Recognizing that healthy systems thrive within a weaving of diverse, interconnected relationships, The Lia Fund promoted a holistic view of the world, informed by nature. We supported innovative, vibrant, transformative work that is a catalyst for change which regenerates people, communities, and the earth. Story written by Beth Rosales and Karen Payne.

Funding Method

Spending Down

The Lia Fund: An Adventure in Philanthropy

Tell us about The Lia Fund!

The Lia Fund recognized that we live in an ever-changing world, and in order to participate in a hopeful future, we sought new models of how we might restore and improve the health, heart, and soul of individuals, communities, and the very world we live in.

Within this, we identified three areas of immediate importance for our focus: Climate Solutions, Community Arts, and Holistic Health and Healing. We understood the interconnectedness and interdependency of these areas of life, as well as how they are shaped and impacted by social and economic justice. We were especially interested in supporting projects whose work embraced this complexity of relationships and understanding.

Above all, we believed in the wisdom of nature, and that all thriving systems are whole, synergistic systems. Whether they are energy-efficient motors, a theatrical play, or the treatment of cancer, systems are most coherent and effective when they are based within the principles of nature and natural systems, and in connection to the natural world.

The Lia Fund wanted to be an agent for positive change. We supported new ideas with far-reaching impact in our funding areas, not only to raise awareness, but to take actions to enact innovative solutions. We were especially interested in good ideas put to good use that can be replicated elsewhere, or can serve as an educational model to be adapted by others.

How do you do your funding? Please describe your approach and process, explaining how it is different from conventional philanthropy.

The Lia Fund sunsetted and closed in 2014 after awarding all of its $5 million in assets to social justice organizations focused on climate solutions, community arts, and holistic health and healing. We made grants once a year, through a process that actively engaged our trustees and community advisors from January through September, when grant checks were awarded. In a two day retreat at the start of each year, trustees and community advisors reviewed their prior year’s work and alignment with the Fund’s mission and vision. They set priorities for the next year, chose potential grantees from a pool vetted by climate, arts, and health committees, evaluated proposals, conducted site visits, and made grant recommendations for the board to ratify in the fall.

Unlike conventional philanthropy, where professional staff makes key grantmaking recommendations to the board, our community advisors were grounded in the communities we funded. They were active in organizations and issues they represented and knew of groups doing good work. This closed grantmaking process funneled assets to grants rather than to costly foundation infrastructure.

Were you influenced by another organization, model, or funding philosophy? What made you realize this funding style would be important for what you were trying to achieve?

The Lia Fund came to being from a trust that Randy Lia Weil, a resident of Point Reyes, California, established as she was reaching the end of her life. She appointed her lawyer, accountant, a friend with grantmaking experience, and her sister as trustees of a grantmaking entity, with a group of friends and colleagues, each actively involved in leading a non-profit or grantmaking organization, as community advisors to identify potential grantees. The trustees initially considered setting up a donor advised fund at a community foundation or brokerage gift fund, a support organization, or a fiscal sponsored organization, but then decided to form a small but nimble independent private foundation that would include community advisors in key grantmaking decisions.

The global economic crisis in 2008 very much influenced our decision to sunset after a few years of operation. Everyone was on board about giving away more than the conventional standard in philanthropy of drawing only 5% of a foundation’s corpus each year. At a time when the critical needs of low-income communities were growing and demographics of the country changing – government benefits plummeted, along with foundation giving. Many foundations severely contracted their giving. The financial crisis in 2008 brought on the demise of many small non-profit organizations, especially arts groups and grassroots organizations led by people of color. In view of the critical needs in the community and decline in available funding, the trustees and community advisors of The Lia Fund decided to spend down the assets of the Foundation within 6 years. This increased the Foundation’s grantmaking budget threefold to almost a million dollars per year. The average private foundation grant at the time was $8,000. Our average grant turned out to be $20,000 – $25,000, with many repeat and multi-year awards for general support.

We googled spend-down foundations and did not find many. There was a dearth of models to look at for best practices in spending-down. We found that communicating our spend-down decision to our grantees was key. At every opportunity, we were transparent with our grantees about our sunset plans, always encouraging grantees to diversify their funding base. When we over-reached the traditional practice of “no grants exceeding the 15% budget threshold of an organization,” we articulated our exit strategy, especially to small-budget grantees.

Have you ever been met with resistance or criticism in Spending Down? What specifically were the concerns, and how did you respond?

Initially, we were criticized about our closed grantmaking process. Because of the small number of progressive and social justice funders, our grants were sought out by a wide swath of social justice and movement-building organizations around the country. After learning about our limited assets and our rigorous internal due-diligence process, which included conflict-of-interest policies and a thorough vetting process by each committee, The Lia Fund gained respect within grantee circles for our fairness and clarity around our funding criteria and grantmaking process. We also gained allies by devising a grantee-friendly application process that did not require too much paperwork and complex reporting. For example, we relied on year-end grantee reports to decide on multi-year commitments instead of making grantees re-apply for funding. We reviewed grantee financials through their 990s in Guidestar. And we also stayed in touch with grantees year-round, seeking to decrease the power dynamics and unequal paradigm that money brings into the relationship between funders and grantees.

What challenges have you encountered as you started implementing your strategy?

Randy Lia Weil made two unusual decisions about the $5 million she left. First, she appointed 14 people she trusted to select the organizations who would receive funding. Most were lifelong activists with passionate dedication to issues. Second, she left no instructions.

It was a complex journey to turn a group of passionate individuals into effective funders. They had to agree on their mission, vision, values and how they would make decisions that honored Randy.

The advisors and board wanted the way they operated to reflect the values they supported: interconnectedness, diversity, compassion and community. They had to learn to work together by finding common ground. The group built community by having face-to-face meetings that lasted a day or more. This gave them time in natural settings to share food, meditate, talk about their lives, and exchange memories of Randy.

Choosing a consensus model for decisions had a major impact. Members came to appreciate each other’s perspectives. They became more willing to give up their personal agendas. They could also be honest when something was really important for them at a deep level.

What’s the best piece of advice you’d give to a funder curious about doing something similar?

  1. Democratize philanthropy. Involve trusted community activists in decision-making about how wealth is distributed.
  2. Recognize interconnectedness. Creating a community and building trust among the decision-makers takes time. But it can lead to discovering your team’s common purpose.
  3. Adhere to bold principles. The Lia Fund’s principles of systemic change, sustainability, general support, multi-year funding, nimbleness, risk-taking and a holistic approach, all led to highly effective grantmaking.
  4. Be aware of who benefits. Consider how grantmaking can support the well-being of constituencies of underserved and under-resourced organizations.
  5. Develop a trusting relationship with grantees. Be mindful of the volume of information collected from grantees and burdensome bureaucratic processes.
  6. Stay committed to core grantees. Bringing about social change is difficult and does not arrive within the average grant-span of three years.
  7. Establish an appropriate infrastructure. Ensure that you satisfy legal requirements and have thorough due diligence, while facilitating mutual respect and discovery.

Why does Indie Philanthropy matter to you?

The trustees and the community activist advisors of The Lia Fund benefited greatly from our collective efforts. We were inspired to fund and further the work of many inspiring and hardworking organizations, and to be able to focus funding toward issues that mattered most to us. Many of the community activist advisors had never been in a position to gift money before, and certainly not on this scale. As grantmakers, it expanded their experience and understanding of philanthropy; as grantseekers, it expanded their networks in political arenas outside of their own.

The trustees and advisors each came from different disciplines and areas of expertise such as permaculture, prison reform, arts, somatic education and beyond. We educated one another, helping to open new ideas, information, dimensionality and understanding beyond what we had already known, which made us much more informed in our grantmaking decisions and political worldview. Our consensus decision-making process refined our communication skills, capacity for deep listening, patience, strategic thinking, and spirit of working as a whole. All these qualities allowed us to be more discerning, effective, and compassionate grantmakers.