Case Study: Pooled Funds and Donor Collaboratives Amplify Giving | 5 Shifts
Leverage capital to scale the issue.
The Giving Code revealed a host of barriers to significant local giving. Place-based donors often don’t know where to start giving, nor how to give in amounts and over timeframes that support meaningful and durable change. Donors often find the local nonprofit ecosystem difficult to navigate, don’t have direct knowledge of local communities, and struggle to comprehend social issues, including systemic racism, that have long histories and multiple interacting root causes.
Donor collaboratives encourage donors to give while learning from their peers or issue leaders and outsourcing the expertise, management, and grantmaking to experienced intermediary organizations. Further, donor collaboratives can aggregate significant capital, opening up the potential to address issues at a much larger scale.
Place-based pooled funds are growing in number in Northern California. Regional examples include giving circles managed by the Latino Community Foundation, Tipping Point’s Impact Through Equity strategy, San Francisco Foundation’s Bay Area Leads Fund and Rapid Response Fund, Community Foundation of Santa Cruz County’s Rise Together initiative, and the California Black Freedom Fund managed by Silicon Valley Community Foundation. “These funds know how to review and assess organizations and strategies based on deep community knowledge,” says Crystal Hayling of The Libra Foundation. She recommends that local donors support regranting funds led by Black, Indigenous, and people of color leaders. “They provide donor education as part of their work.”
Libra launched the Democracy Frontlines Fund, a pooled, $36 million fund consisting of multiple foundations and individual donors that engages BIPOC community leaders to develop a national portfolio of Black-led nonprofit grantees. Donors participate in four learning sessions a year and take a backseat in decision making, relying instead on community leaders’ expertise to guide funding decisions. This national model for pooled funding/donor collaboration could be replicated locally.