Funders can build on “constituent engagement” by supporting peer groups as they lead their own change and work collectively to advance their lives.
Perched near the top of the Texas Panhandle, surrounded by chess-board flat fields of wheat and corn, the unassuming town of Gruver shows how informal networks of neighbors can create economic opportunities for their children, without the support of an institutional funder or a nonprofit. Nevertheless, the community’s success points the way for funders to explore an age-old, but often overlooked pathway for advancing social change.
Each spring, local farmers contribute seed, fertilizer, and sweat equity to plant 440 acres of corn on land gifted to the Gruver Independent School District by a neighbor. Each fall, the harvest yields money—sometimes as much as $500,000, which is invested through the Gruver Scholarship Foundation to provide tuition-free college educations for potentially every Gruver High School graduate.
At a time when college costs are soaring, this community-wide endeavor is changing the financial calculus for parents and the prospects for their children, some of whom will be the first in their families to attend college. While Gruver’s “corn scholarship” story is unique in its details, its neighbors-helping-neighbors ethos speaks to something that is pervasive in communities around the world, even if it is rarely celebrated: the notion that people share the same fate with their neighbors; that when they pull together, they can overcome common challenges.
History is filled with examples: Think about the 19th- and early 20th-century barn raisings throughout rural America, where everyone in the community put their shoulders to the task. Or the autonomous, all-Black townships in Reconstruction-era America, where formerly enslaved people, fleeing the brutality of the South, created their own mutually supportive, self-sustaining micro-economies. Or the initiative and mutual support that has helped immigrants, such as the Jewish communities that powered New York’s garment industry and the Indian Americans who now own nearly half of the country’s motels, build entrepreneurial lives in the US.
We describe this social-impact phenomenon, where communities of peers work together to overcome the obstacles to socio-economic progress, as “peer-driven change.” While this model of change has endured for centuries, philanthropies have not yet fully recognized and embraced its promise.
Instead of relying on funders, governments, and nonprofits to engage communities and incorporate their input into institutionally led strategies for improving people’s lives, peer-driven change occurs when constituents identify their own goals and lead their own change. Funders and nonprofits can support peers’ efforts, but they don’t drive them. However, while initiatives that are authored and directed by individuals and families are a pervasive part of social change, they are often hidden in plain sight. As a result, philanthropists typically overlook this naturally occurring resource when they launch “interventions” directed at low-income individuals and families.
What does it look like when peers build their own approaches to enhancing their lives? Why should philanthropists support peer-driven efforts? And how might funders abet peer-driven change, without getting in its way?
These animating questions led our team to investigate efforts where individuals and families are harnessing their assets in Boston, in three villages in Rwanda, and in Oakland, California, which are chronicled in three case studies.
Our aim is to take a step toward exploring peer-driven change, engaging social sector actors who might want to lean into it, and surfacing insights for funders who decide to pursue it. These philanthropists might create a parallel track to their standard grantmaking—one where they channel resources to individuals and families who have the latitude to set their own direction and the opportunity to collectively advance it.
We’ve found that peer-driven change has three distinguishing features. Each of the features may seem commonplace, but their combination gives peer-driven change its vitality:
- Self-determination and initiative: Individuals and families define and lead for themselves the improvements they seek in their lives and communities since they are closest to their challenges and know best how to overcome them.
- Mutual support: Individuals and families, informed by the experiences of pioneering peers who have succeeded at getting around barriers, help each other by sharing knowledge and resources.
- Financial capital: Families and individuals share funding from internal sources (such as savings groups), as well as from external sources, such as funders and nonprofits.
Some philanthropists and NGOs are finding ways to integrate the agency of individuals and families into their work. For example, participatory grantmaking, which is robustly explored in landmark reports by Cynthia Gibson with the support of the Ford Foundation in 2017 and GrantCraft in 2018, transfers decision-making power and strategy-setting from foundation staff (who traditionally oversee these processes) to the communities themselves. Participatory grantmaking shares similarities with other efforts in philanthropy, including community philanthropy and trust-based philanthropy. Also, research has highlighted Unconditional Cash Transfer (UCT) programs, such as GiveDirectly, which provide financial support to people experiencing poverty, without any restrictions from individual donors. The US government, responding to the COVID-19 crisis, brought UCTs into the mainstream of American life when it issued no-strings-attached stimulus checks to millions.
However, what distinguishes peer-driven change from even these peer-centric approaches is that it emphasizes people’s mutuality, where peers share information, connections, and funding to achieve their goals. For social sector actors, abetting the conditions that give rise to mutuality, as well as peer-driven change’s other key features, often requires a new way of thinking.
Nonprofits and philanthropists often think of low-income community members as the last mile of a social impact effort, where adoption and buy-in from community members are vital. With peer-driven change, those same people must be viewed as the first mile, where leadership, autonomy, and tenacity constitute the very engine of their own progress. This means that peer-driven change does not orient itself around the goals, resources, or plans of external actors. It does not privilege technical expertise over lived experience. Centering on the capabilities and mutual support of individuals and families on their own terms undercuts the power dynamics inherent in much philanthropic activity, the very same power dynamics that recent critiques of philanthropy have rightly scrutinized.
For funders, peer-driven change can require a fundamental shift in perspective: to recognize and embrace the initiative, self-determination, and mutuality of individuals and families and to reconceive of them as “makers,” not “takers.”
Peer-Driven Change and Poverty’s Mutability
When the social entrepreneur Mauricio Miller launched the Family Independence Initiative (FII) in 2001, he drew from his experiences growing up among the working poor in San Jose, California. He developed FII as an alternative approach to poverty alleviation by recognizing the first feature of peer-driven change: constituents’ capacity for determining their own best paths out of poverty. FII provides low-income families with a platform to collaborate with peers and a means to track and share their monthly progress toward self-identified goals, such as raising their income, reducing credit card debt, or completing a professional development course. This reflects the second feature of peer-driven change: mutual support.
FII also provides the approach’s third feature, financial capital, by investing an average of $2,400 over a two-year period. Peers do everything else. To access these unrestricted dollars, families commit to document their self-identified goals and account for how they accomplished them in monthly journals. The journal entries and comparison data help peers keep track of what they have done each month and identify where they can do more. They typically meet in small groups, where they facilitate their own discussions and support one another.
The novelty of this approach forced FII’s staffers to rethink the way they work. Instead of depending on professionals to crack a problem, Miller made it clear to his team that families could look to their peer groups for guidance. As a result, when an FII family of refugees from El Salvador fell victim to a predatory lender while purchasing a house in Oakland, Miller refused to let his staff intervene. Instead, the family turned to its peer group, who helped the family refurbish the house, which increased its value and enabled the family to refinance. Buoyed by this success, the four other families in the peer group began to increase their savings. According to Miller, within 18 months, each family owned a home of its own.
Today, FII has reached nearly 100,000 households in all 50 states across the US (primarily due to its financial support to families since the beginning of the COVID-19 crisis). According to FII’s data, families that participate for at least two years average a 23 percent increase in monthly income and a 23 percent decrease in their use of public subsidies, as well as an increase in the value of the social capital they supply and receive (such as by providing childcare or transportation for a friend).
That kind of progress is especially encouraging because, while persistent poverty is an ever-present feature of society, people’s experience of poverty is far from unchanging. For example, from 2013 to 2014, 27.5 percent of the US population experienced poverty for at least two months—that is, they fell below the federal poverty level—but just 6.4 percent of the population remained in poverty for all 24 of those months.
This is not to underestimate the looming structural obstacles that even the most hard-working low-income individuals and families frequently encounter, including racism, stagnant wages, and substandard education. However, poverty’s mutability underlines the ingenuity of those who experience it. Their resourcefulness suggests a built-in receptivity to peer-driven change, which recognizes that because people are closest to their challenges, they can spot solutions that external experts miss and thereby make real progress.
Indeed, these qualities animate many successful, mutually supportive approaches throughout the world, such as self-help groups, rotating savings and credit associations, and peer-driven organizations like Alcoholics Anonymous, which has delivered a complex service through thousands of small, self-organizing groups for more than 80 years.
Peer-Driven Change’s Potential
Few organizations—including philanthropies—put the principles of peer-driven change at the forefront of their strategies for driving impact. But the working poor—like anyone else—are resilient and resourceful, and possess the capacity to improve their lives. Why shouldn’t that be the starting point for philanthropic work?
As the field visit to Rwanda demonstrated, people who encounter poverty are fully capable of rising above it, despite the not-so-infrequent episodes of hardship in their lives. Six years ago, Nyirankunzurwanda Marie Chantale could barely manage to provide a single daily meal for her husband and six children, and sometimes had to turn to her neighbors to acquire food. With an average annual income of about $165, her neighbors in the village of Siganiro did not have a lot to give.
However, in 2013, Marie Chantale and the 74 households in her village resolved to pull together and develop home-grown solutions to their challenges. Spurred in part by the possibility of obtaining funding from an intermediary NGO called Spark Microgrants, Siganiro’s families began to hold weekly community meetings, where they collectively committed to acquiring iron roofing for every house in the village. They also mapped out a path for realizing their ambition, by purchasing fertilizer and investing in other practices to improve their bean harvest and thereby increase their revenue. Each family committed to contributing $1.10 monthly to a village-wide savings group, to help scale the bean-cultivation effort.
By 2016, Marie Chantale’s house was topped with a sturdy iron roof, as was every other house in the village. Surrounding villages, inspired by Siganiro’s accomplishments and with support from Spark Microgrants, had begun to launch their own, community-led efforts to build durable pathways out of poverty—evidence that peer-driven progress is contagious.
Spark Microgrants’ co-founder and executive director, Sasha Fisher, was inspired to launch the organization after a dispiriting experience working for an NGO building schools for girls in South Sudan. She saw a number of unused school buildings during the course of her work there, despite the overwhelming need for them, as more than 70 percent of the region’s children cannot access an education.
“I would ask families why the schools were empty, and they would consistently respond that ‘those buildings were built by outsiders,’” Fisher recalled. “‘They aren’t our schools.’”
Today, Spark Microgrants works in more than 325 rural villages in five African countries, and is notable for what it doesn’t do: Spark doesn’t come into those villages with the kind of highly designed aid program that is commonplace in Africa. It doesn’t embrace the status quo notion that low-income families need a great deal of assistance to improve their lives, nor does it prescribe solutions.
Instead, Spark backs the efforts of mutually supportive peer groups to help themselves. The organization promotes a facilitative structure, enabled by local youth, to bring constituents together. In community meetings, people envision a common goal to improve their livelihoods and design solutions to achieve it. As the village works toward its collective future, Spark contributes a total of $8,000 in seed funding over three years, to support families as they bring projects to life.
We do not know whether providing Siganiro with seed funding only, without any facilitative support, would result in the same outcomes. But we do know this much: The peers themselves worked collectively to drive their own change.
Neighbors Learning from Neighbors
When peers model what is possible, others can follow their lead, and their efforts multiply. Although a shared sense of purpose animates these efforts, pioneering promising pathways that other peers might follow isn’t about do-gooders and utopian dreams. The power of peers comes from learning from neighbors and then pushing to accomplish more.
The multiplier effect of peers discovering a better way to overcome a common challenge—a solution that other peers might utilize—can be seen in the experiences of the Iu Mien, people who farmed the highlands of Laos and were persecuted by the Pathet Lao communists during the aftermath of the Vietnam War.
One night in 1974, at the age of 17, Kao Chiem Saechao and 262 people from his village fled into the jungle, evaded gunfire from Pathet Lao soldiers, and crossed the perilous Mekong River into neighboring Thailand. Along with thousands of other Iu Mien, they languished in refugee camps for years, before emigrating to the US.
As refugees in the US, the Iu Mien found that the traditions and norms that previously united them began to slip away. When they first arrived, most of the adults did not speak English and lacked marketable skills for building career pathways in America. In 1987, an estimated 71 percent of the Iu Mien population in Sacramento was on some form of public assistance. As the Iu Mien’s culture and traditions eroded in their new homeland, some of their young people, hungry to achieve a sense of belonging, joined violent street gangs in the San Francisco Bay Area.
In response, Iu Mien elders in Oakland and San Francisco set out to build a sense of affinity among isolated families and reclaim a sense of pride in their culture. Kao Chiem was among those who were tapped for a leading part in this effort. Role models such as Kao Chiem, who had secured work as an interpreter at the Alameda County Medical Center, demonstrated for other Iu Mien how they too might pioneer pathways into the US economy. At the same time, building from the village social structures that bound their clans in Laos, Iu Mien elders helped create a mutual-support system consisting of a central council of leaders as well as representatives of eight Bay Area “districts” of 50 to 80 families.
The goal was to collectively advance initiatives of the people’s own choosing. However, in contrast to the ladder-like hierarchies that typify many top-down social-impact efforts, the Iu Mien created a lattice: a network of peer-to-peer connections, where information flowed in all directions, across families and districts, unfiltered by an intermediary. In this way, the Iu Mien brought to life the first two features of peer-driven change, initiative and mutuality, which exist in virtually all communities, even if they are sometimes latent.
Believing that a shared, vibrant culture could help give young people the confidence to pursue their dreams, Iu Mien families in districts throughout the Bay Area and beyond opted to contribute what they could to a pooled fund. They raised $500,000, which was used to help purchase land in East Oakland and construct a community center and temple. Families also pitched in to establish a modest college scholarship fund for high school seniors, signaling to young Iu Mien that higher education was within their reach.
Although Iu Mien families did not have a lot to give, the community’s leaders minimized the amount of funding they received from external sources. Rebuilding a sense of pride in the community meant that the Iu Mien would take the lead role in organizing financing, peer-driven change’s third feature.
“We wanted people to feel like this [center] belongs to them,” says Kao Chiem. “We wanted everyone to value themselves.”
How Can Funders Support Peer-Driven Change?
Peer-driven change is starting to attract an array of funders and supporters: FII has expanded its support beyond older funders such as St. David’s Foundation and Google.org, to include Blue Meridian Partners and Stand Together. Spark Microgrants’ funders include Peery Foundation and Imago dei Fund. Additionally, Children International, a $140 million NGO, is exploring peer-driven change in three countries.
But why hasn’t philanthropy backed this approach more broadly? Perhaps it’s because embracing peer-driven change requires a different way of working, where funders hand over control to the very individuals and families they seek to help. At minimum, this requires acknowledging when funders’ mindsets and strategies do and do not align with the principles of peer-driven change. When funders embrace peer-driven change, it means more than transferring financial resources directly to communities, since ceding control will inevitably mean relinquishing status and power.
Funders that choose to engage peer-driven change will likely have to grapple with three fundamental questions:
1. What should funders invest in? Because peer-driven change seeks to alleviate poverty by emphasizing peer-generated strategies over funder-sponsored programs, it falls outside of the mental models that guide most grantmaking. So where should funders direct their investments?
The straightest path is to make financial capital directly available to individuals and families. For example, a nonprofit called Springboard to Opportunities, which works in five federally subsidized affordable housing complexes in Jackson, Mississippi, used a portion of its funding stream to launch a pilot effort, Magnolia Mother’s Trust. The Trust gave 20 Springboard families $1,000 per month over one year, no strings attached, to spend in whatever way they thought would best advance their lives. By funneling capital directly to constituents—one of the core features of peer-driven change—Springboard is exploring what happens when the working poor have the resources to think beyond their financial survival.
In a similar vein, GiveDirectly has distributed cash without conditions for more than a decade to people living in poverty in sub-Saharan Africa. A 2019 study found that Unconditional Cash Transfers not only directly benefitted recipients in rural Kenya, they indirectly benefitted people in nearby villages as well, since some of the recipients spent money on their neighbors’ businesses.
Both Magnolia Mother’s Trust and GiveDirectly address two features of peer-driven change, inherent initiative and supplemental financial support. However, FII and Spark Microgrants take UCTs a step further, by emphasizing mutuality. Peer-driven change is about peers together (not individuals alone) scaling their efforts through social networks.
In the near term, we suspect a credible way to engage peer-driven change is to fund nonprofit intermediaries that harness it, such as FII and Spark Microgrants, or a new effort that Mauricio Miller has launched, the Community Independence Initiative.
There are also opportunities to support initiatives that peers themselves bring to life. These self-organized groups do form 501(c)(3) organizations, if they know they can compete against more structured, professionally run programs. For example, the Bay Area’s Iu Mien formalized its community-building efforts by creating a 501(c)(3) nonprofit, the Lao Iu Mien Culture Association.
2. How will the ways funders source and work with their grantees need to evolve? To overcome the power dynamics that can stymie peer-driven change, grant makers who cannot connect directly with communities can seek grantees that are deeply involved with constituent communities. However, some grantees lack the skills and resources to successfully navigate their relationships with funders or even secure sustainable funding. As a result, grantmaking decisions that privilege technical expertise (such as social science research and strategic business thinking) may not fully recognize the hard-won experience that some front-line nonprofits possess.
To rethink grantmaking for peer-centric approaches, foundations are moving beyond traditional funding categories. Every philanthropy has its specific funding “buckets,” as Sasha Fisher calls them, such as “education” and “health care.” But peer-driven change does not yet have its own funding category. Funders that feature fixed funding areas are far less likely to get behind initiatives in which peers define the focus. However, Fisher has found that if funders are at least willing to experiment with approaches that puts families and peer-centric nonprofits first, they can create some space in their portfolios for a Spark Microgrants.
“I told them from the get-go that we weren’t going to fit into any of their buckets,” says Fisher. “But when we asked them if our model fit with their values, the program resonated deeply and they made space in their portfolio.”
If funders want to minimize power differences with communities they seek to serve, it also makes sense to do the same with respect to their grantees. That insight animates the Peery Foundation, which supports social entrepreneurs in the San Francisco Bay Area and around the world. Peery Foundation takes a “grantee-centric” approach to its philanthropy, co-creating expectations around what success looks like by asking grantees to set their own milestones and goals.
Giving grantees the space to define the initiative’s goals does not mean the grantee decides that the goals have been achieved, of course. Peery Foundation continues to fund only those grantees that make it through three stage gates: year-to-year, relationship-building grants; proof of concept grants of two to three years; and $1 million grants over four years, for organizations that have proven their model and aim to scale it. This allows the funder and its high-performing grantees to learn as they go and build trust over time.
“We view the relationship [with grantees] as a partnership,” says Lindsey Padjen, the foundation’s portfolio manager. “By working together this way, we aim to create space for the grantee and Peery Foundation to each share what we are learning and help one another problem-solve to ultimately best serve communities.”
3. How can we assess peer-driven change’s impact? Funders that want to integrate peer-driven change into their work might wonder how outcomes are achieved and when measurable results might emerge. They could look to practitioners for answers.
FII, for example, tracks a sweeping array of indicators, including changes in families’ income, savings, and debt, as well as the percentage of families with side businesses and children whose school attendance and grades have improved. Perhaps the most telling indicator of Spark Microgrants’ impact is that 85 percent of the African communities it has worked with continue to meet independently after Spark’s involvement ended and 71 percent have gone on to launch their own standalone, peer-driven initiatives.
However, those kinds of benchmarks fall short of what matters most about peer-driven change. It may be necessary to create evaluation schemes that are better suited to taking peer-driven change’s full measure. That is why FII also tracks social capital, initiative, and sense of control. Similarly, Spark Microgrants tracks civic empowerment among women, as well as changes in civic engagement and community cohesion.
Both organizations have separately enlisted external reviewers to pressure test those indicators and the resulting data. But this much is already clear: Peer-driven change does not imply a lack of accountability. It simply requires accountability for different sorts of measures and milestones than would be expected of a grantee that delivers a direct service. Traditional gauges of progress matter as much as they ever have. But so do measures showing the degree of confidence and cohesion among marginalized individuals and families.
Another Pathway for Philanthropy
Although there is a clear rationale for pursuing peer-driven change, it remains one of the rarer species in the social sector’s formal ecosystem. Perhaps that is because peer-driven change arises naturally when people come together to solve common challenges, whether it’s a village in Rwanda or neighbors helping neighbors in the American Midwest. However, when organizations encumber peer-driven change with their bureaucracies, they can stifle the very things that animate this approach, such as peers having the choices, control, and connections to collectively improve their lives. When they do, they just might make sector-based work more effective.
The thing is, for now, peer-driven change doesn’t necessarily have to be an either/or proposition: either continue with the status quo or fund and validate peers as they lead their own change. We certainly aren’t proposing that funders entirely upend their established processes. Rather, our hope is that funders and other social sector actors might do both in parallel: that even as they continue to drive the processes with which they are comfortable, they might lay down a few new tracks for peer-driven change, and run the trains in parallel. If we accumulate enough learning, validation, and support, peer-driven change just might become a pivotal part of the way philanthropy does its work.
The authors thank Bridgespan Fellow Mauricio Miller for his counsel throughout this project and former Bridgespan Consultant Rachel Heredia for her research and insights.
You can find the original article here.