The Rockefeller Brothers Fund announced Monday that it will increase its grant-making budget by $48 million over five years, including $10 million for a new program focusing on racial justice.
The remaining $38 million includes $18 million for the foundation’s democratic practice program and $10 million for its climate-change mitigation efforts, plus a $10 million “insurance policy” against possible dips in the fund’s endowment that could put future grant-making budgets at risk, according to Stephen Heintz, the foundation’s president.
The $48 million is intended to help current grantees weather the Covid-19 crisis while expanding the foundation’s footprint to join the new national focus on addressing racism in American society.
The decision to increase grant making came at a regularly scheduled board meeting in mid-June, as protesters across the country took to the streets in response to the police killing of George Floyd in Minneapolis and racial injustice more broadly. Valerie Rockefeller, chair of the Rockefeller Brothers Fund’s Board of Trustees, says the vote was unanimous.
The goals of the new racial-justice program still need to be developed, but Rockefeller says much of the work will stem from the foundation’s democracy practice.
“We’ve worked on voting-rights and civic-participation issues for a long time, and therefore we are well positioned to put more money in these areas,” she says. “We’re saying more specifically that this is about white privilege and inherent racism that has to be very explicitly addressed to realize the potential of democracy.”
While the new program will build on work Rockefeller is already doing, Heintz said the foundation will seek out new grantees in areas it has not supported in the past, such as pushing for changes in policing and prison policy.
Of the $18 million in additional support for democracy, $2 million will go toward efforts designed to impact the current election cycle, such as voter registration and mobilization, assisting local election officials run polling sites, and working to achieve an accurate vote count.
The grant increase in democracy will also go to support longer-term goals spelled out in a report from the American Academy of Arts and Sciences Commission on the Practice of Democratic Citizenship, which Heintz co-chairs. They include changing campaign-finance rules, adopting policies such as ranked-choice voting, putting time limits on Supreme Court appointments, and making voting a requirement of citizenship.
Addressing Inadequacies
Heintz says the increased funding comes because the world is in a “hinge moment” as a result of the pandemic, which has exposed inadequacies in international governance and the response to climate change.
“Our systems of global problem solving are proving quite anachronistic to the kinds of challenges we’re facing in this century,” he says. “Are we going to go back to the old ways of doing things, or are we going to realize that these systems are failing us and reimagine them for the future? And that’s where we really want to devote a lot of these resources: to the re-imagination, the new thinking, the new concepts, the new leaders, the new ideas and new policies.”
The increased grant-making commitment will result in a $46 million grant budget this year, an increase of $7 million. Heintz predicted the increase would mean Rockefeller Brothers would pay out 5.6 percent to $6.6 percent of its assets each of the next three years, depending on the returns generated by its endowment.
The Rockefeller Brothers Fund’s assets have notched a 5.25 percent decline this year and stood at $1.18 billion as of April 30.
Since the pandemic began, calls have increased for foundations to exceed the federal payout requirement of 5 percent of their assets each year. A group of foundation leaders and donors wrote Congress asking that the requirement double for two years to respond to the pandemic, and this month the Doris Duke Charitable Trust, Ford, Kellogg, MacArthur, and Mellon foundations announced sharp increases in grants. Ford, for instance, issued $1 billion in debt so it could increase its payout rate to 10 percent.
Heintz says he’s sympathetic to calls to dig more deeply into the endowment. But he favors what he calls a “diversity of philanthropic models,” where some foundations are time-limited and some strive to operate for decades to come.
Existing in perpetuity allows future generations to respond to crises that can’t be anticipated right now, Heintz said.
“It’s a real balancing act of wanting to do more, wanting to have impact now, and still maintaining the capacity to continue to have impact for decades to come,” he said.
Rockefeller says the board will be getting together for an unofficial meeting in the next couple of weeks to discuss the possibility of increasing payout even more.
That meeting, Heintz says, could “refresh the conversation about perpetuity” and allow board members to discuss whether perpetuity is still the right policy.
Says Heintz: “My expectation is that the board will conclude that it is, but there are a number of people on the board who think it’s worth talking about again.”
