The recent announcement by Melinda French Gates that she would offer an open-call grantmaking program of $250 million to grassroots organizations working on the mental and physical health of girls and women is part of a growing trend of high-wealth donors interested in providing significant grant dollars through large structured grantmaking programs. This follows the early 2024 announcements by Mackenzie Scott’s Yield Giving initiative that they had awarded $640 million to 361 organizations from over 6,300 applicants. Lever for Change, the organization that implemented the Yield Giving Initiative, was founded in 2019 as a non-profit affiliate of the John D. and Catherine T. MacArthur Foundation to provide the backbone for these large donor investments. 

To date, they have helped distribute over $2 billion of individual donor capital. Clearly, formal grantmaking structures built around very specific donor application criteria are front and center in the philanthropy space. In the same timeframe, this approach differs significantly from various trust-based philanthropy “funder distant” community-driven grantmaking processes being implemented by other types of funders, as just one other grantmaking option. 

For grantmaking organizations of all sizes and issue interests, the question of whether to accept applications is one of the initial strategic decisions that a board or donor faces. Parallel opposite perspectives anchor the continuum of choices. For some boards and donors, providing application periods for all issues to all legally eligible non-profits is a display of fairness, transparency, and equity. Those at the other end of the scale often prefer to work quietly, without much in the way of communication, and make decisions based on their own due diligence, values, and comfort levels.

After 30 years in the philanthropic space, PhilanthropywoRx has become convinced that there is little relationship between philanthropic impact and whether grants were generated from open call application cycles or through quieter due diligence processes — if and only if there is a focus on equity and impact. 

Grantmakers and donors have a great many choices in addition to the two extremes noted above when it comes to their philanthropic style. 

Possible Grant Processes

  • Large grants reserved exclusively for invited big-budget organizations with smaller grants made through open applications.
  • Applications for new prospective grantees and negotiated funding commitments for existing grantees
  • Open call Letters of Interest leading to invitation-only applications
  • Allocations to intermediaries who will make grant decisions
  • Allocations to program staff who will make grant decisions
  • Prize competitions
  • Community review panels
  • Site-visit-dependent processes
  • External reviewers guiding decisions
  • Issue and specific applications followed by follow-up questions and interviews
  • Common applications supporting co-funding with other funders
  • Grantmaking that primarily responds to presentations

All of these options have advocates. Importantly, an individual funder can utilize all options. Many concurrently. 

Considerations for Funders

  • How much time, and human and financial resources does a funder have to implement various levels of application and due diligence processes?
  • How open is a funder to new ideas, organizations, and issues?
  • Does the funder have the knowledge base to effectively evaluate the proposals?
  • What level of community input is desired? How might this input be used?

Reasons Not to Request Applications

  • If you know who you intend to fund, anyway!
  • Similarly, if the applications are only a minor part of the due diligence process.
  • If the application requires time, skills, and experience that most non-profits do not have.
  • If the applications are meant not to fuel funding support, but to generate new ideas for funder staff.
  • If funder representatives are not available to answer questions, counsel and give advice re: competitiveness of ideas.

Making Your Choice

Some funders feel strongly about the rigor of their process and applaud themselves for elaborate and protracted application cycles. What they may not realize is the burden they are placing on staff and applicants. Some funders applaud themselves for their dependence on the brightest and best consultants and researchers in the grantmaking process-- not understanding that those same consultants and researchers may be telling the funder only what they think the funder wants to hear. 

It is the PhilanthropywoRx experience that funders that rely too heavily on applications miss the forest for the trees -- that the perfect application is no indication of anything more than well-written and formulated activities. This falls far short of understanding whether the effort is meaningful or if the applicant knows how to do the work. The best grantmaking practices allow applicants the opportunity to present what they know, what they want to do, and why. But that doesn’t have to be part of an open application process. That can be gained just as easily through interviews, for example. The trick is in getting funders in conversation with people and organizations that really have the energy and appetite to make things happen. That is both an equitable practice and will yield a better chance that results are equity-driven. Whether that happens as part of an application process depends on funders considering all their options—right time/right place.