Funding’s Hidden Curricula

In the social sector, we often speak about partnership. It appears in grant agreements, funder communications, and annual reports. It signals equity, mutual respect, and shared purpose. Yet, beneath that language lies a more complicated reality: donor-grantee relationships are shaped by unequal power, often in ways that are rarely spoken about honestly.

At a moment when philanthropy is increasingly grappling with questions of trust, participatory decision-making, and unrestricted support, this chapter reflects on what genuine partnership might look like. This excerpt from The Nonprofit Paradox: What We Don’t Talk About, When We Talk About Giving examines that gap. Drawing on the author’s early career at the Sir Ratan Tata Trust in Mumbai, one of India’s oldest philanthropic institutions, it examines how organizations adapt themselves to donor priorities, how reporting can become performance, and how the language of partnership can mask relationships in which one side defines success. The chapter also brings in the funder perspective, examining the pressures created by the boards, metrics, public scrutiny, and expectations around accountability. Accountability need not flow in only one direction; relationships rooted in humility, reciprocity, and shared learning offer a different path forward.

The Nonprofit Paradox draws on over two decades of experience in international development and philanthropy, blending in global stories and data to unpack how the business of nonprofits operates. It invites readers to see nonprofits not only through the lens of charity but through purpose, financial sustainability, and structures required for meaningful impact. It is for anyone who believes that philanthropy can, and must, do better.—Nehal Gandhi

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What if the most crucial decision in a nonprofit’s life—the line between thriving and closing—hinged not on its community or vision, but on a donor’s priorities? This is often the unspoken reality of our sector. The relationship between donors and grantees is built less on shared intent and more on whose priorities hold sway.

I joined the team at the Sir Ratan Tata Trust in Mumbai, India, in 2001 as a Program Analyst. The Trust is one of India’s oldest and most influential philanthropic institutions, and was deeply rooted in nation-building ideals but operated with a quiet confidence that echoed many of the frameworks seen in global international development. I was placed, in rotation, working through various thematic areas of the social sector, including education, rural livelihoods, art and culture, and a small grants initiative that acted as a pipeline for future programming. The design was intentional: I would gain a bird’s-eye view of the Trust’s philanthropic strategy and, in time, contribute toward shaping its giving objectives.

Coming into the role with a background in development economics and hands-on experience with nonprofits, I had some awareness of how power operated in the funding ecosystem. I did not yet fully understand how invisible that power could be. As a young employee at the Trust, I watched how our giving guidelines shaped grantee implementation plans. Even the most well-intentioned flexibility had boundaries. The Trust is deeply committed to social impact, and equally clear as we often, sitting in the prestigious headquarters at Bombay House, were the ones defining what “impact” looked like. Grantees adapted. They translated their community-rooted work into proposal language that mirrored our frameworks. We would call them partners, but the terms of that partnership were largely that of the donors to define.

A slightly contrasting lens from that is the process of drafting my first official response to a grantee’s annual report. Not an email. It was a typed letter, crafted after reviewing their financials line by line and redrafting language to strike the right tone. Every sentence mattered. Back then, most communication in the rural environment where the organizations operated was sent by post. Once mailed, a letter would take five to seven business days to reach its destination. This reality created a natural pause. Before sending it out, the letter would be reviewed, held back for a few hours, sometimes even overnight, in case anything else needed to be included. Only then would it be printed, signed, and mailed. That meticulous process of anticipating questions, clarifying logistics, and aligning language demanded patience and thoughtfulness. It was a depth that instant communication often lacks. This experience shaped how I came to view the donor role: as a listener, interpreter, and relationship builder.

Today, as I reflect on my two decades of work in the sector, I realize that the grantee-funder relationship is not just about giving or receiving money. It is also a relationship shaped by power, trust, accountability, and the willingness to grow together. This chapter is written regardless of where the donors and grantees come from i.e. individuals, community foundations, independent schools, giving circles, family offices, or corporate foundations. The dynamics of power, voice, and influence transcend these categories. What matters most is how these entities exert control over money, decisions, definitions of success, and how that shapes the lived realities of those doing the work.

Conversations Over Tea, Not Just Logframes

At Tata Trust, I cultivated the valuable habit of writing Back to Office Reports (BToRs) after each field visit. These reports were not intended as formal evaluations or compliance documents; they served as a form of institutional memory capturing not just program outputs but also the context and nuances of the partnership. Often, the tea breaks, car rides, and in-between sessions with field professionals revealed the most about a partner’s journey. These small yet meaningful moments, though informal, frequently found their way into the BToRs, ensuring that the written record reflected not only what was formally presented but also the lived experience of the partnership from both sides.

One visit to a coastal district of Junagadh in the State of Gujarat stands out. It is several hundred kilometers from Bombay House in Mumbai, typically an 8-9 hour train ride, or nearly a day’s journey by road. We sat with the executive director of a local partner organization, discussing not just project updates but the deeper dynamics of the sector. He spoke about what he described as a triangle of interdependence between implementing agencies, support organizations, and donors. For real impact, he argued, these three must be interdependent, not hierarchical. His insights remain strikingly relevant. He offered eight reminders for funders:

Offer flexibility and invest in building organizational capacity.

Approach the role as a mentor.

Recognize the imbalance of language in grant agreements. Use equitable standards.

Avoid funding delays. They strain operations.

Avoid a patronizing tone during visits and reporting cycles.

Ask the right questions. Avoid micromanaging.

Appreciate the challenges on the ground.

Honor commitments because grantees have options, too.

His feedback felt like a mutual exchange. Being a donor did not make me the boss; it meant being a steward of capital, a learner, and a co-creator. Unless funders embrace this truth, we risk becoming obstacles rather than allies. The social sector loves the word “partnership.” It suggests equity, mutual respect, and shared goals. But underneath, the relationship is rarely equal. The donor controls the money. The donor sets the process. The donor decides the metrics. What looks like collaboration on the surface often masks a fundamentally transactional exchange. The Bridgespan group argues that many well-intentioned donor-grantee relationships fall short when they fail to become true collaborations.¹ When donors impose priorities, timelines or reporting frameworks without shared strategic alignment, grantees often adapt out of necessity rather than conviction.

In my later work advising grantees and funders, I have seen this pattern repeat across geographies and sectors. A USAID cooperative agreement may involve hundreds of pages of compliance requirements. A family foundation grant might look more flexible, yet it still dictates outcomes. A donor-advised fund payout seems simple but can shift priorities on a donor’s whim. In all these cases, grantees become expert shape-shifters. They reframe strategies, tailor language, and bend proposals, not to reflect community needs, but to meet donor expectations.

The Hidden Curriculum of Funding

The term “hidden curriculum” was coined by educational theorist Philip W. Jackson in Life in Classrooms where he described how students pick up lessons of unspoken norms, values, and expectations embedded in institutions, the lessons that are never formally taught yet shape behavior deeply.² In the context of this chapter, some aspects of grant-writing get picked up informally like an undocumented norm that shapes who succeeds, and how. As one study puts it, the hidden curriculum of what makes a grant successful is passed down through mentorship and socialization, not textbooks.³

There is a silent syllabus grantees absorb over time. They learn to write proposals that signal alignment, even if their work diverges in practice. Buzzwords that get attention become second nature. Crafting stories that show impact without revealing messiness is an art they master. They perform with confidence, all while quietly navigating underfunding, burnout, and bureaucratic hoops. This hidden curriculum exists because survival often depends on it.

In my consulting work, supporting grantees as they navigate various donor systems, I have seen firsthand the emotional and administrative labor required just to keep these relationships alive.

Over the years, grantees have been clear about what they truly need: trust, flexibility, honest communication, and a willingness to engage in the messy middle. They seek funders who understand the constraints they operate under, who respect their time, and who do not reduce their work to overly simplified metrics. They crave space to innovate without fear of losing funding due to failure. They want relationships, not just transactions.

Why the Funding Conversation Is Hard

Despite all the talk of partnership, the funding conversation still carries a power imbalance that is hard to ignore. For grantees, asking for money can feel vulnerable. For funders, saying no can seem cold or transactional. Somewhere in between is a space we rarely inhabit: one of mutual candor, curiosity, and shared context. Part of the difficulty stems from the language we use. Words like outcomes, KPIs, and scalability dominate our conversations. It is the language of efficiency. As I reflected earlier in this book, excellence frameworks borrowed from business can sharpen discipline. However, they can also dilute the mission of deeply personal work. What begins as a tool for accountability too often reduces impact to short-term outputs: numbers reported, services delivered, targets met. Emphasis on output and outcome is fine. Trouble begins when impact is sought to be measured often within one year. This is unrealistic. Impact often cannot be measured even after several years. Yet, donors are only interested in positive impact, not negative impact.

Nonprofits, too, learn to translate their missions into the vocabulary of measurement and return on investment. This translation can be a strategic necessity for survival. Yet, it often comes at the expense of nuance, context, and community voice. As one grantee told me during my survey: “It is not the reporting that drains us. It is that the report has to tell the story they want to hear.” That voice captures the burden of adaptation. Reports stop being a space for learning or reflection. Instead, they become carefully curated performances designed to reassure donors. The effort to speak the donor’s language may keep the funds flowing. But it risks diluting authenticity and leaving community needs unaddressed.

Encouragingly, the sector is evolving. Several models including participatory grantmaking, trust-based philanthropy, and multi-year unrestricted funding are slowly gaining traction. These are not just administrative innovations; they are deeper power shifts. As the Trust-Based Philanthropy Project notes, the goal is to “advance equity, shift power, and build mutually accountable relationships.”⁴ Similarly, the Fund for Shared Insight, through its Participatory Philanthropy Toolkit, has documented how participatory approaches create more equitable, responsive decisions that strengthen grantee trust.⁵

Some foundations now invite grantees to codesign programs. Others allow organizations to define their own success metrics. A few have even restructured governance to include community voices at the decision-making table.

Donor Voices: The Other Side of the Funding Conversation

If funding conversations are fraught for nonprofits, they are not always easy for donors either. Many funders admit they are caught between competing demands. Hemal Gandhi, Executive Director at GRP Ltd, who also leads the company’s CSR initiatives, shared insights in a survey. She reflected on the tension corporate donors face: “We want to be good partners, patient listeners, long-term allies, and strong supporters. Yet, we are also navigating board members’ expectations, branding considerations, and internal KPIs that were never designed for nuanced, community-led change. Change, trust, and impact take years, sometimes generations!”

CJ Orr, CEO of the Orr Group, echoed the concern about metrics, highlighting the unintended consequences of accountability frameworks. “Donors want to unlock capital and support causes they care about,“ he noted. ”But they often feel pressure to restrict funding to prove accountability. That pressure can actually prevent them from giving in ways that are most helpful.”

Noshir Dadrawala added another dimension which is the role of compliance (which we saw in chapter 6) and public perception. He noted that many first-time donors, particularly in India, are influenced by regulations and media narratives that cast nonprofits in a negative light. This leads to compliance-heavy funding conversations that focus on controlling risk rather than building trust. There is a trust deficit right at the start. Imagine a marriage that happens on the basis of perceived mistrust and prejudices and hoping that setting rules and check lists will build trust over time. I think it is rather naïve and even bordering rude and insulting.

Taken together, these reflections remind us that donors are not immune to pressure. They may hold the purse strings, but they also operate within an ecosystem of expectation, accountability, and scrutiny. When donors choose to share power, to trust, and to embrace learning alongside grantees, the funding conversation can move from a transaction toward a relationship.