Article
April 24, 2010

Young Grant Makers Urged to Make Bigger and Riskier Grants

Denver

Nonprofit groups say it takes them 25 to 30 hours to apply for a grant. Yet most of the grants being awarded are probably $15,000 or less. 

That's much of what's wrong with philanthropy today, Bill Somerville, founder of Philanthropic Ventures Foundation, told an audience of young grant makers here at the first conference of Emerging Practitioners in Philanthropy. He said the figures on grant size were based on information from the Foundation Center.

"This is absurd; it's patronizing," Mr. Somerville said. "Philanthropy needs reform." 

Mr. Somerville, whose foundation does "paperless" grant making and promises a 48-hour turnaround on grant decisions, urged young foundation officials to help grant makers become smarter, faster, and more responsive. His directives included:

Get out of the office. "I don't think you can do philanthropy from behind a computer," he said. "But in most of America, that's what seems to be happening." He talked about the importance of meeting grantees, identifying excellent community leaders, and working in partnership with them.

Be modest. "It's not your money, it's not your power," he said. "We need them [grantees] as much as they need us."

Get out of your comfort zone. Mr. Somerville talked about standing in line for an hour-and-a-half at a welfare office recently, something he did to expose himself to new people and experiences.

Reduce the paperwork. Mr. Somerville talked about how, at his foundation, he will give out a grant based on a conversation with someone whose organization he knows. He then writes all the information he says is necessary for an audit. "It's a paragraph," he said.

Build trust. Mr. Somerville said grant makers need to trust grantees. If they don't trust the people they are giving money to, he said, then they shouldn't be giving that money at all. Mr. Somerville also said grant makers need to trust themselves to make good decisions. They can inform their decision making by getting out of the office and establishing relationships with people.

Make grants when money is needed. "Forget your schedule," he said. "You can have more impact with smaller grants if you do it when the money is needed."

Be wary of "academic philanthropy." "Those who are talking about it aren't doing it," he said. He also bemoaned the fact that the field is drowning in jargon.

Let grantees tell you how to measure success. They know the work and what success looks like, he said.

Lower your expectations. "No one is going to solve poverty," Mr. Somerville said. 

Embrace risk. Mr. Somerville suggested that grant makers set aside a pot of money for risky investments.

Share experiences on what didn't work. Like rock climbers who must write down their mistakes so other climbers can avoid them, foundations should write down and share their failures so others can learn from them, he said.

Avoid isolation. Visit grant makers at other foundations, he said. 

Also speaking at the event were two young foundation professionals, Christine Tran, a program officer who focuses on domestic violence at the Blue Shield of California Foundation, and Eyal Yerushalmi, strategic learning and evaluation executive at the Atlantic Philanthropies. 

Ms. Tran, who has held her job for just shy of a year and has a background in community organizing, talked about her on-the-job education about grant making. 

When her boss came to her with news that the foundation was considering some recession-related budget cuts, Ms. Tran urged against cutting the travel budget.

One of the smartest things she has done, Ms. Tran said, is to drive all over California meeting with grantees in an effort to get honest feedback and advice on how to carry out the foundation's new giving strategy.

Ms. Tran said she has also encouraged the foundation to make one grant payment to its grantees instead of two, something that some people worried would undermine accountability. But Ms. Tran said her feelings on the topic were the following: "If we're going to respect and trust grantees, we need to do this, even at the risk of some the money getting 'mismanaged.'"

Ms. Tran and Mr. Yerushalmi were asked how they felt about more young people heading straight into grant making without spending a lot of time at charities.

Mr. Yerushalmi, who said he fit this description, said there were other ways to get perspective on charities, such as board service and volunteerism. But he said grantees will sometimes tell him, "That doesn't make sense." He urged others, regardless of their past experiences, to listen carefully to grantees.