As the coronavirus started to spread, a group of grant makers led by the Ford Foundation circulated a pledge that read like a wish list for grantees focused on equity and social justice. The foundations declared they temporarily would provide general operating support, waive certain paperwork requirements, and throw support behind community organizations in areas that were hardest hit.
Within two weeks, more than 500 other foundations from every corner of philanthropy responded. Large established philanthropies like the W.K. Kellogg Foundation and Omidyar Network, community foundations from Maine to Iowa to Oregon, and family foundations including the Lawrence Welk and the Sawyers family foundations signed up.
In the pledge, proponents of equity grant making see an opportunity but not a complete answer. For a response to truly incorporate an equity approach, proponents say, it must both prioritize changes in public policy and shift more control over foundation endowments to groups that work directly with those in need. A racial-equity focus must specifically address whether certain populations are harder hit by the coronavirus and seek a remedy to the disparity.
Equity as a Guide
Equity grant making involves delving into the historical norms and current policies that dictate why groups of people, whether they are African Americans, immigrants, women, or people with disabilities, don’t have as much chance to succeed as the broader population. Using equity as their guide, foundations look to lessen those disparities.
Proponents say that multiyear general operating grants and reduced bureaucratic requirements for grantees would help achieve those goals. While the pledge could help nonprofits across the board, specific attention should be paid to groups that need the most help, say social-justice proponents.
Tonya Allen, president of the Skillman Foundation in Detroit, took part in the early discussions that led to the pledge. While she says it goes a long way in addressing the power imbalance between foundations and the grantees they support, it is not an equity document.
General operating support grants are great, she says, but a strategy based on equity needs to pay specific attention to public-policy advocacy.
“We need to go beyond,” she says. “We need to use this moment to investigate our public policies so we don’t have such big gaps and that we’re not relying on philanthropy to address them. It’s about changing the rules so these stubborn differences won’t exist, not just giving resources temporarily to alleviate them.”
The pledge does have a plank that addresses public policy, specifically pushing for expanded paid sick leave, increased rental assistance, greater access to affordable health care. However, the advocacy language in the pledge is more of a suggestion than a requirement: Participating foundations will support groups that press for changing the law “as appropriate.”
The pledge is welcome, says Lori Villarosa, executive director of the Philanthropic Initiative for Racial Equity, because it can pressure foundations to ask questions that some might have brushed past: Who is being denied a coronavirus test, or who is hurt most when schools are closed?
As welcome as emergency support is, Villarosa believes that longer-term strategies, including community organizing, legal strategies, and advocacy, shouldn’t be sacrificed. Philanthropy, she says, needs to use a time of crisis to help underrepresented communities build power and ensure they don’t bear the brunt of the next catastrophe.
“This can very well be the moment for greater transformation,” she says.
Time for Extraordinary Things
James Head is president of the East Bay Community Foundation, one of the grant makers that signed the pledge. He recently took $1 million from the foundation’s endowment to create a fund to support Oakland-area residents who have been hit economically by the pandemic, particularly people of color who worked in the hospitality industry but lost their jobs, people who have lost access to social services, and people who are seeing smaller paychecks because they’ve had to take time off from work to care for children.
The decision to dig into the foundation’s endowment was easy, Head says: “These are times when you do extraordinary things.”
While the pledge laid out some important steps for foundations that want to focus on equity, Head said foundations need to be more clear about their intentions.
“We in philanthropy need to be more specific about the need for equity,” he says. “It’s about race. It’s definitely about gender. It involves sexual orientation, and it is necessary to spell out that way,” he says.
Back to Business as Usual?
The scramble to throw grantees a lifeline highlights the gap between nonprofits that struggle day to day — pandemic or no pandemic — and foundations that have the power to declare “Emergency!” says Susan Taylor Batten, president of ABFE, which was founded in 1971 as the Association of Black Foundation Executives.
What remains to be seen, Batten says, is whether the adjustments to grant-making policy will last.
“I hope that what’s happening now will be further evidence that foundations can change, that grant-making institutions can do business differently and bend the rules,” she says. “But experience suggests that often the sector just bounces back to business as usual.”
Batten and others would like to see foundations direct more of their wealth into permanent funds that are controlled by groups of nonprofits, that could be based on geography or on certain issues like housing. That way when a crisis hits, there will be funds at the ready for nonprofits dealing directly with groups of people who are threatened the most.
“There are certain populations that are going to be disproportionately hit harder,” she says. “We’ve got to move beyond core operating support. Part of the vision has got to be about endowing nonprofit organizations.”
More Money Needed
Unless foundations make a concerted effort to send out more money, the continued existence of fragile networks of groups promoting equity — particularly racial equity — is in jeopardy, according to Claire Knowlton, director of consulting at the Nonprofit Finance Fund.
The danger is even more acute as a plunging stock market eviscerates foundation investments.
“It will take really intentional work to safeguard the small gains that have been made,” she says. “The cycles of contraction start by cutting out people of color.”
As part of a $75 million effort to shore up the finances of New York nonprofits, the fund is providing $25 million in no-interest loans to help nonprofits stay in business. The next steps, she says, are to push to make the relaxed grant-making standards in the recently circulated pledge permanent in as many foundations as possible and to encourage foundations to cut into their endowments and spend more even when there isn’t a crisis.
“We have a huge amount of wealth that is not accessible to the community,” she said. “It’s sitting in the corpuses of foundations. We need to move away from a handful of people holding control of all the money.”
At the Skillman Foundation, Allen has allowed current project grants to be used for general support, and next quarter all grants can be used at a grantee’s discretion. A lot of project-related grants, she says, serve to advance equity in Detroit’s schools. Making permanent changes, or eating into the endowment to put out more grants, isn’t out of the question, Allen says, but it’s too early to take long-term action that could jeopardize future grant making.
“There are too many unknowns for us to be grappling with that question,” she says. “Right now we’re trying to be as flexible as possible. We’re making decisions quarter by quarter.”
