Recently I’ve been exploring a participatory, shared approach to philanthropy – a bottom up, rather than top down approach to giving – and I like it.
I was introduced to this concept by Mark Finser, Chair of RSF Social Finance. RSF started a “Shared Gifting” programme 15 years ago after a donor felt that her own personal bias shouldn’t be what directed her gifting.
Unlike traditional philanthropy, this model decentralises the decision-making into the hands of those on the ground. It recognises that at the grassroots there is a level of community wisdom that donors or grant-makers might never achieve.
With The Gift Trust’s focus on effective forms of giving, the shared giving model is a service we’re keen to see added to our toolkit for donors looking to do things differently.
How it works
A donor (an individual, family, corporate or previous grant-making trust) has identified an area of interest they are keen to support but don’t have a defined charity in mind.
They carve out a set amount of funds for a Shared Giving donation. RSF recommends $50,000 for meaningful impact and cost effectiveness. This could also be pooled together by various donors with a shared interest.
Next a public call is made to seek nominations and applications. At RSF this includes their community of donors, previous grantees, borrowers and savers (they run a social finance arm too). An internal review of proposals takes place and 10-12 organisations are invited to participate in a full-day meeting.
Here’s the interesting bit – at the meeting, the pool of gift funds is divided equally between each organisation. For example, with a $50,000 pool of funds and 10 participating organisations, each would go home with a guaranteed $500 in their pocket to cover potential lost wages and travel expense for the day. They would also have $4,500 each to distribute, not for their own project, but to others in the room.
All the original applications are shared with the group a few weeks before the meeting and on the day they are discussed and evaluated. Each organisation can allocate their funds to others often where they see a clear need, value and justification for the proposal.
In 2014, The Lafayette Practice released a publication “Who Decides: How Participatory Grantmaking Benefits Donors, Communities and Movement” which researched and interviewed eight key organisations using this model. Organisations like: Disability Rights Fund, FRIDA and The Robert Carr Network Fund. No doubt each has a slightly different modus operandi, but takes the decisions of where to place grant funds to the grassroots.
What are the benefits?
Firstly, communities themselves are likely to make the decisions that work for them. It provides the flexibility to choose emerging priority areas which traditional models may not yet be aware of yet.
Secondly, there is a switch where the grant receivers become donors themselves. It improves the philanthropic literacy of those who participate– perhaps providing a light bulb moment of why people may choose not to fund a proposal – which may aid in writing better grant applications and securing more funding in the future!
Thirdly, the reporting process is turned on its head too. No longer are donors driving an outcome. The outcomes are determined by the participants during the session and the groups are accountable to each other.
Even more importantly, the previously mentioned Lafayette research highlighted benefits in developing trust, reciprocity and unprompted collaborations that strengthen communities and movements in a way that is not possible in more traditional philanthropic models.
Yes, it is a model that may be challenging or threatening for some to participate in – sharing the inner workings of their organisation, their projects, programmes and needs – but it could be invaluable in encouraging collaboration and resource efficiency. There is potential for conflict of interest and bias, but if well facilitated and managed this can be reduced.
There is also the issue of cost and time involved in organising and facilitating such a meeting (estimated at around 10-20% of the grant funds available), but by removing the need for the traditional grant making committees, paid philanthropic advisers and contractors, this cost can also be offset. And, if these decisions can be moved online, perhaps there can be even more savings to be made.
The Gift Trust pilot
Having the community at heart could add a lot to philanthropy and its effectiveness. If you are interested in exploring this form of giving, we are seeking one, or multiple, donors to contribute to a pilot here in Aotearoa. This may have an area of interest or geographical focus decided by the contributing donors.
If you are interested in learning more about how some international models of Participatory Grantmaking funds are working, read Wikimedia Foundation’s ‘Funding Knowledge the Wiki Way‘ and ‘Letting the Movement Decide’ by FRIDA.
RSF Social Finance in the US, in collaboration with the Embrey Family Foundation, also recently ran a Giving Circle. Read more here: Generosity that's Bigger'n Dallas
Please contact us if you a are interested in discussing this opportunity.
LIKED THIS POST? You might also enjoy our conversation on philanthropy with David Carrington.