Over the past few years, the Peery Foundation has cemented a practice of grantee-centric philanthropy rooted in building trust, dignity, and self-reliance. Its portfolio is focused on strengthening youth and families by supporting social entrepreneurs and organizations in the San Francisco Peninsula, as well as leaders in developing countries working on innovative solutions to address poverty. As they continue to experiment with a trust-based and grantee-centric approach, Peery is finding more joy and learning than they ever expected. We sat down with Executive Director Jessamyn Shams-Lau to get the scoop.
Describe your grantee-centric approach, and how does trust factor in?
Our approach is not complicated. It is informed by two questions: 1) What does philanthropy look like when we regard grantees as our customers or clients? and 2) What does philanthropy look like when we hold ourselves accountable to the same standards we ask our grantees to live up to? As funders, we tend to hold our grantees accountable to so many expectations – and a very high standard of expectations. That’s great, but maybe we should think about holding ourselves to the same standard. That’s where we in philanthropy often slip. We’re very good at having expectations of our grantees to be super rigorous, metrics-driven, responsive, etc. They have to do exactly what they say they will. But we as philanthropy professionals and funders don’t hold ourselves to a similar standard.
As we look at the complexity of intractable problems, the acceleration of those social problems, and the development of new problems as technology and globalization take hold, we [in philanthropy] are not keeping up. What we’re doing is not working fast enough, well enough, broadly enough. We fund organizations in a way that keeps them alive, but if we’re completely honest with ourselves, [traditional philanthropy] doesn’t necessarily take the step toward accelerating organizations’ progress. If we are to have a hope of accelerating solutions, broadening the distribution of solutions, and applying new insight and existing insights in a way that tackles problems at the scale they exist, we have to maximize all of our inputs. And we have to do so in a way that prioritizes trust. If we can’t trust each other, we cannot work together, we cannot communicate clearly and honestly. We cannot tackle challenges in an effective manner if we don’t have a trust-based relationship.
Grantee-centric philanthropy is about bringing in empathy to understand our grantees’ circumstances. We may have constraints in capacity, resources, and knowledge, but nonprofits are working with that, plus a huge capital constraint. If we want those nonprofits to accelerate their work, we [funders] must work hand in hand with nonprofits, sometimes prioritizing their needs over ours.
How do you balance your grantees’ needs with your foundation’s needs?
We simply we don’t work with people we don’t trust. If their goals are not your goals, why would you be working with them? [Asking grantees to adjust their work to fit into your goals] inherently means you’re trying to change them.
Our approach [at Peery] is that we try to ask those questions in our due diligence process right up front. Are their goals aligned with what we want to do? Are we aligned with what they want to do? Are we shoehorning our priorities into the way they talk about their work, hoping that they will change? If the answer is perhaps yes, then we probably aren’t going to be completely honest with each other.
Describe your due diligence process. How does it work? How do you make time for it?
We’ve gone through various iterations. We started off extremely light touch, when it was all conversational. Then we built in more process and paperwork, and realized we had swung too far. Now we’ve landed on what we believe is the right blend of information seeking. We’re committed to the idea of essentialism, often asking ourselves, “is this question essential to us making a decision?” If it’s not essential, let’s not ask out of curiosity. Philanthropy is risk capital. It’s okay for us to not fully understand every single detail of an organization’s approach. Especially when those details don’t make a significant difference to whether or not you will continue funding them.
We are currently figuring out how to do our due diligence process in 4 hours or less, and then spending the rest of the grant cycle engaging with our grantees more directly—going to an event, volunteering with them, meeting with their senior leadership. And we tie that into consideration for when we’re ready to make the next grant recommendation.
Has your approach been this way from the inception of the foundation, or has it been part of an evolution to get here?
This is a direct product of our last executive director, Dave Peery, and his desire to embody his family’s values, and some of the key ways his dad [founder Dick Peery] did business. One of his core tenets was doing a deal on a handshake—which means you don’t work with people you don’t trust, and if you say you’re going to do something, you do it.
When I joined in 2009, Dave Peery was asking those two key questions: 1) What does it look like when we hold ourselves accountable to the same standards we hold our grantees to? 2) And what does it look like when we view our grantees as our customers and clients? Those questions and the feedback we hear from our grantees have shaped our work over the past 8+ years. We continue to ask ourselves, how do you provide philanthropy with a heavy dose of humility?
How do you evaluate impact when taking a grantee centric approach?
We take a loose view, trying to remember that we’re not often funding at a stage that we can actually define impact. For example, with the social entrepreneurs we work with—which covers a little over two-thirds of our work—they have an idea of what they want their impact to be, but because of the life cycle stage, impact isn’t necessarily something that is very often provable. We’re looking for grantees that are focused on figuring out that question around impact, and how outcomes lead to sustained impact and systems change. It’s seeing that mindset and the direction that they’re going in, when it comes to understanding their path to impact, rather than whether they can prove they are making impact today.
In terms of our local portfolio [in East Palo Alto], we’ve also learned that the change we’re driving toward may not be the change that communities need. We had focused our East Palo Alto portfolio on educational outcomes, but unfortunately circumstances and events in the community have been such that there has been a huge housing crisis. Now, 50% of students in the school district are homeless. We’ve had to reorient our priorities there. Yes, we are still funding education in the area, but we’ve now realized that educational outcomes are not our measure of success. We’ve been doing more listening with our grantees and the community to better understand how they see success and what we as a foundation can do to support them. As funders, we need to be humble, and flexible to adapting to circumstances to figure out what impact is needed and attainable.
What are the challenges of taking on a more flexible, grantee-centric approach?
Initially our impressions of grantee-centric philanthropy was that our grantees had our phone numbers and they could call us whenever they had an issue or challenge. One program officer was basically doing counselling calls into the late night hours. We realized that we had to address the situation because it’s not [the program officer’s] job and she’s not qualified to do that. Plus, she was burning out. So we sat down and decided to pilot a program to contract with mental health counselors and therapists that our grantees could access. Basically, we identified that this was a need, but it wasn’t our role to play. So we came up with a way to use our resources and funding to meet the needs of grantees without overburdening our staff.
In the bigger picture, even though we have these values, behavior is very much influenced by the people around you. As we talk to other funders, it’s very easy to get pulled in the direction of wanting more paper-based accountability. We try to use those opportunities to offer an approach that is more risk-tolerant. It’s really difficult, we all have reputations we’re trying to protect and build. But overall, we [at Peery] have found our approach to be more rewarding and more effective, for both our team and our grantees, than a top-down, metrics-driven approach.
How do you explain your process to those who may be critical?
I’ve had a number of conversations with people who just don’t understand this approach. There are a number of selling points for us:
- We’re helping grantees protect their time, which is absolutely not a renewable resource; this allows them to spend more time on the issues and outcomes we’re investing in. (Technically, we see it as a positive outcome if we’re preserving more of their time and energy for their work!)
- We have extremely open and honest conversations with grantee staff and sometimes, through knowing more sooner, we can help the organization weather a storm before it’s too late or take advantage of an opportunity before it disappears.
- It’s just so much more enjoyable to do the work this way. We have more fun. The fulfillment you get from working with people you have a real relationship with should not be underestimated.
What advice do you have for funders who may want to take steps toward a more trust-based, grantee-centric approach?
Every foundation and funding situation and culture is different. Go with the obvious opening and potential. There are easy first steps you can take:
- Send hand-written thank you notes to grantees. It takes only 15 minutes a week, and expressing gratitude goes a long way
- Next time you go into a meeting with a grantee or prospective grantee, ask yourself, what does it look like to view your grantees as customers or clients? For instance, can I go to them instead of have them come to me?
- Take the time to ask how your grantees are doing. Relate to them as whole people, dealing with real life stuff. It’s so rare for a funder to say “how can we serve you, how are you doing as a human being”? It’s so easy and so missing in what we’ve evolved our [funder-grantee] interactions to be. And it costs nothing.