Participatory philanthropy: an analysis of community inputs impact on grantee selection

Institutional philanthropy (which includes the spectrum of all formalized grantmaking organizations) remains one of the least understood and researched aspects of giving. There is also limited scholarly attention to the relationship between foundation governance and grantmaking, despite normative claims about 'elite' foundation boards selecting 'elite' nonprofit's. Yet, foundations are increasingly using committees of community volunteers to allocate grants, rather than leaving grant decisions to a traditional board of directors. The goal of community involvement in grantmaking is better grant decisions, due to community members' information advantage and consequently greater knowledge of community needs. However, no one has tested whether community boards are making different decisions than traditional boards, much less whether their decisions are better. Drawing on a sample of 6 funders who use both community and traditional boards, their 616 grantees, and 955 comparable non-grantees I build on the economic model of giving to identify differences and similarities in the characteristics of nonprofit's that receive grants. Although I find much more congruence between grant decisions of community and traditional boards than literature expects I explore this finding through an in depth case study of two foundations who do this type of work. I find, similar to previous work in the public sector that simply involving community members in a grants process does not automatically generate different organizational decisions. Instead, it is only when a public participation program is effectively designed that grant decisions truly reflective community input.Ph