More than half a century after it served as a safe haven for striking sanitation workers, the Clayborn Temple in Memphis remains a central meeting place for civil-rights activists. Just as protesters congregated in the church’s plaza with their iconic “I Am a Man” signs in 1968, demonstrators in support of the Black Lives Matter movement and raising the minimum wage gathered at the doorstep of the temple over the past year.
“This building has become a place where people go when they want something better for themselves and their people,” says Anasa Troutman, the temple’s chief executive.
But the building is in a sorry state. It’s ceilings are crumbling, and its stained-glass windows have lost their luster.
To rebuild, Troutman imagines more than just putting new plaster on the walls and reinforcing the church’s foundation. With grant money from the Kataly Foundation, which has committed more than $2 million in support, she’d like to transform the temple into a community-run institution that preaches the gospel of cooperative ownership and equity based on race and class.
The Clayborn project is a signature example of “restorative economics,” an approach developed by Nwamaka Agbo, Kataly’s chief executive. Using both grants and investments, the idea is to provide capital to groups in areas that have been shut out of the economic mainstream and then make sure any investment returns stay in those neighborhoods. That often means building relationships with smaller organizations led by Black and Indigenous people and other people of color who haven’t received much philanthropic support and providing grant dollars to leaders with a vision.
Spending Nearly Half a Billion Dollars
Kataly, created two years ago with $445 million from heirs to the Hyatt hotel empire, is looking to break away from the traditional mold of foundation giving. The grant maker decided from the get-go that it would spend itself out of business, which it will do in the next decade or so rather than using investment returns to build an everlasting endowment. Grant-making decisions rest with the staff and, to an increasing extent, local leaders who have been overlooked by banks and other traditional sources of investment.
While other foundations have included these approaches in their grant making, Kataly is unique because it is among the largest foundations to embark from its very beginning on spending down all of its assets while also building a new style of philanthropy from scratch.
At the end of the day, the family board of a closely held foundation is totally untouchable and accountable to no one.
Agbo believes the approach can help repair centuries of racism in America that have taken wealth out of Black communities.
“We’re helping to create mechanisms for shared prosperity as opposed to helping a private developer who gets all the returns,” she says. “If we don’t build the capacity of those communities that have been locked out of systems and institutions to be able to engage in conversation, we’ll likely have the same wealthy white individuals leading those conversations going forward.”
At Clayborn, Troutman envisions a community-owned building and educational center people in the neighborhood can point to and say, “That is mine.”
To start, Clayborn is hosting six months of training on community ownership and cooperative finance. And for a smaller scale test of the model, Troutman plans to take “Union: The Musical,” a performance based on the sanitation workers’ strike, on the road post-pandemic. The musical is community-owned. Nearly all of the singers and musicians are from Memphis. The cast and crew share in the musical’s profits, as do the children and grandchildren of the original Memphis sanitation strikers, Troutman says.
“We want for the folks whose story it is to actually own the story,” she says.
Relinquishing Control
Kataly, a name derived from “catalyst,” was formed in 2018 by Regan Pritzker, a member of one of the wealthiest families in America, with a fortune built primarily through the Hyatt hotel chain, as well as large holdings in Braniff Airways, Ticketmaster, and the Royal Caribbean International cruise line. Pritzker had some clear ideas of what she didn’t want to accomplish. She didn’t want to perpetuate what she saw as the top-heavy approach of much of philanthropy, with rich trustees investing the bulk of their wealth in an endowment and dictating to grantees exactly how to use the small amount they parcel out each year.
Instead, the goal at Kataly is to relinquish control over the money in the endowment as quickly as possible and in a way that ensures that grants and investments help grantees and the people they serve build both wealth and power. The money she received from her family was the result of “extractive” capitalism, she says, something she wanted to reverse.
“We are the beneficiaries of a racial capitalist system that doesn’t quantify the impact to people and planet,” she says. “And so when I think about how I want to move resources, it’s to center those who have been most intentionally harmed by that system and get them a seat at the table.”
The foundation has three main areas of interest. Pritzker supports efforts to build community-owned assets through its Restorative Economies Fund. Its Environmental Justice Resourcing Collective supports social and environmental justice activists, and its Mindfulness and Healing Justice program supports retreats, teacher training, and mindfulness trainings that stress the relationship between racial justice and spiritual growth.
While the broad outlines are clear, Pritzker, Agbo and other leaders at Kataly are still determining how they will get their work done. The foundation doesn’t have a set date to sunset, but it will likely be about 2030. The actual plan will be developed “in conversation” with grantees and will account for their needs, Pritzker says.
The foundation is also in the process of deciding the role of the board, staff, and grantees in decision making. Grants in the Environmental Justice Resourcing Collaborative are made by a panel of eight activists, a model that may be replicated throughout the foundation’s grant making. While the board is actively involved in learning about the grants the foundation makes, most grant-making decisions are made by Agbo based on staff recommendations; many foundation CEOs have just a small discretionary grant-making budget.
Instead of Agbo and her staff preparing a docket of possible grants to make each quarter for board approval, the board places money in a donor-advised-fund account. Agbo is named the adviser to the account, meaning in practical terms that she controls the foundation’s grant making.
By using a donor-advised fund, Kataly was able to bypass a lot of the administrative work necessary for setting up grant processing and get money to nonprofits quickly after the foundation was formed. While Pritzker and her husband, Chris Olin, who is a Kataly trustee, acknowledge that oftentimes foundation boards simply rubber-stamp grant dockets, that model isn’t consistent with Kataly’s drive to devolve real power away from the sources of wealth behind the funding. The foundation says it will include information on grants made through the accounts as attachments to their Internal Revenue Service filings, and will post individual grant amounts on its website when grantees have given permission.
The use of a donor-advised fund, like much of the grant making at Kataly, is an experiment — a place holder for a type of philanthropy its founders are still planning. For instance, the foundation is still codifying how the board will function and how it will incorporate feedback from grantees. Olin says he’d like the board to be accountable so Kataly’s actions match its founders’ words.
“If the grantees aren’t happy with a private family foundation, they can gripe, or they can post something on social media. If the staff aren’t happy, they can quit,” he says. “At the end of the day, the family board of a closely held foundation is totally untouchable and accountable to no one.”
Tested Amid the Pandemic
The crisis brought on by the Covid-19 pandemic allowed nonprofits to determine if attempts to forge a new, trusting, relationship with their donors was just empty rhetoric, says Nia Evans, executive director of the Boston Ujima Project, a Kataly grantee. As the nation endured lockdowns and business activity froze under Covid-19’s grip, the project, which links nontraditional investors to business projects vetted by a community governing board, stopped doing due diligence on projects in its pipeline, putting new loans on hold.
Some foundations’ first response to that news, Evans says, was to ask whether the Boston Ujima Project’s loan repayments were still going to hit projections. Kataly’s first impulse wasn’t to see whether cash flow was going to be interrupted, Evans says. Instead, the foundation appreciated that she took a pause and asked her what she needed, Evans says. The foundation, which provided Boston Ujima Project $150,000 in 2019, gave the project the $150,000 early that it had previously committed for 2020 and also provided $20,000 in an additional rapid-response grant.
Kataly’s response deferred to the viewpoints of local residents and activists, the people Evans says are the true experts on how citywide economies have been impacted by systemic racism.
Over decades, banks have given white men a “presumed competence” in financial matters, offering them a basic level of trust that Black people have not been afforded, Evans says. By opening up the Boston Ujima Project’s investment fund to investors who are not accredited by the Securities and Exchange Commission, meaning those with less wealth, Evans is attempting to extend trust to people who have been overlooked by the banking system. The model further veers from traditional financial governance by putting a committee of local residents in charge of investment decisions.
The dominant philanthropic approaches to rectify the lack of ownership of businesses and property among Black entrepreneurs have been investments in affordable housing and financial-literacy efforts. Both fall short, Evans says. Affordable-housing projects do little to keep wealth in the neighborhoods surrounding a new apartment or condo building, she says, and teaching people how to budget has a negligible affect when pitted against business practices and societal attitudes that have widened the racial wealth gap in America.
To support that work, it takes a foundation like Kataly with a much greater appetite for risk than a typical grant maker, Evans says.
“We came out the gate saying we just need a new system,” she says. “That’s a much different proposition.”
Redistributing Wealth
While Kataly’s approach runs counter to much of philanthropy, Pritzker doesn’t see herself as a pioneer. She runs through a list of philanthropic mentors: Farhad Ebrahimi, the founder of the Chorus Foundation; Sonja Swift, program adviser at the Swift Foundation; and Marnie Thompson, co-managing director for the Fund for Democratic Communities. Other foundations contribute to projects in Kataly’s portfolio, such as the Oak Foundation, which provided early grants to the Boston Ujima Project. And other grant makers have participated in training programs offered by Justice Funders to use philanthropy to transfer wealth and power.
To Pritzker, Kataly is a logical extension of the grant-making approach of the Libra Foundation, a grant maker she and her family started in 2002. (Regan chairs Libra’s board, and her mother, Susan, serves on Kataly’s board.) During the pandemic, Libra has aggressively increased its payout. Last year it turned to a team of women of color to help it decide where to make grants from a $36 million Democracy Frontlines Fund, which is led by Libra with contributions from other grant makers.
Kataly is just one appendage of the Pritzker family’s philanthropy. Regan Pritzker says she admires some of the approaches to philanthropy her cousins have taken, but there are differences among family members regarding politics and philanthropic priorities. The descendants of Jay Pritzker do not formally coordinate on how to spend the more than $15 billion left to them after his death in 1999.
For Pritzker, the endgame is a style of philanthropy driven by the redistribution of wealth.
“We’d really like to hospice philanthropy to a more just and equitable system where you might not need philanthropy in the way we’ve previously conceived of it,” she says. “I’m interested in using philanthropy as a vehicle to build power outside of philanthropy.”
