relationships with funders that would increase their probability of being invited to apply.
For funders, though, they are a way to channel limited funding to aligned organizations without wasting the time and energy of those who wouldn’t have a chance to get funding anyway.
So are IOGs good or bad? I tried to go onto Reddit’s “Am I the Asshole” (AITA) to ask whether a foundation that has an invitation-only process is an asshole, and apparently that is “not what this subreddit is for” and “I don’t think you understand the internet, Boomer.” (Accurate, but hurtful).
Here’s where I stand on this: I’m not necessarily against IOGs. I think when they are done right, they can be a tool to advance equity. For example, a funder that is focused on addressing the attacks on trans people should have a process where only trans people-led-and-serving organizations are eligible for funding, which means only those orgs would be invited to apply. Same goes if a funder wants to help address the plight of missing and murdered Indigenous women; funding should only go to Indigenous-led-and-serving organizations. Ensuring only organizations led by communities that are most affected by systemic injustice get funding they need, instead of forcing them to compete in an open process, that’s equity.
But like many of the things we grapple with in this field, we’re not focused on the real problems behind them. I’ve addressed pointless, handwringing questions like “Does the nonprofit sector need to change its name?” and “is the nonprofit model even effective?”
The question about whether invitations-only grants are valid is also a distraction. When I hear it, it sounds like “Should we invite everyone to compete to the death in the Hunger Games, or should we only invite a few people to compete to the death in the Hunger Games?”
Maybe we should stop and ask, “Uh…why do we have a Hunger Games in which people must compete to the death in the first place?”
The more we spend time debating minor issues like invitations-only grants, the less time we’re examining the inequitable larger systemic issues at hand. For instance, why are most funders still hoarding money? As this recent article in Time, titled "Philanthropy Must Choose Courage Over Caution," points out:
“And precisely when it is most needed, philanthropy is failing to meet the moment—not because it lacks money, but because it lacks courage. Philanthropy commands over $1 trillion in assets in the U.S. alone, yet distributes just above the 5% legal minimum each year. At the same time, most funding remains restricted and risk-averse, with nearly 70% of nonprofits reporting that funders avoid bold or flexible investments. And all this at a time when, according to a recent report from the Center for Effective Philanthropy, 69% of nonprofits have reported funding cuts while 65% report increased demand for their services.”
Yes, I'd rather spend more time discussing why philanthropy, with few exceptions, fails to be courageous at this moment (Here's a great article from Aparna Rae in Forbes discussing just that). And how progressive-leaning funders in particular keep refusing to learn lessons from the right-wing and what to do about it. And what our sector needs to do right now to stop authoritarianism.
Right now, Trump and the Republicans are systematically dismantling voting rights, destroying democracy, openly courting fascism, and causing untold cruelty to the most vulnerable in society, and our sector is barely hanging on by a thread, barely surviving, much less actually responding effectively.
Meanwhile, funders, who can make a significant difference if they so choose, are still hoarding resources in a delusional bid for perpetuity. Except for a few courageous foundations, most are still giving at a sad rate of 5% or 6% of their endowments, saving the rest for a future that won’t exist for anyone except rich white dudes. (And of course, the 94% in foundation endowments are often invested in prisons, fossil fuels, gold mining, or whatever other horrible things that further injustice in the world).
And the processes they use to give out the measly dollars are rife with paternalism and main-character egotism, making nonprofits jump through pointless, excessive hoops and taking forever to make decisions and then only giving out one-year grants at a time. And they force nonprofits to align with their priorities, and some won’t fund advocacy or advocacy or political engagement and other strategies communities need and ask for.
We get distracted by red herrings when we should be angry and organized. Everything is on fire, and we need to focus on the issues that matter. Which is better, an open process or invitation-only process for nonprofits to compete in this giant trash fire of philanthropic cowardice, inequity, ineffectiveness, and delusion? Neither, because that's not the question we should be concerned with right now.
Nonprofits: Stop getting mad at foundations that are invitation-only and get mad at the fact that most foundations don’t give out enough while society is burning down, have horrible processes, and through practices like restricting funds are actively preventing nonprofits from effectively doing their work. Be bold, get angry, ask for more money. Gather other nonprofit leaders, write joint op-eds to your local newspapers, collectively send open letters to funders, and/or have group meetings with them demanding more funds and more flexible funds. We need to stop being so deferential to funders and organize better. Maybe have everyone wear powdered wigs. Invite the media.
Funders: If you have an invitations-only process, do careful (but quick) analysis of whether you are using it to ensure funding is going to the communities most affected by injustice right now, or if you’re just inviting organizations you know and have good relationships with, because they’re often not the same. And regardless of whether you have an invitations-only process or not, now is the time to give out significantly more funds and stop with all the bullshit you’ve been putting nonprofits through. Give multi-year general operating funds, accept grant proposals and reports that have already been written, fund much faster, and fund organizing and political engagement and whatever else communities ask for.
As threats to our communities, our sector, and our world increase every day, I’m heartened by the brilliance and dedication of our sector.
And I’m also so frustrated that we keep being distracted by minor issues and spending our time in pointless conversations that do not challenge but rather reinforce the inequity and inefficiency of our field. Let’s spend less time debating the merits of things like invitation-only grants, and spend more time challenging the inequitable systems that allows funders to hoard funds and force nonprofits into this situation in the first place.
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Vu’s book, Reimagining Nonprofits and Philanthropy, is out. Order your copy at Elliott Bay Book Company, Barnes and Nobles, or Bookshop. If you’re in the UK, use this version of Bookshop. If you plan to order several copies, use Porchlight for significant bulk discounts. Also, if you're buying 25 copies or more, I'll be glad to call in for a 50-minute discussion; please contact NWBspeaking@gmail.com.
