Lessons for Local Philanthropy: What We’ve Learned So FarPart I

By Catherine Crystal Foster, CEO and Co-Founder

As we open the new year, we turn our gaze from the past to the opportunities stretching before us. Every new year brings uncertainty and optimism, but this year, the magnitude of the uncertainty and the urgency of the optimism are greater than most of us have ever known.

Entering this uncharted territory with a learner’s mind is essential. We don’t know what 2021 will reveal, but the remarkable and devastating year now behind us has taught us many lessons. Key among them are the imperatives to approach our work with humility and an openness to learning, to dig deep into our reservoirs of generosity, and to work as hard as we can to stay connected with one another.

With those lessons in mind, we’ve taken a look inward at Magnify Community, and are sharing some of what we’ve learned now that we’ve completed the first two years of our work. We began as an innovation lab in late 2018, and have now entered the final year of our experimental initiative to catalyze more local philanthropy in Silicon Valley. This reflection looks first at what we’ve tested, then what we’ve learned so far, and concludes with what we hope to learn in the months to come.

Silicon Valley, which prides itself on being a place where people move fast, think big, and change the world, has a complex relationship with philanthropy. It’s full of people with massive capacity to give (more than 121,000 millionaires and billionaires, at last count), and many who do, in fact, give very generously.

But most of the philanthropy from Silicon Valley’s own goes outside the region or to Stanford University and other private universities, while the nonprofit organizations that valiantly and effectively serve the people who live or work here are left to compete for dollars in amounts far less ambitious than the challenges the nonprofits are working to address. The funds historically have flowed slowly, and many of the donors aren’t even aware of the depth of local needs or the high-impact organizations meeting those needs (though the dramatic increase in need recently caused by COVID-19 has been something of a wake-up call).

That’s why, in 2018, six well-regarded and high-capacity family foundations in Silicon Valley pooled some funding and put out a call for someone to forge a path to a new way. The result: Magnify Community, a small and nimble philanthropic innovation lab, working with urgency and a three-year time horizon to start to change norms around local giving in Silicon Valley; make local giving easier, more rewarding, and more high-impact; and catalyze $100M of additional philanthropic investment in local community-serving nonprofits.

Two years in, we’ve taken the Silicon Valley script to heart, and moved fast, thought big, and worked hard to change our piece of the world. We’ve chalked up some wins, pivoted quickly after failures, and learned a great deal along the way, which we’re sharing here. It’s our hope that transparency will fuel more learning, more impact, and more inspiration to join the local giving movement — here, and elsewhere across the country.

We’ll discuss our experimentation related to norm change in the next part of this series. Here, we’ll share what we learned from pilots of the giving tools we developed.

What We’ve Tested

After consulting existing research on donor behavior and engaging in dozens of one-on-one conversations with Silicon Valley donors and philanthropy organizations, we developed a series of pilots to activate local funding from local donors. We did so primarily by providing curated information from trusted sources — which is what donors told us they were seeking.

Silicon Valley Give Lists: Targeted portfolios of pre-vetted local nonprofits, developed by Magnify Community and shared via Fidelity Charitable

We have been aiming to increase local giving from individuals who give through family foundations, their personal checkbooks, as well as donor advised funds (DAFs), which are the fastest growing philanthropic vehicles in the US, and which collectively hold hundreds of millions of dollars of assets that could be deployed for local philanthropy. In fact, when we started, the Silicon Valley Community Foundation was stewarding more than $10 billion in DAFs, and at last count, US DAFs held more than $121 billion in assets.

We consider all our efforts to be pilots, and adjust, maintain, or retire them based on their efficacy and what we’re learning. These pilots include:

  • Targeted, curated, pre-vetted lists: We started by developing four portfolios of pre-vetted local nonprofits with the Sobrato Family Foundation, distributed to more than 3,000 local Fidelity Charitable DAF holders via email, and available on the Fidelity website. We then modified that experiment to create a local civic participation portfolio with the Silicon Valley Community Foundation, in which the foundation was both the curator and the distributor to its DAF holders. We also enhanced the presentation and giving options, based on what we learned from the performance of the Fidelity pilot. And several weeks ago, we debuted a new tool for donors, Housing Justice in Silicon Valley: An Action Plan for Donors — combining analysis with curated lists, in an engaging format — developed based on all we have learned from our prior experiments.
  • Bigger bets: To test whether major opportunities could spark major gifts, we created a portfolio of “bigger bet” opportunities that could absorb significant capital with major impact, which we provided to high-net-worth donors, wealth advisors, and family offices. Such bigger bets included high-six-figure and seven-figure opportunities to make transformative change through a capital investment, funding a collective impact initiative, scaling-up a major program, and the like.
  • Searchable database: We developed a robust and searchable database of more than 300 local nonprofits across dozens of issue areas so that donors could find organizations that had already passed the vetting processes of seven well-regarded local funders. We then posted a slimmed-down version of that database on our website for public use.
  • Live events with nonprofit leaders: We hosted monthly virtual briefings for high-net-worth donors who took a local giving pledge we developed (to be discussed in the second installment of this learning series), to help make sense of local needs since the onset of the pandemic, present local opportunities to give, and introduce outstanding local leaders. We also started organizing personalized events to bring local nonprofit leaders directly to the virtual homes of donors willing to put up significant matches to motivate friends they invited to attend. (These pilots remain ongoing.)
  • Timely and topical recommendations: We created collections of giving opportunities for donors based on current needs during the early phases of the COVID pandemic, in the wake of the racial justice reckoning following the murder of George Floyd, after the local wildfires, in response to the digital divide challenges exacerbated by remote learning, and to address the precarious state of our child care system. We continue to develop these collections.
  • Bespoke recommendations: At the request of donors, we regularly share giving opportunities and customized information about local nonprofits.

It’s important to note that while Magnify is a nonprofit ourselves, we intentionally do not raise funds from individual donors or local foundations for our own operations (since we are fully funded for the duration of our initiative). We don’t charge fees, drive commissions to anyone else, or have any vested interest other than serving the community. We also differentiate ourselves by championing the full range of nonprofits serving the community, rather than limiting our focus to, for example, safety-net services. We are a hub and a connector, and have been able to test and build tools quickly that we willingly share with others who will use them to further our “give local” mission.

What We’ve Learned So Far

We’ve successfully catalyzed millions of dollars of local donations — from $200,000 gifts to COVID-related cash relief funds, to six-figure gifts for specific initiatives, to individual gifts in the tens of thousands for general support to community nonprofits — but we’ve learned as much when we’ve missed the mark as when we’ve succeeded. The lessons are many:

  • Curation is not enough: Curation is necessary and valuable to motivate new local giving, but it is most effective when coupled with in-person (or virtual) connection to the nonprofit leaders, to compelling stories, and to peers vouching for the nonprofits, when the recommendation feels more personal to the potential donor. This is consistent with research showing that curated lists motivate giving but need careful calibration to meet their full potential.
Local nonprofit leaders Camille Llanes-Fontanilla (SOMOS Mayfair), Rev. Ray F. Montgomery (PACT: People Acting in Community Together), and Lorena Melgarejo (Faith in Action Bay Area) discuss their community-based work during a Magnify Community Pledger Briefing, ”Supporting Democracy Every Day,” moderated by Suzanne St. John-Crane and hosted in partnership with the American Leadership Forum ‑ Silicon Valley.
  • Donors rarely use unpersonalized tools: Donors say they want lists, databases, and the like to make giving easier, and those in our network have appreciated the ones we created. But donors don’t often use them independently to make decisions on their giving. They give to what they know, what they see or learn about first-hand, or what a peer or trusted intermediary encourages them to support. When we presented information from the tools in a way that seemed more personalized — e.g., presented directly by us or a fellow donor in a personal email or in a small-group Zoom, donors selected information from the tools to make donations.
  • Scalability is elusive: Our most successful approaches to motivate donors to give are not easily scalable. We’ve catalyzed giving when we’ve delivered information in high-touch, individualized, or small-group interactions directly with donors. Neither tools with broad reach that required less mediation by us, nor use of wealth advisors as a means to transmit information to a large client base, have resulted in a high volume of gifts or dollars.
  • Neutrality is respected, but opinions drive dollars: We originally considered our even-handedness, broad scope, and “no favorite children” approach to be a virtue. But we catalyzed giving when we expressed a point of view and presented donors — individually or in a small group — with a specific, small number of nonprofits that we endorse. We moved money when we shared an opinion or recommendation. Donors don’t want to see a self-serving bias, but they do want to feel confident that we’re taking a thoughtful and informed stand in support of particular organizations or issues.
  • Donors don’t know how to size the market or assess the needs: Donors frequently articulate a gap in understanding at the macro level how much money and what type of interventions are needed to address the most pressing local issues. Similarly, they struggle to size their donations appropriately. Recent research underscores the need for frameworks to help donors size their gifts. Even with most of the success factors above, as prior research validates, initial gifts to a nonprofit from high-net-worth individuals often start at the $5,000-$25,000 level, regardless of how much more the donor could give, the size of the nonprofit, or the scope of the challenge being addressed.
  • The bigger bets concept is appealing, but its efficacy in unlocking donations from newer donors seems limited: High-capacity donors rarely are sitting with large sums that they are willing to deploy as soon as they receive guidance on how to do so. Even when presented with pre-vetted, ambitious giving opportunities that can absorb large sums, most donors don’t jump to give to nonprofits or initiatives they don’t already know, or to unfamiliar issue areas. They still fear making a wrong move, or spending too much; and the financial advisors who are excited to receive the giving recommendations hesitate to pass them on. Donors may give entry-level or stretch gifts if there is a direct and personal ask from a peer donor, or if a peer donor is putting up a match. And the most consistently large gifts we have seen so far are for basic food assistance to the regional food bank during the ongoing COVID crisis; not for a “bigger bet.” Driving significant social change through “big bets” has been an elusive goal, as researched and documented in recent years by Bridgespan. We have yet to crack that nut in Silicon Valley.
  • Urgency and immediacy matter: Donors were highly motivated to learn, show up (in virtual venues), connect with one another, and give deeply and to organizations that were new to them in the wake of the COVID crisis. When we surveyed donors, they shared that the tools they relied on most were those that helped them make sense of the interlocking crises and find nonprofits addressing urgent and severe local needs in a way that the donors understood, most often for direct essential services.

Overall, when our pilots have unlocked donations, some combination of the following factors has always been present: (i) A big ask by a peer; (ii) a compelling, topical issue; (iii) a tight and manageable set of options on where to give; (iv) a charismatic and trusted nonprofit leader; and (v) urgency or timeliness regarding specific needs.

What We Hope To Learn Next

As we continue into the final year of the Magnify Community experiment, we’re refining our work on “navigational” approaches to catalyze more local giving. We’ll be testing to answer questions including:

  • Will augmenting curated lists like the Silicon Valley Give Lists piloted with Fidelity to add a personal element (direct presentations by nonprofit leaders, in-person or Zoom validation by current donors, etc.) lead to greater giving?
Magnify’s Issue Brief on Housing Justice in Silicon Valley offers a roadmap for philanthropic investment in the best-in-class local nonprofits working, with cross-sector partners, to address the housing and homelessness crises
  • Will deeper and more strategic exploration of a specific issue, coupled with curated lists of nonprofits addressing varied strategic levers, lead to greater giving by certain donor archetypes?
  • What will prompt donors to increase the sizes of their local donations?
  • What will motivate other ecosystem partners to adopt or share our pilot navigational approaches to generate more local giving?

Stay tuned to hear more as we learn more. We’ll share what we’ve learned through our norm-changing and community-building pilots in a subsequent post, and will reflect on the initiative as a whole when we transition to a new phase in Fall 2021. Because we are a learning-focused initiative, we’re eager to receive feedback on our work to date. We encourage others to offer their comments or reach out to us about how to use what we’ve learned so far to improve their own practices here in Silicon Valley or elsewhere. In this work, especially at this time, we are better when we learn and take action together.

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