A radical approach to grant making transforms relationships to money
Shared Gifting Circles put nonprofits in the role of making grants and evaluating proposals among peers
David Lozano’s first experience as a grant maker was a powerful one. Given the opportunity to fund any or all of a group of applicants, he awarded the majority of his funds to Trans.lation, a tiny nonprofit that supports immigrants through the arts. Both grant maker and grantee had strong emotional reactions. Carol Zou, leader of Trans.lation, did not expect to receive so much money and was deeply moved by his generosity. And for the first time in his life, Lozano was able to challenge a system that he believes overlooks people of color when it comes to decisions affecting arts funding.
Putting funding power in the hands of nonprofits
Lozano made the grant as part of a Shared Gifting Circle hosted by RSF Social Finance and funded by the Embrey Family Foundation. Along with the leaders of six other nonprofits, he was given $8,000 to distribute to a group of local creative organizations in Dallas.
In a Shared Gifting Circle, a foundation or RSF invites 6 to 12 local nonprofits to spend a day as grant makers. Typically, each participant receives about $10,000; they keep $2,000 and must distribute the remaining $8,000 according to their own criteria. They review each other’s proposals and ask questions about each other’s work. Participants also decide how grantees will report back on how they used their gift.
Restoring the values of gift giving to grant making
Philanthropy is all about giving money as a gift, so the kind of transformational moment experienced by Lozano and Zou in Dallas should be commonplace. But the grant-making process often ends up looking more like an investment or a purchase transaction.
Grantees have to come up with a proposal that aligns with a foundation’s criteria or focus areas, rather than with the needs of the communities they serve. They promise results based on receiving a certain amount, almost as if the foundation were purchasing their services. In addition, grant reporting frameworks often are burdensome for grantees, and while they track the outcomes the foundation aims to measure, they don’t always track the outcomes the grantees hope to measure. The values inherent in giving, such as trust, deepened relationships, and letting go of control, can get lost in the traditional grant-making processes.
That’s why I was so inspired when I came across the idea of shared gifting, first used by Elise O. Casper as part of the Mid-States Shared Gifting Program. Shared gifting turns the traditional approach to grant making on its head and creates value from the very process of giving money away. Whenever I facilitate a Shared Gifting Circle, I am blown away by the innovation, collaboration, and learning that takes place.
Fostering innovation
One reason David Lozano decided to give most of his funding to Trans.lation is that he knew they would struggle to raise funds elsewhere. In his experience, foundations opt for safe, well-established organizations that are viewed as low-risk investments. Smaller organizations and those pursuing novel, untested projects either receive smaller amounts or can’t get funding. This reinforces a paradigm that leaves organizations serving marginalized, hard-to-reach communities with less support. It also stifles innovation, because nonprofits that want to try something new can’t get the money to do so.
Shared Gifting Circles tend to restore focus on a point that’s often lost in contemporary grant making: Money that’s given as a gift should not always have to deliver guaranteed results; there’s huge value simply in discovering whether a new approach has promise.
Supporting collaboration
One of the most powerful outcomes I see on a regular basis is collaboration. As nonprofits discuss their work, there’s usually an “a-ha” moment when organizations see specific ways they could deliver more value if they worked together. A few examples come from a circle we ran with food and agriculture organizations in the Pacific Northwest. When two local farmers markets found out they were both invited to the circle, they decided to submit a proposal for a joint project. That led to the creation of an umbrella organization for all the farmers markets in the area. Two other organizations found ways to collaborate after the circle. Viva Farms, a bilingual farm incubator, and Community Action of Skagit County, a social services provider, found that by combining forces they could improve access to healthy food for low-income residents while providing more customers for new farmers.
“For me, the community aspect was really powerful — having the opportunity to see all of these programs within our region, and to think about how we can spread the resources that we have amongst our peers,” said Ethan Schaffer of Viva Farms. “It was a very different way of thinking about our organizations, how they relate to each other, and how we are all funded. It made us think more about what our priorities are as a community.”
Stimulating learning
Often a Shared Gifting Circle is a nonprofit leader’s first experience of giving funds away. Reading others’ proposals with the eye of a donor gives them a whole new perspective on the fund-raising process. The chance to discuss their proposals can also yield powerful insights. In one Shared Gifting Circle, a man decided to give a smaller portion of funds to two organizations because he felt that given their stage and size, they should have had a strategic plan in place. To the organizations involved, this feedback was as valuable as a financial gift, and it was well received because it came from a peer.
Interest in shared gifting is growing. My sense is that people are starting to question the traditional power dynamics of philanthropy and to seek out value that can’t always be measured quantitatively, such as building trust and shared understanding. We usually do one circle a year; this year we are planning to do five. In the past I received about five calls a year about the shared gifting model; this year I’ve had two or three calls a month from people who want to implement it — so many that RSF has published an online tool kit to help people get started.
I’m also working with the Kozmetsky Global Collaboratory at Stanford, which is facilitating conversations among investors, entrepreneurs and consumers for research on how shifting relationships to money can help address climate change. Researchers Syed Shariq, Neeraj Sonalkar and Thomas George want to understand how the shared gifting process creates shared value, and how that can help investors and entrepreneurs work together to form innovative ventures aimed at neutralizing or reversing climate change. Their students and collaborators will experiment with using components of the shared gifting model and expanding its scope to shared returns.
What I’ve already learned is that Shared Gifting Circles offer us a new lens through which to view philanthropy. They challenge traditional power dynamics and demonstrate how the act of giving a gift can transform relationships and create new value through the process of giving it away.
