Opinion: A new approach to development funding is uncomfortable but needed

Climate change and poverty reduction efforts face a critical juncture as traditional development funding models prove inadequate. Today, as we all feel the need to accelerate climate action, it’s time to learn from the past few years and address the systemic issues with these models and move toward innovative approaches like learning-based funding that aim to redefine relationships between funders and communities. In December 2023, the inaugural Shift the Power global summit convened in Bogotá, Colombia, with 700 delegates from 76 countries. This three-day event was more than just another gathering — it marked a pivotal moment in the effort to redefine development funding and address these systemic problems. Before that, seven years ago, at the Global Summit on Community Philanthropy in Johannesburg, South Africa, the hashtag #ShiftThePower emerged as a rallying cry for change. Adeso, a grassroots aid organization operating in the global south, was present then and reflected on this evolution ahead of the Bogotá event. In a blog post, Degan Ali of Adeso critiqued the “unhealthy power dynamic” between aid organizations and funders, arguing that a shift toward “philanthropic capital” has allowed Adeso for more creative, locally led solutions. Traditional grantmaking practices, because they’re transactional, perpetuate the inequality of power dynamics and encourage competition instead of collaboration. The granting process has traditionally been determined by the funder, without involving community members, who then have no decision-making power. Shifting the funder-fundee power dynamic has emerged as one of the most critical issues in development funding over the past five years. Yet there is still a lack of resources for experimentation, adaptive thinking, and community-based learning programs that support individual and organizational transformation. So while it is important to shift the funder-fundee power dynamic, shifting power in development initiatives also requires deeper collective unlearning, self-transformation, and a redefinition of roles within the sector. Navigating uncertainty Admitting our own vulnerability and recognizing that no one has all the answers can lead to discomfort and uncertainty. And while colonialism has shaped our history, there is no clear forward-looking blueprint for shifting power in international development. As we move forward, collaborating with partners who are equally committed to navigating uncertainty will be essential. A pioneering voice in this paradigm shift is the System Innovation Learning Partnership, or SILP, funded by the Swedish International Development Agency, or Sida, in collaboration with EIT Climate-KIC. The initiative embraces discomfort as a catalyst for change, using participatory grantmaking to redefine development funding and power dynamics. Real change begins with a willingness to change ourselves In my work advocating for justice, access, inclusion, diversity, and equity, or JAIDE, I have observed that organizations often think that establishing guidelines is enough to bring about change. True inclusivity demands more — it requires individuals to challenge deep-seated mindsets of funding risk and compliance, and experience the discomfort of doing so, both from the top down and the bottom up. As a member of a marginalized group (Asian-Canadian), I have learned to navigate the dominant culture through code-switching, or adjusting one's typical behavior to fit into an environment, while also facing the discomfort of speaking out against discrimination and injustice. Similarly, individuals from majority cultures — especially leaders — must confront the discomfort of recognizing differences and embracing diverse voices, narratives, and norms. Shifting the power compels us to reevaluate our roles, whether as donors, community members, or intermediary organizations. Adapting to new roles, or even designing ourselves out of the equation, becomes a necessary possibility. The discomfort of a new relationship dynamic Transformation is not just about self-change — it extends to our relationships with others. Adjusting to new dynamics can be uncomfortable. Rather than acting as a traditional funder, Sida has partnered with EIT Climate-KIC on a journey to explore experimental funding practices. The organization has placed trust in how their funds are allocated, whether to the intermediary (EIT Climate-KIC) or to grassroots organizations that co-decide on funding. Indeed, one of the most significant insights that came out of the SILP Experimentation Fund is the difference between outcome-based funding and learning-based funding. A learning-based funding program is purposefully designed to enable people working in complex environments to build collaborative learning relationships among groups in local systems, to design action research experiments and explorations together, and to learn together about the changes these experiments and explorations create in the systems they are part of. This approach differs significantly from conventional philanthropic funding, which is often outcome-based and constrained by compliance and risk management. The shift from a transactional relationship to one focused on mutual learning has disrupted the old balance, making the new dynamics uncomfortable yet necessary. This feedback, from Javier Guillot and Antonia Brock from Power Compost, one of the grantees of the System Innovation Learning Partnership and based in Colombia, summarizes some of the potential of working in this way: “By participating in SILP's Experimentation Fund, we have recognized the immense power that lies in funding for learning, for it has allowed us to develop this project without the limitations of a predetermined, fixed and rigid vision of results and rather harness the grand potential that exists within the local system to cocreate and catalyze sustainable transformations. “Through our SILP experiment, which aims to learn about how to transform the organic waste system of Chía, a municipality in Colombia, we have realized the importance of making the tacit and implicit relationships and elements of a localized system more evident, thereby increasing the potential of driving radical transformations through collective learning processes. “The approach of funding for learning has enabled us to reveal a multiplicity of paths for transforming the system, allowing us to harness the existing potential not by adhering to a logic of compliance but rather co-creating with all actors present in the system.” Bringing people along The Shift the Power movement is about transforming personal relationships. The most important — and most uncomfortable — aspect of this shift is the commitment to bring others along, not just those who share our views. I hope we can embrace and celebrate discomfort as we work toward a more equitable future.