How Lever for Change is Innovating the Open Call Philanthropic Funding Model

Tyton Partners (TP):
What is Lever for Change?

Cecilia Conrad (CC):
Lever for Change is a broker. What we try to do is to match philanthropists who are prepared to be bold; and by bold, we mean make large gifts for social change with organizations who can absorb those gifts and put them into impactful work.

100&Change puts the decision making of philanthropic funding to external voices

TP
You are working at a different scale than most philanthropy works. You started with 100&Change, can you talk a little bit about the original story?

CC

Lever for Change began with MacArthur Foundation’s first 100&Change, back in 2015 or 2016. We started talking about it and created the first award in 2017. The idea was to open the doors of philanthropy to shift decision making from the internal staff at the foundation and the foundation board to voices from outside the foundation about what we should do, where we should do it, and what organizations we should work with. We created 100&Change as a global open call. We said, “Tell us what you would do with $100M. It doesn’t matter where you are, it doesn’t matter what the problem is. We are just looking for solutions that promise to have meaningful impact, evidence to back it, a strong team, seems feasible to execute, will be durable, and has a way of sustaining the solution or the work beyond the $100M grant.”

I didn’t know how exciting it was when we thought about it because I was so new to philanthropy. We asked ourselves, “If I were going to do this, how would I do this?” And so we came up with this idea. It was not until the reaction started happening that I started to appreciate how exciting this was for the field to think about doing philanthropy in this different way. We never thought of it as the only way to do philanthropy, it was just: there should be a door like this, there should be an opportunity like this.

What was gratifying aside from the projects we’ve been able to fund with 100&Change (and you know that the first one, “Sesame Workshop and the International Rescue Committee” are now at the five-year mark) is we have released some and have more reports coming out on the number of households that the projects have reached. This is with COVID, where they had to make shifts to digital nudges. There is a whole television show now, Ahlan Simsim (Welcome Sesame in Arabic), with some good news recently that there’s regional funding coming to that television show to help continue the new season. Aside from all that, we started getting phone calls from other funders and foundations asking, “Are you really doing this? This big open call with no parameters? I’m sure you’re going to get something in health, I’m sure you’re going to get something in education. Will you share what you’ve gotten?” It was clear that there was an appetite on the part of the foundations (at least in funders), to see what would happen if you did an open call, even if they were skittish about doing it themselves.

An ecosystem where a donor picks 20 organizations to award at least $1M grants each

TP
In March, you announced a $250M open call with Yield Giving, McKenzie Scott’s philanthropic vehicle. Can you talk a little bit more about what’s happening there? You mentioned before this is new for Lever for Change.

CC
It’s a departure. What it has in common with what we’ve done in the past is that it’s an open call and it has the same values of transparency to assure an even playing field of engaging external voices to inform the decision process. All of those are baked into the DNA. Our other challenges in the past have focused on a single grant to help move the needle on a single project and not always a single organization, but a single project. The distinction here (and it’s something we’ve been talking about doing in Lever for Change for a while) is we are focused more on a group of organizations. We have an ecosystem where a donor will fund at least 20 organizations with at least $1M grants each. It’s more general operating support than project-based. It still has a focus on scale, but scale is more on the field than the individual project. It’s exciting, it’s a new thing for us, and the focus is on community-led and community-based nonprofits who are seeking to address the needs of those who could most benefit from additional resources that could help increase economic opportunity for those organizations. It’s a field in the sense that we are looking at community-led, community-focused nonprofit organizations who have a track record of impact. We’re excited to be working on this front.

TP
You are focused on smaller organizations they are not startup nonprofits. These are organizations that over the last four years, and at least twice, have had at least $1M in operating budgets and a maximum of $5M. So, if you’re defining this community-based, community-led organization also in part as if you are a national nonprofit, are you going to exceed that $5M mark so it’s open?

CC
It’s an open definition of what we’re looking for. The focus is on helping people with foundational resources to create opportunity. It’s focused on organizations with budgets in a particular area and as you know, it’s small, it’s not the smallest and it is a starting point in thinking about how one does this.

TP
I agree with you; it’s a game-changing move. Imagine if we were able to provide general operating or unrestricted funds to nonprofits and see what they can do with it. I think you could look at this and say, “We are releasing $250M, but the data you’re going to be able to gather through that process, and the impact that the data has, can actually shift the entire philanthropic field from a everybody-applies-with-a-very-specific-type-of-thing. It’s restricted funding ­– you get smaller checks and it takes a while to get bigger ones. If we release money in this fashion and fund organizations in this manner, then maybe the impact can be significantly greater because it gets leveraged more effectively.

CC
You’re right. That is a question that we can ask as we look at the impact of this. I think the other part of it that’s certainly consistent with what we’ve done at Lever for Change in the past, is it’s also going to elevate these organizations. Sometimes, when we hear donors say that it’s hard to find organizations, I think this is the category that may be one of the hardest, particularly if there is not a big philanthropic presence in some communities. And if you look at maps of where there’s giving, you’ll see that there are gaps. I think there’s an opportunity here to share information with other funders about what we found, and the geographies where you can really make a difference.