- Generate a space for discussion among relevant actors for the financing of social and environmental projects in Latin America.
- Disseminate the NGO Urgent Letter with Latin American funders to gather feedback, assess challenges and ensure regional relevance.
The letter, drafted and led by Catalyst 2030 members, is part of the Shifting the funding paradigm initiative and proposes ten transformative grantmaking practices. The luncheon aimed to present this proposal for new funding processes needed to achieve broad transformation and social inclusion in Latin America, such as providing multi-year funding, reducing lengthy application procedures, collaborating with funders, strengthening the operational structure of implementing organisations, among others. You can find the letter and more details on the ten principles here.
The event was attended by 18 participants, including donors, investors, impact entrepreneurship support organisations and a social entrepreneur.
Five key takeaways from the conversation:
1. Several of the principles are already being applied, but in a disconnected way.
Funders are already indirectly implementing some of the principles in their organisations. Some of them seek to make their application processes more streamlined by requesting concept notes rather than full applications or provide greater flexibility by generating amendments to contracts. Others seek to be more publicly transparent about their challenges and areas for improvement. However, these efforts are often made in a disconnected way. Discussing these principles prompted them to reflect on actions they can take to improve their practices individually and as a funder community.
2. Consideration should be given to the specific risks faced by each funder.
Some funders may be affected by political risks and others by social risks. It’s imperative to consider the particular characteristics of each and the needs and risks they face. It is also important to consider the local context in Latin America as a whole as well as the specific contexts of the different countries comprising it.
3. A more cohesive ecosystem for funders must be created.
Funders expressed the need for more, similar discussion spaces to help maintain fluid communication and address issues of relevance to them. There are few spaces where they can meet with similar organisations to share experiences and good practices. If more spaces like these were created, it would be easier to reach agreements that would allow them to have a greater impact.
4. The wording of some principles should be made clearer.
Some funders commented on the importance of being clearer in the wording of the principles, so as to leave no room for subjective interpretation and have a means of monitoring and verifying compliance. For example the word “unrestricted”, can sound threatening to funders. The word “flexible” could be used instead. Funds should always be framed under the charter of each organisation to ensure that the impact objectives sought are met. In this case they cannot be unrestricted. Instead they can be flexible within the framework of the programme.
5. Funding organisations are dependent on decision-making bodies.
Simplifying funding processes is complicated for some organisations as they depend on mandates from their board or other decision-making bodies (e.g. Congress) which have to comply with complex processes themselves. Government organisations cannot easily change the paperwork process. They have very little tolerance for risk. Foundations also have many IRS restrictions which prevent simplification.
Where do we go from here?
As an Impact Network, the Impacto Latam Network believes it is important to generate more spaces for discussion among funders in the Latin American ecosystem. That is why we will seek to create more events so that relevant actors in the impact ecosystem can raise their voices.
Catalyst 2030 will continue to support our global partners to facilitate and lead these discussions, sharing key insights and developments with our community. We are working to facilitate more global dialogues. Are you interested in hosting a Donor Salon in your region? Please get in touch!