A New Year’s Resolution for Funders: Model Courage in Giving

I gained a first-hand view of the scourge of domestic violence during law school, when I worked for the Los Angeles Bar Association helping survivors secure temporary restraining orders. What struck me most as a young law student was their courage. People of all walks of life who had endured terrible trauma trusted me, a stranger, to help them in their pursuit of safety.

In the foundation world, it is time we embraced vulnerability — or in philanthropy-speak, risk — and started giving more courageously to meet urgent needs. As we begin a new year and look ahead to how and what we will give in 2023, I encourage my fellow foundation leaders to model courage through giving that is generous, trusting, and responsive.

Generosity

First, let’s be more generous.

Since the onset of the pandemic, more attention (and scrutiny) has been paid to the 5 percent minimum annual payout required for foundations to stay compliant with the IRS. I believe this giving requirement should be considered a floor and not a ceiling, and here’s why: unless you’re working with a very small endowment, you can keep an eye on growth while making a meaningful impact and giving well beyond the minimum.

In times of crisis, like the onset of the coronavirus pandemic, we often see a spike in giving as people respond to an acute issue. Unfortunately, the reverse is also true. When uncertainty affects the stock market — as it is now with high inflation and global political instability — foundations get nervous and prioritize preserving principal, giving just enough to satisfy the 5 percent requirement. Those dollars that are withheld and invested might earn money to be used later, but those dollars could also help solve critical problems today — problems that are acute, persistent, and pervasive across our country right now.

The Pinpoint Foundation funds organizations working to support survivors of domestic violence, combat sexual assault, assist foster youth transitioning to adulthood, and eliminate the disparities in birth outcomes for women of color. The further we get into this post-Roe reality and as options for accessible and affordable reproductive health care diminish in many states, the intersectional crises of domestic violence and sexual assault, maternal mortality, and unplanned pregnancies among foster youth become even more urgent, especially for low-income and BIPOC individuals.

In the United States, more than one in three women (35.6 percent) have experienced rape, physical violence, and/or stalking. Every 68 seconds, a person in America is sexually assaulted, and nine out of 10 rape victims are female. At the same time, of the nearly $500 billion in charitable giving in the United States in 2019, less than 2 percent of that ($7.9B) went to causes supporting women and girls.

Meanwhile, billions of philanthropic dollars sit in investment accounts. More of those dollars could and should be used to help address critical health and societal needs like these.

Determining payout is a balancing act, but even if a foundation’s goal is to exist in perpetuity, there’s nothing too scary about increasing giving by a percentage or two to test the waters. Foundation boards across America need to think about this more deeply and consider what kind of impact they could have if they had a little more juice in their giving budgets.

Motivated by the increasing urgency of the issues we support, Pinpoint Foundation pledged to distribute at least 10 percent of its assets^[1] in 2022. And guess what: we managed to provide more funding to more organizations in more communities, and despite economic jitters, our endowment is doing just fine.

Trust

Our mission at Pinpoint is to address inequities and mitigate harm, and importantly, to do so in a way that respects the knowledge and discretion of the organizations doing the work. When we started out, we didn’t know about “trust-based philanthropy” — I first heard the term last year — but for us, that approach just made sense from day one. We started our giving with deference to our nonprofit grantees, and with a focus on general operating grants and unrestricted support.

This is not news in the nonprofit sector, but more funders need to hear it: flexible funding is essential. Not everything an organization needs fits within the categories prescribed by a foundation or government contract. Many donors want to see quantifiable proof of impact for their dollars, like the “number of people served,” but organizations can’t make an impact if they don’t have the space, materials, or infrastructure to function. Organizations get hit with unexpected building repairs, they need gas money, and especially for front-line providers, they need funds for simple necessities to serve their clients. And nonprofits that are largely sustained by government aid, including many domestic violence shelters, may not seem to need support as much as other social ventures, but the restricted nature of those contracts is precisely why supplemental unrestricted funding is so critical.

Foundations also tend to be very focused on outcomes, but intractable and intersectional challenges don’t necessarily demonstrate a clear fix. We cannot fix America’s culture of violence with a single grant or program. It requires us to take the long view.

Trust-based philanthropy does not mean giving money away without due diligence or oversight. It’s based on cultivating awareness of an issue, finding the organizations that are closest to that issue and to the communities being served, and then relying on their expertise. For many funders this feels like a big risk, and that is often exactly what’s required to really help people.

Responsiveness

Responsiveness means being flexible enough to understand complex, emerging needs and fill gaps, even if it requires shifting or expanding your giving strategy. When the killing of George Floyd heightened the national focus on persistent racism in the United States, many foundations rightly revised their giving strategies to prioritize anti-racism and support for Black and Brown communities and BIPOC-led organizations. Similarly, the coronavirus pandemic activated a wave of more responsive, less formal giving to meet pressing needs.

At Pinpoint, we continue to find ways to support our grantees beyond the grant dollars. We aim to support them in ways that help them grow as organizations without ties to a specific program or metric.  For example, a common refrain we heard from our local rape crisis support leaders was the desire to have time and space to meet and collaborate with peer providers. To support that goal, we funded a series of convenings that brought together leaders from these 11 organizations to build relationships, share best practices, and work on common challenges. We also organized sessions focused on capacity-building — including fundraising and communications support — and paid for follow-up technical assistance for each of our participating grantee organizations. Because we handled all the logistics, and compensated organizations for their time, our grantees could prioritize working together to find unique solutions to systemic issues.

In the foundation space we talk a lot about responsiveness. We want nonprofits to be nimble and willing to adapt, but as philanthropists, are we? Collectively, we’ve lived through a lot over the last few years, weathering numerous crises affecting the fabric of our society. At the same time, we’ve learned valuable lessons about how to live and operate in new, more effective, ways. As we head into 2023, let’s focus on the silver lining by applying these lessons learned to change the trajectory of philanthropy for the better.

Amanda Peiffer is president and co-founder of Pinpoint Foundation, a Silicon Valley-based family foundation that provides flexible financial support to nonprofit organizations addressing domestic violence, sexual assault, foster youth, and birth justice.

[1] Pinpoint Foundation’s total assets are approximately $26 million, subject to market volatility