Where we live is a huge part of who we are–and the challenges that we experience. A single parent in the inner city may need vastly different kinds of support than a single parent in a rural small town. These kinds of differences are why nonprofits and foundations are turning to place-based philanthropy as one way to address the unique needs of communities and provide more effective aid.
Place-based philanthropy is a giving strategy that centers the people who live within specific communities as the foundation for providing resources and support. Recognizing that social issues don’t exist in a vacuum, place-based philanthropy argues that grantmaking is more impactful when tailored to grantees’ specific needs, instead of providing blanket solutions in a siloed, top-down manner. To this end, place-based philanthropy empowers members of local communities to voice what forms of support would be most beneficial to them.
As nonprofits and foundations look to make their grant programs more equitable, place-based philanthropy has recently emerged as one way to answer the root causes of inequity as they are actually experienced. Place-based giving can create long-lasting, sustainable outcomes by trusting the communities your program serves and involving them throughout the grantmaking cycle.
Place-based philanthropy has deep roots
Though place-based philanthropy has gained prominence in the past decade, the concept of community-based giving has existed in some shape or form for decades. Historically, the two main avenues for place-based philanthropy have been community foundations and national foundations.
Community foundations, established as far back as 100 years ago, have long played a pivotal role in supporting local communities. These foundations are traditionally located within the communities they serve, usually receive funding from local sources, and remain laser-focused on distributing aid locally. The emphasis on funding being raised by the community, for the community is a principle that resonates to this day in place-based philanthropy. However, community foundations have been limited by resources and scope in their ability to drive outcomes at scale.
That’s when national foundations, which typically have the massive resources to scale, took up the mantle of place-based giving. In the 1960s, national foundations began directing their efforts toward improving economically disadvantaged urban neighborhoods, inspired by the civil rights movement. However, this approach often employed top-down methods, with pre-designed, one-size-fits-all grant programs. These efforts could appear rigid, controlling, and misaligned with the unique needs of the communities they aimed to serve.
Nonprofits and foundations have looked at place-based philanthropy as a potential way to bridge the gap between too small and too big. Then, the COVID-19 pandemic hit. It helped prove the true potential of place-based giving as foundations and nonprofits suddenly needed to reach people at the household level. Some nonprofits found great success in quickly getting aid to those who needed it most by partnering with grassroots organizations that already knew their neighborhoods–and their neighbors–well. By investing in these partnerships, they were able to leverage those established relationships to continue to build solutions that emerged from those communities, for those communities.
Place-based philanthropy recenters the focus of grantmaking on communities and people instead of reducing them to a singular issue or cause. By applying an intersectional lens that acknowledges the full range of people’s lived experiences, place-based giving helps redistribute power from the grantmaker to the grantee.
“Funding connectedness is more important than is trying to fund specific outcomes. Putting people with similar interests in proximity with each other and with people who have a natural interest in helping them is a better strategy than is trying to figure out what kind of output to fund.” (Ryan Streeter, Dir. Domestic Policy Studies at AEI)
While place-based philanthropy has gained traction with modern grantmakers, it remains a developing practice. As nonprofits and foundations continue to foster positive, two-way relationships with communities and source community-driven solutions, place-based giving will also continue to transform and evolve.
Place-based philanthropy benefits both community and foundation
Place-based philanthropy prioritizes people over issues to create lasting, sustainable change in communities and drive long-term results for the nonprofits and foundations that serve them. Here’s how:
It centers the grantee and recipients
Place-based philanthropy involves listening to your community and using their opinions as a guiding strategy for giving. In stark comparison to traditional top-down grant distribution, it allows local individuals to be changemakers in their own neighborhoods. As a result, community leaders become strategic partners who play a pivotal role in guiding fund allocation and ensuring that your program is truly impactful.
It builds rapport and trust with the community
You’re placing a lot of trust in people to provide input on behalf of their community and to decide how to allocate resources. Since grantees get to have a say in where and how money is spent, your community is more likely to feel truly served by your program and to trust your organization. This creates a feedback loop of nurturing more effective grant programs over time, based on the insights and opinions shared by the people actually in the community.
It helps correct the inequity of top-down philanthropy
Place-based philanthropy democratizes power and funding to include those who know their communities best. You’re rebalancing the traditional power dynamics of grantmaking by putting trust in grantees. Instead of relying on heady scholarship or theory, your organization treats those with lived experiences and those who are actively facing problems as the experts whose opinions guide your giving strategy.
It creates effective, sustainable outcomes
Place-based giving addresses the root causes of issues by investing in resources that the community identifies as necessary. It ensures that your program answers the specific needs of your community, allowing for customized solutions that impact individuals in an immediate and material way
Let’s say you want to help a neighborhood in which many heads of household are single parents. Do they have immediate needs for groceries or childcare? Would they prefer scholarships for higher education or job placement assistance? Or, do these parents need some combination of all the above?
Place-based giving ensures that you invest in the resources that these households truly need, instead of prescribing them support that they won’t actually use.
But place-based philanthropy requires a fundamental rebalance of power
If place-based philanthropy was easy, everyone would do it. The fact of the matter is that implementing place-based philanthropy requires a fundamental shift in the power dynamics that currently exist in the philanthropic landscape.
As Juliet Squire, senior partner at Bellwether Education Partners, says in her article for the American Enterprise Institute,, “Place-based philanthropy is hard to do right. It requires philanthropies to shift their mindset from that of a benefactor to that of a partner committed to learning and working alongside local leaders.”
That mindset shift from giver to collaborator is essential for the success of a place-based program, but it’s certainly not an easy one for grantmakers to make. You may run into these obstacles while trying to build a case for your place-based giving approach:
Perceived loss of control
Grantmakers may be hesitant to let others determine where money should be spent, especially if they’re held accountable for proving impact or reporting to a Board of Directors. It can be nerve-wracking to feel like your grant program is out of your hands entirely.
Yet, embracing place-based philanthropy means recognizing that helping the communities you serve is more important than trying to impose your own vision of what that help looks like on them. As Andy Smarick of the Manhattan Institute for AEI said, “The ultimate goal of place-based giving is not the realization of the philanthropist’s priorities, but the ability of empowered citizens to shape their communities as they deem best.”
Takeaway: The most equitable solutions may not align with what key stakeholders or board members (who have historically held power at foundations) want to prescribe. Modern grantmakers must be open to ceding control and advocating for the agency of their communities.
Resistance to change
Traditional approaches to grantmaking in nonprofits and foundations can be deeply ingrained, making it difficult to change to new paradigms. “We’ve always done things this way!” You may hear. “If it ain’t broke, don’t fix it!”
In reality, grantmaking needs to change to become more inclusive and equitable. And industry trends signify that more equitable grantmaking strategies, like trust-based philanthropy and place-based giving, that redistribute power to grantees are catching on—and they’re here to stay.
Takeaway: More and more nonprofits and foundations are recentering grantees at the heart of their giving strategies. If you don’t change, your nonprofit could lose momentum, a sense of communal support, or even funding from partnerships.
Difficult to get leadership buy-in
Grant managers may face challenges in getting buy-in from leadership on place-based giving. Some grantmakers might have uncertainties about whether they have the authority to make changes to how programs are run or funded. Others may fear they lack proof that place-based philanthropy really works, since it’s still an emerging strategy.
Historically, grant managers have served as administrators who manage applications, distribute funds, and report on the cycle’s impact. In recent years, grant managers are being recognized for having a bigger seat at the table. Namely, they have the knowledge and experience to create impactful changes for their overall organization by turning one-way transactions into two-way conversations.
“As a Grant Manager, your voice has a longer lasting impact on the way that the strategy can evolve over time, how funds are being distributed, and how you’re communicating with those recipients,” says Sam Ellsworth, Product Marketing Manager at Submittable.
Takeaway: You have more power than you think and you can certainly advocate for the efficacy of a place-based approach based on the insights it surfaces from your communities—more on what this looks like in practice below.
What to consider before implementation of a place-based approach
Embarking on a place-based approach demands careful consideration and alignment with your organization’s mission to ensure successful implementation. It may be a long haul, but it’s worth it; place-based giving is an investment in your community and better outcomes over time. Here’s what to consider before implementing your place-based giving strategy:
Be concrete to get organizational buy-in
The more thought-out your place-based giving plan is, the easier it will be to get leadership’s stamp of approval on it. Develop a clearly defined mission and strategy for your place-based approach, from how you’ll engage community members to how you’ll measure impact. Convince leadership that the knowledge and insights gleaned from the community will guide funding decisions to more effective outcomes.
As part of your pitch, state that by listening to the community first and foremost, their feedback will provide valuable insights and proof of what components your grant program needs to solve for and comprise. This will allow you to structure a program around those needs and later, ensure that eligibility requirements and accessibility features remove potential barriers to apply for funding.
Commit for the long term
It takes time to build trust and see meaningful progress from investing in community relationships. Before you even implement place-based philanthropy, recognize that it’s a progressive approach, not a time-limited engagement. Place-based giving requires longer to ramp up than issues-based grantmaking.
As Peggy Davis from the Chicago Community Trust notes, “Positive change that sticks over the long term requires our long-term commitment, as well as sustained investments in people, communities, and policy change.”
Get ready to stretch
Flexibility and adaptability to changing circumstances are key to implementing place-based giving. Community needs may evolve, and it’s essential that your organization is willing to prioritize those needs over preconceived notions or opinions on what support should look like. Remember to keep the community at the center of your grantmaking strategy above all else.
Consider providing unrestricted funds to enable communities to structure their own change and foster initiatives that may differ from traditional philanthropic approaches. Keep in mind that aid doesn’t always look a certain way, and your role as a grant manager is to facilitate access to the resources communities need—not to decide what those resources are.
Place-based philanthropy involves a leap of faith. As Andy Smarick of the Manhattan Institute for AEI says, “The donors behind such place-based strategies need to have faith that communities can lead change themselves without external management, and donors must accept that community-led reform will almost certainly produce initiatives that the philanthropic community wouldn’t have chosen itself.”
Place-based giving can be uncomfortable. It can be messy. But staying open and receptive will go a long way in helping your community decide how to help itself.
Place-based philanthropy best practices
Place-based philanthropy involves active listening, genuine partnerships, and a departure from traditional measures of success. Here’s how you can put it into practice:
Build lines of communication now, not when you launch
You need to get close to the challenges to understand the solutions. That’s why you should center your community at every stage of the grantmaking process, even before the program is in place. Place-based giving isn’t just letting your community decide where the money should go; it’s also about providing space for your community to voice concerns and share their experiences.
One way to create that space for your community is to host open events, such as town halls and interviews. Invite local leaders to come in and speak for Lunch & Learns, trainings, and seminars, and build relationships with those who have the expertise in your community. Ensure that these voices are truly representative of their communities, not just the loudest or most prominent ones in the room.
Democratize decision-making throughout the program lifecycle
Embrace a culture of shared governance and inclusivity by involving community stakeholders in decision-making processes. Give them a seat at the table where they can actively participate in shaping your giving strategies, setting priorities, reviewing applications, and distributing funding. This could look like voting panels, or something like Data Walks to review research findings in your community and develop community-based solutions.
By democratizing decision-making, nonprofits and foundations can demonstrate a profound respect and appreciation for the community’s insights through words and action.
Develop broad, deep connections with local organizations
Empowering the changemakers who already know and serve your target communities can make your program’s collective impact go further. That’s why it’s important to seek out and forge meaningful partnerships with other funders, local leaders, and groups in your community. You’ll want to target and partner closely with local organizations that have heavy influence and connections in the area, but also expand your network to include a wide variety of these organizations.
“You can’t do this work without the grassroots organizations. They know the nuances of the problems and are the ones who can transform harmful social norms,” says Emily Jones, Co-Founder of Imago Dei Fund, which supports a network of locally-led nonprofits and groups to address gender, racial, and economic inequity.
Measure impact through conversations over reports
Place-based philanthropy, as a long-term strategy, relies on using qualitative storytelling to measure results, at least to start. It’s difficult to think of measuring without metrics, but a grant program’s impact is so much more than just numbers—it’s about stories and how lives are changed.
To measure social impact through place-based philanthropy, you need to build strong relationships and keep ongoing conversations with your communities. You can use those conversations to surface pertinent issues, understand the nuances of community members’ experiences, and identify possible solutions. Then, you can take those conversations back to leadership as proof of your program’s impact, or as a preliminary roadmap for what your program needs to do next.
With place-based giving, you can continue to measure the impact of your program’s funds directly, while stepping away from the transactional impact results of traditional philanthropy. Thanks to the conversations you maintain with community members, you gain rich, contextual evidence of your program’s effectiveness. Plus, keeping a two-way street for feedback open enables you to iterate and improve your program over time, cultivating a culture of continuous growth and accountability to your community.
Choose partners that prioritize your local communities as much as you do
As you put communities at the center of your grantmaking strategy, you’ll need to adopt tools that share your commitment to community-based giving.
Communities are dynamic, and their needs evolve over time. To truly advocate and show up for your community, you need to be able to adapt to those needs even if they don’t align with what your program originally set out to accomplish. With Submittable, you can launch a program, then adjust as needed based on feedback and data from your applicants and grantees.
Be more responsive
Submittable can help your team create stronger feedback loops.