Open grant making – The Council on Foundations’ almost good idea

The Council on Foundations made a stink last week with their proposal to hold a Shark Tank style competition where nonprofits would pitch for a $40,000 grand prize before a live audience. The idea was largely derided by the social sector, so much so that the Council on Foundations ended up scrapping the event all together.

Copying a show called Shark Tank is never a good idea. While it’s certainly unpopular to do so, I do however think there are some elements of the open style grant competition the Council on Foundations proposed that might be valuable.

Funder transparency

For a sector that seems borderline obsessed with transparency, I almost spit my soup at the argument that the open style grant competition was problematic because it failed to preserve grant seekers’ anonymity. Public charities’ financials are largely a matter of public record through form 990s, it’s not hard to tell who has money and who does not. Indeed, I think there could be plenty of value in not only knowing who does get funded, but in who does not and why.

For my part I hang my failures like underwear up a flagpole, hoping others can learn from my mistakes and succeed were I fell short. Grant seekers would be better off not only knowing what does get funded, but what doesn’t get funded as well. Instead of preserving the feelings of applicants, we should be building public knowledge.

More important, publishing rejected grant proposals would better hold funders accountable, providing the public a peek behind the well varnished oak doors of the philanthro-elite. This style of open grant making would create a more equitable power distribution, where funders become accountable to the crowd with their decision making in plain view. Preserving grantee anonymity paradoxically preserves this power imbalance, to the determinant of the applicant anonymity purportedly protects.

Marketplace for grants

Contestants go on Shark Tank not just to secure investment from one of the investors on the panel, but to gain exposure to Shark Tank’s sizable audience. Grant applications are labored over by dedicated staff and entrepreneurs, presented to a handful of program officers at select foundations, and otherwise never really see the light of day.

If grant applications were public, one’s rejection from [insert big name foundation] might serendipitously get picked up by another foundation or donor. Taken a step further, if all these applications were not only public but in machine readable formats, one could truly build a fundee/funder marketplace where investors and social innovators could find one another far more easily.

Game over

Shark Tank is a stupid show. The Council on Foundations really should have anticipated this backlash. But the underlying idea of open grant making has potential, and deserves a better champion and a more intelligent debate. I’m hoping the possible end-game of a more frictionless way for great social innovations to get funded doesn’t get bogged down by a most unfortunate game-show analogy.