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Reimagining Philanthropy: Eight Challenges for Funders to Tackle Today

Thursday, November 19, 2020
To elevate and further the conversations from our 2020 Virtual Conference, Meeting the Movement,  we are pleased to present a series of articles that capture the crucial opportunities for funders to reimagine their philanthropic work.  For SCG members who missed our virtual conference, we are happy to share a special opportunity for you to experience over six hours of our conference content on-demand. Register now to stream our curated keynote, plenary, arts, and mindfulness sessions at a discounted rate. 

The devastation wrought by the triple crises of the COVID-19, systemic racism, and climate change has thrust the philanthropic sector into an existential reckoning. The pandemic has revealed that many of the long-standing practices and ideas we believed to be immutable in our sector are changeable. Not only that, but we also learned that these practices have often been limiting and detrimental to our work.

It is time for philanthropy to become bolder and burn down some of its established philosophies and practices. At SCG’s 2020 VIrtual Conference, Meeting the Movement, Vu Le, Writer at Nonprofit AF, and Sarah Walczyk, Executive Director at Satterberg Foundation, discussed the urgency and necessity of reimagining philanthropy. With our communities and democracy at stake, Vu and Sarah urged philanthropy to ask challenging and uncomfortable questions while considering several paradigm shifts to serve our communities and our sector more effectively. 

 

1. ABANDON OPPRESSIVE AND INEFFECTIVE PRACTICES

During another SCG conference panel, a speaker posed a hypothetical scenario where Harriet Tubman, Martin Luther King Jr., or another famous movement leader, proposed an idea to philanthropy today. Foundations would likely have asked them for a logic model, a data set, and a theory of change before rejecting their proposal for not aligning with the funders’ priorities. “Spreadsheet culture” with its abundance of processes is exhausting, obstructive, and oppressive for people leading the work on the ground. These practices aren’t inherent, but rather, are a byproduct of white professionalism. The unspoken belief is that if an organization can articulate themselves well via a chart or a budget, they are more qualified to do the work and more worthy of funding than other organizations that can’t ascribe these practices.  

This manner of funding and in engaging with nonprofits is no longer serving the sector. Foundations do not need any more data on who’s not getting funding or what’s happening to Black and brown bodies. The solution isn’t to waste any more time or resources on a common grant application that asks organizations to synthesize their impact in 250 characters. These models are out of touch with the world right now and won’t lead to social change. Suppose a foundation finds an organization with aligned values and feels chemistry. In that case, they should just fund it, especially if it’s an organization led by Black, Indigenous, communities of color, and other marginalized communities. Foundations have the freedom to cut out all the processes and support the change they want to see in the world. Philanthropy needs to move away from its fixation with the minutiae and instead envision a more creative and courageous role for itself. 

 

2. CREATE NEW PLAYING FIELD

According to the Philanthropic Initiative for Racial Equity, only 8.5% of philanthropic dollars are currently going to BIPOC-led organizations. Almost always, white mainstream organizations who speak the language of philanthropy receive the foundation’s grants. Instead of aspiring to “level the playing field,” our sector can create new fields that can only be accessed by the people who are most affected by systemic injustice. If funders care about Black lives or Indigenous leadership, then they have an opportunity to create funding intentionally and exclusively for Black and Indigenous communities. We can end the vicious cycle of inequity, where large mainstream organizations receive all the grants and grassroots BIPOC-led organizations who do all the work receive crumbs. 

 

3. OVERCOME FUNDER FRAGILITY 

“Funder Fragility,” a term that closely mirrors white fragility, occurs when funders refuse to engage with difficult feedback or accountability to avoid feelings of failure and discomfort. While critical conversations are never easy, they are an opportunity to do better. It is worth the time for funders to hold up a mirror and ask themselves several intentional questions: Do people want to be in partnership with you? Do your grantees seem to be having a high level of success? Are you any closer to realizing the change you want to see in the world? 

Going back to business demonstrates an unwillingness to grow and do better. If funders want to be in genuine partnership with communities and movement leaders, they need to listen to what people are demanding. Funders should not receive feedback as personal criticism or fault, but instead, view it as an opportunity to change practices to serve communities better. It’s an honest conversation about being in control of processes and systems versus solving problems together and eliminating historic power imbalances that have existed with organizations. 

 

4. DON’T ASK ABOUT SUSTAINABILITY, PRACTICE IT

How are you going to keep this program running when the grant runs out? Grantees have learned to navigate this all too familiar question, but regardless of the answer, funders know that organizations will have to find another funding source when their grants run out. Sustainability is a significant concern for nonprofits because they have never been designed to be sustainable. Asking them to answer questions about long-term funding is an ineffective use of time and woefully inconsiderate and negligent of historic power imbalances in our sector. If funders want the work to be sustainable, they need to sustain it through multi-year general operating grants. A foundation’s role is to support the long-term work, not stop them in their tracks
 

5. TRUST COMMUNITIES AND GIVE THEM DECISION-MAKING POWER 

Many philanthropic administrators still ascribe to a compliance mindset when it comes to working with grantees. Instead of focusing on how they can help organizations be successful, foundations demand detailed answers on how a grantee is spending every penny of their funds. Compliance is not a healthy or productive partnership; it is an oppressive dynamic built on power imbalances and suspicion-based philanthropy. Compliance also does not make room for building relationships with human beings doing the work. Foundations can still have deadlines and accountability, but they can be rooted in conversations and bringing people along. Start from a place of trust by co-creating what accountability will look like in your relationship. 

Building an authentic relationship with a community requires funders to listen to their wisdom and trust them to decide their priorities. Some funders struggle with bestowing a grant and letting the community decide on what it needs. Philanthropy needs to understand that it doesn’t hold the decision-making power in the communities it chooses to fund. Instead, they are there to redistribute resources to communities and work shoulder-to-shoulder with them. A foundation should build its grantmaking strategies to respond to what movement leaders and community-led organizations determine is most needed.

 

6. EMBRACE ADVOCACY WORK

Many funders are still terrified of participating in advocacy work or publicly stating their support for movements like Black Lives Matter. This lack of action is often rooted in a misunderstanding of the IRS code and the roles philanthropy can play. Foundations need to clarify how they can engage in advocacy and policy work because they can participate and make a difference. Silence, complacency, and denial are the worst actions to take right now. As Vu poses, “Are we just going to keep hunkering down to deal with the symptoms of oppressive systems instead of using our influence to change these systems collectively?“ Leveraging your platforms and acknowledging what is happening in our world is the smallest step funders can take to confront systemic injustice and support movement leaders. 
 

7. EXAMINE THE HISTORY OF WEALTH ACCUMULATION 

White settlers accumulated tremendous wealth through the theft of Indigenous land and the forced relocation and enslavement of Black people. This wealth has been passed down through generations and then often hoarded in foundations as tax-havens. This history is where a foundation’s work needs to begin. An essential conversation for foundations to have is what it means to hold on to this wealth level. How can a foundation responsibly steward and return these resources? Philanthropy has the privilege of cutting a check and removing itself from the situation, but that will not bring about an equitable world. If a foundation says they genuinely believe in racial justice, it is time to allocate these funds toward transformative change. Examining wealth through this angle can help philanthropy reimagine what it means to administer grants and funds ethically. 
 

8. CONSIDER THE COST OF THE MINIMUM PAYOUT RATE

Funders often discuss the challenge of allocating their limited resources across such high demand. But when foundations say they don’t have enough money to fund organizations, the follow-up question becomes, Are they only giving at the 5% minimum payout rate? If they are, that means 95% of their funds are just sitting there while communities are being devastated. It is almost unconscionable to hoard trillions of dollars while society is burning. The truth, funders are waiting for a moment that may not exist for anyone except affluent white communities who will survive these crises. Foundations have an opportunity to ask important questions about what role a foundation should play in this moment of incredible urgency. How long do you want your foundation to be around? What are you protecting? What would happen if you put more resources into the community right now? These are potent conversations that can lead to actions that ensure that BIPOC-led organizations and communities survive this moment. 
 

 

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