What is the HIP Funders’ Collaborative for Strong Latino Communities?

The HIP Funders’ Collaborative for Strong Latino Communities is a funder-driven initiative that pools dollars from foundation, corporate, government, and individual donors to support capacity building among Latino-led nonprofits in the U.S. and Latin America. The Collaborative responds to the ongoing inequities in philanthropic funding of Latino organizations, and grows from a theory of change that building stronger Latino-led nonprofit organizations will build stronger Latino communities. Structured as a regranting program, the Collaborative channels philanthropic resources from multiple sources to organizations operating at the local level in defined geographic areas in the U.S. and Latin America. Participating funders retain decision-making authority, and Hispanics in Philanthropy serves as the facilitator, convener, and information hub for the multiple sites in which the Collaborative makes grants.

The Collaborative is one strategy through which HIP pursues its mission to catalyze a closer relationship between organized philanthropy and Latino communities. HIP was founded in 1983 on the belief that philanthropy should be more inclusive and responsive to communities of color, particularly Hispanic communities. HIP has always championed a vision of inclusiveness that reaches across identity lines. Over the years, HIP has developed a network of member volunteers who seek to leverage their individual commitment to Latino communities into a closer institutional engagement on the part of organized philanthropy.

While these strategies have helped increase the recruitment and retention of Latinos in the field of philanthropy, the level of philanthropic investment targeted to Latinos has remained stagnant at less than 1.5% of grant dollars, according to Foundation Center data. In the mid-1990s, HIP’s leadership, which included senior staff and trustees from private foundations like Ford, Rockefeller, MacArthur, Mott, and Kellogg, began to question whether a new strategy was needed to increase philanthropy’s commitment to Latino communities. In January 1997, Aida Rodríguez, who at the time was with The Rockefeller Foundation, brought to the HIP Board an idea that would forever change the organization: to create a funding collaborative that focused foundation and corporate dollars on supporting Latino nonprofits.  By concentrating specifically on building the capacity of Latino nonprofits, this collaborative would further serve HIP’s mission to build a new cadre of Latino leaders while educating the field about Latino issues and serving Latinos in the community.

The HIP Funders’ Collaborative for Strong Latino Communities represents one of the first major philanthropic initiatives focusing on Latinos since the days in which National Council of La Raza (NCLR), Puerto Rican and Legal Defense and Education Fund (PRLDEF), and the Mexican American Legal Defense and Education Fund (MALDEF) were created. This initiative responds to the changing demographics of communities across the country – the five largest cities in the U.S. are now “majority minority,” with African-Americans and Latinos constituting more than 50% of the population – while serving to educate the field about this changing reality. In this respect, it grows naturally out of the work of Hispanics in Philanthropy over the past two decades. In responding to the opportunity for change presented by the gap between demographic trends and philanthropic investment, HIP came prepared with a particular kind of asset: a transnational network of funders.

As of July, 2007, the Collaborative has raised nearly $35million from 159 donors in 18 sites across the U.S. and Latin America. To date, grants have been made to more than 427 Latino-led nonprofits. Much has been done, but much remains to be done, as well. Six sites (Northern California, Philadelphia, Connecticut, Colorado, Upper Midwest, and New Mexico) all made their first grants in 2001-2002. These “mature” sites have begun to evaluate the impact of their work and consider future directions. The two transnational sites in Argentina and the Dominican Republic, launched in 2002, are now on their third and second cohorts, respectively, and are strategizing how to extend their support. Another five sites (Chicago, Massachusetts/Rhode Island, Southeast Wisconsin, Southern California, and North Carolina) made their first grants between October 2003 and February 2004. They are looking to learn from the experience of the other sites as they begin developing their grantee cohorts and designing a second round of funding. New York/New Jersey and South Florida, made their first grant awards in 2005, Arizona made its first grant round in 2006, Washington, D.C. made its first grant round in April, 2007 and Mexico, our newest site, anticipates making a first round of grants later in 2007.

How the Funders’ Collaborative works

In Phase 1, the model has worked as follows:

Step 1: HIP raises matching funds from national and regional donors

Step 2: HIP approaches local donors

With matching funds in hand, HIP then approaches groups of funders in different parts of the country about the possibility of forming a site. A site can be:

• a city (Chicago, Philadelphia, Washington, D.C.),
• a region within a state (Northern California/Central Valley, Southern California, South Florida, Southeast Wisconsin),
• a state (Arizona, Colorado, Connecticut, New Mexico, North Carolina, the state of Córdoba in Argentina),
• a multi-state region (Massachusetts/Rhode Island, New York/New Jersey, Upper Midwest),
• or a country in Latin America (Dominican Republic, Mexico)

The above list includes the 18 operating sites of the Collaborative.

Step 3: Local donors raise local funds, forming a site committee

To create a site, there must be at least two donors who contribute among them a minimum of $250,000 in local funds. Together, these funders form a site committee, which is empowered to make grant decisions within that site. Site committees range from two donors with $250,000 in local funds to 18 donors with $1 million in local funds.

Step 4: HIP matches local funds 1:1, creating a pool of grantmaking dollars for each site

All local funds raised are matched dollar for dollar. In addition to the national matching funds, HIP provides policy, a governance structure, program templates, and staff support. To finance partially the costs of providing these services, HIP retains a program management fee. The formula for the pool of grantmaking dollars is therefore: (Local funds + National/regional match) – Program management fee. For example, ($400,000 + $400,000) – $120,000 = $680,000 available for grantmaking in a given site.

Step 5: Each site committee uses its pool to make capacity-building grants in its site

Working with the pool of grantmaking dollars, each site customizes the grantmaking process for the needs of its particular area. HIP staff provides templates for Requests for Proposals, runs applicant information sessions, facilitates decision-making meetings, drafts grant agreement letters, and disburses grant awards. Funders review proposals, conduct site visits, and make grant decisions.  Once decisions are made, recipients attend a grantee convening, where they not only receive grant funds, but also receive technical assistance, HIP staff support, leadership training, and the opportunity to network with other grantees and funders.

The appeal for local donors is that they get to double their money, retain decision-making control, and receive from HIP staff the materials and staff time needed to carry out the grantmaking process. The appeal for matching donors is that they get to double their money, have national and transnational impact, and reach grassroots organizations they would not be able to reach through their normal grantmaking.