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A Sector in Need of Rebirth, Part Two: Shedding Old Ways

Date: October 5, 2023

Gabriela Alcalde

Executive Director, Elmina B. Sewall Foundation

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In part one of this post, I explored the paradox of false public philanthropic commitments to racial justice amid growing trust-based shifts in philanthropic practices, and the ongoing tension between a charity versus a justice approach to philanthropy, affirming the need for explicit racial equity commitments for sustainable culture change. Particularly when considered in the context of philanthropy’s historical embrace of harmful race-neutral approaches, it is clear that a new philanthropic mindset is needed to meet the existential socio-economic and planetary crises facing humanity.

Outdated Mindset

A keystone of outdated and harmful thinking is philanthropy’s obsession with a narrow and myopic understanding of fiduciary responsibility as growing and protecting assets at all costs. This narrow but pervasive view is undermining the field’s ability to grow up, become more fully realized, embrace the complexity of its own existence, and engage in truly reparative actions. This contracted understanding and application of fiduciary responsibility along with the sector’s profound deference to positional authority and wealth-as-wisdom doctrine is like a rusty, oversized anchor that drags and stymies transformative energy. Good intentions are not enough.

The fiduciary responsibility of mission-driven organizations is to responsibly enlist assets in service of moving the mission forward. For organizations benefiting from the tax status of being a nonprofit entity, mission must come before asset protection. Yes, it is a dance, a dynamic relationship, but when protecting assets (and endowments) is held above all else, we lose our line of sight and abandon the values and purpose that earned the organization its nonprofit tax status. The binary of spend-down versus perpetuity shows limited imagination and prevents moving our missions forward.

When this mindset pervades, a sort of cultural homeostasis of traditional philanthropic power maintains the status quo, keeping even those who believe in equity and justice from truly disrupting the internal systems of the protected network of extreme wealth philanthropy. This harmful status quo mindset was abundantly evident to me as I read a 2023 piece co-authored by multiple U.S. philanthropic leaders, in which the respected authors heavily imply that all philanthropic approaches are good and that we should “assume that those involved in philanthropy have the best intentions, even if they take a different approach.” Beyond this, the article asserts the undisputed power of wealth to lead and influence society, stating that they “affirm the right and prerogative of foundations and philanthropists to take programmatic or public stances in accordance with their best judgment.”

What about communities’ self-determination and best judgment? What about the social contract? What about democracy? More frightening — especially given the growing number of punitive and hate-fueled laws from more and more state and local governments that put specific communities and individuals at risk of loss of life and human rights — is the statement that the philanthropic leaders “reject efforts by anyone to circumscribe or proscribe the programmatic prerogatives of donors or their foundations, so long as the exercise of those prerogatives conforms with the law.” Is that our North Star now? Did we forget that laws in the U.S. have denied personhood to people based on race, gender, sexual orientation, immigration status, ability status, and reproductive state? What about the fact that crossing state lines leaves the same individuals with vastly different rights and protections? It would seem these authors wrote this piece without listening to the news about laws not just restricting but punishing (up to and including with death penalty) individuals and communities for daring to claim their human rights. While I might understand the intent of the letter, I also understand that we are long, long past good intentions being enough. We have to do better, philanthropy.

Disentangling Philanthropy from Capitalism

The nonprofit and philanthropic sectors have long led on the belief that capitalist business approaches are supreme (see, for example, Business Knows Best…or Not), building on the notion that the wealthy are wise, evidenced by their sheer accumulation of disproportionate wealth. Senowa Mize-Fox provides another look at this phenomenon in “The Problem With Billionaire Philanthropists As Climate Experts,” in which, using climate crisis as an example, she shares a compelling analysis: “ollective action has shifted to individual responsibility” even though “ot everyone will feel the effects of crisis equally … those living on the frontlines of this crisis who are people of color, and economically disenfranchised will suffer disproportionately. Those with resources can and will adapt.” The same could be said about many other urgent issues facing society: those with wealth will continue to exist with some level of impunity, at least for a while.

The troubling reality is that billionaire philanthropists, and predominantly white-led, technocratically- and free-market-oriented environmental groups present themselves as the indisputable leaders for urgent existential issues such as climate change, while ignoring the fact that for those outside the protective bubble of extravagant wealth, “all these crises are connected and a result of our exploitive, profit-driven system,” as Mize-Fox puts it. Furthermore, the amount of money contributed to philanthropic efforts (and much less, climate efforts) by billionaire self-proclaimed climate change experts is a minute portion of their total amassed wealth. Almost without fail, the solutions proposed by these billionaire-experts are biased in favor of technical fixes and capitalist approaches that are distant and exclusive of frontline communities. Their efforts do nothing to shift philanthropic culture or structures, with their analysis disconnected from the source of their wealth, which often contributes to both climate crisis and deep inequity.

These are uncomfortable truths to many in the philanthropic sector, and we are not a society eager to sit with discomfort. Crystal Hayling of the Libra Foundation and the Democracy Frontlines Fund addresses the issue of philanthropy being more concerned with getting along and not rocking the boat than with real, radical movement toward justice in her piece, saying: “I am a very polite person, but niceties are not my North Star. In this moment of reckoning, I have a claim to make and I will make it at the decibel level required to elicit a fair and proper response. Protestors don’t yell because they like to be loud. They yell so that those whose feet rest on our necks will step off.”

Forging a New Way

Increasingly, books and articles about philanthropy are more reflective of perspectives critical of the deeply capitalist assumption that the mega-wealthy should have disproportionate power to dictate how to change society. Over the past few years, there has been no lack of articles and reports about the need for and ideas of how the nonprofit sector, philanthropy, and the workplace, in general, can decolonize themselves and evolve to become a better version of themselves; one that is truly in service of community and a kinder, necessarily sustainable future.

The framework of trust-based philanthropy offers a comprehensive approach to assessing and changing the culture, structure, leadership, and grantmaking practices of foundations to address the deep power inequities and create a sector grounded in power-aware relationships, transparency, and accountability. When aligned with a commitment and practice of applying a racial equity lens, trust-based philanthropy can provide a bridge to a new way of being for the philanthropic sector.

There are also a growing number of examples of foundations practicing anti-racist values and centering the voices and work of their community-led grantee partners. At the Sewall Foundation, we have been on a racial equity and trust-based philanthropy journey for many years, intentionally assessing and aligning ourselves with our values and equity principles. Our actions must now amplify the voices of those forging new and radically kinder ways forward so they can breach the protective, self-perpetuating status quo.

It is time for philanthropy to be reborn, rooted in values that center our collective survival and wellbeing. We need foundation executives and boards to be courageous and harness the political will for deep, meaningful change in philanthropic practices, leadership, structures, and culture. We must prepare ourselves for the discomfort, uncertainty, and challenges that deep social change brings with it and resist the inertia to revert to a culture of complacency. This is difficult, long-haul work and must be done internally and externally. I’ll leave you with the words of Michelle Oyakawa in “Building Prisms Of The People Within The Nonprofit Industrial Complex”:

“hilanthropy tends to lag behind communities in terms of responsiveness to issues that are important to people. Our democracy is deeply distorted because the most expedient way to get resources is to appeal to the rich. This goes for nonprofit social movement organizations as much as it does for politicians who rely on campaign contributions.”

Let’s bring another way into being.

Gabriela Alcalde is executive director at the Elmina B. Sewall Foundation. Find her and the Elmina B. Sewall Foundation on LinkedIn.

Editor’s Note: CEP publishes a range of perspectives. The views expressed here are those of the authors, not necessarily those of CEP.

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