We might be smaller funders—but we can still make a big difference in impact investing

Last year, as I was talking with Seattle Foundation, they told me they were in a bit of a quandary: They were preparing to launch an affordable housing impact fund for King County that would support over 200 much-needed apartments. The issue was that they still needed to do the research and testing to prove that their model would work, and that would cost $50,000 that they didn’t have. Could Tableau Foundation help?

This was the same year that Facebook announced a $1 billion to build affordable housing in California, and Kaiser Permanente contributed $200 million to another affordable housing project. Private companies dedicating their resources against the housing crisis was hardly groundbreaking—and the $50k ask was barely a fraction of what some of our larger peers were contributing.

Tableau Foundation is not the type of funder that can throw hundreds of millions of dollars at a problem. But what we—and other small to mid-sized foundations like us—can do is strategically invest to help larger initiatives take off and make a real impact in communities.

When Seattle Foundation (which also holds Tableau Foundation’s donor-advised fund) started the conversation with me about contributing to the Evergreen Impact Housing Fund, they’d already secured a significant startup investment from JP Morgan Chase. But in the process of working out the operational structure between the fund and the Washington State Housing Finance Commission, they’d realized they were around $50k shy of the budget they needed to carry out the R&D needed to prove the model was viable and publicly launch the fund.

We knew that our contribution would be a footnote in the story of the Evergreen Fund: Between JP Morgan’s contribution and the eventual $50 million to come from Microsoft once the fund was announced, monetarily, our $50k might not seem like much.

But to me and our Foundation team, as funders, it reflected some very important aspects of the way we try to work.

Small dollars, big impact

One is the idea that when it comes to investing in and funding projects that promise transformational change—like building hundreds of affordable housing units in a region that desperately needs them—the dollar value isn’t everything. Don’t get me wrong: We need big funders who can step up with major commitments to funds like Evergreen. But that doesn’t mean that smaller funders are boxed out.

If your aim is to fund for impact, not for personal recognition, there are plenty of opportunities where your investment—no matter how small—could tip a project toward success.

Against big issues, don’t go it alone

The second aspect is around what we’ve learned about tackling significant challenges: partnership is key. In Seattle—and in many places across the country—homelessness is one of those big challenges. Over the past several years in our city, homelessness has reached the stage of crisis. After the Seattle City Council proposed, then repealed, a head tax in 2018 that would have raised some revenue to fund affordable housing, Tableau’s CEO Adam Selipsky pledged that the company would pursue ways to make tangible progress against homelessness. That led to our Chief Technology Officer Andrew Beers sitting on the mayor’s Innovation Advisory Council, working on designing better homeless management systems. Tableau Foundation was already working on combatting homelessness through a national partnership with Community Solutions, but we also supported the local coalition All Home and backed Pearl Jam, which had just launched their own effort to affect change through the Home Shows (Seattle is their backyard, too!).

But homelessness is a massive issue. We knew that as much as we wanted to help, we couldn’t move the needle too much on our own. Around this same time, Kris Hermanns, who was just named chief impact officer at Seattle Foundation, got in touch to talk about the impact investing fund they were putting together to finance the development of over 3,500 affordable housing units over the next five years. Tableau Foundation hadn’t contributed to an impact fund before—up until that point, we’d limited our funding to making grants to nonprofit partners. But as we learned more from Seattle Foundation about impact investing—specifically, how it brings together a variety of funders around a specific, complex challenge—we realized that this could be a way for us to join a group of fellow funders committed to the same issue.

Funding doesn’t always have to be sexy

Nobody—least of all me—would say that our $50k contribution will be the thing that brings all these affordable units into the market for families in need. I know what it was used for, and that was to fund the time and technical work in the R&D phase so Seattle Foundation could prove to more funders that the model they were proposing (learn more about it here) would really make an impact. More detail than that and your eyes might glaze over.

But that’s exactly the point. In philanthropy, there’s such a huge need to fund the unsexy side of projects—the administrative costs, the paperwork, the R&D process, the legal work. Trust me, I know that if you’re not in a place where you can grant $500 million to a project, it can be challenging to feel like you’re moving the dial. But with the Evergreen Fund, Tableau Foundation’s relatively small amount to close a funding shortfall was able to help set the stage for Seattle Foundation to bring in many more investment dollars from the likes of Microsoft. If strategically made, a small grant can have a big impact.

As a funder, it may also be easier—and splashier—to write a $50k check and do a press release and call it a day. Donations like this are enormously important for nonprofits. But our experience with contributing to Seattle Foundation’s Evergreen Impact Housing Fund taught us that as a small funder, there is more than one way for us to make an impact – it just might not be sexy or exciting. There’s a lot of value in smaller funders thinking about opportunities to be strategic and contribute to the success of a much larger initiative. We’ve seen this idea play out successfully in other initiatives: The Open Road Alliance, for instance, aggregates a wide range of investments to make high-impact loans and grants for international development projects. There, it’s not about one funder creating a massive shift—it’s about the power of working together and pooling resources for good.

The Evergreen Impact Housing Fund, similarly, got off the ground because a group of funders united around a shared understanding of the value of investing in affordable housing and working together to end homelessness. This was a case where, by building a partnership with the Seattle Foundation, we were able to join a coalition of other funders—from Microsoft to JP Morgan to a group of local credit unions that committed $11 million to the fund—based on trust and shared aims. And that allowed our investment to be much more impactful than if we could have gone it alone.