I’m occasionally asked by well-intended fans of the Awesome Foundation if there are plans to ramp up our granting efforts, to go beyond the measly $1,000 each of our chapters offers every month so that we can fund higher-impact projects, especially now that we are entering the arena of community development and revitalization.
While it’s certainly possible, I have come to strongly believe that the small size of our grants is, as software developers might say, a feature, not a bug.
I’m not the only one. A quick survey of the revitalization landscape in Detroit shows an abundance of organizations, foundations, incubators and competitions that have foregone the “bigger is better” mentality of grant cycles past.
The Detroit Foundation, which gets its funding from Detroit expats who sign up as paying members, is in the process of giving out its first $5,000 grant as part of Fuel Detroit. Detroit Soup and Soup at Spaulding are two community dinner fundraisers with incredible turnout in which attendees pay $5 for dinner and a vote, and the collected funds (usually $600-$900) go towards whoever gives the best pitch during the meal. Kiva Detroit, the first U.S. program by the microfinance giant, gathered over $11,000 in its first three hours from donors giving in small amounts, fully funding all five of its inaugural entrepreneurs. Nearby, in Grand Rapids, Mich., 5×5 night lets five competitors pitch their ideas to compete for a $5,000 grant.
Overall, the general attitude about grants seems to be: less money, more often, and as public and social as possible.
Why this sudden scramble to go small? In my conversations with many Detroiters, there was a general sense of frustration at the perceived lack of results of larger grants past; in their eyes, something had to change. However, the small grants movement should not just be considered a contrarian, knee-jerk reaction. Here are five good reasons why, in funding as in food, smaller portions are a healthier way to grow.
1. Avoiding the boom-bust cycle
The traditional grant model is prone to leading organizations into instability. Organizations that get very large grants are contractually obligated to spend all of the money in a timely fashion or risk reprimands from their granting foundations. However, in doing so, many build up non-essential bulk like extra staff, facilities and programs that they then have trouble sustaining once the initial funding runs out. This not only makes the next fundraising cycle more difficult, but also pulls the organization’s energy and attention away from its core programs. Unless an organization is extraordinarily well-prepared and strategic about its spending, it’s better to have steady growth than to suffer from funding bulimia.
2. Well-rounded growth
To revitalize a community, injecting funds into a single organization or cause is not enough; the whole ecosystem must be systematically cultivated. A system is only as effective as its weakest component, so growing resources and infrastructure across a number of sectors is necessary for preventing bottlenecks. Splitting a large amount of funds into smaller grants acknowledges this and allows for a wider swathe of beneficiaries, which also improves general morale while minimizing resentment and conflict between different organizations.
3. Growing mutual co-dependence
When it comes to running a successful community organization or business, money really isn’t everything. Bootstrapped businesses and organizations are often hardier because, in the absence of sufficient funds, their owners learn how to be more resourceful. By negotiating deals with other local businesses and discovering the bounty of free or pro-bono resources available, these entities build richer connections to their neighbors and become part of a community that runs on mutual co-dependencies.
4. Democratizing philanthropy
Microgrants allow many more people, not just foundations and very wealthy individuals, to make a meaningful financial contribution to a project. This enables more people to feel invested in revitalization efforts and think critically about their priorities in the community, which ultimately generates a more engaged, thoughtful and active citizenry.
5. Lowering the applicant barrier
Likewise, a wider range of people — and their ideas — can be considered with a smaller grant. It takes a great deal of inspiration, experience, resources and planning to successfully implement a $500,000 project; however, most people have a great $1,000 idea they could easily pull off kicking around in the back of their heads, and these smaller projects are ultimately the gateway drug to larger, more thoughtful involvement.
Saplings in Corktown, Detroit.