By Danny Tsoi
Decolonizing philanthropy proposes changing the power structures between philanthropic organizations and community organizations to develop and implement healing and reparative solutions for systemic issues.[i] The existing power structures for strategic philanthropy are top-down decision-making processes and built on command-and-control relationships between the funder and the grantee that restrict use of funding.[ii] Participatory grant making,[iii] and trust-based philanthropy are two related concepts gaining traction among philanthropic funders, characterized by an underlying desire to be more community-driven.[iv] My key recommendations for philanthropic organizations are to: (1) include community input in decision-making, (2) experiment and learn from nuanced solutions, and (3) invest in community partners with unrestricted flexible funding and technical assistance, and (4) provide infrastructure needed for community-driven program development.
Prize Philanthropy to Redistribute Power and Advance Equity
Robin Hood’s Fund for Early Learning (FUEL) was launched in 2016 to invest $50 million in early childhood and support families impacted by poverty.[v] In August 2021, Robin Hood launched their first open funding challenge, FUEL for 50, to provide no-strings-attached funding for 50 organizations that support parents and caregivers of young children. This case-study demonstrates how to use prize philanthropy to transition from command-and-control relationships with grantees to an open-call proposal to support community partnerships, celebrate providers impacting local communities, and find promising models to scale up. The following recommendations highlight the practices implemented by the FUEL team when designing and implementing FUEL for 50.
- Philanthropic organizations need to use participatory processes to gather community input when co-creating grant making strategy.
The FUEL team used participatory design processes to gather community insights to learn more about the perception of Robin Hood and to gather feedback to change grant making processes to be more community driven. Robin Hood historically has been associated with rigorous reporting standards for funding evidence-based programs from their grantees and supporting large nonprofit partners. In collaboration with the Center for Urban Pedagogy, United for Brownsville, Hispanic Information and Telecommunications Network and the Design Insight Group at Blue Ridge Labs, and many other community partners, the FUEL team organized focus groups and interviews with community leaders. Feedback from this community engagement led to the creation of an external committee structure, targeted outreach for under-invested neighborhoods, and guidance for expanding the framing of early childhood supports to include other services for the caregiver and family. The application questions were designed with focus groups to ensure that organizations without development staff were encouraged to apply. The application did not require extensive documentation or use technical jargon, such as “theory of change”. The selection criteria were designed to identify organizations that have deep community engagement and support promising concepts that push boundaries for early childhood by focusing on three areas: strengthening children’s core language and socioemotional skills, building nurturing relationships, and reducing sources of stress.
- Strategic philanthropy needs to include nuanced solutions and prioritize learning over predictability.
Planning for complex strategic philanthropy initiatives must capture the nuance inherent in community development and social change. For example, the numerous aspects that influence early child development, from economic, health, and social factors, have large impacts on future life outcomes.[vi] The broad set of factors that contribute to positive life outcomes for children require a flexible strategy prioritizing learning from community programs with more nuanced perspectives rather than focusing on predictable programs. The FUEL team assembled an external selection committee composed of parents, experts in early child development, pediatricians, and nonprofit leaders, to leverage expertise in selecting the organizations that exemplify promising community-driven, bottom-up impact. A staggering 52% of the FUEL for 50 applications came from organizations outside the traditional early childhood category. Further, 44% of applicants support caregiver mental health. The expansion of the early childhood category opened the process to a diverse set of applicant organizations, with emergent themes in programs supporting parenting education, resource navigation, job training, financial literacy, homelessness, pregnancy and post-partum, food insecurity, and immigration. Indeed, the diverse applicant set reflects the complex reality that there exists no silver bullet for early childhood development; it requires an ecosystem of nonprofits to make New York City an “early learning metropolis,” a goal of FUEL for 50.
- Investment in community partners need to include unrestricted flexible funding and technical assistance.
Over half of the 15 largest US foundations reimburse indirect costs of 15% or less, while the indirect costs vary widely between the types of organizations and operations needed to deliver their main program.[vii] With most of the philanthropic funding issued as restricted grants or tied to specific projects, many organizations face financial shortfalls from indirect costs. The FUEL team, through the vehicle of prize philanthropy, chose to provide unrestricted funding and build capacity of its 50 winners. The awardees of FUEL for 50 are provided $25,000 without reporting requirements, capacity-building workshops for fundraising, financial planning, organizational development, program design, and evaluation, and opportunities for future funding.
- Funders need to create the conditions that allow for the testing of community-driven solutions and capacity building.
Prize philanthropy and open call innovation challenges are effective approaches to source innovative ideas from the community. However, after the initial funding, there also needs to be a focus on the types of supports needed to cultivate the concept and test its worthiness. While funders have resources, access to expertise, and networks that are beneficial to start a pilot project, infrastructure is also needed to sustain community-driven program development. Social innovation require infrastructure dedicated to the iteration, measurement, and participatory research for program development. Infrastructure refers to resources, such as dedicated staff that are trained in using human-centered design and other frameworks for program development and using evaluators that apply emergent learning and developmental evaluation for continuous improvement.[viii] The high risks and complexity related to iterative program development also require longer-term expectations time horizons from funders and a certain degree of flexibility and willingness to learn together with grantees about evolving impact goals.
There are significant opportunities available for philanthropic organizations to change grant making strategy to be more equitable and rooted in community needs. Nuance and complexity need to be embraced to develop and fund appropriate community-driven solutions. Complexity and nuance also require intentional support from funders to provide infrastructure needed to test and co-create with the community. Prize philanthropy is an effective approach to gather insights from existing service providers and provide initial seed investments to community organizations. By changing the grant making process to include organizations of all types, sizes, structures, and programs, philanthropic organizations can promote a marketplace of potential solutions for other funders to support further growth and fund community impact at scale.
Danny Tsoi is a Master of Public Administration candidate in the Health Policy and Management program. Prior to studying at NYU Wagner, his experience in the social sector spanned from entrepreneurial experiences with healthcare improvement in Cameroon to developing mental health programs in New York City. His current interests include health equity, behavior change, and building capacity for community-driven program development.
[i] Villanueva, E., & Barber, W. J. (2021). Decolonizing wealth: Indigenous wisdom to heal divides and restore balance. Berrett-Koehler Publishers.
[ii] Kania, J., Kramer, M., Russell, P. (2014) Strategic philanthropy for a complex world (SSIR). Stanford Social Innovation Review: Informing and Inspiring Leaders of Social Change. https://ssir.org/articles/entry/strategic_philanthropy
[iii] Kilmurray, A. (2015). Participatory Decision-Making in Contested Societies: Examples From the Field of Community Philanthropy. The Foundation Review, 7(3). https://doi.org/10.9707/1944-5660.1256
[iv] Alter, R., Strachwitz, R. G., & Unger, T. (2022). Trust in Philanthropy: A Report on the Philanthropy; Insight Project 2018-2021. (Opuscula, 161). Berlin: Maecenata Institut für Philanthropie und Zivilgesellschaft. https://www.ssoar.info/ssoar/handle/document/77556.2
[v] Robin Hood Foundation. Community-First Approaches to Support Early Childhood. (2022) https://fuelfor50.org/wp-content/uploads/2022/03/FUELfor50-Spring2022-Report.pdf
[vi] Heckman, J. (2006). Skill Formation and the Economics of Investing in Disadvantaged Children., Science, Volume 312, Issue 5782, pp. 1900-1902 (2006). https://www.science.org/doi/10.1126/science.1128898
[vii] Eckhart-Queenan, J., Etzel, M., Lanney, J., & Silverman, J. (2019). Momentum for change: Ending the nonprofit starvation cycle. Bridgespan, September.
[viii] Pearson, K. A. (2006). Accelerating our impact: Philanthropy, Innovation and Social Change. J.W. McConnell Family Foundation.