More legwork, less desk work – reflections from a dialogue with funders

Felipe Bogotá, Executive Director, TerritoriA

Among the reasons for creating TerritoriA was to help understand the needs of the ecosystem in Colombia and to propose new ways to address them. One of our areas of concern has always been how to contribute to transforming the way in which development has been funded. Therefore, we decided to convene actors in the financing sector working to make social change and asked them the following question: Should we change the way development is being funded today? These conversations took place in November 2023, within the framework of the #RoadToBogotá conversations in advance of the #ShiftThePower Global Summit.

We firmly believe in the power of the ideas and experiences of all those who have dared to propose new approaches. Consequently, we encouraged relevant actors in Latin America to talk, challenge the present, and suggest ways to change the system, based on their experiences. Some reflections from the discussion included:

• Funding systems must undergo changes: There are different challenges in allocating resources, including contracts, requirements to award and execute grants, and little communication with the territories about how best to allocate resources. This system creates inequalities and inefficient incentives for the actors receiving the funds. For example, either smaller civil society organizations face major obstacles in obtaining funding, or a high influx of project funding. Either way, this discourages innovative ways of distributing available funds. @innpactia
• Innovate and dare: The experiences shared by participants revealed that there are no sure bets that guarantee success. A proposal was that funding entities — rather than thinking in terms of “risk” — find opportunities for innovation and for incorporating replicable formulas into their financing schemes. Learning from these experiences should be the basis for future funding mechanisms. Colombia has seen an increase in innovative financing instruments, which, in turn, has created a context that is conducive to proposing disruptive funding modalities. Experiences such as Social Impact Bonds have shown that daring to innovate can leverage major transformations and encourage other actors to think differently about financing. And that more creativity and innovation are needed to bring solutions to the table so that more resources can effectively reach those who need them the most.
• Build bridges to energize the ecosystem: Improving the current funding systems requires collaborative work to build bridges between funders and beneficiaries. Among the suggestions made were designing projects with some level of risk to allow innovation, positioning key actors to encourage others to join, testing emblematic / scalable projects, and experimenting together to generate collective learning. The work carried out by @fhi360 in this field is a reference to carry on energizing the ecosystem and to which we will continue to contribute as TerritoriA to create more enabling environments that connect ideas and processes implemented with the necessary resources to improve territories.
• Local capacities as a basis for catalyzing philanthropy: Different experiences show that it is necessary to continue valuing and catalyzing local actors’ capacities. Not only do we need to build tangible capacities — techniques, assets, positioning — but we should also continue promoting a change of mind-sets towards great transformative ideas, and weaving trust to bet on collective high-impact solutions. In this sense, work such as that carried out by Fundaciones Empresariales @alpina, promoted by the AFE, has been key in showing how working directly with local communities leads to more strategic philanthropy. This implies that we must also value other non-financial resources — time, ideas, in-kind contributions — that are the basis for building other possible futures. This is where the potential lies to turn communities into investors in their own development.
• Localization of resources: Effective localization of resources available for development is an outstanding challenge. Existing processes continue to allocate resources inefficiently among different organizations and actors, which prevents the totality of funds from reaching the intended communities. This is not only detrimental to effectively funding solutions to local problems, but it also inhibits the potential of local actors to develop solutions and strengthen themselves in the face of new difficulties. This is the work of @territoria and @azai, which seeks to territorialize the impact on communities through efficient impact management. We also believe that we need to dream big in order to attract the resources that are actually needed to overcome the challenges of our country and the region. A mindset of abundance, trust building, and strengthening of the ecosystem would ensure a more appropriate, relevant deployment of local resources and more community engagement in decision-making processes.

These conversations clearly point to the changes needed to ensure that the challenges we face as a country and as a region are managed, assigned, evaluated, and shared in different ways. Thus, we call on all those who want to follow the conversations to turn them into collective roadmaps that contribute to our ecosystem and strengthen our territories.

By: Felipe Bogotá, Executive Director, TerritoriA