Case Study: Minderoo Foundation and embedding the PWIT philosophy
Pay What It Takes (PWIT) has commissioned a series of case studies featuring key not-for-profit (NFP) leaders that aim to explore their experiences and insights regarding the PWIT movement. Each case study will focus on the journey, challenges and successes encountered in introducing, adopting and implementing PWIT principles, practices and resources.
This case study features an interview with Kristen Stevenson, Executive Director, Effective Philanthropy at Minderoo Foundation who explains how Minderoo has embedded Pay What It Takes across its strategy, governance and grant-making, using trust-based partnerships and true-cost funding to support the delivery of outcomes.
Kristen highlights the value of flexible, operational and multi-year funding in building resilience and sustainability, while acknowledging that implementation and measurement practices are still evolving. Kristen also encourages not-for-profits to confidently articulate their cost requirements and calls on funders to embrace Pay What It Takes to help create a stronger, more sustainable funding ecosystem.
Case Study Summary
In this case study, Kristen Stevenson, Executive Director, Effective Philanthropy at Minderoo Foundation, shares how Minderoo has embedded the Pay What It Takes (PWIT) philosophy into its strategy, governance, partnering approach and grant-making practices.
For Minderoo, PWIT is fundamentally about trust and recognising that not-for-profit organisations know best what they need to deliver impact, including investment in people, leadership, systems, learning and organisational capability.
Kristen explains that Minderoo’s funding approach towards true-cost funding is about ensuring organisations have the resources required to achieve the outcomes that funders and grantees are working towards together. Minderoo has adopted this approach organisation-wide, securing Board endorsement and integrating PWIT principles into its partnering framework as part of a broader commitment to creating value, strengthening partnerships and contributing to positive systems change across the sector.
Kristen reflects on how adopting PWIT has shifted relationships with grant partners from budget scrutiny and line-item negotiations to more strategic conversations about capability, sustainability, risks, challenges and outcomes. She highlights the importance of flexible, operational and multi-year funding in helping organisations build resilience, retain staff, invest in infrastructure and focus on long-term impact rather than short-term funding pressures. At the same time, she acknowledges that implementation and measurement is context-dependent and still evolving. Minderoo continues to learn how best to apply and measure PWIT across a diverse portfolio of partners, recognising that there is no single formula for determining funding levels because cost requirements will always vary.
Kristen encourages not-for-profits to develop strong cost data and confidence in articulating the true cost of delivering impact, while also calling on funders to prioritise trust-based partnerships, openness and collective responsibility in building a more sustainable and effective funding ecosystem.
1. Why is Pay What It Takes important to you?
“Pay What It Takes at its heart, is about trust.”
What resonates for me about Pay What It Takes, is, that at its heart, it's about trust. It's about recognising our partners understand their organisations better than we ever can as funders. They know what it takes to deliver impact and that includes investing in their people, leadership, systems and learning.
Throughout my career, I've worked with some incredible organisations, and they've been able to achieve remarkable things, but a lot of them are operating with constraints. And too often funders ask partners to deliver things without supporting the actual investment required to make impact possible. So when we, as funders, underinvest, that shows up in whether we're actually able to achieve our shared outcomes.
Pay What It Takes is an approach that shifts the conversation from being about funding and budgets, to being strengths-based and about resilience and shared outcomes. And that's why the whole concept appeals to me.
2. Why did the Minderoo Effective Philanthropy Team advocate for a Pay What It Takes framework?
“A partner-led approach to how we would do our work.”
During our 2023 strategy review process, we recognised that in order to achieve the change we want, and to reach the ambitious outcomes we sought, we needed to shift our ways of working. A critical success component was putting partners at the centre of our approach.
We couldn't achieve our goals alone, and we knew we were going to be depending on those working alongside us. And we saw that partners needed to have the capability to deliver the work, and the support to do so.
So, that led us to ask some questions. How are we funding our partners to best deliver our shared outcomes? How are we recognising their contributions, their knowledge, and any barriers they might be having?
Around the same time, we got the results from our first grantee perception report from the Centre of Effective Philanthropy. And those findings validated what we had been hearing from our partners and gave us an evidence-based way of thinking about this feedback. And our partners were asking us to invest in organisational capability alongside program funding.
And so, those two data points, being the amazing costs framework that Pay What It Takes offers, and the feedback from our partner survey, aligned in time with our strategy refresh and enabled us to bring them all together to create a cohesive approach. It informed our partner-led approach to how we would do our work in the future.
3. How did the Minderoo Effective Philanthropy Team talk about adopting a Pay What It Takes approach with its Board and were there any barriers?
“This is all about outcomes and achieving better outcomes.”
It was a great conversation actually. There were three key Pay What It Takes messages we took to the Board.
The first was: this is all about outcomes and achieving better outcomes. And not about overheads. So we framed the conversation around – if we expect organisations to deliver these ambitions that are in line with our own desires, we need to be honest about what it takes to build a strong, professional and enabled workforce to do that. And this also includes paying for that organisation to have access to what it needs to be successful.
The second was around evidence. For this we used Pay What It Takes resources like their toolkits and evidence about the movement. Examples from peer funders, especially those who have already adopted the approach, were also important. These helped demonstrate it wasn't just a theory or an idea, but a contemporary approach to philanthropy – and something we felt Minderoo should be advocating for and part of.
And the third was around governance. Our Board asked questions around consistency and accountability and how we were going to implement the framework in practice. And we explained that we have strong diligence in place. We've got good financial oversight. We build trust with our partners through getting to know them. And none of those things were at risk by adopting this approach.
And so having us consider all angles of what might be needed to bring it to life gave the Board the assurance they needed.
I don't think any of those were barriers. In my mind, they just created a good conversation about what kind of philanthropic organisation we wanted to be and how we can be a sector leader. And that the organisations we partner with are critical to our success. And we need to treat them like true partners and make sure we're investing in their ability to deliver impact.
Management presented the Board with a well-developed case for adopting the Pay What It Takes approach. We invested significant time in preparing a comprehensive paper, clearly setting out the rationale, supporting evidence and the three key considerations underpinning the recommendation. The Board considered the paper, discussed the rationale and implications, and approved the recommendation.
4. Why was it important for Minderoo to go public in announcing its commitment to Pay What It Takes principles for its grant-making?
Talking about Pay What It Takes publicly is integral I think to the success of the actual movement.
For Minderoo, we wanted to communicate very openly about the importance that we were placing on this way of working. We recognise the not-for-profit starvation cycle and that no one single funder is going to be able to diminish the impact of that. But if we collectively start thinking about funding in a different way, we can help to reduce the shock that many of our not-for-profit partners feel in that cycle.
So we thought it was important to contribute to the broader sector change that was happening.
We needed to signal not only what we were doing, but why we were doing it. And that's why we came out with some thought leadership pieces to talk about it openly. I think it reflected for our partners and our team members that this was a genuine shift we were serious about.
By making a public commitment, it also helps us to be accountable for delivering on what we said and to make a vocal contribution to the conversation in the sector.
Talking about Pay What It Takes openly is becoming much more frequent in the different areas that I'm exposed to. It’s happening because people are bringing the subject to the table. This is a good thing. We're very happy to advocate for it and talk about our experiences. By no means are we perfect in implementing, but we want to learn and grow and see the impact.
And we're hearing from our partners the incredible difference it's making to what they're able to do within their organisations. And it’s just so wonderful to see them thrive without having to constantly fret about things like – how am I going to support my staff? How am I going to develop these amazing people, to retain them? And how can I get the systems I need that other organisations might take for granted? And so making sure that we enable them to invest is critically important to our joint success.
5. How is the Pay What It Takes journey going?
“It’s a fundamental shift in behaviours.”
It's been overwhelmingly positive, but that's not to say that it hasn’t had its challenges.
And it's not just because it’s about budgets and overheads. Mainly it’s because this is a fundamental shift in behaviours. This is thinking about something in a totally different way than funders have previously considered it and how grant seekers have thought about how to quantify what they need to deliver the outcomes that they want, and for them to be able to articulate that well.
And for funders not to apply an arbitrary percentage, because it's not formulaic. I think this is one of our bigger challenges in implementing Pay What It Takes. We have the principles, we have great guidance, but every situation is unique in terms of our funding arrangements with our grantees and partners. And so you can't just apply a rote approach. You need to think through the nuance in each and work that through with partners. So it's created more meaningful and open conversations now and built more trust.
But again, all this is going to take time. This is going to be a constant evolution about how we continue to embed these practices. And it's changing those old, long-established habits on both sides, changing to an open conversation, and not scrutinising every line item, and having more trusting relationships.
But changing behaviours doesn't happen overnight. And so we know that it's going to take time on all sides to further embed this approach in our practices.
6. What are the key Pay What It Takes principles that are now translated into your day-to-day business practices?
Implementing Pay What It Takes
For us, it’s all about implementation. We went all in. The approach was approved by the Board. We embedded it into our partnering principles and practices. And from the beginning of the financial year, we knew this was going to be applied to our work.
We didn't do a pilot. We’ve been learning through applying this new way of working, through putting it into practice. But theory into practice can be challenging sometimes!
Also, there's differentiation in our portfolio – we have not-for-profit partners, university partners, and large NGO partners. Pay What It Takes application is not the same across these different groups. Their requirements are different and we have to assess each situation as is.
Measuring Impact
The other thing that's been challenging for us, and surprising too, is measuring how it's being applied. First off, because we’d applied flexible funding practices already, although without calling this out explicitly. And with those, we had simpler budgets, fewer line items, and higher headlines.
So sometimes it's not obvious where the Pay What It Takes approach is in one of our grant or collaboration agreements. So we're putting systems in place to identify where it’s in practice and we’re tracking over time to see which areas in our philanthropy aren't adopting this approach and why not. And also to understand the circumstances better, so we can coach our team to create a more consistent experience for partners – like around how we talk to them about what Pay What It Takes looks like for their specific circumstances.
Budgets and behaviours
So it's been interesting, and it's changed the way we look at budgets. We used to start with budgets as a negotiation. But now it's a conversation, right? And sometimes when we're finding where things look higher or lower than expected, we're asking the question: help us understand what's driving this. How do you work? What does your team look like? Tell us about your systems. And that is changing the dynamic and the relationship between partners and us and getting rid of the assumptions people make.
One of our learnings is Pay What It Takes can't be reduced to a formula. Our teams love certainty, but that's just not the way that Pay What It Takes is applied in a Minderoo context. And so we are taking learnings through reflecting on how we're engaging with different partners and figuring out how we can further embed our practices, so our team members feel comfortable to have the conversations and that our partners are having a good experience.
The biggest things have been that consistency, and the need for certainty and we're still working through these internally. And I think that the more we hear from our partners about the benefits, it will become a standard way of working for us.
Bottom line, changing budgets is relatively straightforward but changing behaviours is not. And that's where we're going to have to invest the time.
That's why I think case studies are so critical to show examples in different scenarios of where Pay What It Takes principles have been effectively applied, because sometimes things are too theoretical. And you have to work through what that would look like for you, like, how would I have those conversations where the board has concerns, or where practitioners themselves don't subscribe to the Pay What It Takes ethos.
At Minderoo, internally we've had tough conversations where we've said: this is so critical to our success and especially when you see the impact it has on partners.
And when partners submit their proposals, (we don't do open grant rounds, but co-design proposals), we find some are putting in lower budgets in line with what they think we expect as a funder. And it’s important that grant seekers know how to articulate their value. So we talk to them about the Pay What It Takes Cost Calculator and other tools to help them get clear on their costs.
But it isn’t always the case that the funder a grant seeker is talking to, is going to pay the full cost. That's just a reality of where we're at from a sector perspective. But having that awareness of costs and being able to articulate that, as well as articulating the trade-offs is incredibly important.
So if a funder wants a program delivered and a grant seeker is only able to get X budget from them, then there are trade-offs somewhere – they might say - I've got to think about the wellbeing of my team or about the development of my team. I've got to think about the ability of being able to deliver this. And it becomes a conversation and more so if a grant seeker has the data to show what’s actually needed to deliver a program at the best outcome possible.
If the funder doesn’t have the ability or the desire to fund the full cost, then the grantee will have to accommodate for that and tell them, we might have to deliver less, or it might take longer – and it just changes the dynamic of the conversation.
So I would strongly encourage grant seekers to be super aware of what their actual costs are, because it's a helpful thing for funders to know. And so as long as they're clear what’s going to enable delivery, then we can agree how much we’re going to fund. But you need that evidence or that knowledge and awareness of what the actual cost of delivery is.
Minderoo philanthropy processes and Pay What It Takes tools
Minderoo Effective Philanthropy develops many of the frameworks and tools for the organisation, and we'll occasionally coach and provide advice to the team about how to approach those conversations. But we're not the ones having those direct conversations with partners; it’s our program leads doing that.
We're focusing on being more transparent and making sure our partners understand what our process is. As part of our engagement with them, we send out a two-pager that sets out what it's like to work with Minderoo. It explains our partnering principles – the things we think are important – like, for example, embedding trust, open communication, that kind of thing.
So one of the critical things for us to be successful, is to have the materials, the tools and the ability to coach people in order to open up the dialogue between partners and ourselves as funders. We leverage the tools available through the Pay What It Takes website, reinforcing those tools with potential partners, and suggest partners go away and think about what they need to deliver their work.
Now that the Pay What It Takes tool base is building out and there are more things to refer to, that's helpful, not just for the Minderoo team, but also, it shows potential grantees and partners what philosophy we subscribe to. And values alignment and relationships are very important to us. We all want outcomes and we want to be successful at making progress against those outcomes. And we want to have an open conversation about where the barriers are, what extra support is needed, and how we might need to pivot. And that's where flexible funding and operational funding comes into its own.
Flexible funding
I think there’s a real danger of grant seekers being fixated on percentages – of having a number in your mind – because that's just not a reality. Through our work with really diverse organisations at different stages of their development, we know that a grant seeker might need a more significant investment in infrastructure for an early or scaling organisation, than a well-established organisation needs. You have to understand the actual operations of the organisation and take the time to sit down and speak with the grantee and really know what it's like for them to deliver the work.
One of the biggest benefits I think we'll start to see even more of as we move into the outer years of applying these principles, are the opportunities for a much richer relationship. Because now we are taking more time to sit down, have a conversation, to listen and understand what are the challenges and the opportunities, and to figure out how we integrate those into what funding we land on for a particular partner.
And we want to reinforce that flexible funding is okay – particularly if we're working at the systems level which we really aspire to be doing. The work is not linear.
We know that at different points in time, organisations will face different challenges. We want them to talk to us about what those challenges are. And also, to help them understand how we can make resources like our funding, advocacy support and other expertise in our team available to our partners to help them unblock or unlock their potential to get to outcomes.
An example is in our artist funding space, where we’ve been paying artists to develop their applications. We're recognising that putting in their application is a use of our partners' time and we need to be remunerating them accordingly. I think that's a positive shift. I know of artists in that mid-career space who are very grateful for it; it doesn't happen all the time.
Another example is where partners have funders who will fund program costs, but not operational costs. And we've said, ok, we'll fund the operational costs fully if that means you can get started on this piece of work.
And we'll then help by making introductions to other funders, bringing them in too. We can’t make guarantees about how that's going to work, but we're trying to make efforts to take off some of the pressure hanging over organisations who are looking for funding and certainty.
And we've also shifted the length of our agreements into the three-year range to hopefully take pressure off our partners around the constancy of funding seeking. And why wouldn't we enable them to have the best outcomes possible? This is in everyone's best interests, ours included!
We had to change our mindset about how we were going to engage due to our strategy with our partners at the centre, achieving their outcomes. And certainly, we still have a lot of work and learning to do. And we don't always get it right, but we're aspiring to be a good partner and to have long-term relationships with them all.
We do want to back them, and create opportunities to work with us, and also with others, because we don't want to be in a situation where we're a sole funder. We love to crowd in other funding where we can. That diversification is helpful for our partners as well; more revenue streams locked in!
7. Kristen, do you have some words of wisdom for other funders in the sector starting out on their Pay What It Takes journey?
“It's a whole funder movement. It's all of us… Just get in and do it.”
Don't wait for perfection. Just get in and do it and start learning from doing things because your approach is going to evolve over time as you and your teams get more comfortable with applying the principles.
I think the more that funders talk about adopting Pay What It Takes, the better off the whole sector will be. And hopefully that will drive more organisations to learn about the practices and start applying them.
I think my biggest piece of advice is, particularly for fund seekers, to know what it actually costs. And don't be shy about stating the costs, like, it might feel uncomfortable and you might get some pushback saying that's too high, but at least it opens a conversation and a dialogue that isn't there if you don't ask.
And that's really important because we don't want those in the sector to be suffering in silence because they're afraid to raise the conversation. The more of us who can link arms around Pay What It Takes creates confidence for grantees to be asking questions, raising issues and to be transparent about what are the impacts of not being able to have a well-funded team and not having the funding for some of the aspects that funders probably have themselves.
Pay What It Takes is an incredible movement, and we're so pleased to be part of it. Hopefully it's something that inspires others! We all have to contribute. It's a whole funder movement; it can't be that one funder picking up the costs for everyone else. It's all of us. It's our obligation, I would say.
