When Diana Samarasan set out to create the Disability Rights Fund in 2008, she had limited experience in grantmaking and funding. As an activist for the disability community, Diana had spent years putting the community at the forefront of her advocacy efforts. Yet, when venturing into the philanthropic grant-making ecosystem, Diana did not see her activist background as an impediment to breaking into the space; rather, she leaned on her instincts about empowering community members to create a fund that allowed disabled people to lead on grantmaking decisions.
Over a decade later, Diana has created one of the most successful global participatory grantmaking organizations, that empowers the disability community at every level, from its funding efforts to its organizational design and leadership
Diana’s story highlights an alternative approach to grantmaking and impact investing that reimagines funding models from a power shifting lens. As America grapples with recovery from a global health pandemic and a declining economy, models like these highlight a new way forward that provide hope for a more equitable future.
America sits at one of the most consequential crossroads in its history today. The disparate impacts of the COVID pandemic and recent protests demanding racial and criminal justice are bringing renewed focus to the gaping difference between the two Americas and our persistent structural inequalities. Communities have become marginalised in their own decision-making abilities as policies, markets, and capital become less democratically controlled and less representative of the communities they aim to serve.
For too long, the capital flowing into local communities has been determined by ‘outside’ philanthropists and impact investors. While these investment decisions have ranged from arbitrary to well informed, they often have not aligned with the interests of the communities where the funding is going, and they continue to uphold the outdated hierarchy between a small elite group of funders and the rest of society.
Today’s ‘perfect storm’ of challenges has unintentionally created an opportunity for a better way forward. For America to move beyond its pre-pandemic “normal” to a more just society, it is clear we need more representative voices in designing our policies and investments in ways that help to fundamentally shift more power to those who have been marginalised or excluded.
Fortunately, there are a number of pioneering funding models like the Disability Rights Fund that are demonstrating how to bring more voices into decision-making processes and design funding strategies with and not for communities of colour. Broadly, these types of approaches are called “participatory” funding models, and they have taken a variety of manifestations over time. In the 1970s, the participatory grantmaking movement gained traction globally as community organising developed momentum, and activist-led organisations began to develop across different industries — including grantmaking. Over time, the number of funders adopting these approaches has grown in size and across focus areas, and many are still led by activists and community organisers. Indeed, one of the more impactful aspects of these grantmaking groups is that their community organising roots have ensured broad based community participation in their funding approaches. Select examples include the India Foundation for the Arts, which supports practice, research and education in the arts and culture in India, and Thousand Currents, which funds grassroots groups and movements led by women, youth, and Indigenous Peoples in the Global South.
While there is not one ‘standard’ definition of participatory funding models, at their core, these approaches allow more representative voices from historically disenfranchised and marginalised groups into a wide range of processes, decision-making, and leadership. Looking at the broader landscape, the two main types of funders include smaller, grassroots groups and larger, private foundations. In general, the more grassroots movements take a deliberative, “bottom-up” approach that focuses on empowering community members as decision makers and funders, while foundations may work with community and philanthropic partners to determine how they can ‘shift’ their institutional processes and decision making to include more local community members and voices.
Participatory funding approaches can vary widely on the ways they invite community members to participate in their investment or grant-giving decision-making processes. These can range from simple feedback loops on planned decisions, to engaging the community to vote on grant selections, to the more ambitious models that look to embed the values of community participation throughout the entire organisation — including their board, investment committee and leadership, as well as their processes and funding.
Participatory funding approaches can provide more insights on community issues by including the voices of those who stand to be the most affected by grants and investments. Despite good intentions, traditional funding approaches often focus on investors or donor wishes, needs or strategies, which can distance funders and investors from the communities they wish to serve.
Participatory funding approaches can also help illuminate the diversity of actors in a community and highlight intersectional identities, which are crucial to understanding how policy and finance may impact community members. Issues of race, gender, environment, housing, and education don’t exist in silos, and participatory models are often better equipped to highlight the overlap of different societal issues, and reveal the multi-dimensionality of community finance — a perspective that is lacking in traditional structures.
While participatory funding models have typically deployed grant funding, we are seeing models emerge that are applying these approaches to drive community investments. This includes groups like the Buen Vivir Fund, the Boston Ujima Project, the REAL People’s Fund, Village Capital, and the Runway Project. The Buen Vivir Fund provides a great example of how participatory grant funds can evolve their strategies more broadly.
Thousand Currents, the parent organisation of the Buen Vivir Fund, has been involved in a grassroots, grantmaking process for the last 30 years. In 2014, they explored adapting an investment strategy that would challenge existing power structures similar to its grantmaking. After several years of research and experimenting, the Buen Vivir Fund officially launched in 2018. Its guiding principle is to lean on the wisdom of the community to determine the investment capital and other support needed. Another key aspect of the fund is its Member Assembly, composed of 10 grassroots groups and eight investor groups, which gets the final say in any investment decision-making. Fund managers facilitate the decision-making process at Assembly meetings but they are not voting members. The Buen Vivir Fund is an innovator, exploring not only how to apply community driven investments in the grey space between grants and profit-only investments, but how to apply this approach on an international scale.
While the trailblazing work of participatory models like the Disabilities Rights Fund and the Buen Vivir Fund is inspiring, it is important to note they remain the exceptions. Most participatory funding models are smaller, place-based organisations with limited capacity to grow their operations. The time consuming processes of convening community and selecting investments, the obstacles for existing funders to adapt their processes and organisations, and the lack of capital supporting these models limit the ability of these participatory approaches to grow. More broadly, there is a lack of standard definitions and approaches to participatory funding and limited data on their effectiveness and impact. Taken all together, these challenges deter more traditional funders from either supporting these models directly or exploring how they might adapt some of these practices internally.
Despite these challenges, we believe these participatory funding models are pioneers in demonstrating new paths forward towards rebalancing the long standing power structures that have favoured the few over the many. By reimagining how grants and investments can be directed by and for communities, they are demonstrating how capital can become more democratically oriented and can enable the transformation of power structures into more equitable and just systems.
Participatory funding is an idea whose time has come. Now is the time to grow these models beyond the pioneering, grassroots efforts and move to the mainstream. But what will it take to get there?
Andrea McGrath is a strategic and entrepreneurial leader with deep, cross-sector experience helping individuals and organisations to catalyse ideas into action. Saumya Shruti works on reimagining community investing at the Beeck Center, as well as at the Centre for Public Impact. And Shaily Acharya is a student analyst on fair finance at the Beeck Center.