Building a broader donor base is forcing a transformation in grantmaking. Jewish philanthropy has been hard-hit by demographic changes. Last week, I looked at the way the UJA-Federation of New York City is handling the challenge.
 

Now, let’s go West to see how the Jewish Federation of San Francisco is doing it.

“Strategic” is the keyword, according to Adin Miller, Senior Director of Community Impact and Innovations, and the question to answer is “How can we create the greatest impact for the dollar?” It’s not just about giving money, he says, but about how to align resources so they have the maximum impact on the most critical needs in the community.

He outlines four problems that the Federation faces:

1. The San Francisco federation is an intermediary organization that distributes donations to nonprofits. It must convince donors that they are increasing the impact of their donation by going through an intermediary rather than giving directly to an organization. As donors become more educated about giving, they’re asking, “Why should I go through you?” The answer, Miller says, is that the intermediary brings together other resources to leverage the individual donation. It creates a higher level of efficiency and higher impact on the most pressing systemic needs.
2. To attract new donors and new ideas, the Federation is implementing competitive grants. That’s a shock to some of the long-term grantees who are used to getting their grants renewed year after year. To lessen the shock while bringing in new ideas, the Federation is slowly ramping up the proportion of its funds allocated through competitive grants. That allows continued funding for older programs in the short-term while bringing in new programs. Over time, the proportion of grants given out in competitions will increase.
3. To deal with shifting demographics, the Federation is engaging and training philanthropists through intensive, hands-on involvement in the grantmaking process. A group of 26 people interested in different forms of philanthropy — some who’d been critical of the Federation’s work — was brought together as a grantmaking team. Each was asked for $365 and a 6-month commitment of time, creativity and sense of inquiry. It was their job to determine the mission of the funding round; decide what outcomes were wanted; vet the organizations; and decide who got the grants. Of the 26, 15 have extended their commitment to serve as liaisons with the organizations they chose.

Still to come: A standardized tool to measure outcomes and impact.

The shift to 3-year, competitive grants awarded on the basis of impact data will be an evolutionary rather than revolutionary process for the Federation. It will take several years to complete but has already brought benefits: Those 15 engaged new philanthropists.

How has your organization changed its grantmaking procedures? What challenges did the changes resolve and what did challenges did they cause?