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 marginalised communities. Traditionally, foundations award grants that meet pre-determined 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 analysing in-depth interviews from sixteen executives, directors, and social entrepreneurs in the US, 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 paper demonstrates how the implementation of participatory grant making programmes can help to counter the increasing criticisms levied at traditional approaches to grant making.