Minn. Foundation Awards $100 Million to Help Black People and Native Americans Build Wealth

The Bush Foundation in St. Paul is putting $100 million toward increasing the wealth of Black and Native American people who lag far behind white people when it comes to individual financial worth — one of the largest such efforts in the United States. The remarkable move is not a traditional grant program. The foundation wants to find two groups to distribute the money to bolster wealth among Blacks and Native Americans in Minnesota, North and South Dakota, and the 23 tribal areas in those states. And the foundation doesn’t want much to do with how its money is distributed.

Emerging From Crisis: How a Tumultuous Year Is Shaping Grant Making

Foundations are taking what they’ve learned over the past year to nurture new ways of giving.

• Grant Maker Bolsters Human Connection as a Way to Take on Polarization
• A Foundation Fosters Deep Relationships to Boost Economic Resilience in Rural Kentucky
• A New Approach to Research Empowers the Girls and Young Women a Foundation Serves
• The San Francisco Foundation Expands Support for Grassroots Leaders

“The idea at its most fundamental is we are giving this money to the Native community and the Black community,” says foundation president Jen Ford Reedy. “It really goes back to harm caused to those communities from before we were even a nation, particularly around taking land and from slavery. There’s a whole history of policies that either caused harm to those communities or benefited white Americans.”

The foundation began work on the $100 million social-impact bond offering in the wake of the killing of George Floyd in nearby Minneapolis. The board and staff had been working on equity and inclusion for many years, so it was well prepared to act.

At the first board retreat after Floyd’s murder, the trustees created a list of everything the foundation was dong on racial equity. There was a lot of work that everyone was proud of, Reedy says, but everyone agreed it was not enough. “There was a sense of the moment,” she says, “a sense that we’ve got to go deeper. We’ve got to go bigger.”

Some board members had read Decolonizing Wealth, by Edgar Villanueva, who proposed that foundations give 10 percent of their endowments to help Black people and Native Americans build wealth. At that meeting, the board decided to raise $100 million and do just that. And it added another $50 million over five years to address the wealth gap in other communities.

“I never imagined that a foundation would do that,” says Villanueva, the principal of the Decolonizing Wealth Project, who ended up advising the foundation. “It has tremendous impact for the field. It really is something that’s quite radical.”

Longtime Work on DEI

The foundation was not jumping blindly into supporting racial equity. It began a diversity, equity, and inclusion process in 2012 when Reedy was hired as president. She came from the St. Paul & Minnesota Foundation, which had begun similar efforts, and she says it was clear to her how important valuing and understanding equity and inclusion is to being a good philanthropist.

“We’re judging people all the time and investing in people and assessing needs and assessing organizations,” she says. “Every bit of skill you build around inclusion and intercultural competence, you just get better at being able to do that.”

Ackerman + Gruber

The effort stressed recruiting and retaining a diverse work force. It went from about 15 percent people of color on staff to 40 percent in roughly four years.

Part of that process has been requiring people to ask a series of questions about any decision: Who is affected by it? How are those people involved in solving the problem? Who is being left out, and who might not be served well by this work?

Bush officials analyze where grant applications are coming from so it can see who is not applying, whether it is a geographic area or people from a specific race or ethnic background. It tries to understand what it may be doing wrong, whether it is using the wrong language or not reaching out in the right way, and then it tries to connect with people at those nonprofits.

Unlike many foundations that shroud their staff and process in mystery, the Bush Foundation tries its best to break down barriers. It has a hotline staffed by program officers that anyone can call to learn more about whether Bush might support a nonprofit’s work. And before Covid, it sent program officers out across the region to go to events, meetings, and conferences to talk with anyone who was curious or interested.

“So many foundations create a moat around them, because you can’t fund everything. It’s awkward to talk to people when you’re going to have to say no. And it creates a lot more work,” Reedy says. “Our approach to equity is tied into this idea of equitable access. We want people to know that the funds exist, and we want them to be able to raise their hand if they believe that they should be considered for that funding.”

That process is one reason the foundation has been able to boost its grant making to groups that promote racial and economic equality. In 2017, about 58 percent of its grant making was to groups working on those issues. In 2020 it was 73 percent. According to Candid, from 2011 to 2019, less than 1 percent of all foundation giving was for racial equity.

The foundation also has experience with ceding control. Applicants to its Bush Fellowship program, which gives fellows up to $100,000 to spend however they choose, are judged by former fellows and community leaders, with some involvement from staff and trustees. Hundreds apply for two dozen spots. More than 70 percent of fellows are people of color.

“There is power in knowing yourself and knowing when you need to set yourself and your own story aside,” says Anita Patel, the foundation’s vice president of grant making. “That gets missed sometimes in selection processes.”

Easy Access

For Nelima Sitati Munene, executive director of African Career, Education and Resource, a small group in the inner suburbs of Minneapolis, fundraising has never been easy. With a budget of about $200,000 a year, the group provides services to African immigrants. Big foundations are more focused on urban issues and ignore the suburbs, she says. Lengthy grant applications require time and effort she doesn’t have, and too often the group is just passed over. But that whole process was different with the Bush Foundation.

Munene was able to speak with a program officer before ever applying to make sure the work her group did fit with the foundation’s priorities. The application itself was simple, and the foundation accepts applications on a rolling basis so an emergency won’t cause anyone to miss a deadline. Most important, she says, the program officer took the time to understand the group’s efforts to change the systems its clients interact with rather than insisting that she bend people to the systems that were already failing them.

For example, she says, the very small businesses she works with were not getting loans from the government institutions that should serve them because the loans were not designed for the self-employed people running tiny groceries, hair salons, and tailoring shops. Yet they were vital businesses in the community that Munene’s group serves.

With a $200,000, 18-month grant from the Bush Foundation, she has been able to hire more staff and make grants to those businesses to help them through the past year of lockdowns. And her organization is advocating changes to some of the government lending programs so microbusinesses will be eligible.

Munene’s relationship with her program officer has been very important. “She was really interested and intrigued by the microbusinesses that we were working with and just getting to know the challenges that we’re facing,” she says. “She was very receptive.”

Open Minds

Those equity efforts have helped the staff to better work with groups like Munene’s, but it didn’t stop there: The board has also been very involved. The board tracks its own diversity, looking at age, race, gender, and gender identity, as well as whether members live in rural or urban areas and what issues they are most engaged with. Board members serve three-year terms but no more than 12 years so there is always turnover and new members are brought in.

Trustees open up to each other about their own backgrounds, perspectives, and biases and how those things might inform how they view issues and decisions. The board also delved into some of the biggest debates in philanthropy — giving all the foundation assets away in a set time versus maintaining enough to assure perpetuity, native sovereignty versus U.S. government support, reparations and wealth building. Board members were assigned sides of the debates — usually those they were not inclined toward — and asked to represent them.

“Doing things like that just opened people’s minds,” says board chair Tony Heredia. “These aren’t tense debates, not by any stretch of the imagination. They are very collegial, spirited, intentional points of exchange.”

Those years of coaching on diversity, equity, and inclusion helped the board act quickly when Floyd was murdered and protesters called for racial justice across the United States. The board has also come to understand that those closest to the problems are going to have the best solutions. Herida says that though foundations often want to exert control over their grant making, it’s just more effective to give the money to groups that are best able to understand how to spend it effectively.

“We keep coming back to this philosophical notion, this belief that the people within the system who understand it, experience it every day, are going to be the best served to figure out what ideas have the most merit.”