In relation to development and social change, money is both a curse and a cure; both “beauty and the beast.” In the year 1900, Willian Hanna stated: “There are only two things that matter in politics. The first is money. I can’t remember the second.” Although this quotation may overestimate the importance of money in determining complex social outcomes, financial resources are essential to the functioning of most programs, policies and institutions, and they can help to make great things happen. Yet inevitably, money also raises questions about inequality, the strings attached to funding, and the power of those who hold them to push resources to causes they approve of, perhaps even weakening or corrupting authentic social action in the process. These questions are especially acute in work that seeks to address the root causes of poverty and discrimination by transforming the power relations that underpin these problems, in which issues of money and who controls it are inextricably entangled. By design or default, current funding systems are evolving in ways that are detrimental to the pursuit of transformation in this sense, so what could replace them?
In this paper, Michael Edwards explores this question by rejecting the search for a single, “best” approach to social finance, philanthropy and foreign aid that is much in vogue today, and arguing instead for an ecosystem of democratic, institutional and commercial funding models matched to different elements of social change. Each model is analyzed in terms of its strengths, weaknesses, and applicability, and key areas of under-funding are identified. The paper ends by describing a number of promising experiments that achieve the double impact of boosting support for radical changes in society while lso transforming the relationships surrounding money that currently separate donors from recipients.