Funding with Trust and Flexibility – How Robert Bosch Foundation is experimenting with funding ideas and actors
Section
Case in Brief
The issue
Philanthropy needs to create enabling conditions for civil society actors, movements and activists to thrive and bring change. Current funding and collaboration practices such as stringent reporting requirements often constrain the agility and adaptability of civil society organisations. To address complex challenges, philanthropy must trust and invest in community-led programmes and the organisations that support them.
The context
In the context of economic constraints and political instability, not only do civil society organisations fill in the voids and hold institutions accountable, they also ideate better alternatives for people and planet. However, this work is rarely supported: Current funding falls short in enabling people and organisations to test and develop solutions that address the root causes of social issues.
The path forward
Philanthropy takes pride in its built-in feature of having fewer constraints than other institutions, which makes it well positioned to support risky but promising endeavours. Pivoting from supporting programmes and projects to actors and ideas can not only empower philanthropic partners to drive meaningful change, but also bring organisational transformation internally.
The Robert Bosch Foundation: A Snapshot
The Robert Bosch Foundation was established in 1964 and is rooted in the legacy of the entrepreneur and founder Robert Bosch. The foundation works for a just and sustainable future through its funding.
Mindset
- Trust
- Inclusiveness
- Transparency
- Flexibility
- Innovation
- Openness to evidence-informed results
Overview
The Robert Bosch Foundation is active in the areas of health, education and global issues. The foundation considers how the pressing challenges of today intersect as it strives to overcome silo thinking. It also has recently launched special departments: Ukraine Engagement to support Ukrainian civil society over a period of at least five years; and Futures and Networks that focuses on futures-oriented and sustainable philanthropy, in cooperation with political decision-makers in Germany and the Robert Bosch Academy.
The foundation currently holds roughly 94% of the share capital in Robert Bosch GmbH and finances itself from the dividends it receives as a result. However, it has no voting rights. It has evolved into one of the largest company-affiliated foundations in Europe with currently 170 employees working in Stuttgart, its home base, and Berlin.
In 2017, the Robert Bosch Foundation, under new leadership and recognising shifting international contexts, initiated a comprehensive review of its international funding portfolio, which constitutes 50% of its funding for operational and grantmaking activities. Addressing the complexity of global trends required a systematic approach involving a highly participatory process, including commissioning in-depth issue studies and consultations with international experts. This approach fostered a new dynamic, with staff working in cross-departmental groups, making the strategic review and realignment a learning journey for the entire foundation.
This systematic process led to the decision to wind down all existing grants and programmes and start anew. Between 2018 and 2019, the foundation launched a new funding portfolio focused on global issues, emphasising six key areas: climate change, democracy, immigration society, inequality, migration and peace. The strategic realignment in the international funding portfolio inspired transformation in its then other funding areas of health, science, education and society. An enabling factor for this organisational shift had been a 2015 revision of the responsibilities of the board – from overseeing individual projects and programmes to focusing exclusively on adopting a more strategic role and approving the annual budget.
The foundation adopted a mechanism to support organisations already at the ideation phase, addressing a significant gap in the funding landscape, to empower actors to test ideas aimed at tackling the root causes of social issues. The strategic shift implied process reviews, new dialogue formats with the partner organisations, and new internal solution-oriented approaches. The Covid-19 pandemic further helped to technically try out new funding mechanisms and realise them at a faster pace than under normal circumstances.
Challenge
Despite being at the forefront of fighting the complex challenges facing society, civil society organisations and social movements often deal with financial instability and inadequate funding. Two-thirds of organisations report being unable to attract or retain staff with adequate knowledge and experience, while 37% frequently adjust administrative functions to cut costs when donor coverage for administration is insufficient. Additionally, over half of these organisations struggle to fundraise from flexible sources. The type of project funding that many funders offer limits the capacity of their grantees to enact change. The pandemic showed what was possible when foundations use flexible funding: Around 66% of funders relaxed or eliminated grant restrictions, which helped civil society organisations to redirect staff time and resources to respond to the crisis.
Unrestricted funding dropped in 2021, as many funding organisations returned to their usual giving practices. The degree of flexibility shown during the pandemic needs to be “the new normal” in philanthropy and should be implemented beyond crises to ensure impactful and equitable partnerships between funders and grantees. The ability of the philanthropy sector to adapt and provide flexible funding solutions is key as the complexity of the problems society is facing intensify. By embracing accessible processes, flexible funding and a broader range of grantees, foundations can more effectively support marginalised communities and drive significant change in turbulent times. Less restrictive and more flexible funding is essential for organisations to effectively address policy threats, community needs and drive systemic change. It enables them to respond swiftly to urgent issues and adapt to future crises, thereby enhancing their capacity to serve their communities and advance their missions.
Approach
The Robert Bosch Foundation aims to achieve sustainable systemic change, and the way to achieve this requires trust and flexibility. The foundation relies on people and their ideas to change structures and systems, focusing on relational approaches to achieve impact through relationships. This has shifted the foundation’s approach from a traditional asymmetrical power structure to developing trusted partnerships. The foundation cooperates with a wide range of partners, and supports them according to the objectives and needs of each initiative. Its commitment to relational approaches is exemplified by its support of PEX, a community of philanthropy infrastructure practitioners, and the Wasan Network, a network of community builders from foundations and social change organisations.
Support is given at every stage of the partnership, with funding already provided at the initiation stage. The approach is informed by regular peer exchanges where colleagues meet quarterly to understand and share their experiences with partners. The aim of the process is to create a tailor-made approach responding to the specific needs and aspirations of partners and their ideas. While some prefer receiving financial support and light-touch cooperation, others value close involvement and information exchange with the foundation team. To implement funding with trust and flexibility, the foundation employs two key instruments: Funding of Ideas and Funding of Actors.
Funding of Ideas
- The Funding of Ideas process is structured to support innovative solutions for complex social problems through four key stages:
- In the initiation phase, the foundation and the organisation get acquainted and decide whether to start a joint development process. The length of the initiation process varies between initiatives.
- During the incubation phase, they identify partners and settings to explore the idea further, leading to a joint vision and agreement, including funding.
- In the development phase, the idea is turned into a concept with flexibility for adjustments.
- In the decision phase, the feasibility of the idea is assessed, determining if the collaboration should continue for implementation.
Regardless of the outcome, the foundation values the mutual learning experience. For example, the Robert Bosch Foundation considered adapting an app used in Canada for integration purposes but realised it was not feasible due to differing cultural contexts. In another instance, the foundation supported the Superrr Lab by providing resources to develop their ideas, acknowledging the expertise gap within the foundation itself.
Funding of Actors
Funding of Actors is a funding instrument which is meant to support partners in their organisational development. It is general operating support to the organisation for a “next step” they would like to take in their journey. What is important is that the foundation is not doing the organisational development process for or with the organisation – the partner organisation takes over the organisational development process themselves.
To ensure comprehensive support and flexibility, this instrument also involves several key stages:
- Initially, the foundation and a partner get to know each other to decide on embarking on a joint development process. This phase can take at least half a year while trust is built. During the initiation phase, the grant management team assists with administrative steps.
- Exploration follows, where the organisation identifies its strengths, needs and priorities, using financial support to free up resources and gain additional expertise.
- In the development phase, the organisation begins its journey, with flexibility to adjust plans as needed.
- In the finalisation/transfer phase, achievements are reviewed, recommendations are made for other organisations, and feedback is sought to improve the foundation’s support.
For the evaluation of its programmes and strategy development the foundation employs the evaluation framework, MEAL (Monitoring, Evaluation, Accountability and Learning). Conducted annually, MEAL informs the foundation’s theory of change by assessing the impact of its programmes and identifying areas for improvement. This framework enables the foundation to make meaningful contributions by evaluating its role in comparison to larger global actors. By focusing on the interdependencies of global issues, such as the nexus between climate change and migration, the foundation ensures a comprehensive and nuanced approach to addressing complex challenges.
Results
Changes in internal practices
Trust and flexibility are increasingly at the centre of the foundation’s funding relationships, as it relies on people and their ideas to change structures and achieve the foundation’s commitment to effecting systemic change. To support long-term and reliable partnerships, the foundation has increasingly adopted more open and flexible contract forms with fewer reporting requirements. The grant management team deals directly with the partner organisations, engaging with various project topics to foster deeper understanding with partners. Inclusivity and the integration of partner voices in decision-making processes have been prioritised through advisory councils and strategy retreats, ensuring that partners contribute directly to the foundation’s feedback loops and internal thinking. This practice ensures that diverse perspectives and lived experiences inform the foundation’s strategies and initiatives.
Building trust with partners
The foundation has invested considerable time in building trust and understanding with its partners. Listening to their needs and understanding how to better work with grantees has allowed the foundation to be more flexible, for example leading it to customise reporting requirements based on the needs of the partner. Though the foundation has created a more tailored and supportive funding environment, one challenge has been the initial reluctance of some partner organisations to fully embrace the freedom and flexibility offered. Despite these challenges, the foundation’s willingness to adapt and embrace the ambiguity and volatility of the current moment and the systemic challenges we are facing has been key.