Social Justice Philanthropy Restructures to Focus on Power

We live in an era of blossoming social justice movements. The environment, gender, health, policing, the economy, race, education, and even technology have all become intertwined with notions of justice and equity. This shift is playing out in dramatic ways in philanthropy, and it can be hard to keep track of everything that’s going on.

Among those driving the new action are funder affinity groups, which are promoting new philanthropic models that aim to accelerate social change. Working with vanguard foundations, they are pushing for a restructuring of grantmaking to emphasize more movement building and to promote intersectionality—the idea that different forms of discrimination and disadvantage combine, intersect or overlap in many ways.

Most of all, they are focusing on power—how to get, share, use and leverage it—to achieve such goals as a more equitable form of capitalism and dismantling structural racism.

A Just Transition for Philanthropy

One affinity group engaged in this work is Justice Funders, which was founded in California as the Bay Area Justice Funders Network in 2009 and rebranded as a national group in 2018. It organizes much of its current work around a Just Transition for Philanthropy framework that seeks to move foundations from “extractive” practices to “regenerative” approaches and covers everything from philanthropic leadership to endowments, operations, grantmaking and community relations.

Its definition of a “just transition” (a term more commonly used to describe helping fossil-fuel-dependent communities transition to a green economy) includes a critique of capitalism directed at philanthropy. “Like all other forms of wealth in the United States, philanthropic wealth can be directly traced back to industries that relied on economic practices of extraction and exploitation,” writes Executive Director Dana Kawaoka-Chen in a post for the Health and Environmental Funders Network, concluding that philanthropy “has a moral obligation to redistribute this wealth to communities from which it was extracted.”

For Justice Funders, equity is not an end goal but a step on the road to “liberation” from extractive and exploitative systems. Many foundations will find their current practices described as “extractive” or “less extractive” in Justice Funders’ framework. In the final “regenerative” stage, “wealth is redistributed, power is democratized and economic control is shifted to communities.”

The National Committee for Responsive Philanthropy doesn’t go that far, but urges philanthropy to step up its social justice efforts, saying foundations have persistently underfunded marginalized communities. A 2016 NCRP report that analyzed 2003-2013 Foundation Center data found during that 11-year period that grantmaking to underserved communities increased by only 5% despite the 2008 recession, the worst in 70 years, and represented a small fraction of all foundation grants. Funding for social justice strategies such as civic engagement, community organizing and policy change did not increase despite the proliferation of new social justice movements. Moreover, even as community foundations’ assets grew, their share of grants to underserved communities declined.

In 2017, NCRP restructured its staff and launched a new strategic framework to better engage with social movements and advocacy groups and direct more philanthropic resources to them. Its 2018 Power Moves guide helps foundations assess how well they are doing on building, wielding and sharing power and suggests how to improve performance on equity and social justice issues. NCRP has also joined a coalition of affinity groups previously known as the Joint Affinity Groups that has rebranded as Change Philanthropy to focus more on social justice.

New Philanthropic Models

Beyond urging philanthropy to do more, however, the most valuable contribution of these affinity groups may be their efforts to create more impactful 21st-century philanthropic power-sharing and partnership models.

The rise of these new approaches reflects a generational shift in philanthropy. Many new funders have come of age in a world of dynamic networked systems and hail from the tech sector. They want to tackle the root causes of problems and systemic issues, and are more comfortable with the participatory processes, distributed power, social movement-building, and systems change these new models incorporate.

Some of the major characteristics of these new models:

Focus on power. Power, “the ability to direct or influence the behavior of others or the course of events,” is the focal point of these models. The goal is to build the capacity of underserved and marginalized communities—many of them of color or low income—to change systems and policies and counter entrenched interests by helping them acquire and leverage political, economic and cultural power.

Fund nonprofit “ecosystems” rather than issue areas. Foundations tend to focus on one or several issue areas and often operate in program silos. Social justice philanthropy argues that foundations need to adopt more holistic, multi-issue strategies on multiple fronts to successfully address complex problems. They need to support a web of nonprofits operating in social change “ecosystems.” Funders may do this by supporting broad-based community “anchor institutions” that collaborate with or regrant to constellations of smaller nonprofits or community groups. The new models encourage foundations to recognize and strengthen existing nonprofits rather than create new ones.

Prioritize frontline grassroots groups. Institutional philanthropy has often focused on supporting larger Washington-based, brand-name nonprofits that concentrate on federal policy as the best way to achieve impact. The new models posit that building the capacity of frontline grassroots groups working in communities to solve problems is both more equitable and effective. It’s a place-based approach that addresses longstanding complaints in underserved communities that philanthropy overlooks grassroots organizations, particularly those run by people of color, despite their deep local roots. For example, a series of reports about philanthropy in the South produced by NCRP, the Neighborhood Funders Group and Grantmakers for Southern Progress say grassroots leaders in the region are “fusing environmental, economic and racial justice strategies to seek holistic solutions to the challenges their communities face,” but that many funders don’t recognize them because they lack traditional backgrounds and work on a wide range of issues. In this realm, philanthropy is “missing in action,” the reports state.

Let nonprofits run the show. In traditional philanthropy, leading foundations often develop a theory of change, sometimes with the assistance of academics who identify what they believe are the key levers. Then they seek nonprofits to help achieve the desired outcomes. In these instances, nonprofits behave like contractors and program officers like contract supervisors.

The new power-sharing partnership models aim to democratize decision-making and favor long-term general operating support over restricted project funding. Nonprofits tell funders what they need and why they need it to bring about the desired change. General operating support gives nonprofits the option to shift funds from one area to another as they learn what works and what doesn’t and iterate their approaches. It recognizes that social movement building can take a long time and requires flexibility. Ideally, general support grant cycles run as long as eight to 10 years, creating a reliable stream of flexible funding that also reduces the need for special rapid response grants in the face of new developments. As of 2014, however, restricted project support still constituted 80% of all grantmaking and only about 16% of grants were for multi-year support, according to NCRP data.

Align all foundation practices with its mission and values. Every aspect of foundation operations should be consistent with an institution’s stated mission, values and beliefs. The new models expect endowment financial managers not only to disinvest from sectors like the fossil fuel industry or private prisons that run counter to a foundation’s mission, but also to actively invest in institutions that further the mission—like green companies or cooperative revolving loan funds and community development financial institutions. They also urge foundations to spend more than the 5% of their endowment required by tax law, and even to spend down.

Do more advocacy and civic engagement work. Many foundations are skittish about supporting advocacy work, worried it will compromise their tax status. In reality, though, they enjoy considerable freedom to support nonprofits engaged in organizing, civic engagement, policy advocacy and litigation—and funders can also do such work themselves. Community foundations have even more options and may lobby or support lobbying within certain limits. For tax and administrative purposes, the easiest, simplest way for foundations to fund nonprofit advocacy work is to provide general operating support. Social justice affinity groups say foundations have a critical role to play here, but are currently underperforming in this area.

Reassess impact measurements. Philanthropy’s current siloed data collection efforts often fail to recognize the complexity or impact of social movements that work on multiple issues across constituencies, says NCRP’s Vice President and Chief Engagement Officer Jeanné Lewis. As an example, she cites environmental funders who do not consider initiatives by nonprofits led by women of color in the South to be environmental justice work because their activities don’t fit into existing program categories. The new partnership models allow grantees to help decide what metrics to use and what constitutes progress.

Build relationships and feedback loops. These models also focus on building trusting, equitable relationships with communities. Switching to long-term support and devolving more decision-making to grantees frees up foundation staff time for more conversation and exchange with communities. They learn more about local dynamics, and how to devise joint strategies to more effectively support local communities and the foundation’s goals.

New Models in Action

The Boston-based Chorus Foundation, founded by Farhad Ebrahimi, an MIT graduate with degrees in mathematics and computer science, has worked with a variety of affinity groups including Justice Funders and NCRP, and does its grantmaking according to “just transition” principles.

When Ebrahimi started Chorus in 2006, his issue was climate change. But after almost a decade funding climate work, he became disenchanted. He thought climate philanthropy got mixed results at best and felt funders often ignored the concerns of communities that depend on extractive industries for their livelihoods. “A clean energy transition is not necessarily a just one,” he wrote in a recent post for NCRP. “If you’re getting thrown under the bus, it doesn’t really matter if it’s solar-powered.”

Chorus now supports social change nonprofit “ecosystems” in four geographic areas—Alaska; Buffalo, New York; Richmond, California, and eastern Kentucky. It has committed to providing a minimum of $500,000 a year in support to each of these communities for at least eight years. In eastern Kentucky, it has committed $1 million a year for 10 years.

Ebrahimi doesn’t consider Chorus to be a climate funder anymore. It has become a grantmaker that uses “just transition” strategies to connect climate action to a host of other issues. It pushes for long-term systemic change that includes strengthening democracy and economic development.

In eastern Kentucky coal country, Chorus’ funding includes long-term general operating support for two regional “anchor institutions”: Kentuckians For The Commonwealth (KFTC), a statewide organization focused on a fair economy, the environment and democracy, and the Mountain Association for Community Economic Development (MACED) a nonprofit that works with businesses and communities in eastern Kentucky to advance a “just transition” in Central Appalachia. MACED’s programming includes offering loans and technical assistance to entrepreneurs who may not qualify for traditional financing, helping businesses become more energy-efficient, and supporting “entrepreneurial ecosystems” that teach rural Kentuckians how to become Airbnb hosts.

Chorus’ support also includes provisions for annual grantmaking to other, smaller organizations. Some of these funds have gone to citizen law centers, community farm alliances and student environmental coalitions.

It’s a strategy that creates a broad base for community action, even when politicians refuse to act. In recent years, the state’s Democratic and Republican political leaders have opposed the Environmental Protection Agency’s Clean Power Plan to reduce greenhouse gas emissions, portraying it as an economic disaster for Kentucky. State legislators also introduced a bill to block the state from enforcing federal regulations for fossil fuel power plants.

KFTC responded by hosting a series of “community conversation” dinners in all six Kentucky congressional districts to discuss a just transition to a clean energy future. They asked participants to tell them what they needed to benefit from such a transition and drafted a report with the results, creating a campaign called Empower Kentucky.

Even if Kentucky’s legislature isn’t interested, Empower Kentucky has created a community-generated, solutions-oriented plan for the state’s energy future that has changed the public conversation, built momentum and public support, and laid the groundwork for further action.

These nonprofit ecosystems can also act quickly in a crisis. Justice Funders helped coordinate a regional entity of more than 30 frontline grassroots organizations in the Bay Area to advance issues of concern to low-income communities. During the summer of 2018, when wildfire smoke caused air quality to deteriorate and created a public health hazard, local officials could not meet the demand for recommended face masks. Within a week, organizations in the network distributed over 77,000 face masks to residents, outstripping municipal efforts.

A New Role for Affinity Groups

While funder affinity groups have led the way in promoting new models of philanthropy, there are growing questions about how these entities themselves operate. The first affinity groups emerged more than three decades ago, and several hundred such groups now work to organize funders around issues, identity or geography. But Justice Funders’ Kawaoka-Chen believes the current affinity group model is insular and outdated, and needs to evolve to achieve deeper impact, along with the rest of the sector.

Sidney Hargro, president of Philanthropy Network Greater Philadelphia, agrees. A polymath with advanced degrees in both mechanical engineering and theology, he has been a community organizer, nonprofit leader and university lecturer, and is former head of the Community Foundation of South Jersey. He has spearheaded an equity cohort initiative at Philanthropy Network to help members translate values of equity, diversity and inclusion into all of their institutional practices.

Hargro believes it is time for affinity groups to move from a purely membership-services model to more actively promote equity-centered philanthropy. A first step, he says, is to open their conferences to nonprofits. “If we say we want a new relationship with these nonprofits and then close the doors of our conferences to them, it means we don’t really believe that.” Letting nonprofits in “creates an environment that lives out the principles we talk about all the time.”

The next step, he says, is to allow nonprofits to become affinity group members and to build connections between funders and nonprofits outside of fraught funder/grant seeker contact points.

Philanthropic affinity groups have proliferated in recent years. A foundation may belong to 15 or more such groups, and there is a limit to funders’ capacity to absorb all the trainings, workshops, convenings and reports these groups produce. Those that survive and thrive may be the ones that help forge new paths for 21st century philanthropy.

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Louise Lief is a consultant to philanthropy, media, and nonprofits, focusing on civic engagement and collaborative approaches. She is a former public policy scholar at the Wilson Center, former Scholar-in-Residence at American University School of Communication Investigative Reporting Workshop, and former deputy director of the International Reporting Project at the Johns Hopkins University School of Advanced International Studies (SAIS).

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