Nila Kartika Wati
While the landscape of American philanthropy continues to be dominated by multibillion-dollar foundations that set the strategic terms of national giving, a growing network of alternative institutions is challenging the traditional top-down hierarchy. Women’s funds, giving circles, and Indigenous-led organizations have spent decades refining a model of "participatory grantmaking," a philosophy rooted in the belief that those closest to social challenges are best equipped to direct the resources intended to solve them. This shift represents more than a change in administrative preference; it is a fundamental reconfiguration of trust, risk, and accountability within the nonprofit sector.
The Evolution of Community-Led Philanthropy
The historical trajectory of community-led giving in the United States can be traced back to the early 1970s, a period marked by the rise of social justice movements that demanded greater representation in all sectors of public life. In 1972, the Ms. Foundation for Women was established by activists Gloria Steinem, Patricia Carbine, Letty Cottin Pogrebin, and Marlo Thomas. It was the first multi-issue national women’s fund, designed specifically to address the intersectional needs of women across racial and economic lines.
By 1995, academic studies, such as those conducted by Kathleen D. McCarthy at the Center for the Study of Philanthropy at CUNY, began documenting how these institutions were successfully integrating low-income women and women of color into decision-making roles—positions traditionally reserved for wealthy donors. This commitment to inclusivity has only deepened over time. In 2018, the Ms. Foundation launched a five-year strategic plan that allocated $25 million specifically for organizations led by and for women of color. By 2021, the foundation reported that 90 percent of its grantee portfolio consisted of organizations led by women and girls of color, signaling a near-total alignment of its funding with its mission of equity.
Following the Ms. Foundation’s lead, regional funds began to emerge. The Boston Women’s Fund (BWF) was founded in 1984 as the first women’s foundation in Massachusetts. Over the last four decades, BWF has moved beyond simple grantmaking to pioneer "trust-based" models that eliminate the bureaucratic barriers often associated with large-scale philanthropy.
Redefining the Grantmaking Process: Conversations Over Applications
One of the most significant departures from traditional philanthropy is the elimination of the standard grant application. In many large foundations, the application process is a labor-intensive endeavor that requires grassroots organizations to spend dozens of hours on paperwork—time that is diverted from their primary mission.
The Boston Women’s Fund has addressed this by implementing "Requests for Conversations" in place of written proposals for its Community Impact grants. Under this model, the public nominates organizations, and an allocations committee composed of community members conducts interviews with leaders and the populations they serve. This approach prioritizes oral tradition and lived experience over technical writing skills, which may not accurately reflect an organization’s effectiveness.
In 2023, BWF granted more than $400,000 to 22 grassroots organizations, representing a 44 percent increase in funding over the previous fiscal year. All of these organizations were led by women or gender-expansive individuals, with 95 percent of those leaders being people of color. By July 2025, the fund announced an additional $475,700 in grants and sponsorships, supporting 19 organizations. While these figures are modest compared to the endowments of the Ford or Gates Foundations, the growth rate suggests a robust and expanding appetite for this alternative model.
The Rise of Giving Circles and Collective Action
Parallel to the growth of formal funds is the rise of giving circles—voluntary groups where individual donors pool their money and decide collectively where to distribute it. This model democratizes the role of "philanthropist," making it accessible to individuals who may not have the capital to start a private foundation but wish to have a strategic impact.
Data from the Collective Giving Research Group illustrates a dramatic surge in this sector. Between 2007 and 2017, the number of giving circles in the U.S. tripled to approximately 1,500 groups. Collectively, these circles have distributed an estimated $1.29 billion since their inception. Research indicates that nearly half of these groups are women’s circles, with significant expansion noted in Jewish, Asian American and Pacific Islander (AAPI), African American, and Latinx communities.
Industry analysts note that members of giving circles tend to give more money and more strategically than individual donors who act alone. The structure of the circle requires members to debate causes and vet organizations, which builds a deeper level of engagement and trust. In this model, the "risk" is shared across the group, and the accountability is "sideways"—to one’s peers—rather than just "upward" to a board of directors.
Addressing the Crisis in Indigenous Funding
Perhaps the most urgent application of community-led philanthropy is found within Indigenous communities. For decades, Native American tribes and organizations have been chronically underfunded by the mainstream philanthropic sector. Native Americans in Philanthropy (NAP), established in 1990, has been at the forefront of documenting and addressing this disparity.
A comprehensive report produced by NAP and Candid, tracking data from 2002 to 2016, revealed a stark reality: while Native Americans make up approximately 2 percent of the U.S. population, they receive only 0.4 percent of total annual foundation funding. Furthermore, only 20 percent of large foundations provided any funding to Native causes at all, and much of that support was intermittent rather than sustained.
To combat this instability, NAP launched the "Seeds of Connection" initiative in early 2025. This program aims to bridge the gap between community foundations and Native-led organizations. The initiative recently awarded $300,000 in challenge grants to four community foundations in the Southwest and West. These grants require matching funds, effectively forcing traditional foundations to reallocate their own resources toward Native communities. By shifting the decision-making power to Indigenous leaders, NAP ensures that funding is not merely a "one-off" donation but the start of a long-term, sustainable relationship.
A Comparative Analysis: Traditional vs. Participatory Models
The fundamental difference between traditional philanthropy and the community-led model lies in the perception of risk and the direction of accountability.
In the traditional model, the donor or foundation assumes the role of a "protector" of capital. Grantees are often viewed with a degree of skepticism, required to prove their worthiness through rigorous reporting, short-term grant cycles, and project-specific funding. If an organization fails to meet a specific metric, funding can be revoked, placing the entirety of the risk on the grantee.
Conversely, community-led funds like the Ms. Foundation and BWF utilize "General Operating Support." This allows organizations to use funds for their most pressing needs—whether that be rent, salaries, or infrastructure—rather than being restricted to a project chosen by the funder. This model assumes that the grantee is the expert.
| Feature | Traditional Philanthropy | Community-Led Philanthropy |
|---|---|---|
| Decision Maker | Board of Directors / Program Officers | Community Members / Grantees |
| Application Style | Written Proposals / RFPs | Conversations / Nominations |
| Funding Type | Project-Specific / Restricted | General Operating / Unrestricted |
| Accountability | Upward (to Board/Regulators) | Sideways and Downward (to Community) |
| Risk Factor | Borne by the Grantee | Shared by the Collective |
Implications for the Future of the Non-Profit Sector
The rise of these models suggests that the rules of philanthropy are not immutable laws but rather design choices. As the sector faces increasing scrutiny regarding the concentration of wealth and the influence of "big philanthropy" on public policy, the participatory model offers a viable alternative that prioritizes equity over ego.
However, challenges remain. Critics and observers point out that participatory processes are inherently time-consuming. Reaching a consensus within a community committee takes longer than a decision made by a single program officer. Furthermore, there is a risk that large foundations may use these community funds as "performative" partnerships—funding them just enough to claim a commitment to diversity without changing their own internal power structures.
The data from Native Americans in Philanthropy serves as a cautionary tale: unless there is a systemic shift in how the largest foundations operate, community-led funds will remain small islands of equity in a vast sea of traditional giving.
Ultimately, the women’s funds, giving circles, and Indigenous networks are not merely asking for a seat at the table; they are building new tables entirely. They provide a working proof of concept that philanthropy is most effective when it relinquishes control and trusts the expertise of the people it intends to serve. As these institutions grow in both number and financial capacity, they offer a blueprint for a more democratic and responsive era of American giving.
