Could large Australian philanthropies pilot a "deliberative grant-making" process?
Philanthropies are addressing fundamentally public problems but without much democracy
TL;DR: Large Australian philanthropies should consider piloting a deliberative grant-making process
Philanthropies address fundamentally social or public problems but without much democracy. “Participatory grant-making” is a step in the right direction but as it’s currently being practised, falls short in a few ways. In particular, it may not provide legitimate representation of affected communities or allocate decision rights appropriately as between those communities and technical experts, equipping those community representatives with the information and resources they need to make decisions. It’s hard to find statistics on the Australian context, but at least in the US, while more than 80% of foundations in one large study reported some form of direct stakeholder participation, only 10% reported conferring decision rights on affected community members.
Philanthropies could solve these problems by incorporating deliberative democracy into their decision-making processes. This approach would marry genuine representation and empowerment of affected communities with the advisory expertise (on issues like financial management and the subject matter of a grant, like mental health or education) that’s required to arrive at informed decisions.
We might imagine an example for funding set aside for lower-income Australians in rural areas. The philanthropy could appoint a “Community Council,” consisting of randomly selected Australians earning income below a certain threshold and living in the relevant rural areas. The Council would have responsibility (and be compensated) for defining the grant outcomes it seeks to achieve, and the initiatives that are ultimately funded. It would arrive at those decisions via a deliberative process, which includes hearing advice and evidence from experts (using internal resources as far as possible) on financial management, operations, the subject matter of the grant and any other area of technical expertise that bears on the likely success of grant recipients.
Philanthropies address fundamentally public problems but without much democracy
Philanthropic organisations often (almost by definition) seek to address social or public problems. Nearly half of all charities in Australia report the “general community in Australia” as the main beneficiary group. To qualify legally as a charity, an organisation must fall into at least one of twelve charitable purpose categories, including advancing health, education, the natural environment or social welfare and promoting human rights and reconciliation. Taking the two biggest givers on the AFR’s Philanthropy 50 List as examples, their objectives include “helping Australians defy disadvantage” (Paul Ramsay Foundation) and investing in causes ranging from “eliminating childhood cancer to improving early childhood education, ending modern slavery and driving accountability and responsibility for the tech ecosystem” (Minderoo Foundation). These issues fundamentally concern public goods.
But philanthropies largely don’t make decisions democratically. (One important caveat upfront: when I refer to democracy, I don’t necessarily mean the involvement of the entire Australian public, but at least the citizens who are intended beneficiaries of philanthropic funding.) At best, in Australia, charities with members like incorporated associations, companies and unincorporated associations must be open and accountable to their members, for example, through holding at least one annual general meeting with opportunities for members to ask questions and vote on resolutions. But there’s no necessary correlation between members and the charity’s beneficiaries. Of course, many charities don’t have members at all. Further, despite an overwhelming focus on serving traditionally underserved communities, representation from such communities on boards is scarce. In a recent survey, only 17% of respondents said their boards included at least one person younger than 25, 15% at least one Aboriginal or Torres Strait Islander person, 17% a person identifying as LGBTQI+, 28% at least one member with a disability and fewer than half at least one member from a culturally and linguistically diverse community.
Of course, especially the large philanthropies on the AFR List are funded substantially by wealthy individuals, not taxpayers (although almost half of charity revenue more broadly comes from government). These organisations don’t have any legal obligation to make decisions democratically. And far be it from me to preach about ethical obligation to individuals who have pledged to give away hundreds of millions of dollars of personal wealth to serve the public interest. But without any preaching, they have voluntarily assumed a commitment to address various public problems and ultimately to do so in a way that is fair. It’s on the basis of this voluntary commitment to public objectives that I want to humbly suggest a greater role for democracy in their decision-making, or even in fact that democracy should be the default preferred method of decision-making.
There are a few more counterarguments I’ll address later in this post, but a brief note here on expertise (particularly given the philanthropic focus on evidence-based policymaking). In the context of government-funded work, elected representatives are the ultimate decision-makers on problems requiring enormous expertise; experts provide advice. Why should philanthropists reverse these roles?
Nascent efforts at improved participation fall short along three dimensions
The problem I’ve just outlined is well-recognised. The phrase that’s often used to describe efforts to address this problem is “participatory grant-making”. It’s a very broad term that encompasses a range of approaches to “placing affected communities at the centre of grant-making by giving them power to decide who and what to fund” (and you’ll find similarly broad definitions in many other places).
At the level of this broad definition, participatory grant-making is a great idea. Current applications of this idea in practice, though nascent, are a step in the right direction. But I want to suggest that these efforts could better serve the central objective of participatory grant-making in three ways. Along each dimension, I’ll describe the status quo and venture some critiques.
Who is deciding?
The status quo: Participatory grant-making of course seeks to involve members of the affected community in decision-making. Often participants are identified through self-selection or appointment as being leaders or experts in some form; for example, a “community leader” in one form or another. Sometimes it also involves the general public more broadly, where decisions are informed by crowdsourcing, crowdfunding or voting (online or in-person). Other approaches have also sought to involve “peer organisations”.
The problem: I’d argue that from the perspective of participation as a new approach, the most important characteristics of participants you’re seeking recruit are lived experience and representativeness. With this in mind, identifying individuals as representatives either on the basis of their own self-identification or the philanthropy’s external opinion, often taking into account expertise, might not be the best approach. “Community leaders” typically aren’t elected, they might actually just be the “squeakiest wheels in the community,” they’re more likely to be more socially and economically powerful, and they might claim to speak on behalf of groups (especially minority groups) that are far from homogenous. Further, expertise is of course valuable but should be conceptually separated from the central objective of participation.
What are they deciding?
The status quo: The nature of participants’ decision-making power varies greatly. This variation can be framed on a spectrum from informing, consulting, involving and conferring actual decision-making power. I can’t find any statistics on Australia, but at least in the US, while approximately 83% of foundations in one large study reported some form of direct stakeholder participation, only around 10% of those foundations reported conferring actual decision-making power on these participants. The questions they’re deciding on also aren’t clear, especially where they are part of a committee or council including members who aren’t from the affected community but have some kind of technical expertise. In these situations, they might be able to provide input on both normative and technical questions.
The problem: In my humble opinion, affected communities should have decision rights on the most important normative questions, like what outcomes the organisation is seeking to achieve for beneficiaries and what projects should ultimately be awarded grants. In fact, this is really the definition of participatory grant-making: as noted above, it’s meant to be a “way of putting funding decisions into the hands of those who are directly affected by those decisions”. This absolutely does not mean that they make decisions without expert input on technical questions of all kinds. These questions might go to financial management and sustainability, business operations, technology and of course the effectiveness of an intervention to achieve a particular outcome (like improving physical and mental health or education). But as per the approach we follow in a democracy, the people via their elected representatives have ultimate decision rights on normative questions, with input from expert advisors, and not the other way around.
How are they deciding?
The status quo: Where affected community members are involved, it’s not clear how much information and time they’re given to support their input. I’ve written about this more extensively elsewhere in this blog, but traditional community consultation is often lacking in opportunities to consider detailed information and balanced arguments and deliberate with others about issues on as equal as possible a footing. At least in some cases where the public is involved more broadly, they’re voting in the manner of a traditional poll without much deliberation at all.
The problem: Suffice to say that decision-making should be informed. People’s opinions change when they’re given more time and balanced information.
A deliberative grant-making process could address these shortfalls
Philanthropies could solve these problems by incorporating deliberative democracy into their decision-making processes on fundamental normative questions about the outcomes communities wish to realise and the initiatives they wish to fund to achieve those outcomes. This approach would marry genuine representation and empowerment of affected communities with the advisory expertise that’s required to arrive at informed decisions.
The philanthropy could appoint a “Community Council,” consisting of randomly selected individuals from the relevant affected community (for example, Australians earning income below a certain threshold and living in rural areas). The Council would have responsibility (and be compensated) for defining the outcomes it seeks to achieve, and the initiatives that are ultimately funded. It would arrive at those decisions via a deliberative process, which includes, in particular, hearing advice and evidence from experts (largely internal resources) on financial management, operations, management, the subject matter of the grant (for example, mental health or education) and any other area of technical expertise that bears on the likely success of grant recipients.
Who is deciding?
Under this approach, you would randomly sample members of the affected community, for example, lower-income Australians.
This approach overcomes the problem of self-identified or externally identified leaders claiming to speak on behalf of an affected group or identity. Deliberative processes also seek to avoid burdening participants with the role of representing a particular identity; rather, they rely on random sampling to generate a group that is broadly representative but who are encouraged to deliberate as people in all of their complexity.
(Of course, if the intended beneficiaries are very young children or other communities who for any other reason don’t have capacity to make decisions, you couldn’t randomly sample the direct beneficiaries, but you might sample indirectly affected communities, like caregivers).
You might assemble a jury or council of ~12-24 people, for example, and compensate them for their time.
What are they deciding?
Under this approach, the jury would have responsibility for making recommendations about the outcomes the grant seeks to achieve and the initiatives that are ultimately funded, at a minimum. They would make these recommendations on the basis of technical advice from experts on the questions noted above, who might include internal resources or academics from partner institutions.
How are they deciding?
They would decide through a process that is deliberative in character. As noted above, they would be provided with balanced information about the potential projects (especially through the information provided by applicants and through technical evaluations provided by experts). They would also crucially be given the opportunity to discuss with each other, guided by a neutral facilitator.
A word on the counterarguments
“Are you seriously telling me to use a bunch of randoms to make these decisions?” I’ve addressed this one before, but if you’re reading this blog for the first time, these resources on deliberative democracy could be a helpful starting point. Basically, time and again, we observe people engaging deeply and producing quality recommendations. And I’d re-emphasise the point that this approach entails giving people ultimate decision rights but equipping them with advice from experts on technical questions.
“This would be hugely resource-intensive, both in terms of money and time.” It would be more resource-intensive than the typical mode of public consultation. But the costs shouldn’t be prohibitive for the largest philanthropies as a starting point. A deliberative process would typically be run over a couple of days, involve neutral facilitation and support to gather information. But in this context, much of the expert advice and opinion could be supplied internally. You might also reduce costs by running the process online. Ultimately, it’s a question of whether the organisation feels the investment is worth the legitimacy, fairness and empowerment that a deliberative process could deliver.
“How do you know this will actually improve outcomes?” Let me be transparent: there just isn’t data on whether participatory approaches in this context result in “more effective philanthropic investments”. But I’d quote the Ford Foundation on this one, which I think sums it up nicely: “Getting this kind of data, however, is challenging because it involves measuring not only participatory outcomes but also a process that is often messy, difficult to operationalize, and time consuming—all factors that, ironically, have made funders less interested in supporting this kind of research. And, above all, who determines whether or how an investment has been “effective”?” It’s similarly extremely difficult to draw conclusions about whether democracy or technocracy more broadly delivers better outcomes in certain scenarios; but we can at least draw our own conclusions about which approach is better from the perspective of fairness and procedural justice.