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Small Change Fund is a proud member of the Canadian Environmental Grantmakers Network (CEGN). Recently, CEGN interviewed Mary for their newsletter to members. Below is the interview that CEGN circulated to members on May 31.

An Interview with Mary McGrath, Small Change Fund

Editor: The Small Change Fund (SCF) is providing an interesting new model on the Canadian philanthropic scene. Tell us what the impetus was for its creation.

McGrath: Ruth Richardson and I are the co-founders of SCF and, although our professional perspectives are different, we both saw a real need for a small and nimble kind of philanthropy to support local solutions to today’s complex global environmental challenges. Ruth, who has worked in the field of philanthropy for over 15 years, saw a lot of grassroots groups doing amazing work but finding it difficult to access funds. She saw a need to build resiliency within communities by supporting and connecting highly effective grassroots groups. In my work with Citizens’ Environment Watch, Environmental Defence, and other environmental organizations, I saw the same challenges from the NGO side while working with community groups that needed just a small investment for an amazing idea, but lacked the capacity or opportunity to source those funds. This is especially true in remote and rural communities. That is the challenge Small Change Fund is addressing.

At the same time, Ruth and I recognized an opportunity in the explosion of the public’s interest in supporting everything local (i.e. food), building a strong connection with the cause they support, and the growth of social media and technologies that enable giving. And, we believe that more Canadians would support grassroots environmental projects if they could find out more about them.

In conversations with Chet Tchozewski, of Global GreenGrants Fund, an international leader in micro-philanthropy, the idea of a Canadian entity focused specifically on providing critical seed capital to groups at the local level began to emerge. Key features of the approach would be small grants; low administrative burden; a responsiveness to needs; timely support and trust. Ruth and I took this idea one step further to open up the philanthropy process and engage Canadians in micro-philanthropy. We saw an opportunity to build on the success of online giving models, social networking and marketing to build a new culture of philanthropy in Canada.

Editor: You now have a year under your belt. How are you identifying those projects and organizations that you want to support?

McGrath: The heart and soul of our approach is our network of 22 advisors who we have recruited from across the country. These are leaders who are working on the issues we care deeply about in places such as Victoria, Calgary, Old Crow, Iqaluit, the Aamjiwnaan First Nation near Sarnia, Antigonish, and lots of other places in between. Our advisors have their ears to the ground, identifying the best work that needs support and encouraging these organizations to submit their projects for consideration using our very simple online form. We rely on our advisors’ incredible networks to get the word out to talented grassroots leaders. Small Change Fund staff do an initial technical screening of submitted projects. The advisors then review each new slate of projects according to a simple process and using an innovative tool located at the back end of our website and accessed by log-in. This tool is like a private social networking site that allows advisors to view, discuss and rank projects. The top projects are then profiled on our website so all SCF supporters know when they visit www.smallchangefund.org and donate to a project, they are supporting some of the most compelling environmental action happening across the country.

Editor: Most funders have an endowment or another clearly defined revenue stream, but this isn’t the case for SCF. How do you fund these good projects?

McGrath: The first strategy is the most challenging, but also the most exciting with the greatest long-term potential. This strategy is to broadly engage Canadians in micro-philanthropy. To do this, we: (a) Use our networks to find amazing grassroots projects that Canadians might not otherwise know about – an Inuit community that wants to capture elders’ traditional knowledge for scientific purposes, a group of fishermen that want to do shoreline investigations, young people who want to start an urban fruit tree harvesting project – all needing $5000 or less. (b) Help these people tell their stories to Canadians using social media (including our website, where each project has a profile page with photos, video and maps; Facebook; Twitter and blogs); and social networking (a national ‘kitchen table’ event strategy rolled out through our advisor network). (c) Use a marketing strategy (in development through our partnership with SiG@MaRS) to ‘draw Canadians in’, driving traffic to our website where they can find all the project profiles, get to know project leaders and advisors, and make a donation using a simple payment ‘gateway.’

Our other major strategy involves working with major donors (individuals, foundations, corporations) with an interest in a particular geographic area or issue and we assist them to direct their support. This works well because we are able to present a range of interesting projects that have already been vetted, we can leverage their funds by encouraging Canadians to match their donation, and we can tap further into their areas of interest through our advisor network.

Editor: It is early days, but tell us a little bit about your grantmaking to date.

McGrath: Having just launched in December we are still in the start-up phase. But we have accomplished a lot in a short period of time. We launched a beta version of our website on December 22, 2009 and received almost 5000 views with users spending an average of almost 5 minutes on the site, and our social networking stats are climbing. We held our first ‘kitchen table’ event, launching the national series. Five projects are already fully funded and many are partially funded by over 60 donors. Since our launch, we have secured over $30,000 in support to date toward projects, with the average grant size being $4,224. We have focused on areas of Canada that have been traditionally underserved and don’t have access to traditional sources of funding, including the Canadian north.

Editor: I understand that some of the larger foundations are looking at SCF as a way to direct grant dollars to small capacity-building initiatives. Can you tell us about this regranting?

McGrath:  Yes – right now, we are working with the Walter and Duncan Gordon Foundation to explore the innovative potential of our model in Canada’s North. With their support we hope to build our capacity and circle of networks in the North, explore applications of Small Change Fund’s micro- and open-philanthropy model in Northern communities, and provide funds through Small Change Fund to grassroots projects across the three territories. Only 2% of Canadian funding goes to grassroots groups and only a fraction of that goes to socio-environmental causes. And yet it’s at the grassroots level that innovative solutions to our socio-environmental challenges are seeded, tested, and incubated. By bridging the gap between those who can provide support and those who can use that support, Small Change Fund gets critical seed capital to the local level, fosters a new generation of citizen leaders, and acts as a leveraging agent to larger sources of financing.

Editor: What are your thoughts as you and Ruth look back over this start-up phase?

McGrath: We have become comfortable with the idea that things can always be improved — that we are consistently in “beta” mode. We have become better at taking chances and remain committed to being open to input and feedback in a continuous improvement loop, and to be as transparent as possible. Katherine Fulton of the Monitor Institute provides good advice on this front when she notes the need to be: “acting our way into a new way of thinking vs. thinking our way into a new way of acting”. The main conclusion for both of us is that the model is sound and critical. The response has been overwhelmingly positive from funders, individuals and participant groups.

We have added great capacity to our team in our incredible Program Director, Daniella LaGiglia, and an amazing board and key volunteers. We have received a great deal of encouragement and support.

Editor: Thanks Mary. We’re delighted to welcome the Small Change Fund to CEGN and look forward to following your work.