One of the biggest stories in philanthropy right now is all the new action in regions of the U.S. that have historically been off the beaten path, far removed from places like New York, Chicago and the Bay Area, where many of America's biggest and oldest foundations are located.
The South is one area where philanthropy has been evolving fast, as we've been reporting. After decades of wealth creation, new funders are coming onto the scene, even as older ones step up their game with more strategic grantmaking.
Ten years ago, the organization MDC (formerly Manpower Development Corp.) released a publication titled “The State of the South 2007: Philanthropy as the South’s Passing Gear.” Fast-forward a decade, and the Southeastern Council of Foundations (SECF) has released a follow-up on this report at its annual meeting, alongside MDC, titled "Philanthropy as the South’s Passing Gear: Fulfilling the Promise." This new report provides an excellent big-picture view of grantmaking in the region. It shows that giving in the South and Southeast regions of the U.S. has come a long way in the last 10 years, and made some seriously impressive strides on both the local and national giving scenes.
For starters, grantmaking is way up. The report found that the number of foundations in the region grew by 34 percent in the past decade, their assets grew by 76 percent, and total giving increased by 81 percent. Arkansas, Kentucky and Louisiana saw the greatest growth in assets.
But the report offers more than just a yardstick. Drawing on regional history, demographic data, and analyses of past grantmaking, it offers guidance for funders to be more effective at catalyzing community and systems change in a region that's well-known for its deeply entrenched inequities. This research comes at a timely moment. There's growing awareness that the South has often been bypassed by major national foundations, and lots of interest among a range of funders in finding the right leverage points to accelerate progress in the region.
MDC and the Southeastern Council of Foundations had the support of 21 regional and national funders to pull together this new report and take a closer look at the path that Southern philanthropy has traveled over the last decade. Backing came from the Bill & Melinda Gates Foundation, Annie E. Casey Foundation, Foundation for the Carolinas and Foundation for the Mid South. To get an insider perspective on the report and what it all means for Southeast philanthropy, we got in touch with SECF CEO Janine Lee to ask some follow-up questions.
"There is so much opportunity in the region, with more affluence, a diverse economy, and a strong corporate sector," Lee said. "And yet, the racial disparities in poverty, wealth accumulation and education continue to haunt us. The unevenness of prosperity is startling. Philanthropy must be willing to look at the inequities and distress, and understand that we all have a collective responsibility to 'see reality clearly' and create solutions for the shared well-being of our children, our communities, our region."
We asked Lee how she thinks about the concept of “passing gear” philanthropy, a phrase first coined decades ago by Ford Foundation Public Affairs Director Paul Ylvisaker. Lee described it this way:
Passing gear is less of a model than a way of thinking and acting. It is intended to encourage philanthropic leaders to think more deeply about the problems they are trying to solve, understanding and examining the lessons of history, and listening to the people and communities they serve in more meaningful ways. It is a process that engages decision makers to explore trends, data, scenarios and their intended or hopeful outcomes. It layers that understanding with some of the best tools and approaches that we have available to us within philanthropy—ideas that have been generated not only from philanthropic leaders, but from a variety of thinkers who have devoted their lives and careers to creating change.
The report emphasizes how different living in the South is now compared to several decades ago, and reports that foundations here have been required to think differently to address social issues. Topics addressed in the report, drawing on a deep analysis of thousands of grants made to Southern organizations in recent years, include poverty, health inequities, insufficient education and environmental degradation.
A couple of points that stood out in the report include the fact that "passing gear" investments have almost exclusively been made in large metropolitan areas, and that they aren’t reaching a majority of the population in a region that remains quite rural. The Southern areas with the most passing-gear investments are Fulton County, Georgia, Arlington County, Virginia, Orleans Parish, Louisiana, Shelby County, Tennessee, and Miami Dade County, Florida.
The report describes several examples of "passing gear" philanthropy and includes reflections from seasoned foundation professionals on the issues at hand. Local foundations highlighted for their exemplary grantmaking were Alabama Giving (a network of over 30 Alabama grantmakers), the Winthrop Rockefeller Foundation, the Rapides Foundation, the Spartanburg County Foundation, the Duke Endowment, the Mary Reynolds Babcock Foundation and the U.S. Endowment for Forestry and Communities.
Regarding the research, Lee said, "It is so encouraging to see so many powerful 'passing-gear' examples of foundations across the region that have thoughtfully looked at the historical context in their communities, used data to inform their work, considered the various forms of capital that they could deploy to make a difference, engaged communities and assessed impact and result."
Also encouraging is the overall maturation of the South's philanthropic ecosystem. Grantmaking has become more sophisticated, but there's also just more of it in the region. As we've been reporting, the South is now home to some major foundations, many of which have greatly stepped their giving. For example, the Arkansas-based Walton Family Foundation, which gives steadily to its home region, doubled its giving between 2008 and 2014. The Windgate Foundation is another Arkansas funder that gives big locally. The Generosity Index (Fraser Institute) ranks Arkansas 19th and above average regarding local charitable giving. In Georgia, the major foundations created by Home Depot founders Bernie Marcus and Arthur Blank have dramatically expanded their giving in the past decade.
Meanwhile, the Blue Grass Community Foundation, Community Foundation of Louisville, and the James Graham Brown Foundation are the top three funders in Kentucky. The Greater New Orleans Foundation and the Rapides Foundation are top funders in Louisiana to keep an eye on. The South has also seen an explosion of health legacy foundations, as been reporting. We weren't surprised when Lee told us that these funders are the fastest growing constituency group of members at the SECF.