Magic Cabinet: Promoting Capacity Building through Participatory, Trust-Based Philanthropy

Magic Cabinet (“the Foundation”) provides long-term capacity building grants and access to a peer network to small- and medium-sized nonprofits in Seattle and the San Francisco Bay Area. 

The Foundation’s unique participatory approach invests in nonprofit cohorts that share common geography and have similar, but not overlapping, organizational foci. Cohorts are composed of three nonprofits who collaboratively share $2.5 million over five years to support their ongoing capacity building needs.

About the project

Magic Cabinet’s approach brings together four elements of community-centered philanthropy: trust-based philanthropy, participatory decisions, capacity building, and long-term investment.

The Question

Does Magic Cabinet’s novel approach to grantmaking lead to greater organizational efficacy and capacity, as well as a stronger funder-grantee relationship?

When it formed its initial Bay Area cohort in 2019, the Foundation sought to understand the effectiveness of its unique philanthropic approach. In particular, the Foundation was interested in comparing its approach to funders who support nonprofits with similar portfolios but use more traditional approaches to grantmaking. 

The Foundation sought to understand three key outcomes: how the grantee experience aligned with the Foundation’s model; the extent to which grantees built internal capacity as a result of the investment; and the speed at which the grantees achieved desired results compared to before.

The Process

Analyzing the cohort experience and assessing capacity building goals

Public Profit is currently entering year three of a developmental, multi-cohort evaluation for Magic Cabinet. In year one, Public Profit worked with the inaugural grantee cohort in the Mission District of San Francisco. We applied a mixed methods approach that sought to provide high level insight about the initiative along with actionable feedback the Foundation could use to tune the project in real time. Public Profit produced three hyper-focused deliverables to support the Foundation’s ongoing learning and planning: a literature review, a memo summarizing initial evidence, and a final brief describing the findings from year one.

In year two, the evaluation expanded to include two additional Bay Area cohorts, while continuing to track the experience of the inaugural grantee cohort. In keeping with the developmental approach, the evaluation shifted focus over the course of year two from calibrating the grantee experience to examining the extent to which the capacity support directly and indirectly strengthened the organization.

Even before the COVID-19 pandemic began, Public Profit had planned, in collaboration with Magic Cabinet, to examine the extent to which the Foundation can help organizations navigate challenges and overcome obstacles. They hypothesized that being a Magic Cabinet grantee – the funding itself, the cohort relationship, the multiyear commitment, the focus on capacity building, and the trust-based relationship with the Foundation – would help organizations survive unexpected, but organization-specific, challenges. Public Profit was able to test this hypothesis by evaluating the grantees’ ability to weather the COVID-19 pandemic and the heightened focus on social and economic injustices.

In response to the COVID-19 pandemic, the evaluation pivoted further. With the Foundation, we designed a study of non-grantee organizations, their experience of the pandemic, and particularly their experience vis-à-vis their funders during the pandemic. We fielded a survey to organizations from the same communities as the grantees, organization who had partnered with the Foundation over the years but were not themselves grantees. We then interviewed a sample of the survey respondents to better understand the nuances of their experience, which will culminate in a brief to be shared with the Foundation and other funders interested in their model. Notably, the key findings of this focused inquiry were both related to the actual giving – nonprofits asked foundations to give more, give more unrestricted dollars, be more transparent about their decision-making process, give faster – but also about the relationship between the funders and the grantees. Grantees asked funders to build personal relationships with their organizations and create a climate of transparency and growth mindset, where together funders and grantees can acknowledge mistakes and other struggles, learn from them, and address them.

The Outcome

Deepening relationships with grantees, promising initial signs of enhanced capacity

On the first year of the partnership, our real-time strategic and tactical recommendations helped Magic Cabinet to deepen their trust-based philanthropy and participatory grantmaking practices. The Foundation has since used the insights in Public Profit’s year one findings to understand its first desired outcome: ensuring that the grantee experience aligns with the Foundation’s model. 

Our analysis revealed that Magic Cabinet’s innovative model creates relationships among cohort members that are valued and support strategic decision-making and confidence. The evidence for the other two desired outcomes – building internal capacity and assessing the speed at which the grantees achieve desired results compared to before – is highly encouraging. Based on Public Profit’s recommendations, the Foundation hopes to facilitate knowledge sharing among its grantees to achieve their capacity building goals.

Due to the success of the grantmaking strategy, the Foundation is exploring opportunities to raise awareness among other philanthropists about their unique, innovative philanthropic model.

In year two, to complement the evaluation and provide further support to Magic Cabinet and its grantees, Public Profit is offering a customized suite of capacity-building services, including coaching and seminars for the Foundation, its grantees, and other partners.

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