Funders should change their approach to risk to enhance DEI, says NPC

09 May 2023 News

Funders need to reframe their approach to risk in order to embed diversity, equity and inclusion (DEI) into their grantmaking, according to a think tank.

New Philanthropy Capital (NPC) and Civil Society Consulting (CSC)’s guidance says a more nuanced approach to risk is key to improved DEI.

The guidance reads: “If grant-making is not diverse, equitable or inclusive, funders risk perpetuating a status quo which favours those with more wealth and power.”

It also looks at some of the barriers, adding it can be difficult for funders to have a truly deep understanding of the context of the organisations they fund, as they are by their nature removed from delivery.


NPC and CSC recommend funders adapt their grant-making processes to recognise structural disadvantages, especially when giving to organisations who may be the only ones who can address an issue but have historically been underfunded.

The guide also recommends funders think about who is making decisions and how those decisions are made.

Sarah Denselow, NPC’s principal for effective philanthropy, said: “A diverse funding panel with different lived and learnt experiences will likely better understand the communities you work with. You could co-opt community representatives or experts onto committees and seek additional expertise when considering applications relating to specific communities.

“You could also consider forms of decision-making to address power dynamics, such as participatory grant-making or open philanthropy. Or you could use intermediaries to make some of your grants. Always be transparent about who is making the decisions and how.”

The guidance also suggests keeping materials such as application forms accessible, appropriate, and free from jargon.

Denselow said: “Funders could achieve more by reframing their approach to risk to focus on the risk of impact missed by failing to give to charities doing great work for marginalised groups – more needed than ever in the current climate.

“Many of these organisations have been historically underfunded, so they may find it harder to jump through hoops to demonstrate what funders are looking for – but this risks missing valuable impact for people and communities in need of support.”

Funders could also offer a supported application process, which could include guidance, troubleshooting and information sessions to help applicants understand what they are looking for.

The report draws on insights from NPC’s consultancy work and on research conducted for NPC by Civil Society Consulting in 2022, which involved semi-structured interviews and roundtable conversations with a selection of NPC staff and around 25 funders, representatives of organisations led by and for marginalised communities, and infrastructure bodies.

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