Do you know an extraordinary leader who can get resources to the right people? Are you willing to give away money with no strings attached? Are you tired of the bureaucracy tied to your giving?
Flow Funding is a great approach for empowering leaders closest to great ideas and initiatives. By entrusting your money to a well-positioned individual or organization, they can channel resources to the right people at the right time.
What is Flow Funding?
Flow Funding is a model of giving where the donor entrusts money to a ‘Flow Funder’ to distribute as they wish. With this approach, you let the social innovators, activists and community leaders you choose guide the grantmaking, trusting that they will be able to discern how to use the money for the most transformative effect.
There are several variables to make choices about when structuring your Flow Fund.
- Flow Funder – While occasionally the Flow Funder is an organization, most commonly they are an individual.
- Money Manager – You may give the Flow Funder the money directly, either to their organization, to a fiscal sponsor or to the individual. Or you can retain the money, ask for the flow funder’s recommendations, and distribute the money accordingly.
- Timeframe – You can provide a time frame during which the money needs to be disbursed, or keep the timeframe flexible.
- Anonymity – If you, as the Flow Fund Initiator, retain the money, then you have the option of keeping the flow funder anonymous.
- Grant solicitations & reporting – Instead of requiring proposals and strict guidelines, you might let the Flow Funder ‘gift’ the money to grantees and keep parameters on who to fund very broad. This approach builds on the approach’s ‘gift giving’ values.
Why is Flow Funding important?
Flow Funding offers people and communities many gifts. This approach can:
- Empower leaders and build trust. Flow Funding empowers new philanthropists to make grants. When given to community leaders, you redistribute power back to the people on-the-ground doing the work, strengthening that community’s key influencers and infrastructure.
- Help you reach new grantees at the right time. Social innovators, visionaries and grassroots activists are often in the best position to identify key players and windows of opportunity. Often they can lead you (or your money) to people, communities and projects that you would not have found on your own.
- Reduce administration. When given in a gift-giving spirit, with little paperwork and no proposal, these grants free you, your Flow Funders and your grantees to focus on the deeper change work.
- Can challenge you to expand your vision. If you have a strong attachment to a particular outcome or goal, a Flow Fund may challenge you to be flexible with your vision. A Flow Fund requires you to be able to embrace the vision that emerges from your Flow Funder.
What are the limitations and challenges of Flow Funding?
This approach also has its limitations. This approach:
- Can cause you to stray from your vision. If you have a strong vision for a particular outcome, a Flow Fund may not help you realize it. A flow fund requires you to be able to embrace the vision that emerges from your flow funder.
- Depends on knowing strong leaders that you trust. Flow Funding means taking time to identify and get to know leaders in the field. The strength of your flow funding is largely dependent on the strength of the individuals you choose as flow funders.
- Requires you to let go. This approach requires that you trust in the process. You need to be willing to let your Flow Funders learn their own lessons about what makes a project viable or effective.
- Can reduce accountabilities. When money is given as a gift, you don’t have control over how it is used. This can open new possibilities, and there is also the danger that the money be will used for purposes other than expected.
How can I start Flow Funding?
You can become a Flow Fund Initiator as an individual, a family, a group of friends or a foundation.
Visit Marion Weber’s Flow Funding Circle for inspiration and practical tools to become a “Flow Fund initiator.” This website has links to templates for letters to invite people to become flow funders. You can also read Marion’s Indie Philanthropy story here.
Read stories of other funders who have mastered this method
- A Healing Artist’s Way: introducing flowfunding into my practice of philanthropy
by: The Flow Fund Circle (Marion Weber)
- Seeding Possibilities through Flow Funding
by: Aepoch Fund