When we talk about the relationship between funders and nonprofits, it is often framed in terms of support, empowerment, and enhancing impact. However, American author and activist Vu Le – the owner of the Nonprofit AF blog and one of the prominent critical voices in the sector – turns the picture upside down in his article published on June 3, 2025, to reveal how the funding practices themselves may have caused deep harm that has left a psychological and institutional impact on nonprofit leaders and the sector as a whole.

"Funder-Inflicted Layered Trauma and Helplessness – FILTH"

Through this, he describes the toll of decades of conditional support, short-term funding, complex bureaucracy, and lack of trust.

The author formulates a striking term:

The Roots of the Problem: Power in the Hands of Funders

In the traditional landscape, funders set the strategies, forcing organizations to align themselves to receive funding. While there is increasing talk about shifting power to communities closer to the issues, the accumulation of past practices has created a deep "programming" that is hard to surpass with a participatory grant here or a flexible project there.

Additionally, many leaders face additional layers of structural harm such as racism, discrimination, or marginalization, which amplify the effects of these traumas.

Manifestations of Trauma on Leaders

Vu Le clarifies that this "programming" reflects on the behaviors and mindsets of sector leaders in several ways:

  • Contraction of Imagination: Replacing big dreams with a narrow reality imposed by funder strategies.
  • Fear of Explicit Requests: Because rejection or conditional partial funding has become the norm.
  • Limited Long-Term Thinking: Due to the prevalence of annual grants.
  • Excessive Competition: As grant mechanisms pit organizations against each other.
  • Averseness to Risk and Failure: To avoid being punished by funding cuts.
  • Focus on What is Easily Measured: At the expense of long-term core goals.
  • Reticence and Lack of Trust: Where leaders hide real challenges for fear of losing support.
  • Learned Helplessness: Resulting from repeated frustration over attempts to influence funding policies.

What is Asked of Funders?

The author conveys a clear message to grant-making institutions: If you really want to empower communities and shift power to them, you must dismantle these traumas rather than reproduce them. This can only be achieved through:

  • Funding community-led solutions without diluting them.
  • Providing unrestricted funding that extends for ten years or more.
  • Simplifying grant applications and accepting pre-written proposals.
  • Supporting advocacy and structural change, not just service projects.
  • Investing in the well-being and mental health of leaders and their recovery.
  • Treating as true partners, not as oversight entities.
  • Commitment to long-term transformation even if it is messy or nonlinear.

A Reading of the Saudi Context

In the Kingdom, the nonprofit sector is experiencing a major regulatory and oversight boom led by the National Center for the Development of the Nonprofit Sector, alongside an increase in funding sizes and diversity in its sources. However, the challenges mentioned by Vu Le are not far from us:

  • Many organizations are still bound by short-term grants.
  • They are often required to implement projects according to the funder's priorities, not their own strategies.
  • Leaders face pressure to show "quick successes" instead of working towards long-term radical change.

Therefore, adopting long-term flexible funding, encouraging daring experiments, and recognizing the importance of leadership health and organizational sustainability is not merely an option, but a necessity to ensure that the sector becomes a true lever to achieve the targets of Saudi Vision 2030.

Transforming the funding relationship from a conditional relationship laden with restrictions to an authentic partnership based on trust and sustainability is the only way for funding to become a tool for empowerment, not a tool for restraint.

Vu Le concludes his article with a powerful message: Funders cannot ask marginalized and most affected communities to lead change while they continue to perpetuate practices that reproduce the same traumas.