Even grantees want to make grants these days. And investments, too.
Don’t call it a trend, but lately I’ve happened across a number of relatively new grantmaking and investment funds launched by organizations not traditionally known as regrantors, many of them with a green focus.
Amid a sector-wide explosion in intermediaries, particularly in the environmental space, it feels like many groups are looking around and thinking: “Heck, we could do that, too.”
Of course, disbursing funding has never been solely the province of foundations and purpose-built intermediaries. Major green groups like Ducks Unlimited and World Resources Institute rank among the top grantmakers in the space, according to Candid, while certain smaller organizations like Justice Outside have long maintained grantmaking funds alongside other programming.
Yet it feels like the line between grantees and grantmakers is increasingly blurring.
That seems like a win for the democratization of philanthropy. I’ll dive into these groups further below, but consider: A research group like Giving Green already knows where it thinks money should go. A membership group like 1% for the Planet already has an in with potential corporate donors. A fellowship program like Echoing Green can already see the gaps in funding for its graduates. Why not make the grants or investments themselves?
Blurry lines also seem like a recipe for confusion — or at least realignment. Philanthropy is — typically and traditionally — a bipolar world: You are either grantee or grantor. Many events and resources, for instance, are “funders-only.” Intermediaries have long skated that line, and now it seems more organizations are starting to plant a foot on either side.
This shift could help remake grantmaking, but it also means yet another set of relationships — or power dynamics — for potential grantees to manage. It may help more dollars reach the field, particularly the marginalized communities long ignored or underfunded by philanthropy, but it may also mean more potential competitors for donors’ dollars.
These are early days. Sweeping conclusions would be premature. But in the interest of trying to understand this possible phenomenon, I spoke with the three environmental groups mentioned above, all of which started new funds in the last couple years: Giving Green, 1% for the Planet and Echoing Green.
When you run a first-class fellowship…
To understand Echoing Green’s new investment fund, just read the name: Signal Fund.
“The intent is that our investments send a signal to other capital providers,” said Liza Mueller, vice president of thought leadership. “A signal to go ahead and do that due diligence and look under the hood at these organizations, meet these individuals and determine if they’re right for your portfolio.”
After all, Echoing Green has been at this for 36 years. The organization has now graduated nearly 1,000 fellows, along the way building a reputation as one of the social impact space’s premier fellowships. (Unlike the other new funds listed here, the fellowship does not have a strict environmental focus, but that is a key constituency.) As Mueller puts it, the organization is “one of the flagship early-stage talent spotters” of “highly innovative, highly dedicated, highly passionate” leaders in social impact.
Yet there’s no sugarcoating it: Raising the resources for such work is a “slog,” Mueller said. Those close to the problems they face, or “proximate leaders,” as the group puts it, typically face even higher barriers.
The fellowships have long been intended as a head start against these odds — and the fund aims to help social innovators cross “the proverbial valley of death,” said Cheryl Dorsey, the nonprofit’s president, in a press release announcing the fund. “It wasn’t enough to hope that philanthropy would come along,” Mueller said.
It’s gone well. Officially launched in May, the Signal Fund has raised $15.6 million. It has disbursed, or approved, investments totalling $5 million to 17 groups. Those funds have helped spark an estimated $22 million in related investments.
For all of Echoing Green’s experience, investing in the social innovation capital space is a first for the organization, Mueller said. Yet it is not wholly new territory. The group already considers itself an intermediary, she said. A fellowship, ultimately, is little different than a seed investment.
In one sense, the fund is the latest stop on an upward trajectory. Since 2020, Echoing Green has started to get more recognition and attention for its research, Mueller said. One example is its report with the Bridgespan Group, published in 2019, that found the revenues of Black-led organizations were 24% lower than those of white-led counterparts, and their unrestricted funds were 76% smaller.
The exposure has helped Echoing Green go bigger and more global than ever before. For instance, its most recent cohort was one of the largest and the most geographically diverse in the organization’s history.
In other words, Echoing Green is just getting started.
When you have relationships with thousands of businesses…
Launched in 2002 by Patagonia founder Yvon Chouinard and Blue Ribbon Flies founder Craig Mathews, 1% for the Planet is now a global phenomenon. You can find brands with its blessing selling children’s toys, cannabis, shoes and scalp oil. As the name suggests, participating businesses must give 1% of annual sales to vetted environmental partners.
Now this commercial movement, too, has a grantmaking and investment fund.
So far, it’s tiny. Launched in 2022, the 1% for the Planet Impact Fund granted just $50,000 in its first year, and roughly $100,000 last year. Hosted by donor-advised fund sponsor National Philanthropic Trust, it has $1.3 million in assets.
But with 5,200 businesses in a network that stretches across more than 110 countries, and at a time when the corporate sector is increasingly turning its attention to climate, the potential for growth is as high as, well, global temperatures.
At least that’s what it’s betting on. Based on its tracking, the nonprofit has facilitated $655 million in giving since its launch. The goal is to reach $1 billion by 2028.
The new fund’s purpose is actually less about grantmaking than investing. It grants only 10% annually — twice the foundation rate, but only a fraction of what most intermediaries regrant. The team works with impact investing firm CapShift to put the rest toward environmental investments, mixing private stakes in firms focused on topics like waste management with public investments in climate leaders, and screening all selections to omit companies with heavy fossil fuel exposure.
“It’s an investment fund, essentially,” said Susan Lane, who joined 1% for the Planet this summer as director of philanthropy.
If it can grow, 1% for the Planet’s fund will mean more support for climate solutions — and the fund already has a long list of potential grantees. The 1% for the Planet team has vetted 7,000 nonprofits across 110 countries for its members. Evaluations are based on a “data-driven” rubric that scores groups based on things like “storytelling, clear impact, unique positioning, how they engage their stakeholders, what [do] their metrics look like, what are their DEIJ philosophies,” and more, Lane said.
Like others on this list, it remains a work in progress — and changes are still possible.
“I will really be looking closely at the landscape to determine what are our unique identifiers, how we are setting ourselves apart, what value are we adding,” Lane said.
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When you’re already researching green groups…
Giving Green broke onto the climate scene in 2019 with its now-signature offering: an effective altruism-inflected list, called Top Nonprofits, of groups its analysis says get the most climate mitigation bang out of each dollar.
It still shares those tips annually, with its latest due to drop at the end of this month, as well as more detailed reports. But last year, two motivations led it to launch its own fund, said Dr. Daniel Stein, Giving Green’s founder and executive director, and the chief economist of IDinsight, which hosts the group.
First, big donors would approach the group and say, basically, “I’ve got this money, you have all these recommendations — would you do the rest?”
“Some people just want to trust you to figure it out,” Stein said.
Second, Giving Green aims to widen its aperture. Its classic recommendations are always for unrestricted funding, which leads it to focus on smaller groups whose specific impact it believes it can analyze. With the fund, Giving Green sees space to make restricted grants to larger organizations, back startups with shorter track records, and seed grants to incipient efforts. It’s also evaluating the funding of more niche work, such as hyper-local building interventions.
In classic EA fashion, these motivations and a whole lot more are spelled out in detail — and with laudable transparency — on the Giving Green website.
The fund, called simply the Giving Green Fund, got off to a slow start, granting $150,000 in 2022 and $500,000 in 2023, but will ship $12 million this year. That’s thanks to a $10 million anonymous donation that, as the AP put it, “essentially fell out of the sky without warning.” The fund is housed at Giving What We Can, a group cofounded by effective altruism icon William MacAskill.
Stein sees the fund as one of several similarly minded efforts. Peers include Founders Pledge’s Climate Change Fund, which is also in the “EA universe,” as he put it, and the Europe-based Milkywire’s Climate Transformation Fund, which focuses on corporations and carbon removal. ClimateWorks Foundation, too, has a comparable approach, he said, if on a completely different scale.
Giving Green believes that intermediaries should move money as fast as possible. Its fund aims to turn around donations “very, very quickly,” with the goal to spend each year’s donations by the end of the same year, or within six months of receipt. Stein is concerned some donors think the job is done once the money is off their books.
“If then it’s just sitting at the intermediary, it doesn’t actually solve the actual problem,” he said.
…why not start a fund?
For these three nonprofits, becoming a regrantor was the best way they saw to fill a gap. The question is whether more organizations — from activist groups to think tanks — will follow suit.
That’s an exciting prospect, but endless new, small grantmaking funds may also result in diminishing returns for everyone. Overall funding is already scarce — philanthropy for climate mitigation famously accounts for less than 2% of all philanthropic funding, by ClimateWorks Foundation’s account. The last thing philanthropy needs is more structures that siphon off money and time for administration.
But it’s hard to imagine we preserve a habitable planet without growing the pie. And as long as that happens, everything needs a lot more funding, not just climate. If these outfits can deliver on that, then I hope another thousand bloom.
It’s not like the money is not out there. The Great Wealth Transfer is expected to move trillions of dollars from boomers to heirs and charities. I think it is inevitable we’ll see multiplying efforts to capture that flow — and further loosen the spigot.
That proliferation might cause headaches for fundraisers and funders dealing with an ever-changing philanthropic map. Covering this sector full time, I not only hear the irritation from some quarters, but sometimes feel overwhelmed myself. But that does not seem like a worthy reason to wish for fewer intermediaries. In fact, funders grousing about this explosion seem like they might be, consciously or not, worried about losing their own power.The real issue, as I see it, is not the overall number of grantmaking and investing funds out there, or whether grantees start running them, but how those new funds go about the work.
