Foundations excel at breaking the exact things we say we want to fix. I know, because the private foundation I’ve managed for six years used to break what we thought we were fixing, too.
Westword recently covered an open letter to foundations by Jami Duffy, the executive director of Youth on Record, in which she reiterated what many foundation executives continue to ignore: pleas from nonprofit leaders across the field to provide unrestricted, multi-year funding and to quit wasting their time with extensive applications, reports, meetings and requests for information. To Duffy’s voice, I’d add the voices of twenty local nonprofit organizations led predominantly by leaders who are Black, Indigenous and people of color (BIPOC). They are making the same requests for foundations to quit wasting their time and requiring that they serve us, often taking priority over serving the communities we are actually trying to support.
Makisha Boothe, founder of Sistahbiz Global Network, a business accelerator for Black women, puts it this way: “My calendar is color-coded so that every time I’m working with a Black woman, it’s purple. Every time I get to coach or train or support a Black woman, it’s purple, because that’s my love and that’s my heart, so my ask of you is to help me keep my calendar purple. That means less back office work, less paperwork, less funder meetings. Help us stay on the frontlines doing the work with the people we love the most and are trying to serve.”
Prioritizing funder requests over the communities’ needs is just one way that foundations break the things we want to fix. The second is by underfunding the programs and people who are doing the actual work to address the things we want to fix.
Neha Mahajan, executive director of Transformative Leadership for Change, a nonprofit that serves BIPOC leaders in social-justice organizations, says it best: “Against all odds, we’re trying to end the school-to-jail pipeline, eliminate poverty, solve climate change, end disparities in our schools, fight fascist and white supremacist attacks — and we’re supposed to do this on shoestring budgets, with vastly inadequate resources, in the model of nonprofit scarcity. We’re asking philanthropy to give us the resources we truly need to make change at the scale that is necessary for our communities to experience liberation.”
This request is absolutely reasonable, especially when it’s known that private foundations are only required by the Internal Revenue Service to distribute 5 percent of our assets every year. This leads me to the most destructive way we break the exact things we are trying to fix: By traditionally investing up to 95 percent of our assets in the same markets that are responsible for the social injustices, wealth and opportunity gaps, and climate crisis that our missions purport to be addressing, we are essentially breaking with $95 what we say we want to fix with $5.
More than 1 trillion philanthropic dollars nationally are invested in Wall Street markets that have resulted in the most significant threats to the long-term well-being of the global economy: global warming, resource degradation and scarcity, and widening, destructive levels of inequality. Those 1 trillion philanthropic dollars only result in about $75 billion in actual foundation grant-making each year. Meanwhile, the wealth gap between America’s richest and poorer families has more than doubled from 1989 to 2016.
Is it possible to generate enough positive impact with 5 percent of our assets to outweigh the harm we are doing with 95 percent of our assets? No, it is definitely not.
At best, it can be viewed that we foundation managers are charity-washing by touting a mission that applies to that meager 5 percent of our assets distributed to nonprofits, while 95 percent of our assets are invested in the same markets that perpetuate the inequities our missions seek to address. At worst, leading with missions that only apply to 5 percent of our assets feels akin to “deceiving or misrepresenting,” which is the definition of fraud.
If we are truly committed to our missions and our communities, foundations need to take full responsibility for the impact of 100 percent of our assets. We can start by increasing funding to local nonprofits led by community leaders doing the work to support the communities most negatively impacted by our inequitable economic system and current crises, but it can’t end there. We need to use every single dollar we have to work toward an economic system built upon social, economic and environmental justice.
Kristi Petrie is the executive director of the AJL Foundation.
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