My LinkedIn profile has been flashing with the painful updates from my colleagues in the region, and across the globe, who - whilst trying to improve the state of the world - received their financial support cancellations from USAID this week.
It is a stark reminder to me of how brutal the financial environment for social impact work can be, particularly in relation to grant funding dependency. I sadly have significant experience with the incredible harm that can be associated with grant reliance, having had to shut down an organisation that was decades olds when grant funders decided its subject matter was no longer a priority (though to be fair there were definitely other organisational issues that justified the shutdown as well).
I truly want to offer my colleagues hope, and the best thing I feel I can offer our community right now is our own experience. At OpenUp a few years ago our main funder “sunsetted” its support and our other significant funder, the Open Society Foundation of South Africa, was shut down as the Open Society Foundations have been going through their multi-year, and ongoing, strategic refresh. But I had already begun implementing strategies to reduce our donor reliance. In fact, in under 12 months, OpenUp was able to move from 73% grant reliance to 63% project revenue reliance in 2024. This has not been easy, but in doing these strategic redirections I thought I could offer some very high-level lessons from that process - because I believe many solutions to the negative risks of the grant funding environment will be forwarded by strengthening the African innovations communities more generally.
I’ll share some lessons specifically about moving from being more grant funding reliant to project revenue reliant, but it is also worth reflecting on the work we did with our colleagues at the Civic Tech Innovation Network in 2024 that considers risk-conscious strategies for a broad variety of actors in the civic technology ecosystem (https://funding.civictech.africa/).
Approach your income as a strategic asset
I think generally those in the social impact community have a complicated relationship to money.
I have found it incredibly useful to reframe money for the organisation as a strategic asset for reaching the social impact I want us to achieve, rather than viewing it in the abstract.
It is not the most important asset you have, but it's up there.
When we see income as a strategic asset, you also begin to appreciate how different kinds of income come to require different strategies not just for sourcing them, but also for how you work with them to ensure you use them the most productively for your own organisation. In the early days of our funding pivots, I prepared a funding brief for our internal team to ensure an organisation-wide appreciation of this (we are in this together, after all). In that, I highlighted that at the time we had three main kinds of income that needed to considered slightly differently:
The key lesson on cash flow vulnerability has been an important one; the difficult reality for those in our community is that you need to have cash reserves already (and you need to be able to build them up) to protect you from the cash flow difficulties that arise from project revenue.
There are many more tips and tricks on how to maximise your budgets and income types in the best way, from people financially smarter than me, but step one is definitely putting a strategy in place so that you can start testing it. Now.
Your systems must be adjusted
Different kinds of income imply different kinds of management. When you are thinking about diversifying your income streams, you will simultaneously need to plan how to adjust both your financial systems and your project management systems.
There can be some joy in it. For the kinds of income we wanted to attract, we knew we had to build more efficient project management. And there is something wonderful about delivering things well, particularly coming from a sector where, often as a result of the kinds of grant funding we have needed to access, efficiency-for-impact has not necessarily been encouraged.
Your ecosystem may need a reeducation
This is not as condescending as it sounds. We need to take people with us, and there are many teething problems to changing your approach. The interesting truth is that, in my experience, people don’t like non-profits trying to act as businesses. And honestly it is hard to balance the priorities of our organisation with clients who have become very used to grant funds subsidising the kinds of help we are able to give. But that's why it's so important to build a community with trust and honesty, because - if we can show how we are working together to advance the communities we love - finding a way to do it together, with no party feeling exploited, is absolutely possible.
The future of consortia
We’ve also been rethinking the kinds of grant funds we do try and access, as well. The last three years have seen us accessing grant funds through consortia in really productive and impactful ways. Consortia help us spread risk, access larger pools of funding, and leverage our different partners' strengths so that we can push for truly systemic approaches that drive impact. It's also just great to collaborate: but you must acknowledge that the collaborating itself is half the work. This is why I always try to include project management and collaboration as their own area of impact within our project design.
When I use my “future glasses”, it has become more and more clear to me that the problem with many of the activities of the social impact community in Africa is that we are actually too small to attract significant funding.
The more we can join together, strategically, to see funding as a community opportunity and asset, the better.
In our shifts, I have been incredibly proud of the adaptability of the OpenUp team who have each had to weather these changes at a personal level. But it earnestly breaks my heart to see so many wonderful colleagues’ work so derailed by the shifting political priorities of another country or institution, over which we have no control. Dependency is vulnerability. And whilst I hope our experience is helpful, I really would encourage us all to just hold the space for each other in this moment to feel stress and pain. OpenUp and I are here for you. And we are already planning the different ways we might be able to help build an African innovation community that can remain so focused as it is on advancing social goals.
