This Bespoke Funding Intermediary Focuses Donors on a Dozen Highly Vetted Global Grantees
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One Acre Fund, a Focusing Philanthropy grantee, serves smallholder farmers in Sub-Saharan Africa. Photo: Yaw Niel/shutterstock
Larry Gilson, founder and current board chair of the funding intermediary Focusing Philanthropy, sat at a round conference table in the group’s bright office and pointed to a big, glossy photo on the wall. It showed nine people standing in a village in Nepal, high in the Himalayas. Five elders in the front row looked out at the camera, many with hands clasped before them in a gesture of thankfulness. “This picture here? All the people in the front row were blind the day before this picture was taken,” Gilson said.
But then Seva Foundation, a grantee of Focusing Philanthropy, brought a pop-up cataract surgery clinic to the region. Through its network of about 450 donors, Focusing Philanthropy has provided $7.1 million to Seva Foundation to date, covering the costs of 89,715 cataract surgeries. In Nepal, “People carried their elderly relatives on their backs through the mountains to get to the clinic for the procedure, in one case for four days,” said Gilson, who was there. “The next morning, the bandages came off, and the blind person could look across and see the younger relative who had been their caregiver for years.” The cost of cataract surgery in the regions that Seva Foundation serves averages about $50. “There is nothing more powerful. These are actual, real people, individuals who have their whole lives and networks and experiences changed. This is important because people feel like they can’t make a difference. But you can make a difference.”
Focusing Philanthropy, an 11-year-old, venture-capital-firm-inflected nonprofit, grew out of an observation and a desire to address it. The observation: Donors ask themselves a series of questions about the impact of their dollars, consciously or not. These questions include things like: “How confident am I that this organization can deploy my dollars effectively?” Or “How will I know what happened?” Many donors are paralyzed by these questions. They give less than they otherwise would or default to a familiar slate of “safe” recipients — well-known, domestic-facing nonprofits and those that make regular pitches, like colleges, universities and religious institutions.
Focusing Philanthropy attempts to answer these questions, improving donors’ giving experience and expanding the range of organizations they support. “Our value proposition is to provide highly credible, substantive insight about the program and the intervention strategy,” Gilson said. “We’re trying to be a confidence-inspiring, credible source of well-vetted giving opportunities that we believe are delivering life-changing impacts through scalable programs.”
The group’s donors come from the ranks of current philanthropists who are looking for more advice, information and a point of view — and who, for the most part, bring with them hefty checkbooks. Its top 40 to 50 donors give between $25,000 and $2 million a year and comprise about 90% of the organization’s annual giving. Focusing Philanthropy is a free service to donors and theoretically anyone can use it, but, as Gilson put it, “There really needs to be a comma in the donation. We’re not set up for retail. We’re grateful, but best equipped after you get over some kind of materiality threshold.”
A unique process of matching donors to grantees
Focusing Philanthropy is a distinctive funding intermediary for a few reasons. Its first loyalty is to the donors it advises, but unlike other funding intermediaries, it works closely with only about a dozen nonprofit partners around the world at any given time, and only routes donors’ money toward those nonprofits. Also, unlike other 501(c)(3) public charities, it channels 100% of donors’ money into programming because Gilson, and a small group known as “Friends of FP,” personally pay its expenses — rent on the office, travel, salaries for its current staff of 10, coffee. As of the end of August 2023, Focusing Philanthropy has helped donors contribute $129.8 million through more than 160 campaigns around the world.
Gilson founded Focusing Philanthropy after 16 years spent leading GFI Energy Ventures, a private equity firm focused on energy investing. Taking a venture-capital-informed approach is nothing new to philanthropy: Numerous funders have sought to apply the techniques of private investing to the social field. Nevertheless, I was skeptical, because, as anyone working in a nonprofit will tell you, impacting people’s lives is rarely a matter of clear-cut ROI.
But Gilson’s approach to measuring SROI — social return on investment — makes a lot of sense. Focusing Philanthropy vets nonprofits using the same kinds of tools and processes that GFI Energy Ventures developed as screening criteria for its for-profit investments. Due diligence is also informed by Gilson’s experience with the practical challenges of small and medium-sized private-sector firms.
The 12 nonprofits in Focusing Philanthropy’s current roster have a few things in common. For starters, they have track records. “To use private equity language, we think of ourselves as private equity-stage philanthropy and not venture-stage. This means an organization that has enough history so it’s possible to look at what their experience is and what they’ve achieved,” Gilson said. Because Focusing Philanthropy aims to provide growth capital to help nonprofits expand, it limits its funding to groups that have already shown an ability to scale and have real human impact while maintaining efficacy.
Take the grantee Per Scholas, which works with extremely low-income Americans. Per Scholas offers short-term IT training and graduates about 85% of its clients, many of whom go on to pass nationally recognized credentialing exams. This makes them attractive prospects for IT employers struggling to fill entry-level jobs. Impressed by its track record, Focusing Philanthropy has given Per Scholas $8.9 million so far to help the group expand to more cities and reach more people.
The process of vetting grantee partners may be similar to how Gilson vetted companies in his previous career, but the goal and metrics are different. “It’s not profit. It’s defined by helping to achieve life-changing human impact in some fashion on a reasonably cost-effective basis,” he said. “When we keep score, we ask, ‘How many lives have we profoundly improved?’” The organization’s 2022 annual report lists more than 13 million lives changed, but this number seems low as it leaves out the community of people impacted by an individual’s change of circumstance. Something like cataract surgery, for example, directly improves the lives of the family caregivers, the community and all the people the now-sighted person can touch.
True to its venture approach, Focusing Philanthropy doesn’t take grant applications, nor does it throw its resources behind interesting nonprofits it hears about. Rather, it makes long-term commitments to about a dozen groups at a time, after extensive discussion, reading, visiting and vetting.
It only adds a new grantee when it has the capacity to do so, such as when one grantee rolls off its list. “We look at the portfolio, decide what sectors we want to work in, and then what organizations could make a good partner. It takes a really long time,” said Teresa Burton, who has been at Focusing Philanthropy for five years and recently took over the role of executive director from Gilson. This “zooming in” from the big question to the specific grantee can take a year. “We then spend a ton of time working with every partner and promoting them to donors. We’re limited in how much we can do.”
So how is philanthropy better than venture capital?
Gilson was clearly excited about the programs that Focusing Philanthropy supports, and their details — like the specific types of trees being planted through another grantee partner, One Acre Fund, which helps subsistence farmers in Africa increase their yields and earn more money. Having given $19.9 million over the years to One Acre Fund, Focusing Philanthropy is currently involved in a project to provide farmers with trees, some that can improve soil and diversify their diet. Others, like those grown and later sold for timber, act as organic savings accounts (with leaves).
But Gilson also seemed excited about the intellectual challenge of philanthropy, and the questions that Focusing Philanthropy asks on its way to finding a new partner. “‘What do the world’s poorest people have in common?’ More than half are subsistence farmers. We start with that. That was our starting observation. There is always some version of a question like that,” he said.
Then there’s the numbers. Take One Acre Fund’s tree program: “We think this is one of the largest income-augmenting and environmental-benefitting initiatives in sub-Saharan Africa,” Gilson told me, leaning forward in his chair, talking with his hands, his eyes bright under his thick brows.
Gilson was an English and history major as an undergrad, and has a graduate degree from the school of advanced international studies at Johns Hopkins. He also served on the White House staff of President Jimmy Carter and was one of the founding members of Common Cause, a nonpartisan nonprofit focused on government accountability, protecting democracy and expanding voter enfranchisement.
He went from literature to government to finance to philanthropy. So, I had to ask, “What’s the most satisfying?” Gilson leaned back in his chair. “What I’m doing now is the most personally rewarding thing since I was in the White House. I can see in very practical terms how what we’re doing here as a group is helping people who were dealt a very tough hand. Being able to do that at scale is very gratifying. The feedback loop is unambiguous. And I am able to apply the skills I accumulated over a number of years. What’s not to like?”
