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Shifting Power Through General Operating Support

Date: October 27, 2020

Julio Marcial

Vice President of Strategic Partnerships, Liberty Hill Foundation

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A Black leader from Los Angeles recently texted me: “Why is it so hard to get a core support grant from foundations, even though I have been doing this work for 20 years?” Her question might as well have been: “Why don’t funders trust us?

While many funders claim to view their grantees as “partners,” few actually allow grantees to take charge of their grant funding and do what needs to be done to achieve their goals. Further, for too long philanthropy has underinvested in people of color as anchors of democracy and civil rights work.

Right now Black, Brown, Native, and Indigenous leaders are on the frontlines defending our democracy, yet they are forced to fight those battles with far less funding than white-led organizations while tangled in the strings attached to the grants they do receive. This lack of trust perpetuates systemic racism by depriving these organizations of the resources they need to succeed and then demanding they demonstrate success to receive funding. Susan Taylor Batten, CEO of ABFE (the Association of Black Foundation Executives), has rightly called this disinvestment and circular reasoning by its name: “philanthropic redlining.”

In surveys asking nonprofit leaders what they need most, general operating support always finishes in first place. In a CEP study from last year, 92 percent of nonprofit leaders surveyed said it was very or extremely important for major donors to provide them unrestricted gifts. Another study, from 2018, revealed that nonprofit CEOs report that general operating support grants have the most impact on strengthening their organization.

Many leaders in the social sector have been calling for funders to provide more of this crucial support as well. Vu Le, writer of the popular NonprofitAF blog, pinned this statement to his Twitter account:

My good friend Edgar Villanueva, vice president of programs and advocacy at the Schott Foundation and author of Decolonizing Wealth, tweeted the following:

If EVERY report about philanthropy best practice says that funders should provide general operating support — WHY are some foundations not doing it? Funders, if you’re not providing these grants, what’s holding you back?

In a new study, New Attitudes, Old Practices: The Provision of Multiyear General Operating Support, CEP was unable to identify significant barriers foundation leaders experience in providing multiyear general operating support. Rather, the explanation heard from foundation leaders for why it’s not being done more widely seems to be that it doesn’t fit with a foundation’s approach, hasn’t been prioritized, or isn’t seen as possible given constraints.

I suspect that many funders’ belief might be that project support allows them to focus their resources on driving key priorities. But the reality is that project grants hinder the real work necessary, which is a shift in power. Project grants keep the locus of power, as well as the public relations spotlight, centered on the funder rather than on the people experiencing — and solving — community injustices. Too often, foundations are imposing their own (often cumbersome) requirements onto their grantees, taking credit for spearheading the efforts, and then celebrating short-term wins in their boardrooms rather than contributing to lasting change in the streets.

I am proud to work for the Liberty Hill Foundation, but we too struggle with this contradiction.

While we have awarded general operating support grants for many decades, we previously required robust workplans and mountains of paperwork for organizations to access relatively small grants. This year, we eliminated lengthy applications and opted instead for quick online interest forms to allocate grants. We continue to learn and grow, pushing ourselves to let go of cumbersome requirements and embrace radical accommodations instead.

Some observers claim that philanthropy has shown its best side this year. A new report by the Center for Disaster Philanthropy and Candid, “Philanthropy and COVID-19 in the First Half of 2020,” found that the $11.9 billion given in response to the pandemic thus far has far exceeded philanthropy in the wake of previous disasters. This would be commendable, except for two problems: 1) Few awards were identified as general support; and 2) only five percent of funding that specified recipients was designated for people of color, despite the fact that these communities have been hardest hit by the pandemic.

Fighting racial injustice has also attracted notable support from funders following the murder of George Floyd in May. According to Candid, funders have pledged $6 billion to attack systemic racism so far this year, surpassing the total committed to racial justice over the past nine years combined.

However, as Crystal Hayling, executive director of the Libra Foundation, recently noted in a CEP blog post, “Although many foundations have been quick to post statements and announce commitments related to racial justice, the vast majority of these pledges do not explicitly name the philanthropic approaches and practices that need to be undone…” As someone who has worked in the philanthropic sector for more than 20 years, I too have contributed to some of these bad practices and commit to working with my colleagues to transform from within.

The challenges of growing up Black, Brown, and Native have always been daunting, despite the creativity and resilience of organizations led by people of color. And philanthropy’s disinvestment in these communities over decades has now placed communities of color in the crosshairs of these two crises. While I applaud the impulse to do something now, rapid response is no substitute for long-term core support for groups led by people of color. If we commit to building relationships with grantees rather than processing one-way transactions, the trust will follow — and travel both directions.

Here are three ways to do it:

1. Adopt a grantmaking plan that favors general operating support for nonprofits led by people of color and talk to others who are doing the same.

Numerous studies have documented the advantages of unrestricted support. I am not opposed to project grants, but core support that puts power into the most knowledgeable and experienced hands should be the default. Follow the lead of the five foundations highlighted in CEP’s publication, Making the Case: Foundation Leaders on the Importance of Multiyear General Operating Support. Foundations such as the California Wellness Foundation have long put a greater focus on mission alignment than on project funding. And more than 750 foundations organized by the Council on Foundations have pledged to prioritize core support for organizations created and led by the communities most affected by the pandemic.

2. Add general support to program support.

Some grantmakers will continue to cling to project grants as their go-to strategy. Adding general operating support on top of project support can signal to grantees a sense of trust that will perhaps lead to more general operating support grants over time.

3. Listen to Black-, Brown-, and Indigenous-led organizations and amplify their messages.

Commit to listening to the communities least heard. At Liberty Hill Foundation, we use our power to lift up our grantees’ consistent calls for justice. We bring them and their ideas into meetings with editorial boards, elected officials, and progressive donors. Despite their stretched resources, our grantees also willingly serve on our community funding boards to help us make grant decisions, which builds accountability into our processes. The working assumption for foundations who are doing it right is to let go of their attachments to their traditional — and often biased — ways of doing business, and to instead share their power with those who can put it to the best use.

Julio Marcial is the vice president of strategic partnerships at the Liberty Hill Foundation. Follow him on Twitter at @jmarcial8.

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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