Cover Story

Chet Tchozewski, winner of the Council on Foundations 2004 Robert W. Scrivner Award for Creative Grantmaking, is a pioneer in international small grantmaking. Tchozewski is the founder and executive director of Global Greengrants Fund. The fund makes small grants (typically $500 to $5,000) to grassroots groups working around the world to help people protect the environment, live sustainably, preserve biodiversity and gain a voice in their own future. As their website says, "In a way, we are in the business of hope . . . . Who knows where the next great idea or environmental leader will emerge? Who knows what action will have the greatest impact? Like an incubator of positive change, we can be there at the beginning as great things begin to happen."

While the fund is based in Boulder, Colorado, its staff and volunteer advisors worldwide direct its grantmaking. Since 2001, the fund has made more than 1,500 grants in 73 countries. Initially, the fund was established by Tchozewski as a project at the Tides Foundation in 1993.

Tchozewski served as director of the Pacific Southwest regional office of Greenpeace in San Francisco from 1989 to 1992. He cofounded the Rocky Mountain Peace and Justice Center in 1983. From 1980 to 1983, he was a staff member of the Rocky Flats Project at the American Friends Service Committee, working on the Nuclear Freeze Campaign and disarmament. His first foray into activism was as a founding member of the Rocky Flats Truth Force in 1978. He lives in Boulder with his wife, Susan Carabello, and daughter Tian.

Tchozewski shared how he came to challenge the "invisible hand of overhead" that often keeps small grants from being made.

What drew you to environmental issues?

I felt an urge to do good in the world. I wanted to work on the most challenging, global problems, because doing that meant I could do anything. For instance, my first serious involvement in social change work was during the 1970s in the nuclear disarmament movement. I jumped straight into the fire: "Let's just disarm all nations of nuclear weapons." Part of the reason for shifting to environmental issues was that we felt we wouldn't get nations to disarm without first addressing the entire range of social justice issues, including the environment.

That's big.

I realized that while the nuclear disarmament movement—the peace movement, in general—was always going to be important, other social movements, like the environmental movement, might be able to mobilize more public sentiment in favor of global equity than the peace movement could, because the peace movement was so politicized by nationalism. And the environment seemed to circumvent that a bit.

Global Greengrants Fund grew pretty directly out of my work at Greenpeace, recognizing the value-added opportunities and interests and the interlocking networks of social change organizations, like the peace movement and the environmental movement, around the world. Those opportunities with the highest return on investment were in almost all cases in the developing world, because the problems are so great, but so close to being solved with a fairly small amount of money. By tapping into existing networks for advice about where small grants can make a big impact, donors could achieve a higher return on their investment.

Were there other people involved in Global Greengrants Fund at the beginning, when it became a donor-advised fund at the Tides Foundation?

Among our most significant early supporters were Roy Young of the Caribou Fund, Humberto Mafra of the Damien Foundation and Wendy Emrich of the Tet Ansamn Fund. From the outset, we were relying on people who had first-hand awareness of what was happening on the ground. In the early '90s, there were several organizers based in the San Francisco office of Greenpeace who were working in Latin America and the Asia/Pacific region. In their travels, those organizers would meet highly skilled and influential activists in countries ranging from Brazil to Burma. They'd come back to San Francisco and report that they'd found a group and they needed $500 or $2,732.

Greenpeace had a good reputation with donors, so I was able to raise money from our supporters—the people I had worked with, in some cases, for decades—to say yes to those requests. Then the challenge became how to build a bridge between the groups the Greenpeace network was discovering all over Latin America and the Asia/Pacific and the money we knew was there among U.S. environmental donors.

I still remember one of the very first things we did. Before Greengrants existed or was even a concept, I was helping U.S. donors figure out how to make a tax-deductible donation to a grassroots group in Thailand or in Burma. And I realized, this isn't simple. It was an explanation for why so little of this kind of thing was done: Small grants in developing countries were often more costly to make than the value of the grant. That caused me to look at why and what could be done to reduce the overhead costs. The best answer was to use existing networks of volunteers, like Greenpeace or Friends of the Earth or World Wildlife Fund in the environmental movement. The key was to find a way to tap into that.

In 1991, we made this first $5,000 grant to a group working inside Burma. The military dictatorship there had just put down a student uprising and refused to hand over power to the democratically elected president, Aung San Suu Kyi. Without getting into the politics, it was a delicate situation and the grantees were actually a group of refugees living on the Thai/Burma border. They had produced a guidebook to sustainable agriculture in the rainforest, and they didn't have money to print it.

And you gave them a little bit.

That $5,000 enabled them to print it in both Thai and Burmese, and distribute it to people who were otherwise clearing the rainforest for agriculture. Getting the money to them in a timely way and protecting the tax deduction of the donors was what opened my eyes to an unmet need that could make a big difference in social change organizing around the world—devising a cost-effective mechanism making it possible for Americans to give tax-deductible gifts to small community groups abroad.

Why has the fund chosen to focus on small grants?

Precisely because very few other U.S. donors make small grants abroad. Not because they've come up with a better strategy, but because of the invisible hand of overhead. In other words, their accountants tell them, "Our overhead costs are fixed. No matter the size of the grant, it costs us approximately between $3,000 and $5,000 for every grant we make. Therefore, let's not make any grants less than $5,000, because it would be silly to spend more on the administrative process of grantmaking than the grant was actually worth."

But that doesn't take into account the multiplier impact of those five thousand dollars in an economy like Indonesia or India. The Greengrants Fund has stayed committed to making the smallest possible grants as cost-effectively as possible because: A) we believe it has a big impact; B) the risk of something going wrong is quite small, because the amount is not one that fosters corruption; and C) it is an overlooked strategy, because of the overhead costs embedded in any U.S. foundation's formula for processing grants.

Frankly, the fact that the U.S. foundation community doesn't even talk about cost per transaction is a major oversight. Everybody is upset about payout and things like that, but the real invisible factor affected by payout and all the other IRS requirements is the cost per grant. In the United States, there's an incentive to make larger grants, which inevitably suggests a certain strategy that fails to penetrate through to the community level. In the United States, it's a problem. In the rest of the world, it's a major problem, because most of the best opportunities for social change organizing—including creating stable civil societies—are in small or medium-sized community groups that don't need much more than $5,000 or $10,000.

The fund has made grants on every continent except Antarctica. What's the secret to managing so many small grants in so many countries?

The secret to making a lot of small grants effectively and efficiently is to tap the social capital of interested networks in the environmental movement.

How do you cull through the numerous funding recommendations from your networks of regional and local advisors?

Actually, they do that. The advisors know how much is in their budget and what's the best use of that money in their region. That allows them to make the important decisions about each specific grant, but, moreover, the broader decision about the allocation of resources available in, say, the Andes. This puts decisionmaking in the hands of those who know best.

We truly empower local advisors to make grant decisions. We just say to them, "We'll raise as much money as we can, and here's how much you get. You decide within these parameters." Those parameters are: small grants to community- based groups that are democratically run and are addressing a local environmental concern.

While 70 percent of our grants are under $5,000, some of them are up to $15,000 in certain regions, like Mexico, where the dollar doesn't go as far as it does in Nigeria. In China, they make quite a number of grants less than $1,000, which goes a long way there. The advisors decided on a strategy that focuses on one of the best leverage points in China—the student movement. Like in most societies, the students on campuses around China are expected to raise tough questions and challenge the status quo to a certain extent.

What are the greatest challenges to being on the international stage?

Raising money. We've put in place a network of 100 advisors who volunteer their time and wisdom to help us make good grants. This year, we are making about $1.5 million in grants—about 400 or 500 grants. But we could quite easily do three times as much, without adding much to our overhead costs. Optimizing the efficiency of the model depends on raising another $2 to $3 million a year to raise the advisors' grantmaking budgets, so they don't have to spend so much time making tough choices between good projects.

Why do you think international grassroots grantmaking is important?

Most important social changes have started with a small group of people who were considered to be trying to do the impossible—that's what grassroots community organizing is all about. In the United States and Europe, the grassroots environmental movement still is the constituency that legitimizes the large environmental NGOs. Neglecting the grassroots movements in other parts of the world means that the large international environmental NGOs have no constituency to represent. Environmental donors have to find more ways to support the growth of small, local organizations that are connected by vast networks nationally, regionally and globally.

How have the USA PATRIOT Act and the Executive Order to disrupt the support of terrorism affected your grantmaking?

They haven't affected our grantmaking, except for making it more time-consuming and expensive to administer grants, when we're trying to go in the other direction, toward simplification. It's been terrible for international grantmaking in general, mostly because it's perceived to be impossible to comply with. In fact, some parts of the Voluntary Guidelines are, literally, impossible to comply with.

We've adopted an effective compliance method and participated in creating standards of best practices with the Council on Foundations, Grantmakers Without Borders and our own donors, who want to make sure that they're in compliance. Because if we're not in compliance, they're not in compliance. We've established high internal standards to comply with both the Executive Order and the USA PATRIOT Act, and to utilize the few resources now available, like the software programs for checking grantee names against multiple terrorist watch lists.

But it's added a burden and a chilling effect to potential new international donors in all fields. The effect has been greater than is necessary. Especially for small grantmakers who are trying to minimize per-transaction costs, it's unfairly burdensome. It's counterproductive to the intent of the anti-terrorism guidelines, which is to make the United States safer in the world. We're not going to make ourselves safer by being less generous with philanthropic wealth—much of which has been generated overseas—or if we make it difficult for donors to give to good people around the world.

I hope that the Voluntary Guidelines don't become mandatory. I wouldn't be surprised if within a generation or two, we see a reverse trend where American taxpayers are offered a 200 percent tax deduction for their generous gifts to hunger groups in Afghanistan or something. Because that's what philanthropy is really all about—providing incentives and encouraging generosity. I know of no U.S. donor who has found a terrorist on any of the watch lists that matches one of their grantees.

Large companies, like Cisco and Oracle, have stopped doing employee match grants abroad simply because it's too burdensome for them. The unintended consequence of these guidelines could be that they're actually aggravating the view of Americans in the world.

Because the amount given has gone down?

Yes. There is a popular perception that international giving has increased in the last few years. The truth is, while it has in an absolute sense, it only increased because of the Gates Foundation. There's a small decrease if you take that out.

What's next in your grantmaking?

Well, to bring it to scale. To reach an optimal level of tapping the resources of the networks that are now part of our advisory network globally, by reaching a level of about $5 million in grants—about 1,000 grants a year—through the U.S. office. We are also working to replicate the model through the creation of local, independent Greengrants funds in three countries, Brazil, Mexico and Indonesia, in the next year or two. Helping them establish best low-cost practices for re-granting on environmental issues in their countries. With the increased budgets we hope to provide, they can raise a significant amount of money in their countries and from European donors who like the model and want to support the work, but who aren't going to support an American NGO to do it.

You've been both a grantmaker and a grantseeker. Which role is more difficult?

Grantseeking, definitely. People are fooling themselves if they think grantmaking is harder than grantseeking. However, I know very few people who haven't been both.

Have the roles informed each other in your continued work?

Absolutely. Everything I've just described, in a way, are lessons learned as a grantseeker and a grant process observer. It taught me that some of the best work in the world is going on completely unaided by Western philanthropy, simply because people didn't know how to get money to them. Pioneers like the Grameen Bank in micro-lending, and Ashoka and others, who have tried to build bridges between northern donors and southern advocates, have been some of the most significant developments in a generation. The truth is, paradigm shifts occur in society only once a generation or so. And they're not political shifts, they're paradigm shifts. The awareness of microlending qualifies as a paradigm shift.

For generations, it was assumed that poor people would not or could not repay loans and everything about the international development infrastructure was based on that assumption. Well, that turned out to be wrong, and that changed everything. That's a paradigm shift, and it's undeniable and really unforgivable. How could they have been so wrong about that?

Do you have any favorite success stories?

Interestingly, I go back to the first ones, like the Burma grant, which was to a group called Green November 21. Also, there's a lead mine in Kabwe, Zambia, that was abandoned by the government years ago, where now people live and go to school on the mine tailings. Children are exposed to extraordinarily high levels of lead there. The problems that result from lead poisoning multiply over generations—people end up with brain damage and lower IQs. So we helped fund a local organizing effort to bring government and World Bank attention to this situation in Kabwe. It's making progress toward holding somebody accountable, but, more importantly, getting people moved off the site.

Any final thoughts that you want to share?

What I'd emphasize, in conclusion, is that small grants are effective, but the reason that they're effective is because they leverage the collective creativity of the hundreds of people in our network and the thousands of people in their networks to simply ask, "What would you do if you had an extra $10,000?"

The people who really know the place and the problems.

That's right. So we find those people, and we ask them and we take their answers seriously. As simple as that sounds, it turns out to be a rather creative thing in a fairly uncreative industry. I hope it can someday become the norm.

A longer version of this interview is online as a web extra.