On most calls or meetings with other funders, the pipeline question almost always comes up: Do you know any great organizations working in X region, focusing on Y topic? It can feel like the “deal flow” conversation is the only one we’re having. I’ve lost count of how often we’re asked to share our list of grantees or refer our “favorite” one. At least once a month, we’re invited to attend a pitch session to “introduce” us to a new set of nonprofit organizations.

This isn’t surprising, since identifying potential grantees is a universal challenge for any funder. One might therefore assume that the tools for doing so would be streamlined, effective, and exhaustive; one might think that funders have developed sophisticated strategies for building and exchanging robust pipelines. We don’t. The vast majority of funders find potential grantees through the same combination of tactics, what we call the “pipeline playbook”:

  • Research: reading blogs and sector articles or attending conferences
  • Referrals: sharing and receiving introductions from other funders
  • Open call for proposals: grant applications and letters of interest
  • Consultants: sector-based experts who make recommendations

For the most part, that’s it. There are certainly nuances in design and there are alternative approaches, employing creative, progressive strategies for building pipelines: funder collaboratives like the Agroecology Fund and the Freedom Fund, funding intermediaries like Global Green Grants and Grassroots International, and community-based efforts like the Equality Fund and Fund for Front Line Power. These are, however, exceptions to the rule, which is why the pipeline playbook is simply inadequate to the task-facing funders.

When we asked ourselves how we might do this differently, we decided to experiment with a new approach. The model has evolved and expanded to include other funders, but the core is the same. First, we ask proximate leaders and local experts—sourced through trusted networks and who are closest to the issues we seek to remedy—to nominate a peer for funding. Then, if their nominee receives funding, they, in turn, receive a small honorarium in recognition of their referral. Finally, we ask both the original nominator and their newly funded nominee to pay it forward by identifying more peers for funding.

Read the full article about funder pipeline by Lior Ipp at Stanford Social Innovation Review.