August 21, 2022 / admin
Driving Big Results with Small Grants
By Peter Brach, Ed.M.
If I could only impress one thing upon those reading this article, it would be the power of strategically investing in people. While many may not find this topic interesting, for me, it is one of my most exciting discoveries. My fund’s impact on organizations through these types of investments has been enormous, and I am convinced that under the right circumstances others can replicate similar results.
In one instance, the SDG Philanthropy Platform had several foundation leaders interested in its work, and they requested grant proposals. However, SDGPP didn’t have the human resource capacity to write grants. The foundation I worked for provided $19,000 to hire a temporary grant writer, bringing in approximately $240,000 of funding. My fund gave the Worldwide Initiatives for Grantmaker Support a $65,000 grant to bring on one additional staff person; this gave its staff the time needed to work with the European Union. As a result, it received a one-million-euro grant, the largest in its history. A $100,000 grant to another organization for hiring two additional assistants enabled it to expand its programs and raise $450,000.
Essentially, all I did was follow the example of what every large, successful for-profit company does. They invest in people. They ensure their leaders and high performers can dedicate as much time as possible to engaging in those activities that increase profits. They invest heavily in training, marketing, sales, M&E, R&D, and technologies, all of which are known to lead to sizable growth.
One way to create the right circumstances is by building trusting relationships with staff members of organizations you plan to support. I try to develop this in my work by engaging in deep listening and by being a respectful thought partner. And there are times when after listening, I might suggest another solution I believe could be helpful. But even then, it is done with respect for their knowledge and experience. After building relationships with close to 30 social impact support organizations (SISOs), I can predict that some would benefit enormously from having an assistant for one of their high-powered leaders or by hiring a development person. However, some organizations have other needs, such as building strategic plans or updating their technologies. Sometimes, covering operational costs can free up the staff’s time to focus much more intensely on its mission (an indirect way of investing in people.)
However, providing funding for a development person can be challenging. Desired characteristics such as charisma, the ability to put people at ease, and interesting them in funding are more difficult to measure than, for example, hiring a technical assistant. However, in addition to interviewing the prospective employee (which I highly recommend), make sure to look closely at their track record.
The cost of hiring a top-level development person is typically in the $120,000 a year, but if the organization’s fundamentals are solid, it could be well worth the investment. Be aware that, depending on the situation, it is not uncommon to take two years to raise enough money to exceed the cost of your grant.
In one instance, a foundation I worked for provided funding to hire a development person who spent close to a year building its Salesforce database – something someone else could have done for considerably less money. I learned that sometimes organizations should build fundraising infrastructure first to ensure that a development person can do their job effectively.
My sweet spot begins with finding SISOs with an extraordinary track record. For example, in 2020, TechSoup (TS) facilitated $1.9 billion in free or discounted technical services and products to hundreds of thousands of nonprofits in 236 countries  — a clear demonstration of achieving macro-level results. Then I looked for a catalytic opportunity where a relatively small grant could make a sizable difference for this organization. Its staff told me they needed to close a $11.5 million public offering within four months and hoped to hire an assistant for one of the two lead people working on this campaign. My fund provided a grant under $75,000 to employ this assistant, and they raised the entire $11.5 million. But they did so barely and would not have without freeing up a large amount of this lead person’s time.
It is essential to adopt a venture capitalist’s mindset. They might invest in 10 projects, understanding that while nine may fail, the one that succeeds will far outweigh the money lost. Fortunately, most of my grants have achieved exceptional results. And, while a few failed to meet my expectations – at least from my perspective, they all had a meaningful impact.
Admittedly, some of it was luck. In one instance, my fund covered half the cost of hiring an assistant ($70,000 in total) for a high-level leader in Kenya who helped coordinate development work with President Kenyatta, governors, multi-laterals, and others. According to him, this grant gave him the bandwidth to create a band of ten governors interested in adopting early childhood education in their respective counties. However, he worked alone. What if he quit or got too sick to work? Or, to use the TechSoup example, what if it didn’t meet the deadline? I have taken numerous risks, understanding that some circumstances are out of my control. So, my work involves doing my best to undergo due diligence while maintaining the mindset of a venture capitalist.
In some cases, I have mitigated risk by agreeing to cover only part of the cost requested if others cover the rest. Sometimes I provide a challenge grant or match one provided by another person. This process has increased giving by hundreds of thousands of dollars. Doing so can mitigate risks in two ways: 1) By reducing the chances of failing due to being underfunded and, 2) by lessening each participant’s exposure. Although I have not done so yet, I also hope to pool funds to enable an exceptionally promising social impact support organization achieve extraordinary impact. You can also lessen your risk by providing a grant for a full-time remote Executive Assistant from another country for as low as $15,000 per year. (If you are concerned about equity issues, you can provide a more generous grant.) There are also circumstances when an organization could benefit considerably by hiring a less trained assistant or a volunteer coordinator & recruiter. However, in the latter instance, ensure the person hired has a successful track record.
If I am convinced of one thing, it is that there are times when relatively small strategic human resource grants can have huge, transformative outcomes. In this article, I’ve provided numerous examples where the results of adding staffing have been immense. These results make sense considering that every successful for-profit company invests in human resources. I focus on identifying high-performing social impact support organizations and providing catalytic funding to them because I have not found anything that compares in results. However, funders can achieve exceptional results by investing in people by funding promising coalitions, networks, platforms, affinity groups, or direct-service nonprofits.
No one is rich enough to solve the world’s problems alone, nor do any of us have all the answers. We achieve the best results when we work together – when we pool not only our financial resources, but all other resources while tapping the power of our collective intelligence. This is why it would be valuable to convene funders to find better ways to break new ground together. You can contact us at Propel Philanthropy here.
Please contact us if you are a funder interested in participating in these peer-to-peer learning groups.
1. We’ve coined this term to describe what might be called philanthropy support organizations or initiatives, but we are including other sectors and functions. Collectively they unlock immense resources within communities, regions, and countries. Well-known examples include GivingTuesday, VolunteerMatch, Council on Foundations, National Council of Nonprofits, and TechSoup. Many others exist.
2. You can read about the campaign statistics at https://www.techsoup.org/growth-capital-campaign