(Small) Size Matters
Categorized as: Stories on November 10, 2011.
This piece was published by Council on Foundations, and it explains why we work so hard to make every dollar count.
(Small) Size Matters: Sometimes It Pays to Be the David Among Goliaths in Philanthropy
Growing up in a family of nine in the suburbs of America’s Heartland—Ohio—actually provided good training in strategic philanthropy and kept me rooted in cost efficiency as an adult. Now running a dynamic family foundation on a tiny budget, I am living the lessons of middle-class family budgeting. We leverage our resources through young organizations with self-sustaining, quickly scalable programs that provide “self-help to end poverty worldwide,” as our mission boldly states.
To achieve our ambitions, we have to move faster and smarter than Goliath. Our simple strategy involves likely sustainability, careful risk, early investment, and full-scale relationships.
First, we seek sustainability, eschewing the need for a constant stream of donations to maintain the status quo. Increasingly, we seek market-based solutions that provide education and jobs to boost the economic prosperity in a given community.
Second, we focus on small organizations that allow us to make big bets on new ideas. We provide vital funding to ventures others deem too new or risky. When those programs are successful, our early-stage investments allow the organization to recycle our grant dollars into future outreach.
Along the way we’ve been shocked to see that our example sometimes motivates larger donors and corporations to join the cause. One of our grantees, Freedom from Hunger, asked us to be the first to fund a microfinance campaign to reach three million members—and they used our family as an example when courting one with, uh, slightly deeper pockets—namely, the Gates family.
We’ve used challenge grants to get bigger funders to kick in to:
- Remodel a kitchen serving hungry kids in Ohio (Dayton Christian Center);
- Get poor kids to college in San José (Summer Search Silicon Valley); and
- Keep kids in school in 12 developing countries (The School Fund).
Currently, we’re seeding an initiative to extend health care services through microfinance networks. Again, we were the first to get behind this project, which is now proving its validity through research and metrics. A corporate donor just jumped into the game with us this month.
Taking risks early on allows us exponentially to multiply the number of people reached through our initial contribution. Moving nimbly not only gets us the most bang for our bucks. It’s the key advantage we have in the field.
As a kitchen-table donor and then a beginning philanthropist, I didn’t always see the power of small. I used to feel frustrated by the limited size of our grants and scope. However, time progressed, and I began to leverage the power of relationships. With larger nonprofits, providing multiyear grants and pro-bono assistance allows plenty of time for trust and creativity to bloom. With smaller startups, we enjoy multidimensional collaboration with core founders and administrators on strategy, fundraising, and communications. For our global grantmaking, we trust carefully chosen experts to help us reach far across the world.
Small-small collaborations can equal huge impact. From my desk in California, I can—with as little as $500—employ a woman like Suman Devi in a community dairy in her village slums in northern India. A widow and mother of four children, Suman lives in a makeshift hut of mud and twigs. Previously, on lucky days she worked as a day laborer and eked out two meals per day of rice and potatoes. Now, Suman has a steady job with a reliable paycheck and the ability to educate her kids, and skills training necessary to help her take control of her life. How do we help Suman? Not from our tiny office, tight schedule, and limited know-how—and not alone.
Launched earlier this year, one of our grantees—Seattle-based nonprofit Upaya Social Ventures—provides seed funding and management support and will recover all startup costs in 14 months through milk sales. Profits get reinvested into future dairy units and other locally owned businesses, creating new jobs in new regions. Upaya measures improvements made in the lives of the poor, adjusts its model, and expands our mission through its expertise and dedication.
As a small foundation, we can quickly move to fund Upaya. And as it demonstrates the impact it can have, larger institutions will get behind this new approach.
Upaya is just one of many organizations our family foundation supports. A few other examples:
- Creating a scholarship program for homeless teens in San José, CA who complete their GEDs (EHC Lifebuilders);
- Converting an abandoned building in Appalachia into a thriving laundromat microbusiness (St. Joseph the Worker Mission); and
- Cocreating a scholarship program to educate survivors of violence around the world (V-Day).
I meet plenty of other small foundations, giving circles, and savvy individual donors who also desire maximum leverage with limited resources. Our causes may vary, but I see the same strategy at work: sustainable models, seed-funding, strategic risk, andreliable relationships. These are investments my frugal parents—who still live in Ohio, thrive on a middle-class budget, and serve on the board of the Skees Family Foundation—can really believe in.
Suzanne Skees is director and board chair for the Skees Family Foundation, a member of the Council on Foundations.