Participatory Grant-Making as a Social Innovation: Examining Relational Processes in Social Finance

This study examines how philanthropic foundations develop innovative approaches to grant-making by collaborating with social entrepreneurs who are embedded in marginalized communities. Traditionally, foundations award grants that meet predetermined strategic objectives that support their theories of change. However, this study explores an alternative approach known as participatory grant-making, in which philanthropic foundations cede control over strategy and finance by adopting an innovative approach that is based more on trust and collaboration. By analyzing in-depth interviews from 16 executives, directors, and social entrepreneurs in the United States, we demonstrate how participatory grant-making constitutes a social innovation that inverts traditional power dynamics in the philanthropic field by enhancing legitimacy, and thereby facilitating a more interconnected, inclusive, and equitable approach to solving social problems. This article demonstrates how the implementation of participatory grant-making programs can help to counter the increasing criticisms levied at traditional approaches to grant-making.