How to Double Your Impact by Changing the How, Not the What

Most donors spend most of their deliberation on what to fund (cause area, charity) and almost none on how they fund it. But choice of mechanism can plausibly 2x the impact of a given dollar independently of getting smarter about causes, and is likely the lowest-hanging fruit for many donors. Here is a list of 6 ways to get smarter on how to fund.

1. Seeding to unlock scale

2. Organisation-shaping grants

3. Activating sideline donors

4. Psychological grants

5. Regranting

6. Active grantmaking

Seeding to Unlock Scale

Funding the same project at different stages of its lifecycle gives you very different returns on investment. Early-stage funding is often both strictly necessary to unlock later scale and decisive in whether the project continues at all. To pick on the Lead Elimination Project as one example, I have written before that their seed funding (~$60k) is worth at least 10x what a marginal donation would be to them now, and I think a reasonable case could be made for far more. This is a common phenomenon in early-stage charities: most larger donors need charities to reach a certain stage of development before they will consider them, which means that dollar for dollar, funding them earlier is worth a lot more value. Virtually every AIM charity has reported that getting funding a year earlier would be worth roughly 2x the same amount later, and the pattern is consistent enough across the portfolio that I take it seriously.

This seeding phenomenon is not specific to charities. Funding a charity evaluator like GiveWell today is very different from supporting it in 2007. Funds are another good example: if you anchor something like Prevail, you can have an oversized impact by being one of the first funders in. You are essentially getting a leverage factor on your donation, enabling others to donate and allowing the mechanism itself to get set up. This can easily mean that anchoring a fund is 2x as impactful as donating to it as the 10th donor.

In all these cases you are giving to the same organisation but causing far more impact by going earlier in its development. Going early does have its downsides: there is more risk involved, and it is typically harder and more time-consuming to vet per dollar. But for many impact-focused donors, I think the total expected impact is still considerably higher.

Organisation-shaping Grants

Many organisations need more than money to grow; they need to develop a specific skillset or hire a key staff member. Sometimes the highest-leverage thing a grant can do is change the organisation itself, not just fund its existing plan. This shows up in two patterns I see often. The first is capacity-building: take a small LMIC org with a single founder, no playbook, and nobody to turn to for advice. A year of funding plus active coaching can move a grantee from ‘not yet fundable by larger donors’ to clearly fundable - and the financial gap between those two states is often small compared to the trajectory shift it unlocks. I have seen this work in both poverty and animal spaces, and the pattern is consistent enough that I now actively look for it.

The second pattern is targeted capacity grants: funding a specific hire the org needs but cannot yet justify. The clearest examples are things like a COO when operations are falling over, or a monitoring and evaluation officer when the numbers are not yet good enough to convince larger funders. Both are cases where one well-chosen role unlocks the org’s ability to absorb much more funding later. The common thread is that you are not buying activity, you are buying a change in what the org is capable of. It is harder work per dollar than a standard grant, and it only pays off if you are right about the bottleneck, but when it works the multiplier is easily 2x and often much higher. You are funding the solution to the bottleneck to impact, not the general organisation.

A strong caveat is worth flagging here: organisation-shaping grants go badly when the donor is not actually better informed than the org. Telling a grantee to hire, restructure, or change direction in an area you do not know well is one of the worst things a donor can do. You impose costs on people closer to the work than you are, and you are likely wrong about the bottleneck. This mechanism is for organisations that actively want a playbook, are growing into a new area without one, or have an obvious capability gap they cannot fill alone. It is not for organisations that have a strong plan you happen to disagree with. The test I try to apply is whether the grantee would recognise the gap I am pointing at if we sat down and talked about it. If yes, a shaping grant can be transformative. If not, I am probably the problem, not them.

Activating Sideline Donors

Some of the best leverage in giving comes not from your own dollar but from the dollar you pull in alongside it. Funding circles are the cleanest example I know. The basic structure is a small group of funders who share a cause area, meet monthly, vet opportunities together, and each decide independently whether to give, but they do it in the same room, with the same information, after the same conversation. The social and informational dynamics mean that when you fund a good project, other members often fund it too, and a reasonable share of those co-funders would not have given, or would have given to something weaker, without the circle.

In my own experience 1:1 leverage is very achievable: for every dollar I put in, roughly another dollar follows. I have seen up to 1:5 in some cases, though that was harder to engineer reliably. The mechanism works because the bottleneck for many sideline donors is not willingness to give but lack of vetted opportunities and a trusted peer group to give alongside. Solving that bottleneck is cheap relative to the capital it moves. The main caveat is that the leverage is only real if the co-funders would not have given to similar opportunities anyway, which can be hard to tell.

Psychological Grants

Not every grant needs to move the grantee’s bottom line to be worth making. Some of the cheapest high-impact grants I have seen are ones that mostly affect the charity’s psychology rather than their bank balance. The clearest example is backstopping: a funder tells an early-stage org something like “go try to raise your $500k budget from others, but if you fall short I will cover up to $100k of what you need to keep going.” The charity feels a lot of psychological relief, which changes how they fundraise (typically for the better) and how likely they are to burn out. It is also quite cheap: roughly 80% of the time I have seen it, the backstop never gets called. The org raises what they need and the commitment costs the funder nothing but the option.

Other variants exist: reassuring a grantee that a renewal is likely so they stop worrying about runway, or publicly signalling confidence in an org so other funders take them more seriously. It can even be used for acceleration: asking a grantee what they would do with a much larger grant than what they were seeking can radically change their pathways. The shared mechanism is that the grant’s value comes from how it changes the grantee’s state of mind. It rewards donors who know their grantees well enough to know what would reassure them or push them to the next level.

Regranting

The classic model of philanthropy is a principal who sets up a foundation, hires two staff, and deploys the funds themselves. But the same pot of money can often be deployed better by splitting it. The version I have written about elsewhere is taking a $10m annual budget and giving $1m each to ten regranters, some full-time and some part-time, rather than running it through a small in-house team. The overhead is higher, both in literal costs and in coordination, and more time has to go into finding and vetting the regranters themselves. But you get a wider spread of opportunities considered, more innovative and smaller-scale grants, tighter feedback loops (because regranters are not guaranteed next year’s budget), and roughly 4x the effective outreach for the cause area from having ten voices in it rather than two.

My best guess is that ten regranters produce more variance but higher expected impact overall, especially in ecosystems where the best opportunities are small, hard to find, and scattered. The main objection is that it is harder to pick ten good regranters than to hire two good staff, and the leverage claim depends on actually finding people whose judgement you trust. But compared to the time cost of funding 50 charities directly, picking 10 regranters feels reasonable. If the binding constraint on good grantmaking is often attention rather than capital, spreading the attention wider is probably underrated. Many of the best people you might want to hire also cannot go full-time but could still regrant effectively.

Active Grantmaking

Most grantmaking is passive: you wait for applications, evaluate what comes in, and fund the best of the bunch. But the best opportunity for your dollar is often something that does not yet exist, or something that exists but would never think to apply to you. Active grantmaking is the pattern of going out and creating the pipeline yourself, things like writing an RFP or hosting a public prize challenge. A funder expressing interest in an area can help bring the charities that accomplish the goals into existence. Active grantmaking seems to have huge potential impact, and because most grantmakers do not have the time to do it, there are often low-hanging fruits.

The catch is that active grantmaking is much more demanding per dollar than passive grantmaking. You become more like a general manager of a problem area, and you need a real view on what is missing plus enough ecosystem knowledge to know it is actually missing. It is not a mechanism for donors who want to deploy capital quickly, but for donors willing to trade time for leverage.

Conclusion

There are lots of mechanisms that are not deeply considered and could really amplify giving for some donors. If you already have a strong scope and time, as well as funding, these might be the best ways to continue improving your impact.