Going All In: A Legacy Funder Spends Down to Boost Movement Building

When the trustees of the Edward W. Hazen Foundation made the decision to “go all in” and spend down the century-old institution’s assets, they weren’t alone. Time-limited philanthropy is a growing trend, especially among the family foundations that Rockefeller Philanthropy Advisors and Campden Wealth examined in a recent set of reports on the topic. When living donors—like many of those profiled in the reports—decide to spend down philanthropic assets, they’re often motivated by a desire to see greater impact around urgent causes in their lifetimes.

The situation is both similar and different for a grantmaker like the Hazen Foundation. Founded by one-time schoolteacher and publishing executive Edward Warriner Hazen in 1925, it’s the very definition of a legacy foundation. Edward and Helen Hazen were childless, but the foundation’s longstanding focus on youth reflects their concern for young people. Over the decades, the foundation’s funding priorities shifted from developing the “character” of young people through public education to community organizing for school reform in the 1980s.

Hazen adopted an explicit racial justice lens under the leadership of current President Lori Bezahler. For the past decade, Hazen has been making modest commitments to grassroots groups in two buckets: parents organizing for educational justice, and youth organizing more broadly for racial justice. “Parents have always struggled to have systems that serve their children well, and young people always take part in movements for progressive change,” Bezahler said.

According to Bezahler, the current political climate has at once strengthened the voices of progressive youth and thrown their futures into doubt. Those challenges spurred Hazen, one of the nation’s oldest private foundations, to set a time limit on its own giving and dramatically step up grantmaking over the next five years.

Going All In

Empowering parents and youth to take on structural racism is a timely and politically potent mission, but Hazen’s actual grantmaking hasn’t really made waves until now. That’s because most of its grants hovered in the four- and five-figure range—large enough to make a difference for the grassroots organizers getting the money, but hardly eye-catching in the grand scheme of things.

Hazen’s decision to “go all in” over the next five years changes that math. Its first round of grants under the spend-down plan totaled $5.45 million, far outstripping its typical annual outlays of just under $1 million. Similar spending over the next four years should see Hazen successfully run through its assets of around $24 million.

It took a while for Bezahler and the Hazen board to come to their decision. “A couple years ago, we started thinking about whether putting out a small grants budget was sufficient at a moment like this,” Bezahler said. “This is a definitive moment for our country, and here we are doing what we do while young people and parents are literally putting their lives on the line.”

The late Obama years saw the rise of intersectional justice movements led in many cases by young people of color—Black Lives Matter, Dreamer activism and the climate justice movement are some of the most prominent. Along with the “tremendous opportunity” inherent in those movements, Bezahler spoke of an urgent need to address Trump-era backlash. “Having a black president had a social impact. It shook up a lot of people who had assumptions about who had power in this country,” she said. “White nationalism is in the public mind, and that’s deeply disturbing and scary. There’s also greater opportunity for acknowledgment that there’s a structural problem to be solved.”

Perpetuating Impact

The big question for Hazen is how to leverage its spend-down to make headway on those nation-spanning challenges. That starts with the grantees. “Our approach is that getting this grant is step one. Let’s support your practices,” Bezahler said. Most of the 22 beneficiaries of Hazen’s first $5.45 million received multi-year, general support grants.

Around two-thirds of those grantees have received money from Hazen in the past. They’re located all across the country. The foundation reports that 82 percent are led by people of color and 77 percent operate on under $1 million a year. Some of them, like the Philadelphia-based Youth United for Change, have received institutional grants dollars through programs like Pipelines to Power, an effort of the Funders’ Committee for Youth Organizing (FCYO). FCYO is also a Hazen grantee this round, alongside local organizing outfits like Kids RETHINK New Orleans, Tunica Teens in Action and Action in Montgomery.

Hazen plans to announce a second set of core grantees later this year. The foundation will work with its core grantees through 2022 to build capacity, infrastructure and skills with the goal of strengthening the field. Toward that end, it wants to engage in dialogue about organizations’ needs and let grantees set their own parameters about how they’ll use Hazen resources once the lights go out.

Hazen’s spend-down plan also includes robust engagement with other grantmakers and greater attention to external communications—an area this funder hasn’t prioritized in the past. “We need more money going to the stuff we care about,” Bezahler said. For one thing, that means increased involvement with donor collaboratives like FCYO. It also means interrogating internal and field-wide assumptions around power, oppression and white supremacy.

Relationship-Based Communications

Those are noble goals, but they remain difficult to implement in a liberal grantmaking field where practice often lags behind rhetoric. For Hazen, reworking its own grantee selection process was one way to get at the grantmaker-grantee power imbalance. “[Selecting grantees] was exciting and unnerving,” Bezahler told me. “We really were committed to challenging ourselves as an institution.”

Hazen abandoned written proposals in favor of “relationship-based communications” with potential grantees, using video calls and interviews to get a better sense of how groups in the field operate and what they think about their interactions with organized philanthropy. During that process, the foundation strove for honesty around the issues of power dynamics and inter-grantee competition, acknowledging those realities and emphasizing transparency on its own end.

Bezahler pointed to simple fixes—like relieving applicants from onerous paperwork until later in the process—as one way to streamline things. She also emphasized how important it can be to rip off the bandage with unlikely prospects early on, rather than prolonging relationships that will likely lead nowhere. “People told us that if we don’t stand a chance of getting a grant, don’t even pick up the phone and raise expectations,” Bezahler said.

A Question of Power

Spending down foundation assets can be seen as a matter of the best deployment of power. On one hand, spending down is a form of “giving away power” in the sense that the funder relinquishes perpetuity to pay out far larger sums to its grantees. But those larger sums also vastly increase the funder’s influence for several years, power that spend-down grantmakers from Hazen to Atlantic Philanthropies embrace. Spend-downs can also undermine themselves if they fail to ensure grantee sustainability once the tap runs dry.

Questions about how quickly to deploy philanthropic resources have been getting a lot of attention lately, in part because of all the new billionaire donors who’ve emerged in recent years—some of whom are sitting on the world’s greatest fortunes and have embraced “giving while living.” The prospect of massive spend-down grantmaking by living Giving Pledgers is exciting and also kind of scary, since more rapid grantmaking can serve to make big philanthropy even bigger.

Meanwhile, though, we shouldn’t discount the cumulative effect of more spend-downs among small and mid-sized funders like Hazen. There are, after all, thousands of U.S. grantmaking foundations with assets between $10 million and $25 million, and tens of thousands sporting between $1 million and $10 million. That amounts to many billions parked in investments, money that could help rework the public sphere if even a fraction were deployed into movements and advocacy today.

Whether that’s a threat or an opportunity is a matter for debate. But as a charged political moment compels more living donors to spend down—Farhad Ebrahimi’s edgy approach through the Chorus Foundation comes to mind—it’ll be interesting to see how many legacy funders abandon perpetuity and go all in.

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