Peer Nominations for a More Diverse Funding Pipeline

(Illustration by iStock/nadia_bormotova)

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.

Problems With the Playbook

Our collective dependence on the standard playbook not only limits our utility, it often exacerbates structural, long-standing biases in philanthropy, creating a funding ecosystem that is too often highly inefficient, insular, and unequal.

For a start, there are an overwhelming number of nonprofit organizations and issues to choose from, over 1.8 million in the United States and 11 million worldwide (which doesn’t include mission-driven for-profit ventures or individual grant seekers). With 50,000 new nonprofits entering the sector every year, the challenge of identifying who to fund is nearly impossible. And complicating the “abundance of choice” is the reality that 95 percent of the 260,000 foundations worldwide are based in Europe and North America, far removed from the realities, contexts, and networks that confer a deeper understanding of who’s doing what and how in countries outside our own. Relying on referrals from other funders who are similarly situated only leads to more insularity, and in the “donor darling” phenomenon in which a small number of organizations receive an outsized proportion of grant funds. 

Let’s add to this mix the influence an organization's website and social media play in whether they attract funding: Organizations with a sophisticated online presence and a compelling brand are far more likely to receive funding than those that don’t. As a result, we’re missing out on countless organizations that are worthy of support but can’t invest in their web and social media game. Whether we admit it or not, most of us have been enticed by a website with detailed information, a funder-friendly theory of change, and compelling, on-the-ground images. This reliance has in turn, at least in part, contributed to the vicious cycle in which most of the funding goes to better-resourced (white-led) organizations that are, for that reason, more likely to have an online presence.

For funders with capacity, an important tool in our playbook is an open call for applications. Yet, the process of reviewing and evaluating hundreds (if not thousands) of applications can be an expensive and onerous endeavor. For grant seekers, writing, rewriting, and tailoring applications for each funder is an incredibly time-consuming and frustrating experience. As a result, winning grants (like a good website) too often reflect writing chops and storytelling talent rather than the organization’s actual impact (which also favors male-led, well-resourced organizations that have dedicated development staff). No one wins.

Peer Nominations

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. 

This model has since become the foundation of the +1 Global Fund. After three and a half years and hundreds of grants in 26 countries we’ve decided that we’re all in on peer nominations, and here’s why: 

1. Breadth and Depth. Across dozens of countries and multiple issue areas—WASH, education, food security, and health—asking locally based leaders to nominate their peers gives us access to networks and organizations we never knew existed (further proof of how hard it is to source organizations through the playbook): Of the 1200 nominated organizations that have been evaluated, 54 percent are women-led, less than 70 percent are affiliated with any established networks in their field, and 30 percent have never received prior international funding. This speaks to the enormous potential of peer nominations to break through the “usual suspects” dynamic and surface organizations doing impactful work under the radar. In the absence of a referral from a local peer, the odds of us finding organizations that are connected first-hand to their nominator, but not to other well-known networks or funders would be slim at best.

2. Quality. Receiving referrals from leaders who are themselves changemakers has yielded a higher quality applicant pool than we could source otherwise. The percentage of organizations we eventually fund has jumped from less than 1 percent in our open grants program to closer to 11 percent through peer nominations. Our nominators are curated, high-performing social innovators or local experts who are nominating peers whom they know well or work with closely—64 percent of nominators indicate they have either partnered with or are actively supportive of their nominees’ work—and this proximity is invaluable. 

3. Efficiency. Our model is predicated on nominations from social entrepreneurs, experts, and innovators who are members of well-established networks (e.g. Acumen, CEWAS, GAIN). Because all of our nominators are curated by our partners, we don’t have to spend time or resources finding individuals to make nominations, and we can trust the “quality” of the nominations. 

4. Blunted Power Disparity. Power imbalances are inherent to funder and grantee relationships, building an entire pipeline based on peer nominations by proximate leaders is a step in the right direction, something confirmed by internal surveys. Placing these leaders at the center of the funding process with the knowledge that their recommendations are the sole source of our applicant pool has, in the words of one nominator, “opened our eyes to how foundations can engage us in more inclusive and equal ways.”  

Using peer nominations, like any strategy, is only as effective as its execution. It took us time and lots of tweaks to get it right. At first, our nomination process was too long and cumbersome, frustrating nominators. After streamlining the process, we realized we still had changes to make, like tweaking the online platform to prevent self-nominations. It took us a while to calibrate our internal capacity to meet the demands of “applicant pools” that differed in size depending on how many nominations we received. And it took even longer to realize the need for (and then build) a mechanism that enables nominations in multiple languages.

Based on these observations we have five tips to offer other funders interested in using peer nominations to build their grantee pipelines:

1. Focus on the “peer” in peer nominations. This may seem obvious but peer nominations means a nomination from a peer of a potential grantee, not your peer. Asking for nominations from other funders really isn’t what we mean by a peer nomination model. Instead, we work with trusted organizations whose vetted partners are the ones making the nominations. This means that we bypass intermediaries and receive nominations exclusively from proximate leaders in the communities we seek to serve. 

2. Compensate nominators. It’s important to recognize the time invested and expertise imparted by nominators who, in our case, are themselves social entrepreneurs or local experts, particularly if they come from vulnerable or historically marginalized communities. Don’t reinforce extractive practices by asking someone to take the time to help without some remuneration. We offer small honoraria to all nominators whose nominee received funding, which formalizes the process, incentivizes high-quality and aligned nominations, and compensates nominators for their time and expertise.  

3. Make it quick and easy. If you’ve ever been asked to submit a reference, you know how important it is to make the process as simple as possible. You can distill the ask of a nominator to three basic questions: Who are you nominating? How do you know them? And why are you nominating them? It doesn’t have to be more complicated than that.  

4. No half-measures. Design a process that accounts for the impact you’re after, the communities you’re targeting, and the issues you care about. Be intentional and strategic. Tacking on nominations to existing strategies or using them as an add-on will not offer the value and quality of a more strategically thought-out approach. 

5. Lean into Trust. Committing to peer nominations is an exercise in trust. Nominators may not be individuals you know personally, or they may be based in a different country or speak a different language. You can “de-risk” the process by starting with nominators you know (such as your own grantees) and then expanding the nominator pool as you become more comfortable with the process. Here’s an easy experiment to get your feet wet: Ask 10 of your grantees to identify three organizations they know well and would fund themselves. If you fund any of their recommended organizations, then compensate their efforts in some way. 

Designing a funding model based on peer nominations starts with the realization that the pipeline playbook is not working and that without change we’re at risk of staying stuck in our echo chambers, funding many of the same organizations and missing out on many more, particularly those closest to the problems and best positioned to solve them. While the resource investment needed to change course can seem daunting, it doesn’t need to be. Through our work, we’ve learned that the impediment isn’t financial, it simply required a commitment to change and a willingness to experiment. 

The greater challenge, therefore, is cultural—the pipeline playbook remains popular because of the deeply held assumptions and aversion to risk that are endemic to our sector. Though change is never easy, and takes multiple iterations to align tactics and desired outcomes, we have emerged the better for it.

Read more stories by Lior Ipp.