Funding is Governance

On governance, money, and power — and what's emerging at the live edge

The Megunticook watershed, Maine — Aerial perspective of water and forested land at watershed scale.

The first post in this series claimed governance as the precise word for how we navigate together toward shared purpose — not as a stand-in for stewardship, strategy, or relational infrastructure, but as the most accurate name for those constellations of practices.

Once we hold that word with care, three things often treated as separate problems begin to show themselves as one shape:

Governance, Money, and Power.

The way money moves IS a governance act. Who decides where money moves IS a power arrangement. The three are not just coordinated; in the dominant culture they are three names for the same circulation viewed from different angles. Which means governance, of all things, is where the heat is. A colleague of mine, Michelle Smith, likes to joke that this is what makes governance sexy.

In the dominant paradigm, governance, money, and power concentrate together — at the same apex, by the same logic. David Korten calls this empire culture. To see how that concentration happens, it helps to leave the meeting room for a moment and watch a hillside in the rain.

A hillside in the rain

When rain falls on bare soil, water finds the path of least resistance and begins to concentrate in narrow channels. The narrower channels allow the water to run faster, which erodes deeper channels, which pulls in still more water. The rushing water carves deep gulleys as soil is washed away. Paul Krafel, a naturalist who has spent decades watching this happen on the land, calls it a downward spiral — possibilities draining away with the runoff.

The same dynamics shape wealth and authority. Money flows toward where money already is. Decisions migrate toward where decisions are already being made. This is not a metaphor borrowed from nature; the same geometry holds wherever the flow away from a place outpaces what circulates within it. A neighborhood whose dollars leave through a few large corporate outlets; a region whose talent and capital concentrate in distant centers; a sector whose decisions accumulate in fewer and fewer rooms; these are different scales, but the same shape. This is concentration by physics.

What gets starved

In the field of social change, what gets starved when resources concentrate is the relational infrastructure beneath the visible work.

Turning to nature for guidance again, in the forest, what we see are trees. But the trees are sustained by a vast underground network of mycelium that channels nutrients between them, brokers exchanges across species, and holds the whole system in mutual nourishment. Networks for social change behave more like forests than projects. The visible programs are sustained by a slow weave of trust, communication, and mutual learning. And yet, funding cycles geared to programs and predetermined outcomes feed the trees and starve the mycelium.

We struggle to see what gets starved because we have learned to recognize only the kind of power that concentrates. Krafel names two powers: the visible power that runs off and erodes, and the invisible power that soaks in and creates soil. The first we celebrate; the second we overlook. Yet it is the second that raises the earth.

The upstream move

To shift from downward spiral to upward spiral, Krafel does not oppose the runoff. He goes upstream, where the rain first begins to leave the land, and makes small openings that invite the water to soak in. Water held in this way soaks in, becomes groundwater, and nourishes plants whose roots and leaf litter create more surfaces that hold the next rain. The slope grows greener. The spiral reverses direction. The work that was invisible at first, grows on itself as natural allies emerge.

What might that upstream move look like in funding?

Here’s a practical way to consider it. Trees share up to thirty percent of the sugars they produce through photosynthesis with the mycelial networks beneath them. Nearly a third of the food they make feeds the mycelial network that, in turn, sustains the forest. It’s not tit-for-tat or transactional: there are no metrics of return on investment. It is the complex reciprocity of living systems.

What if a meaningful share of investment — say, a sustained thirty percent — went to relational infrastructure: the trust, communication, and learning that lets a network behave like a forest?

Mycelial work has practitioners. Bridgespan calls them field catalysts; the field also names them backbones, network weavers, ecosystem builders, and systems stewards. They are the roles invented to do what the dominant funding model has yet to learn to value and feed.

The live edge

An upstream move is taking form across the field — quietly, in many rooms, often invisible to one another.

David Renz observes that the locus of governance is moving above the level of the individual organization — from the networked organization to the network as organization. Michael Quinn Patton and Ruth Richardson trace an evolutionary arc from autonomous foundation grantmaking, through alliances, toward principles-driven networks of networks. Dimple Abichandani names a relational shift inside philanthropy itself — from holder-of-wealth to mover-of-wealth, from governance-proximate-to-wealth to governance-proximate-to-community. John Fullerton, working from finance, names robust circulatory flow as one of the principles of any healthy living system.

The practices reaching toward this shape are visible too: trust-based philanthropy, participatory grantmaking, community giving circles, bioregional financing, Pando Funding, and long-horizon capital, to name a few. These are early forms of resources flowing through rather than concentrating upward.

Grantmakers for Effective Organizations, an association of more than six thousand funders, has just published Toward Meaningful, Valuable, Equitable Governance — a sign that this conversation is alive at scale within the funder community itself. Their own diagnosis is that current governance frameworks are static while community needs are dynamic — a square peg in a round hole, they say. They name innovative models — shared governance, minimal-viable boards, a network advisory group described by one member as “like a murmuration.”

The vocabulary is reaching toward ecology: ecosystems, networks, mycelium, a murmuration of birds. What GEO’s leading-edge work does not yet ask is whether the shape itself wants to change. The unit of governance throughout remains the individual organization; the alternatives are still alternatives within or attached to a single board.

The shift the field is reaching toward, but has not yet crossed the threshold of, is structural: the network itself emerging as a locus of governance, with the individual entities nested throughout it. To inhabit ecological language structurally is to let go of the assumption that complex conditions can be atomized and controlled.

The network is the form governance takes in complexity.

This is the live edge.

What’s stewarded

What begins to change inside this emerging shape is the position of the funder: no longer above what is being resourced, but inside it — accountable to the same purpose, regulated by the same flow.

This is not a question of relinquishing fiduciary responsibility. It is a question of where the fiduciary imagination places the boundary of what is being stewarded. If the network is a locus of governance, the imagination has to widen to include the ecology, not only the institution.

Inside that widened imagination, trust becomes a medium of exchange that, unlike concentrated money, compounds with use rather than degrading. Resources cycle. Decisions emerge from the flow rather than concentrating above it. The funder is not less responsible, but the funder is differently located. The network can sense where the resources are needed most.

The cycles we learned as children — water, carbon, nitrogen — are how life sustains itself. Life circulates its essentials rather than concentrating them.

An illustration of nutrient cycles: carbon, nitrogen, water, phosphorus, and oxygen, from microbiologyclass.net

Whether what is taking form across these rooms shares a deeper pattern — one that names itself across the soil, the forest, the funding flow, and the network — is a question this series begins to explore next.