Big Change Requires Bold Funding: Why We're Upping Our Annual Grantee Payout to 11%

“It is our duty to fight for our freedom. It is our duty to win. We must love each other and support each other. We have nothing to lose but our chains.” — Assata Shakur, “Assata: An Autobiography”

In June last year, the U.S. Supreme Court overturned Roe v. Wade, threatening bodily autonomy and medical privacy for women and female-bodied and trans people. In June this year, the Supreme Court struck down race-conscious affirmative action policies at Harvard University and the University of North Carolina, which will have reverberating impacts on college-bound Black, Latino/x, and Native American students and other under-represented groups at colleges across the country, and perhaps even workplaces eventually. State legislatures across the country are banning books and school curricula exploring race, racism, colonialism, misogyny and non-heteronormative sexuality. Last month, in which we commemorated Pride and Juneteenth, wasn’t as celebratory amid these vicious attacks on equity and justice.

The slow pace of social change on urgent problems, both locally and nationally, is exasperating. Unfortunately, our philanthropic sector, notorious for hoarding and restricting resources, is partly to blame.

Although the federally mandated 5% payout for private foundations is a floor, most treat it as a ceiling. They have a reductive view of “fiduciary responsibility” that prioritizes growing and maximizing the future value of their endowments, instead of increasing investments in urgent organizing and advocacy for racial, economic and social justice. Most liberal and progressive foundations have missions that align with the vision of grantee partners on paper, but foundations’ actual financial practices do not align nearly as well. In fact, those practices are often cul-de-sacs and roadblocks to the progress grantee partners work tirelessly to achieve. But just as our sector is a significant part of the problem, it can be a collaborative partner in seeking solutions.

I serve as board chair of Woods Fund Chicago, a grantmaker promoting racial, economic and social justice by supporting the community organizing, coalition-building and public policy advocacy of grantee partners activating the most impacted people. In 2022, the board began reevaluating our overall investment strategy to better align it with the foundation’s mission and the values of our grantee partners. We asked ourselves: Should we look at ways to utilize our corpus beyond what we have done? How can we better support the organizing and advocacy ecosystem? Who said we must choose between perpetuity or sunsetting, and why are we clinging to this false dichotomy? What other possibilities should we be exploring?

After serious deliberation, the Woods Fund board decided to increase our collective payout from 8.5% to 11% to help our grantee partners combat well-coordinated attacks on the legislative victories they fought an uphill battle to achieve. We knew that now was not the time to play it safe. I’m grateful to my fellow board members for their courage to ask tough questions and take swift collective action. Our decision has pushed us that much closer to being the “bold grantmaker” we profess and aspire to be in our mission statement.

The truth is that big change requires bold funding. It’s not enough for us as foundation leaders to content ourselves with warm and fuzzy mission statements and pat ourselves on the back after each grant cycle. The time is over for economic austerity and growing endowments while restricting or decreasing funding to grantee partners working on the front lines. We must be willing to examine and change our funding approaches and practices, and, in solidarity with grantee partners, open our eyes to the urgency of the times.

So I challenge my fellow board chairs in philanthropy to ask themselves and their boards: What does our fiduciary responsibility even mean, and what should it mean, given the attacks on racial, economic, gender and social justice in our country? To whom are we responsible, and at whose gain and whose expense? What more could we be doing to strengthen our support of grantee partners? Name it, own it, then go do it.

The Woods Fund board and staff stand in solidarity with our grantee partners on this path — a path we invite foundation peers to join us on. Although the decision to increase our collective payout is not a silver bullet, it is a significant step in the right direction. Investing in organizing, advocacy and coalition-building on racial and economic justice reflects our ethical and fiduciary responsibility.

Woods Fund Chicago will continue fortifying our fidelity to grantee partners and the communities they serve without apology. We owe them nothing less, and the times we’re in demand it.

L. Anton Seals is Board Chair of Woods Fund Chicago, Lead Steward (Executive Director) at Grow Greater Englewood, and a community organizer.

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