Last week, we learned that MacKenzie Scott has sent more than $12 billion in unrestricted gifts to 1,257 organizations in the past two years.
Among her beneficiaries were a significant number of donations to racial-justice organizations led by people of color — nonprofits that research has shown are too often left out of the grant-making process.
Scott’s distribution of resources without restrictions shed the old rules of philanthropy and raised the bar for how high-net-worth donors and foundations should give to organizations.
As the president and board chair of Race Forward, we are proud and grateful to represent a Scott grantee. Founded in 1981, Race Forward catalyzes the racial-justice movement by working with organizers, community groups, and government agencies to advance racial equity and build a multiracial democracy that serves all of us.
But as much as these types of large donations can help, they are also distorting movements for social change.
Large capital infusions create new centers of gravity. They often warp the movements they seek to shore up because they interrupt the dynamics between large and small organizations and create perceptions that organizations that receive huge gifts have achieved newfound sustainability. Already, officials at large foundations are questioning whether Scott grant recipients need their continuing support — as if one major donation is enough to create true multiyear sustainability, let alone make up for decades of underinvestment.
If the ultrawealthy want to truly change the game, they need to think both bigger and smaller.
Smaller by ensuring that resources make their way to the grassroots organizations that are both the avant-garde and the heart of the racial-justice movement.
And bigger by funding to create real sustainability through self-perpetuating endowments. These funds would be a form of philanthropic reparations that could become the real game changer, providing steady streams of investment income to fuel the racial-justice movement and representing a true transfer of power. If the white-led Aspen Institute (and other such storied nonprofits) can have the security of a nine-digit endowment to “help solve the greatest challenges of our time,” why shouldn’t the organizations undoing the great challenge of racial inequity have the same ability to plan for the long term?
Generations of Underinvestment
Even with the new wave of interest and giving, philanthropy is not immune to the systemic racism that prevents the United States from a true reckoning. Black leaders and the people their organizations serve continue to experience the fragility brought on by generations of underinvestment.
After analyzing just three years’ worth of grant making by community foundations from 2016 to 2018, the National Committee for Responsive Philanthropy found a $2 billion gap in support for nonprofits that focus their work on advancing Black Americans. Another report by Bridgespan Group and Echoing Green found that the average unrestricted net assets for Black-led, early-stage nonprofits are 76 percent lower than those of white-led nonprofits.
When large donations like Scott’s are made, the majority of recipients are primarily national groups or those with a high profile like Race Forward. We received $12 million, the size of our annual budget at the time Scott’s gift arrived. We’re sending $2 million of that gift to grassroots organizations and using one-quarter of it to take advantage of strategic opportunities that have emerged in this moment. The rest will go to develop the long-term sustainability of the organization.
Organizations like ours are easier for donors to find and evaluate than small, community-led ones. Indeed, many Scott grant recipients were surprised by their grants because the process was highly confidential, held among just a small group of advisers until they were announced.
A great surprise for the recipients, but where does this leave the universe of small, local grassroots organizations that go overlooked? These organizations are composed of the very people who experience injustices every day. They are embedded in the communities they serve and derive their effectiveness and power by drawing on the strength and leadership of those communities, rather than networks of power and national influence that can attract the attention of billionaire philanthropists. Yet, the very selection processes, especially when a grant maker takes a nonpublic “team of advisers” approach, often leave those most connected to the issues by the wayside.
Year after year, philanthropists have failed to trust organizations led by people of color to receive the money needed to create a more inclusive economy, representative democracy, or equitable society. The unexamined structures and practices of our institutions have created these vulnerabilities, resulting in organizations trying to survive from year to year by begging for crumbs.
Grassroots Groups Are Essential
As large, national racial-justice organizations know, our success depends upon the strength of grassroots partners and allies. We understand that, for movements to have impact, they must be grounded in the experiences and analysis of those closest to the pain.
Unfortunately, national grant makers exacerbate the imbalance of power within movements, disrupt the strength of this interdependence, and undermine the resilience and impact of their work.
One example is Nollie’s Family Center in Holmes County, Mississippi, whose local work fighting punitive school discipline and corporal punishment has put the organization at the center of national advocacy efforts to end corporal punishment in schools.
Yet the organization struggles every year to make ends meet on an annual budget that rarely exceeds $250,000. Local grant makers won’t support this work, so Nollie’s relies on national grant makers who come and go. An endowment, providing sustained funding from year to year, would be a game changer for such an organization.
Supporting groups like Nollie’s, as does the Hazen Foundation, which Lori chairs, is an acknowledgment of the essential role that these organizations play in structural transformation. We understand that our work would be impossible without these local partners and allies. However, this runs the risk of shifting the relationship from one of partnership to one of grant maker and recipient, heightening the existing imbalance and threatening delicate power-sharing relationships that take years to develop and steward between national and local organizations in a movement.
A truly sustainable movement is composed of organizations, advocates, and activists, all aligned around a common vision of justice. The success of the movement as a whole rises or falls on the sustainability of the organizations and the structures that connect them. Without the strains of constant fundraising, organizations of every size could focus on their mission. If both national organizations and their grassroots partners across the country were stable and less vulnerable to the vagaries of unchecked capitalism, the economy, and grant-making trends, we could shave decades off the path to realizing a truly just, equitable democracy.
It’s time to shed longstanding norms and accelerate the transfer of the ever-compounding assets of America’s philanthropy into endowments for organizations large and small. It’s time that large donors consider whether their donations are truly transferring power and wealth to people of color. If they’re not sure, they can simply ask leaders of the racial-justice movement, who are ready for that conversation. In this moment when grant makers are focused on racial justice, it is time to rethink how philanthropic dollars are distributed so that we can build the movement without distorting relationships and create an unshakable financial foundation for decades to come.
