When I began to explore the ‘back story’ of philanthropic decision-making in the early 1990s, I could not understand why so few foundations made small grants, really small grants – say under $5,000. Eventually I began to realize that, despite the strong evidence of the relatively high impact of small grants (especially in developing countries), the high fixed costs of administering grants created a ‘glass floor’ of grant size below which foundations chose not to go.
The underlying reason for the unnecessarily high fixed costs to administer the grants, I realized, was the culture of mistrust that moved organized philanthropy to spend heavily on unnecessary due diligence and pointless monitoring and evaluation.
In Grassroots Philanthropy, Bill Somerville begins to assemble some of the puzzle pieces to help us better visualize how risk-tolerant ‘venture philanthropy’ accelerates social change from the bottom up. Although his precise theory of social change is somewhat vague, his unique combination of passion and discipline suggests a subtle mastery of social change grantmaking that is the result of four decades of foundation experience in the same community.
An intensely focused grantmaker inevitably learns a lot in 40 years – local knowledge that even they can’t fully comprehend or articulate. Like a successful venture capitalist, a master grantmaker learns to trust their subconscious understanding of the unique cultural context that is key to high-return investments. They also learn quickly from their mistakes and create tight feedback loops that adapt immediately to improve results.
Somerville, founder of the Philanthropic Ventures Foundation and former Executive Director of the Peninsula Community Foundation in Silicon Valley, focuses on an unorthodox and risk-tolerant ‘responsive’ approach to grantmaking, involving ‘paperless’ discretionary grants and grants with a 48-hour turnaround and suchlike. Embracing what he calls ‘Very High Trust Discretionary Grants’, Somerville says that he has learned to trust his instincts to make rapid-response grants where ‘there is no application, review, or lag time. It’s high-trust philanthropy, grounded in a continuing relationship with the people who work each day at the most intimate levels of human suffering, need and service.’
This unorthodox guide explores five simple principles of ‘responsive philanthropy’: 1) Locate outstanding people doing important work. 2) Move quickly (and shred paper). 3) Embrace risk. 4) Focus on ideas instead of problems. 5) Take initiative. In a section called ‘Trustees With Time to Kill’, Somerville takes aim at unnecessary and expensive due diligence (or un-due diligence). ‘Too often,’ Somerville writes, ‘foundation boards add their own layers of bureaucracy to philanthropy. Instead of relying on staff, they burrow into assignments that prove unnecessary and repetitive. They demand excessive documentation on potential grantees – thereby assuming the appearance of oversight, if not its reality.’ This is certainly true in my experience, especially with international grants.
Although Somerville writes with certainty, his enquiring style is meant to find solutions to the problems of traditional high-cost, low-impact philanthropy by experimenting with the obvious alternatives. His good-natured bantering with dozens of foundation executives on a conference call about the book organized by the US affinity group Grassroots Grantmakers is evidence that Somerville sees the book as any ‘maverick’ would – as a prod to get a horse moving.
The innovative methods advocated in Grassroots Philanthropy might not be a perfect match for every grantmaker, but they may be a perfect match when you need an exception to the rules – like those times when the potential harmful consequences of doing nothing while waiting for more complete information are greater than the consequences of making a snap decision that turns out to be a mistake.
Chet Tchozewski is Executive Director of Global Greengrants Fund. Email email@example.com
Grassroots Philanthropy: Field notes of a maverick grantmaker
Bill Somerville with Fred Setterburg Heyday Books $15