The relationship between funders and grantees is structurally unequal — funders hold money, and grantees need it. This power imbalance shapes every interaction in the grantmaking relationship, often in ways that are invisible to funders and acutely felt by grantees.
Funders who acknowledge this power dynamic and actively work to mitigate its negative effects build better relationships, receive more honest information, and produce better outcomes than funders who ignore it.
Compliance over candour. When grantees know that honest reporting of challenges or failures might affect future funding, they have an incentive to report positively rather than accurately. Funders who base renewal decisions heavily on positive outcomes create incentives for grantees to manage perception rather than manage programmes.
Excessive reporting burden. Funders with significant reporting requirements often underestimate the burden they impose on grantees. For small, under-resourced organisations, completing detailed outcome reports, financial acquittals, and multiple progress updates consumes significant management time. Grantees rarely push back on reporting requirements for fear of jeopardising relationships.
Application burden and relationship advantages. Complex application processes with word limits, specific format requirements, and multiple evidence requirements privilege organisations with professional grant writers and established funder relationships. First-time applicants and smaller organisations are disadvantaged relative to experienced applicants, regardless of the quality of their work.
Power in site visits and assessments. When funders conduct site visits or assessments, the power dynamic is explicit — the grantee is being evaluated by someone who controls their funding. This can make honest, equal conversation difficult even when funders intend assessment as a partnership.
Transparency about criteria and process. Funders who are explicit about what they fund, how decisions are made, and what the selection criteria are reduce the information asymmetry that disadvantages less connected applicants.
Proportionate reporting. Calibrating reporting requirements to grant size and grantee capacity — not to funder ideal information preferences — respects grantees' time and recognises that time spent reporting is time not spent on programme delivery.
Multi-year funding. Short grant cycles force grantees to devote significant management time to reapplying. Multi-year grants that don't require annual reapplication free grantee management time for programme delivery, and signal funder confidence in the relationship.
General operating support. Grants that can be used for core organisational costs — staff, rent, management — rather than project-specific expenses, give grantees the flexibility to run their organisations effectively. Project-only grants that exclude overhead force grantees to cross-subsidise their programmes from unrestricted funds.
Listening and feedback mechanisms. Funders who create structured opportunities for grantees to give feedback — about the application process, about reporting requirements, about funder behaviour in the relationship — demonstrate genuine interest in the grantee perspective. This feedback must be genuinely welcome; feedback that is solicited but not acted on is more damaging to trust than not asking.
Trust-based philanthropy. The trust-based philanthropy movement advocates for funders to move away from intensive oversight and toward trusted relationships — providing multi-year general operating support, streamlining reporting, soliciting and acting on grantee feedback, and treating grantees as partners rather than service providers under surveillance.
Some funders resist equitable grantmaking principles on accountability grounds — arguing that proportionate reporting, multi-year funding, and general operating support make it harder to ensure charitable funds are used appropriately.
This framing presents a false choice. Accountability and respect for grantees are not incompatible:
The real question is not whether to require accountability, but whether the accountability requirements are calibrated to actual risk and proportionate to grant size — or whether they reflect risk aversion by funders at disproportionate cost to grantees.
Tahua supports funders to design more equitable grant processes — with accessible application portals, proportionate reporting tools, and multi-year grant management that respects grantee time while maintaining appropriate accountability.