Why grantmaking isn’t commissioning, and vice versa
Grantmaking and commissioning are different. Being clear about how they differ will make your life as a grantmaker better and less stressful, and will help your grantees a whole bunch too.
You might think that this is going to be an essay about the joys of tax regimes. Not quite. The authorities in different countries do care about grantmaking-vs-commissioning, but there's a deeper philosophical point that transcends different legal regimes, and that all grantmakers should have clear in their minds.
The key difference between grantmaking and commissioning comes down to the idea at the heart of a funded project, and where that idea comes from.
Consider the idea of building a new playground. Picture workers in hi-vis installing a slide, some climbing frames, a
merry-go-round. But playgrounds don't come for free - someone is going to have to pay for the equipment, pay for those workers.
This means that someone who controls funds - a funder - is going to have to sign off the expenditure, and transfer some funds. But this still doesn't tell us whether this money is a grant or a commission - a funder can be a grantmaker, or a commissioner, or both.
What determines whether the money for this playground are a grant or a commission is who had the idea to install the playground.
A tale of two playgrounds
If local parents decide that they really want a playground, and then seek out money for it from the local council, then the idea is fundamentally theirs. This means they money they are seeking is a grant.
But if local council officers decide that a playground should be built, and they deploy council funds to get it built, we call this a commission.
In both scenerios local kids get the exact same playground, with money that even came from the same source, but the mechanism for getting there is different.
Given that the output of these two ventures is basically the same, you might then assume that the precise type of funding activity that enabled it is largely irrelevant. But you'd be wrong.
People care a lot about their own ideas and dreams
Imagine that the see-saw in this playground jams and breaks. It won't see and it won't saw. What happens next?
With the playground that's been commissioned by some council officials, the local residents might consider that the breakage is "not my problem", and may never report the issue at all. Or if they do report it, their problem might or might not get fixed, depending on a thousand other council priorities.
But with a playground that was thought up by the local parents, there will likely be a greater sense of shared responsibility towards "our playground". Someone might bring a tool kit and try to fix it themselves. Or the parent who arranged for the equipment to be installed might contact the contractors to see if they can be encouraged to fix it.
In short, the people who recieve grants for "their idea" bring personal involvement, a sense of ownership and passion to projects, whereas people recieving commissions may do their professional best, but fundamentally see the work as a job being carried out for the benefit of someone else. And we all know from our own lives how it feels to do something for passion, vs for work.
Grantees get frustrated and confused when they're given disguised commissions
One story we've heard repeatedly while working with grantmaking clients goes like this:
"I keep trying to get my grantees to do what we told them to do in their grant agreements. But they keep letting us down, doing things we didn't agree, and then complaining about the way they feel we're bossing them around. Help!"
When have dug into this lament, a common cause has emerged, one we have seen across different funders in different fields.
What happens is that funding applicants believe they are entering grant relationships, recieving money to realise their own ideas. But what they are actually doing was entering into a commissioning relationship where the funder needs certain jobs doing exactly to their own specification. When these jobs are then not done well, or not done at all, this creates stress and grief for the grantmakers: people who are normally themselves under pressure from boards, bosses and funders. It is at this moment that difficult calls between funders and fundees can happen, and where grantees can start to complain about being pushed around.
What to do if you are experiencing granting vs commissioning problems
If you think your organisation might be suffering from problems that result from mixing up grantmaking and commissioning, here's a few things you can try.
Convene an internal discussion around the question "What are our organisations definitions of 'commissioning' and 'grantmaking?"
Make sure your board has a briefing on how commissioning and grantmaking are different, and encourage them to understand that even if one mechanism has a tax advantage in a certain situation, that doesn't mean it's necessarily the right thing to use.
If some of your grant programmes are actually commission programmes, and for some reason you can't change this, make sure that your guidance to applicants is super clear that they are going to be held to tight standards for delivery.
Latest Reading, Watching & Listening - Modern Grantmaking recommends
US President Donald Trump’s gutting of USAID and foreign assistance programmes has left a deficit of around 25-30 per cent of the world’s development funding. Philanthropy network WINGS has published an open letter urging funders to ‘act boldly to protect and strengthen civil society’ given democratic backsliding and the withdrawal of aid from the US and Europe. In response, WINGS is inviting funders to take specific actions including supporting organisational and field resilience and growing grantmaking operations to meet the moment. You won't find a lot online about the vital job of designing really usable grantmaking technology systems. FF Studio worked for Sport Engand on this and have a fun writeup, full of visuals.
How about a new job or trustee role in grantmaking?
Bedfordshire and Luton Community Foundation (UK) is hiring for a Grants Manager. Salary is £32.4k to £36k. Deadline is 30 April 2025. Premier League Charitable Fund (UK) is hiring for a CEO. Salary is £100k-£115k. Deadline is 4 May 2025. Friends Provident Foundation (UK) is hiring for a Grants Manager. Salary is £42.5k. Deadline is 7 May 2025. Funding Lead - Natural Environment Research Council (UK) is hiring for a Funding Lead. Minimum salary £51,7540. Deadline 15 May 2025.
Want to see your job ad in next month’s newsletter? Ping us, it’s free! Just… #ShowTheSalary
Grantmaking ‘joke’ of the month
What well placed, pastry custard-filled goodness can help you get funding? Why, a strategic flan, of course.
Credit: Grantmaker and friend-of-the-newsletter, Stuart.
Got any terrible or actually funny grantmaking jokes to share?......tell us.
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Who are we?
Gemma Bull and Tom Steinberg run Modern Grantmaking, and write this newsletter. We do consulting and training specifically for funders, and wrote a book on how to be a modern grantmaker, too.
