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From EACH According to His Ability

lionel_shawIf a traditional foundation is an orchestra, then The EACH Foundation of San Francisco, California is the Kronos Quartet—a boldly experimental group where traditional rules simply don’t apply.

Like Kronos, which happily bounces from classical music to pop, world music, jazz, and other genres, The EACH Foundation doesn’t limit itself to one particular cause. Its name is an acronym for the verticals in which it takes an active interest: Education, Environment, Arts, Animals, Children, Community, Health, and Homelessness. It’s a broad scope, but the Foundation has a unique organizational model that enables it to be as effective as it is ambitious.

“We call ourselves social entrepreneurs,” says EACH founder, Lionel Shaw. “Instead of program advisors, we rely on 25 members of the community who serve as our Philanthropic Advisors and drive our decision making. These are people from every ethnicity, background, and socioeconomic strata. We really wanted a rainbow coalition involving members of the community, influencers, and anyone else who was civic-minded and willing to roll up their sleeves.”

These Philanthropic Advisors (PAs), who each serve a two-year term and appoint their successors, are responsible for making grant recommendations to the foundation, and their role is to represent the concerns of their communities. “For example, there are four or five members whose giving has an African-American focus, and they spearhead our giving in that area. Then, there’s an LGBT group and that’s their giving orientation. There’s a women’s contingent, etc.,” Shaw explains. “I’d compare their functionality to cells within a larger corpus.”

This grand experiment in what Shaw calls “radical egalitarianism” had modest beginnings. “I started with a donor-advised fund (DAF) at the San Francisco Foundation Fund of perhaps $150,000,” Shaw recalls. “But even though the restrictions and limitations of a DAF weren’t flexible enough for what I wanted to achieve, the experience helped me to get to know more people in the community. It was like having training wheels before starting the foundation.”

Together with five core board members that included childhood friends, Shaw then formed EACH as an open architecture foundation that would empower individuals from all walks of life to make a positive impact. “EACH started with $1 million in assets, but after we proved ourselves, The Wallace A. Gerbode Foundation saw that we’d come up with a good, scalable idea, so they gave us the green light along with a $10.3 million bequest, and we were off to the races!“

Today, the 25 PAs are each charged with disbursing $30,000-$35,000 per year to dozens of different nonprofits. “We gave $800,000 last year to 120 entities—we don’t like the baseline of the
IRS minimum distribution requirement, and we try to at least double that,” Shaw says. And Shaw says he’d like to add five additional Philanthropic Advisors next year to distribute even more. “In fact, we might go to spending down the foundation because we believe that a dollar today in the hands of the needy is worth more than two dollars tomorrow.”

Asked if having so many grantmakers working independently makes it difficult to coordinate efforts or measure impact, Shaw says, “The Foundation Source website helps us keep track of everything, but there are different thrusts to our grantmaking, and the bottom line is that they’re not going to be congruent.” As far as tracking impact, Shaw observes, “It’s not a scientific process. We measure success through conversation, letters of appreciation, and photos of what results we have achieved.”

Although the philosophy of The EACH Foundation is certainly radical, Shaw explains that its approach is also a model of efficiency. “We believe in leveraging free human capital and being 100% volunteer,” Shaw says. “We keep expenses low and use Foundation Source, which has been wonderful administratively and offers good economy of scale with reasonable fees. We also work to decrease the burden on grantees. Most foundations expect nonprofits to come to them, but we don’t accept outside proposals because we don’t want them to put together PowerPoints to pitch us. Instead, we take work off the table and let them do what they do best—run their organizations. To fundraise is important, but we want that off their hands. We want to save them time and money.”

And speaking of fundraising, The EACH Foundation is unusual in that way, too. Although most private foundations don’t engage in fundraising, The EACH Foundation hosts an annual Four Charities Fundraiser on behalf of its grantee organizations. “All of the funds raised go directly to the organizations (they don’t return to the foundation), and we don’t reimburse ourselves for any of the event costs,” Shaw says. “We treat it as an irrecoverable cost and pay for the event from our operating funds.” Last year’s event raised $117,450. Fittingly, it featured entertainment by the Kronos Quartet.

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