Grantmaking in the 2020s: Giving Collectively, with Trust

Women’s collective giving is a movement that began in the mid-1990s and has gained tremendous momentum in recent years.

Philanthropy Together estimates that there are more than 2,500 giving circles in the United States, with 150,000 donors having given away $1.29 billion. For those of you unfamiliar with the term, collective giving is a form of philanthropy that combines contributions of individual participants into larger grants.

Typically, giving together in this way leverages each individual’s donations and makes the collective philanthropy more meaningful.

Along with my colleague Beth Dahle, I’m a co-founder of Impact100 Philadelphia, which we launched in 2008. Inspired by the original Impact 100 in Cincinnati, Impact100 Philadelphia pools women’s individual donations into large collective grants that support underserved and underfunded nonprofit organizations, communities, and issues in the Philadelphia region.

Since our founding, we have been struck by the immense benefits that stem from acting together. In the course of a grant cycle, our members learn collectively about the incredible breadth of nonprofits in our region, which address an equally broad range of pressing issues: deep poverty, gun violence, arts access, mental health, and countless other needs.

We learn together and then we give together, and our collective grants, allocated in lump sums of up to $100,000, accomplish far more than any of us could on our own.

What Collective Giving Looks Like

Women who join Impact100 Philadelphia make a one-year commitment and donate to the collective grants pool to fund the current year’s grants and awards. Members are 21 or older and give at least $1,150 (or $575 for women 35 and younger). This tiered structure helps make our collective giving more collaborative and inclusive; our goal is to have a place for anyone who wants to be involved.

More than half of our members choose simply to invest in the grants and be part of our collective impact without having the time or ability to volunteer. However, about half do want to volunteer; these members join Impact100 Philadelphia in part to learn about the nuts and bolts of philanthropy.

They often engage in hands-on proposal review, conduct applicant site visits, and participate in the group discussions that are central to our grantmaking process. Regardless of whether she volunteers or not (as well as how much she gives), each member has equal voting power: “one woman, one vote.”

Impact100 Philadelphia’s signature funding program is large, unrestricted grants of $100,000. Each year, member volunteers review applications in five focus areas: Arts & Culture, Education, Environment, Family, and Health & Wellness.

Members work together throughout several months to select grant finalists to present to the full membership for a vote. With 454 women members last year, we awarded three unrestricted grants of $100,000 and two of $50,000, along with $35,000 in smaller awards.

To date, we’ve awarded a total of $4.5 million.

Why Unrestricted Grants are Better for Nonprofits

I do want to stress that our collective giving program offers unrestricted grants and awards. You might wonder why we make that choice, and the simple answer is we didn’t always. The more complex answer has to do with our organization’s movement to trust-based philanthropy.

At its core, trust-based philanthropy seeks to address the power dynamic in grantmaking, breaking free from the binds of traditional philanthropy—what Vu Le and others describe as a supplicant-benefactor model. This old model is based on nonprofits designing attractive projects that appeal to funders (but are not necessarily based on community needs).

If they are lucky, these “supplicant” nonprofits receive a grant, but the funding is restricted and cannot be spent on regular operating expenses or staff, let alone infrastructure or longer-term planning.

In recent years, philanthropy’s curtain has been drawn back to reveal the deep flaws in this older arrangement. It’s clear now that both nonprofits and funders can benefit from a more transparent and honest relationship that is focused on addressing the true needs in our communities.

The Impact100 Philadelphia Example

We first came to grips with problems in our own system back in 2016. We became increasingly uncomfortable with the notion that applicants were designing special proposals for our $100,000 project grants. In short, we realized that if we wanted our funding to have more impact, we needed to stop asking for these special proposals that were pulling organizations away from their core work.

Furthermore, we became convinced that our grants would be more successful if the grantees—who are the ones doing the work, and who know their communities’ needs best—had flexibility and control over how to spend funds. We didn’t want grantees limited by a previously written proposal that was no longer relevant.

Once we decided on unrestricted grants, we spent about nine months planning for this change. This planning included intense small-group conversations, regular presentations to our board, and frequent communications to our entire membership, always offering a chance for them to provide input.

Perhaps most influential were our interviews with past grantees. We asked them to be completely candid about the experience of receiving our grants. Their feedback generally confirmed our suspicions: the grants were important to their organizations, but restrictions on funds made their lives challenging.

Most said that the grants would have been even more effective if funding was unrestricted and allowed grantees to adjust course when circumstances changed.

For example, one grantee told us that a school partner was reorganized just before their grant project started. Since the funding was specifically tied to the original project, they felt that they had no choice but to soldier through.

However, when interviewed, they told us they would have reached more children and run a better program if they had been able to pivot to a new project that suited the school’s reorganization.

Change Begets More Change

Our external research clearly pointed us in the direction of unrestricted funding. Internally, some members felt we were being too cavalier and taking on too much risk with unrestricted grants, eventually deciding to leave our organization.

But well over 90% of members supported this pivot and stayed, and we quickly saw the benefits of unrestricted grants. Proposals were stronger, and we felt that they were more authentically tied to nonprofits’ missions and work in their communities. Our review process became deeper and more cohesive. T

hroughout the next few years, we streamlined application forms, reduced grantee reporting requirements, and inspected our priorities to ensure they aligned with our stated goals of equity and inclusivity.

But we weren’t done changing. And in fact, it was our members who pushed Impact100 Philadelphia to keep innovating the way that we fund nonprofits.

The Community Awards Pilot

In a June 2020 survey, Impact100 Philadelphia members expressed strong desires to expand our funding to a more diverse group of nonprofits, be as inclusive of the community as possible, and have the ability to fund emerging and/or critical needs. Our board convened a working committee to explore these ideas.

In 2021, we launched a second grant program, the Community Awards Pilot, with an initial pool of $20,000 to distribute. We decided to begin with small awards (two at $5,000 and one at $10,000) intended to support nonprofit leaders of color and smaller grassroots organizations working on urgent issues but not receiving significant funding. Most importantly, these awards would not require an application.

Instead, we wanted to reverse the grantmaking process: Impact100 Philadelphia volunteers would do the work of researching critical issues in our region and identifying small nonprofits that address these issues. Then without taking a minute of their time, we’d award them funding and shine a light on their work as well as the issues they address.

Community Awards in Action

A committee of 15 Impact100 Philadelphia volunteers did extensive research, first on issues in our area and then on nonprofits who worked in the selected arenas of education/job training, food insecurity, and gun violence.

We scanned news stories and research articles, talked to nonprofit and funder colleagues, and sought input from our own membership. We specifically looked for smaller organizations with budgets under $500,000, where we felt the smaller award amounts would make a difference. Our committee created a shortlist of 24 organizations, and ultimately all Impact100 members voted on three finalists to receive $5,000 or $10,000: Chester Community Coalition, Sisters Returning Home, and YEAH Philly.

Year two of the pilot followed a similar process but honed in on three different areas: environmental justice, older adults, and poverty (particularly direct cash assistance programs).  After considering 40 candidate organizations, the committee selected three. Impact100 Philadelphia members voted to award $10,000 each to ARTZ Philadelphia and New Sanctuary Movement and $15,000 to Kensington Corridor Trust.

Although the time commitment was intense, our committee discovered so many local organizations that were previously unknown to us. These nonprofits have small staffs who juggle a wide range of pressing needs; many do not have the bandwidth to conduct extensive fundraising efforts or go through arduous application processes.

Simply put, had we not done the research ourselves, Impact100 Philadelphia would not have funded their work. The Community Awards program allowed Impact100 Philadelphia to more equitably fund a more diverse group of nonprofits and communities in our region.

Where do we go from here?

As we continue to examine our grantmaking, Impact100 Philadelphia has learned a lot from working with our Community Awardees. A few months ago, co-founder of YEAH Philly (which works to create safe and authentic teen hangout spaces) Kendra Van de Water spoke to our members about the need to be honest with her funders. She talked about the onerous accounting funders can request, like documenting every bus or train fare used by program participants.

Those are the things where I will say, ‘We’re not doing that.’ Being transparent is very important because a lot of times it’s that they just don’t understand. We don’t have time to do that. I’m not sitting here and writing 300 people’s names for every transportation we order for them to get back and forth to our program or to work.

That’s ridiculous… I’m okay with people looking at our finances, but I think that it doesn’t have to be so contentious. We have to be able to trust people. I think a lot of times people think people are undeserving of having money. How do we get out of that mindset? How do we shift that narrative to: once we give this money, we need to allow the experts to do what they need?

I’m hoping that we can continue to build and shift that narrative when it comes to philanthropy.

Kendra’s words are what all of us—nonprofits and funders alike—should strive to live by.

As Impact100 Philadelphia embarks on a new grant year, we are evaluating our Community Awards and making plans for using what we’ve learned to make further changes to our grantmaking. We are talking with our own members to hear their ideas about how we can continue to improve and be equitable with our funding. We’ve sought input from the local nonprofit community about what we can do better from their perspectives.

But we also want to spread the word to others about what we’ve learned here in Philly. We’re talking with other collective giving groups around the country, promoting all the positives that come from unrestricted, lower burden grantmaking.

We know next year’s funding won’t be perfect. There will be missteps and mistakes; these are inevitable as we change and try to improve. We need to have the courage and confidence to go forward, maybe not knowing exactly the path we’ll follow but with the goal of partnering with and serving our community as best we can.

That’s how we must continue to innovate and make our impact as positive as possible.

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• Your Nonprofit Got its Grant. Now What?
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• 9 Principles to Make Your Nonprofit Fundraising Effective — and Fun!

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Dottie Lechtenberg

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