Have you ever met an individual who you felt, with a little support, would become a trailblazer? Are you ready to make a profound difference in someone’s life?
Funding Individuals can be a high impact, deeply rewarding Indie Philanthropy approach. If the individual is just starting out, you can provide support on the ground level as they turn creative energy into form. If someone is already successfully on their path, you may help re-energize them at a critical moment.
What is Funding Individuals?
Instead of giving money to support an organization, you give money directly to an individual. You might give someone money with no strings attached, or tie the money to specific objectives.
Why Fund Individuals?
Funding Individuals has many powerful advantages. This approach can:
- Reach the world of cutting edge visionaries, innovators, writers and artists. Bubbling below the surface of the organizational landscape, millions of more informal networks are seeding innovation. Funding Individuals lets you tap unrecognized work.
- Give you flexibility to fund individual needs. A few innovative ways that you can use this approach include to: a) give awards to honor someone’s past work; b) pay for a paid vacation to recharge; c) fund tuition for skills advancement; or d) give to an individual who will use it to benefit a community.
- Help change-makers focus on THE work, not the paperwork. When you know someone is doing great work, why distract them with reporting requirements? If you provide a no strings attached gift, you free them to focus their creative energy.
- Diversify the work you can support. Funding Individuals often means skipping the tax deduction. Take advantage of this fact to support individuals doing political and lobbying work that you would not have been able to fund if the money had been donated to a tax-exempt organization.
What are the limitations and challenges of Funding Individuals?
Funding individuals may also have challenges. This approach can:
- Be higher risk. More freedom can mean more risk. Organizations have reporting and accounting systems in place for a reason. Choose your recipients carefully, so you can feel confident your money is being used wisely.
- Keep you from taking advantage of tax law. Donations made directly to an individual are not tax deductible to the donor, unless they are given through a tax-exempt organization (acting as a fiscal sponsor for that person’s work). Recipients may also need to treat the gift as taxable income, and account for it accordingly.
- Lead to miscommunication. You may be tempted to keep the money exchange informal, and this is a great approach if your gift has no strings attached. But if you expect certain outcomes, write these up. A simple one-page contract outlining deliverables and a one-page final report can eliminate bad feelings after money has changed hands.
- Divert resources from movements. Social movements play an essential role in change-making. Movement-building organizations provide a sustainable commitment to important issues and strategies for the long-haul, and their infrastructures are often under-funded. If you fund individuals, consider balancing that with supporting the organizations that provide the backbone of support for the movements those individuals are championing.
How can I start Funding Individuals?
You can fund individuals whether you are an individual or a foundation representative. Here are a few ideas to get you started:
For Foundation Representatives
While generally foundations can give to individuals, you should check with your legal counsel for any restrictions before setting up your program.
- Set up a specific foundation program that targets individuals, such as an awards program. You might consider also providing non-monetary support, such as grantee leadership and communications training or sponsoring relationship-building networking events.
- Partner with an organization or fiscal sponsor to distribute funds or provide technical support on your behalf. They will then take care of administration and management.
There are lots of ways you can get involved, from creating your own funding vehicles, to contributing to ones others have already created.
Connect to What Is Already Happening
- Participate in a crowdfunding campaign. Look for platforms like Indiegogo or Kickstarter where individuals crowdsource resources for their great ideas. Some platforms will let you leverage your dollars with matching contributions.
- Support an existing public foundation or other nonprofit organization that gives awards or makes grants to individuals, or that offers a fellowship program.
- Attend a fundraising event designed to raise funds and support an individual artist or social entrepreneur.
- If you give frequently, set up a separate checking or brokerage account to give to individuals you’ve identified. You can even give that account a name, so that checks come from “The ABC123 Fund”. Then distribute the money by writing checks, or if your changemakers don’t have bank accounts, give pre-paid debit cards. (See Pollination Project, which gives grants to individuals in this way)
- If there are several of you giving grants, you might consider establishing a limited liability corporation (LLC), with its own bank account, to pool funds. Your friends can write checks to the company, and you can then redistribute the funds to individuals.
Read stories of other funders who have mastered this method
- Rapid responses for courageous activists and resilient communities
by: Urgent Action Fund
- Helping Young People Improve their Communities: The Bay Area Inspire Awards
by: The Bay Area Inspire Awards
- Makers Muse – Giving Without Strings
by: Kindle Project
- A Grant Everyday
by: The Pollination Project
- A Pioneering Approach to Funding Individual Artists
by: Creative Capital