Grants to Individuals: Investing in People and Their Communities

Aiming to have a broad effect on organizations or communities, some grantmakers choose to fund individuals. It’s true that grants to individuals make special demands on foundations, both legally and administratively, but sometimes they're the only way to achieve an important objective.

In this guide, grantmakers talk about the rigors and rewards of investing in people. Learn how to design and manage a grants-to-individuals program, including developing a theory of change, using the right funding mechanism, and finding the right people to support.

Highlights

  • Five funders, five programs, five theories
  • From purpose to program: theories of change
  • Grants to individuals and the law

What's in the Guide?

  • Supporting Individuals: Five Examples: Five funders, five programs, five theories about how individuals affect the wider world and what foundations can do to offer support. Each short profile describes the reasoning behind a funder’s decision to make grants to individuals, the program itself, and a few words of advice. (A chart on page 7 includes snapshots of even more programs.) The lesson here: grants to individuals entail a few extra steps, but many grantmakers believe they’re worthwhile.
  • Designing a Grants-to- Individuals Program: There are decisions to be made about purpose, costs, selection criteria, extra features, and management and funding mechanisms. For private foundations, detailed planning is an absolute necessity, since many grants-to-individuals programs need to be approved in advance by the IRS. Careful mapping is important for any funder, grantmakers said, as is the need for good legal advice.
  • Managing the Program: Grantee Selection and Beyond: A lot of work goes into choosing the right grantees and supporting them in ways that make the people, their work, and the program itself as effective as possible. Experienced grantmakers offer suggestions for managing major activities, handling tensions and tradeoffs, and fine-tuning program components.
  • Evaluating Impact on People and Communities: Individual grantees are often asked to report on their progress or demonstrate their accomplishments. But how does a funder quantify the accomplishments of the program itself? In this section, grantmakers talk about what can and can’t be evaluated — and even hazard some views about why evaluation might not be worth the time and trouble.
  • takeaways
    What Grantees Wish Grantmakers Knew about Providing Funding to Individuals

    The application. GranteeA microbiologist expressed concern that "many of our students are turning away from research because they see their professors spending so much time on grant applications." An accomplished artist described her life as "deadline-driven" and wished aloud that she could "build an organization around myself" to manage the administrative aspects of art-making. s said that applications should be concise, have a reasonable time frame, and not involve too much busy work.

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  • takeaways
    From Purpose to Program Six Theories of Change

    Here's a quick look at how six funders started with a purpose they wanted to accomplish, articulated a theory of change, and ended up with a program model for making grants to individuals. The names are changed, but the descriptions are based on real programs.

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  • takeaways
    Evaluating Impact on People and Communities

    “You get a much richer perspective from an individual. They’re not often asked to reflect on what they’re doing and why they’re doing what they’re doing. It curiously gets to mission better than an organizational grant.”...

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  • takeaways
    Program Learning and Fine-Tuning

    Midcourse corrections can make a program more responsive or efficient. In deciding what to change, grantmakers rely on information from grantee surveys and reports, evaluation or analysis of the field, or attention to grantees’ success and their own internal operations:

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  • takeaways
    Providing Individuals More Than Money
    • Make connections.
    • Time disbursement.
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  • takeaways
    Understanding Needs of Grantees

    Do grantees always know what they need? Yes and no, contributors said.

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  • takeaways
    Promoting Racial and Gender Equality in the Selection Process
    • Place people who represent the “diversity we are seeking and who have a consciousness and awareness of the importance of diversity” in visible positions of authority — specifically, on the advisory group and selection panels, as well as on the foundation’s staff and board of directors.”
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  • takeaways
    Grantee Selection: Decision Making

    Create a standardized assessment system. A standardized system to assess and rank applicants can help make the selection process objective and nondiscriminatory. It ensures that the same criteria are used by all readers and across stages of the application process.

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  • takeaways
    Grantee Selection: Recruitment & Application

    Selecting individuals can be difficult logistically, for two reasons.

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  • takeaways
    The Fine Print: Grants to Individuals and the Law

    Private foundations are allowed under the Internal Revenue Service Code (Section 4945, Regulation 53.4945-4) to make three types of grants to individuals:

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  • takeaways
    Mechanism for Funding Grants-to-Individuals

    Provide support through a host institution:

    Host institutions may benefit as well: colleges get the students they admit, nonprofits get their leaders back rejuvenated by a sabbatical, research centers get the reflected prestige of prize winners, and fiscal sponsors fulfill their missions and get the administrative fee they charge.

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  • takeaways
    Designing a Grants-to-Individuals Program
    1. Define the Purpose
    2. Settle Money Questions
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  • takeaways
    Funding Organizations and Individuals

    Funding organizations or individuals is by no means an either/or proposition. Most grantmakers suggest doing both, often as complementary strategies.

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  • With trustees and colleagues: Some funders shy away from grantmaking to individuals because they believe it's prohibitively difficult to do. The guide demonstrates that funding individuals can be a manageable and strategic choice that complements other grantmaking activities. If your foundation doesn't make grants to individuals, use the guide as a taking off point to examine your current policy and consider the possibility of adding a grants-to-individuals program.
  • With others involved in an existing program: If you're already making grants to individuals, read and discuss the guide with an eye toward making the program stronger, more effective, or easier to administer. Should you outsource some aspects of the program? Could you fine-tune the selection process to attract a wider cohort of grantees, or to target a specific one more precisely? Should you offer different services or do a better job of keeping in touch with former grantees? How will you assess the impact of the program? and other questions are raised throughout the guide. You might also get ideas for gathering information that reflects in a meaningful way on the program's impact.
  • With grantees: If you're already funding individual grantees, use the guide to open up conversations (or perhaps develop a survey) about how well the program works from their perspective.
  • With consultants and partner organizations:The guide should also help you prepare to discuss the foundation's needs and preferences with legal counsel, or with an organization or consultant you're considering to manage all or part of a grants-to-individuals program.

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