Last month, SCG convened its family philanthropy network for an encore program of our summer virtual town hall encore program. Led by Shawn Escoffery, Executive Director, Roy & Patricia Disney Family Foundation, and Farhad Ebrahimi, Founder & President, The Chorus Foundation, Putting Your Assets to Work: Using the Power of the Next Generation, focused on helping funders respond to the pressures of our continuing crises while navigating the changing dynamics of family philanthropy.
With next-gen funders soon to take the reins of family foundations, our speakers encouraged family members to begin familiarizing themselves with the diversity of ideas and perspectives circulating throughout the next-gen arm of philanthropy. In particular, they urged funders to more deeply in conversations around race, capitalism, wealth distribution, social movements, and other ideas gaining traction in our sector.
To help SCG family members navigate these emerging perspectives, we would like to elevate our speakers' critical recommendations for family foundation members interested in challenging the status quo and reimagining traditional family practices. Please note: the following suggestions provide a broad overview of our speakers' conversations. We encourage you to watch the recording above for the full discussion.
Reframe & Embrace Risk
Our speakers asserted that the most significant risk the philanthropic sector can take right now is not funding equity work. Some organizations are reluctant to move resources in the direction of communities most impacted by systemic oppression. This hesitation is directly tied to notions of power and can have dire consequences on our sector’s recovery work. Funders should consider taking risks in the social change context just as they do in the business sector. The truth is that systems change will never be clear-cut and straightforward; if the crises of 2020 have demonstrated anything, it’s that nonprofits need to be ready to adapt to the evolving realities at a moment's notice. Reframing risk requires funders to move away from a deficit lens and toward a positive and generative framework. Funders should allow the work to change and evolve in ways that might go against their expectations. After all, foundations have the power and privilege to manage risks while minimizing the repercussions felt by their grantees.
Interrogate Implicit Biases
This year’s racial justice awakening pushed funders to reconsider how they could move beyond their pre-pandemic diversity and inclusion efforts and adopt intentional racial justice frameworks into their foundation’s efforts. A place funders can start is by looking inward and identifying any long-standing beliefs and practices that uphold white-dominant culture. One example of this is recognizing the implicit bias present in funding only well-resourced, white-led nonprofits that can speak the language of philanthropy. Some funders have recently begun to search for Black, Indigenous, and other people of color-led organizations to fund to address this issue. However, more often than not, funders search for BIPOC organizations similar to the grantees they are used to funding — those who can speak the language of philanthropy and uphold the same norms. In other words, funders continue to look for organizations that operate in ways that they believe are effective instead of funding efforts that depart from the status quo. Our sector should continue to interrogate the power dynamics inherent in the project of philanthropy and root out all the ways they manifest in their biases.
Keep the Momentum Going
This year, philanthropy made many bold and decisive decisions in response to the global pandemic and racial justice demands. Our sector activated and responded with rapid renewals, general operating support, and reduced reporting tactics to address unprecedented crises. However, while this year’s events have been exceptional, it is crucial to recognize that the root causes have always been present because they are systemic. For this reason, philanthropy should sustain the strategies and adjustments it made this year, even after this moment of crisis. Philanthropy has an opportunity to continue funding folks who are closer to the realities of what’s happening instead of going back to their usual suspects and traditional modes of operating. Philanthropy can continue to allocate resources differently, especially as we look toward the looming economic recession. Some funders are already beginning to pull back from their momentary flood of funding under the justification that markets are not doing well. In the months ahead, more funders will likely use the recession as a reason to shut down long-standing programs and end funds right when organizations will need them the most. Our sector cannot lose this year’s momentum, especially with many funders activated around systematic change.
Let Go of the Steering Wheel
It’s time to democratize decision-making and diffuse the power dynamics in philanthropy. Funders should prioritize getting to know the communities they are working with and building open, honest, and vulnerable relationships. It is vital to sit down with community leaders and members and discuss what partnership means to them. How can the relationship be mutually beneficial? Listen deeply and often. This trust-based approach encourages philanthropy to let go of the steering wheel and allows folks who are the closest to the problems to lead the solutions. Funders can help community leaders unlock their power by supporting their vision for a new world and assisting them in setting determinations around policy and infrastructure.
Practice Thoughtful Experimentation
Communities should never feel like funders are experimenting on them. Any new ideas or approaches should always be co-designed with community leaders and organizations instead of randomly imposing the latest trends onto their grantees. Funders should engage in sustained conversations to learn about what grantees are interested in and how they are willing to experiment. Community leaders are already thinking about new ways to address pressing issues or reimagine the grantee/funder relationship. As mentioned earlier, philanthropy should lean into trust and democratize decision-making to design alternative structures and approaches with their grantees.
Foster Community-Led Development
How can funders support the kind of infrastructure that can outlive the foundation? Providing grantees with multi-year funding is a step in the right direction. Still, there will be an inevitable funding gap when the grant is gone, especially if a foundation has decided to spend down and sunset. While funders can help grantees access other funder networks, this also fosters dependency on the philanthropic community. An alternative option is for funders to help grantees initiate community-led economic development efforts and enterprises. These efforts include community loan funds, financial cooperatives, establishing grassroots intermediaries for resource allocation, small businesses worker cooperatives, and other wealth preservation strategies. By helping communities change how their economy works, funders can support grantees in building the infrastructure needed to not depend on outside resources and private philanthropy.
Should foundations be designed to exist in perpetuity? It’s useful to question the fundamental nature of how philanthropic institutions operate to answer that question. Most often, foundations are focused on generating wealth by optimizing the performance of their endowments. Maintaining a healthy endowment usually entails giving at the minimum payout rate, while 95% of a foundation’s wealth remains untouched. As our communities continue to be devastated by crises and systemic injustice, it is necessary to pose another question: is philanthropy one of the systems that need to be changed? At the moment, foundations are a financial institution that supports social change work as long as it benefits their investment portfolio. If funders want to genuinely address systemic issues such as housing, policing, and mass incarceration, it will require our sector to transform our resourcing system. Foundations have an opportunity to become mission-driven organizations that will support systems change work even if it risks diminishing their endowment and their lifespan.