An interview with Cecilia Conrad, Chief Executive Officer of Lever for Change, on the open call funding model.
We continue our Voices of Impact interview series with Cecilia Conrad, the Chief Executive Officer at Lever for Change, a philanthropic organization that matches donors with philanthropists to fund initiatives aimed at creating solutions to problems such as racial equity, access to economic opportunity, and climate change. In this interview, Cecilia talks about:
Our conversation has been edited for length and clarity.
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
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?
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.
A tool that could help donors and foundations find social change projects to fund
We also realized that not only were they interested in seeing what they got, but they were also willing to fund what was coming out of this. We had worried that there was a stigma associated with not being the winner. We try to avoid using that term, but it turns out that funders are still willing to fund if we have uncovered good ideas we’ve vetted. That observation was one piece of our puzzle. The other piece was that we were attentive to this research on the money that’s sitting on the sidelines in philanthropy. A couple of high-net-worth individuals have talked about how hard it is to find projects. We are conscious that this could be helpful to other funders, and that was really what came into being into Lever for Change. It was the idea that we could take this tool and expertise we had developed, which was a competition, then we added new bells and whistles to it. We could use that to help individual donors and other foundations like Kellogg to uncover new projects. We can also take those projects and get them in front of other donors to create a secondary market and drive even more dollars for social change. That is what we set out to do from 100&Change to Lever for Change. I am astounded sometimes at how this has turned out. We set an initial goal for ourselves in our pilot of a billion and we surpassed that four months early. What is exciting for me is roughly half is from the secondary market work that we are doing.
We are now at a moment where we are trying to look back at all the things we did, because whenever you try to create a secondary market, you’re throwing everything you can think of and you’re not necessarily being scientific. We are now asking, “What really matters? What really helps?” Organizations tell us that every single organization gets extensive feedback through this process: the evaluation panel members write feedback, other participants write feedback. If they make it near the final stage, they get technical review feedback and they work with a coach. If they are a finalist, and they get feedback there. This feedback helped them refine their case for their project as well as their case for funding and that has generated funding from other funders, even without us being active on this front. We also know that we do a lot of curation where we talk to funders about what they’re interested in and we go to our database, that is not only the public-facing one, but also the bigger database of everything we’ve gotten and put together lists for funders and we know funders have funded projects that way. We also know that there is this public-facing database that philanthropic advisors sometimes use to help source for their clients, and then we have events around the finalists, which can have a big impact.
I want to dig into the idea of crowdsourcing. When you did the first 100&Change, you put together a big panel with people who are experts across a variety of fields and I want to hear about how you thought through that and what impact that has had.
When we launched the first 100&Change, I was asked what I thought success looked like. I thought, “If we got 100 proposals, and 50 of them were competitive, it would be considered a success.” This idea of forming a panel emerged from our decision to let external individuals guide our funding choices. How do you do that? There was discussion of an American Idol-style voting system, but ultimately opted for assembling a panel of experts to assist in the decision-making process. We started out thinking we would get a panel of about 100 members drawn from the philanthropic and the academic sectors. This approach allowed us to introduce the projects to a wider audience and gain valuable insights.
The initial panel for 100&Change, when it first started, was out of a Rolodex I already had due to my academic background and connections with individuals who had previously worked in various fields. We expanded the panel to include contacts from other MacArthur staff and sought recommendations and suggestions from additional people. I began inviting individuals to join the panel, and one group that stood out was comprised of retirees. It was an exhilarating experience to read about the endeavors people were undertaking to change the world and feel a sense of contributing to that impact. We were incredibly fortunate to have numerous volunteers willing to participate in the early rounds as we experimented with the process. In my previous work on an AP exam for economics with the College Board, I learned the significance of a rubric when multiple people evaluate the same content. There is a distinction between what we were doing and what they do because an AP exam typically has a definitive right answer. In our case, we rely on the panel since there are multiple correct answers, and we acknowledge the subjective judgment involved in determining our current objectives. Nevertheless, having a rubric and scoring plan was a crucial aspect of the process. Asking the volunteers to provide feedback served a dual purpose: it was beneficial for the organizations and also for the reviewers who assessed the top scorers and finalists since they would read both the feedback and scores. These design elements were established for the initial round as the number of applicants and registrants started to grow. It was initially daunting, wondering if we would be able to gather enough participants, but we succeeded, ultimately forming a panel of over 400 individuals.
Another lesson we learned from the initial round was the need to offer more opportunities for organizations to evaluate their own suitability. We wanted to avoid wasting volunteer time on organizations that would not be viable. As a result, we developed an organizational self-assessment tool for the subsequent rounds, known as the organizational readiness tool. Academic institutions have reported that it helped reduce the number of applicants. This model has been employed in all of our challenges. We introduced it partly based on the influence of the competition manager we were collaborating with at the time, and we continue to embrace the concept of participatory review, involving applicants to bring additional perspectives. Notably, the perspectives of the applicants offer a distinct wisdom when assessing the projects. They are more likely to consider unintended consequences or unexpected obstacles due to their prior experiences. The feedback provided by peers differs from that of the expert panel, and I believe both sets of reviews are valuable.
Going back to that second question, the 100&Change was a big deal in terms of being an open call. It was also a big deal because one organization was going to get $100M to spend in between three to five years – and it ended up being two. And we should mention that what Sesame and IRC did was bring Sesame to two refugee camps!
That was the first one. One of the things we noted is most of the top applicants to 100&Change have been collaborations. That’s turned up in our other challenges. We have a $1M- $10M award at least and others have had a couple of awards given out. We’ve recognized that if you give a larger award and you give freedom to the organizations to define what they are going to do (or how they’re going to do it), you see some incentives to collaborate to bring in the skill sets that you do not have from other organizations. In some of our more localized contexts I’ve observes, when competing with another organization for funding, particularly in fields where there are few funders, organizations tend to be cautious about collaborating. They hesitate because both want to go after the same grant. In our case, when you offer $100M or even $10M for a local area, you’ll find that organizations will come together and say, “This will allow us to do something we have wanted to do, but we could not do before and work together.” That’s the other thing that we saw come out of that: figuring out that you can scale. If you give organizations the space so they are not going out and having to raise funds year by year, it’s hard to plan to solve a problem or make headway if you don’t know what you’re going to do next year. I think the multi-year large grant is a critical part to moving the needle on some of the problems we face.
An ecosystem where a donor picks 20 organizations to award at least $1M grants each
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.
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.
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?
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.
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.
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.