The Changing Landscape of Philanthropy – Bolder Moves for Greater Impact

Lysa Ratliff

Philanthropy and the nonprofit sector are changing. There have been signs of shifts for years, but nothing as significant as the transformation we are experiencing now. And this is good. The issues we are addressing are deep and complex. They require fundamentally new ways of thinking if we are to make real progress.

Donors are waking up to just how systemic the problems are, and that they can’t be fixed with highly restricted gifts that fit nicely into their categories of giving. Nonprofits are seeing the need to be more disciplined with their resources, and that impact can be accelerated through stronger collaboration with each other and with the systems that have struggled to serve the people they were built to support.

As a nonprofit sector, we’ve always been situated closer to the need, understanding the disparities that shape the reasons for our missions to exist and how to leverage resources to address the deepest needs in communities. But traditionally, nonprofits have not been able to be as effective as they’d envisioned because of the old philosophy of “donor knows best,” where the funder has control over how and where the work is done, by nature of the fact that they control the funding. This has trapped nonprofits into often compromising the truest pathway to achieving our missions because we have been reliant on highly restricted resources that often do not align with the work needed or the pace necessary to make a real impact.

Collectively, we can learn from the historic lack of significant progress toward achieving our missions and look differently at how we work together toward big, bold, shared goals. Our starting point for this must be self-reflective, doing the work to understand what it will take to achieve our missions and then identifying the resources and disciplines that put us on a path to impact — what needs to be central investment and what needs to be let go of. At KABOOM!, we had to get real with ourselves and recognize that in order to solve the systemic issue of playspace inequity, we needed to invest deeply in adapting our approach. We also had to let go of our fears and replace them with a bold vision for how the issue of playspace inequity could be solved. A gift from MacKenzie Scott came to us at precisely the right moment, allowing us to invest deeply into transformational change.

On the heels of Scott’s $14 million gift in January, KABOOM! launched the 25 in 5 Initiative to End Playspace Inequity, our bold plan to accelerate progress to achieve our mission, starting with ending playspace inequity in 25 places in five years. We were inspired to match the boldness and scope of her unprecedented moves by making some of our own.

The new Center for Effective Philanthropy report on the impact of Scott’s gifts on nonprofit recipients confirms what we have heard from our peers and partners – that many nonprofits are in a similar position of having big dreams and deeply informed roadmaps for change, but struggle against an often inequitable funding landscape that hinders rather than catalyzes our progress. In reflecting on the impact of Scott’s recent giving and conversations with other nonprofit executives, a few themes stand out to me that may be valuable to leaders in both philanthropy and the nonprofit sector.

Unrestricted grants are an amplifier (and a huge responsibility).

Restricted grants make amazing work possible, but can cause us to chase after the priorities of funders and set our sights too low rather than standing firm in what our experience tells us is the right path to achieving our mission. We, as nonprofits, have lamented the dearth of unrestricted funding, but hand-wringing doesn’t lead to change. We have a responsibility to our stakeholders to do what we can to change this dynamic.

At KABOOM!, we had proactively developed a plan to achieve our mission at scale, so we were ready to act when we received this transformative gift. As with other major gift recipients, particularly organizations led by women or people of color who have not historically been invested in, we are using this unrestricted gift to strengthen our infrastructure — the foundations needed to run an organization optimally equipped to solve the problem at scale and to implement bolder strategies to pursue our mission.

Scott’s gift has provided nonprofits with something rare: the authority to use our expertise to direct the funds we receive as we see fit to drive impact. Her gift is also influencing other donors to stop hamstringing the nonprofits they support. Now, it is our responsibility to make the most of this opportunity by not compromising on the priorities or scale of goals of the communities with which we work.

Nonprofits led by people of color, women, and those whose lived experiences are connected to the problem are able to advance equity-based missions faster.

Investing in nonprofits led by people of color, women, and people who have lived the experiences of the problems they work to solve is critical to actually fixing the problem. Shared lived experiences between those in positions of power and the people they seek to impact creates a space for solutions that are more authentic, sustainable, and reflect the desires of the community.

We must address the persistent disparities that exist in the resources available to nonprofits led by people of color and women. In FY2021, 41 percent percent of white-led nonprofits received 50 percent or more of their funds as unrestricted grants, compared to just 26 percent of organizations led by people of color.

From our work in communities that experience racialized disinvestment, we also know that funder-driven efforts often breed distrust by stifling community priorities and community leadership. At KABOOM!, like many mission-driven, equity-focused organizations, we are impatient for change, but we also recognize that our impact is dependent on us moving at the speed of trust with communities. Simply put, nonprofits with leadership reflective of the community are better positioned to earn that trust.

Investing in nonprofits led by leaders of color and women isn’t just about correcting disparities in representation — although that is a critical step. It’s about acknowledging that those closest to the problem are best equipped to solve them.

Systems problems require systems solutions.

In MacKenzie Scott’s Medium post announcing the 465 nonprofits that would receive funds, she expressed that, “When our giving team focuses on any system in which people are struggling, we don’t assume that we, or any other single group, can know how to fix it … we seek a portfolio of organizations that supports the ability of all people to participate in solutions.”

If we only take on work that we can do ourselves, if our mission is something we can easily accomplish within our four walls, we aren’t dreaming big enough. People live interconnected lives, and their success depends on many systems working together to provide opportunity and equity.

A world where playspace equity is a reality is one where reliable buses and trains are also available, where streets are safe, schools are strong and well-funded, and vibrant parks are within reach. It also takes committed partners in government agencies — leaders in parks and recreation, schools, housing, and elsewhere — who recognize firsthand the value of spaces to play. This is exactly the vision that guides our 25 in 5 Initiative that Scott’s generous gift helped launch.

I’m profoundly grateful for the generosity and vision of Scott and others who understand the transformational power that this type of giving will have in the lives of millions of people. Every dollar we can direct toward our mission of ending playspace inequity is a sound investment in this generation and future generations of kids. It’s up to us to think bigger and bolder, and to create the novel partnerships we need to solve the problem at scale, once and for all. It is not a responsibility we take lightly. We won’t stop until we make this vision a reality, together.

Lysa Ratliff is CEO of KABOOM!. Find her on Twitter at @lysaratliff and on LinkedIn.

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