Good question! My own thoughts about goals are these:
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To act as “community glue”. We are working together to build something great. Simply having a small community grants programme gives tangible expression to that abstract goal. (There are other forms of tangible expression too, but the more the better.)
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As a form of recognition to contributors. People contribute to open source all the time, for a variety of reasons. But the more ways we have to recognise, celebrate, and reward their work, the more likely we are to hit on the one that makes a difference for that person.
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As a clear signal that the Foundation is not just about big corporate stuff. As someone put it recently, we want it to be “our” foundation not “their” foundation. By directly supporting small projects, the programme helps to say that yes, individuals matter. A lot.
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As a seedbed of ideas. Every big, influential idea grew out of a small experimental one. We need lots of the latter to get some of the former.
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For some people, a small grant really will make an important financial difference. I don’t think we’ll have enough $$ to make grants that suffice to pay the mortgage, at least not for a while. But people’s circumstances vary a lot, and for some a small sum can have a big effect.
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I think it is possible, perhaps even likely, that (as Chris says) individuals may be more motivated to support the foundation if they feel that their donations are going to support other individuals, mediated through the judgement of the Foundation.
This isn’t going to matter to everyone. But I see increasing the number of individual donors as an end in itself, not just a fundraising matter. Why an end in itself? Because I feel a much stronger sense of ownership, belonging-ness, and participation in the charities that I support financially than those I don’t. It’s another form of community glue.