Top 50 equitable Funders - the method(ology) to the madness
When the Top 50 Equitable Funders project was conceived, QuakeLab conducted extensive research to define an equitable funder. Combined with our years of experience in the field of equity, we set out to create the definition and then refine a methodology to rank how equitable funders are.
In doing this, we sought to move away from aesthetic diversity (diversity where people are valued purely for their outward identity without valuing their knowledge, ideas, ability or lived experience) moving beyond a simple counting exercise. The forefront of building this definition was to ensure that we were considering not only how the funding landscape operated all the way from wealth acquisition and accumulation to how it is distributed - in other words, how funding ultimately ends up in the hands of charities.
Based on the research, an equitable funder stays informed about current and historical
inequities – especially those imposed on Indigenous peoples in Canada – and takes
responsibility for reducing barriers; an equitable funder is accessible, transparent, and
trusting of the people and organizations that it funds; an equitable funder is actively
aware of the intergenerational impacts of their funding and investing policies and procedures.
We deliberately set up the definition in this way - acknowledging the past, taking action in the present, and planning for the future with accountability. From there, we designed our 7 metrics, directly tied to this definition:
Accountability,
DEI efforts,
Team and governance,
Application and reporting,
Who you Fund,
Funding and disbursement; and
Investment portfolio.
Each metric includes a series of key performance indicators which were developed after examining the wealth held by foundations, investigating trends, understanding the funding dynamics and looking to other initiatives elsewhere, such as the UK’s Foundation Practice Rating (FPR).
While there is argument for only using publicly available data and information, much of true equity work is in the how, and some of this is not always immediately apparent from the outside. For this reason, we differentiated our approach to other ranking exercises by using a survey.
In choosing to include a survey, QuakeLab wanted to provide organizations with the opportunity to demonstrate how they are ‘walking the walk’, rather than just ‘talking the talk’ on their websites. For instance, we felt it was necessary to include a KPI in Stage 2 (Publicly Available Information), on the presence of a DEI statement on a funder’s website; however, from QuakeLab’s experience in this sector, we knew that even where statements valuing diversity, equity and inclusion appear, there is evidence that they make no actionable difference. Take resume whitening; a 2016 study detailed how job applicants submitting resumes with both white sounding names and non-white sounding names received identical results regardless of whether the organization had diversity statements on their websites. In other words, there was no reduction in the discrimination of applicants with non-white sounding names when it came to receiving a callback even if the organization had an outward statement valuing diversity.
Worse still, besides being hollow, DEI statements can also be downright problematic. The placement of a DEI statement on a website has at times acted like a free pass for companies, who continue to act in exactly the same way they have always done but then point to a DEI statement as proof that they have ‘done something.’
So while an acknowledgement on one's website does harken back to our definition of being aware of the historical inequities, we were also equally (if not more) concerned about what is being done presently and into the future to address the inequity and operationalize it in practices, policies and procedures. And that meant for some cases, the survey gave rise and opportunity for foundations to tell us what they were doing, and have that count towards their evaluation of being an equitable funder.
Other aspects of our definition of a funder being ‘accessible, transparent, and trusting of the people and organizations that it funds’ spoke to a shift that is starting in philanthropy and we hope to see continue. We’ll have a full blog post about the new ways that we’re seeing equity in philanthropy and what can be considered best practice. But this aspect of being an equitable funder spoke to the present day, and to measure this, our metric on ‘Applications and Reporting’ looked to how foundations were treating grant recipients today. That included whether reporting requirements are onerous which speaks to trust, whether grantees are compensated for their time and whether they provide unrestricted or core operational funding. Why is this important? CanadaHelps reported in 2023 that 80% of charities had issues with inflation impacting delivery costs and 44% stated they had to cut staff salaries, which affects service provision. Further, core or operational funding is one of the hardest things for a charity to get. Funding is often provided on a program or project basis so the amounts are usually finite and for a defined period of time. But to run a charity effectively, to build relationships, to manage stakeholders, fundraise and promote your organization you need staff and for that you need money to pay staff. With the make-up of non-profit staff is overwhelmingly women (77%) and people of color are overrepresented as staff (but underrepresented in management), core funding is absolutely critical. Furthermore, the same report indicated that one of the largest stressors for charities is burnout amongst staff. Given the demographics of non-profit workers and the people that they provide services too, this speaks directly to the lived experience of marginalised people and so is a fundamental equity issue.
When speaking to the future, our definition of equitable funders included that they are “aware of the intergenerational aspects of their funding and investing policies”. The ‘Investment Portfolio’ and ‘Who You Fund’ metrics were critical pieces, designed to examine how grantmaking foundations were granting out and growing their portfolios. Are they tracking who they are funding, examining demographics and addressing community needs? Are they making investment decisions that harm the environment through carbon intensive industries? We sought to measure whether they were re-investing back locally or within Canada. All of this speaks to the future, and to whether funders are actively thinking about how they can correct past harms and reduce future damage.
Did the QuakeLab method(ology) for this project appeal to you? We’re always looking to work with teams to build and solve for your toughest equity challenges. Please get in touch if you’re interested in working with us to further embed and systematize equity in your organization and processes.
