Will foundations’ next crisis response be déjà vu all over again?

Steven Lawrence and Melinda Fine

Foundations say they are eliminating restrictions on existing grants, exceeding payout requirements, listening to their grantees on what they need to weather current challenges, and thinking about increasing support for policy, advocacy, and organizing. They’re also being asked by everyone whether these changes in their practices will outlast our ongoing crises.

This is the current state of philanthropy in response to the COVID-19 pandemic. It was also the state of philanthropy in response to the Great Recession more than a decade ago.

Over this past year, we at TCC Group had an opportunity to explore how the philanthropic sector is responding to the interconnected inequities laid bare by the COVID-19 pandemic and the national movement against police brutality and racism. We also examined whether this time of acute social upheaval is leading funders to reevaluate their generally siloed approaches and consider what it will take to address today’s challenges in transformational ways. We share what we learned in a new report, Approaching the Intersection: Will a Global Pandemic and National Movement for Racial Justice Take Philanthropy Beyond Its Silos? (Support for this inquiry was provided by the Robert Wood Johnson Foundation.)

What we found, through focus groups with local and regional funders and interviews with national philanthropy-serving organization (PSO) leaders, is a sector that appears motivated to embrace new ways of working and that has access to promising approaches for making transformational change — and yet is also moving cautiously and at times hesitantly toward undertaking the types of fundamental institutional realignment toward approaches with the greatest promise for delivering systemic equity and justice.

Numerous organizations have been exploring similar questions — including the Center for Effective Philanthropy (CEP) through its Foundations Respond to the Crisis series — and there has been a strong degree of consistency and affirmation in what we’re all discovering. In our report, we frame our learning around five key findings:

1. Changes in funder practice in response to the COVID-19 pandemic generally mirror earlier crisis-response funding patterns.

Consistent with CEP and others, our research found that the philanthropic community has shown nimbleness, adaptability, openness to new learning, and a willingness to collaborate that bely characterizations of foundations as being slow to respond and less innovative and flexible than the organizations they support.

At the same time, the philanthropic response to the pandemic has been consistent with past crisis responses — especially to the Great Recession (2007 to 2009) — which have had little-to-no sustained impact on funders’ long-term grantmaking priorities and approaches.

2. The COVID-19 pandemic is nonetheless unique in its scale, unpredictable duration, and disproportionate impact on traditionally marginalized communities, raising new opportunities (and challenges) for funders.

It will be years before the lasting impact of the pandemic can be known. But leaders of foundations and PSOs are focusing on changes that may have a stronger likelihood of being reflected in funder priorities and practices in the future — such as building more sturdy and reciprocal relationships with communities and increasing support for policy, advocacy, community organizing, and systems change. Whether these changes will be sustained will depend in part on whether funders hold themselves mutually accountable.

3. Existing disparities highlighted by the COVID-19 pandemic, combined with the national movement for racial justice, have expanded philanthropy’s commitment to supporting work to tackle longstanding inequities.

Among commitments funders will need to make to advance racial justice will be: 1) changing systems, practices, and mindsets within their own institutions; 2) adopting new approaches, such as being guided by community priorities and investing in building the power of communities most impacted by inequities and injustice; and 3) making multiyear — and potentially multi-decade — commitments to change (and to the specific organizations, coalitions, and alliances that drive these change agendas).

Not altogether surprisingly, CEP’s research found that foundations with more racially diverse boards were slightly more likely to make new efforts to support communities most affected by the pandemic (particularly communities of color and undocumented immigrants), and to have supported organizations led by communities of color prior to the pandemic. At the same time, among the foundation leaders CEP interviewed for their study, “only 12 percent…proactively raised the need for their board to be more racially diverse.”

4. Despite their far-reaching impacts, the COVID-19 pandemic and national movement for racial justice appear as yet unlikely to weaken most funding silos.

The current crises have undeniably revealed the ways that people’s multiple identities are interconnected. Yet so far they have not substantially incentivized funders to move beyond silos toward approaches that embrace and think across multiple issues. While siloed grantmaking may reflect donor passions, a desire to maximize impact by homing in on a specific priority area, or other factors, it remains unclear whether such narrowly focused funding can catalyze and sustain transformational change for individuals who do not lead siloed lives.

5. Moving beyond funding silos will require philanthropy to let community power lead and make other fundamental changes to how it conceives of and undertakes its role.

Embracing and instituting more intersectional work among foundations is likely to take time and a multiplicity of approaches. Examples of existing models that can help to advance intersectional work include participatory grantmaking and trust-based philanthropy. For funders seeking support in understanding and adopting approaches that move beyond existing silos, PSOs are an essential resource.

As TCC’s report, the trio of reports from CEP, and those of other organizations have documented in the past year, a number of funders have been taking this time of national crisis to engage in deep reflection on their priorities and practices. Some are adopting or accelerating new ways of working that will make them more approachable, less restrictive, and, ideally, more equitable. A very few are also taking this time to fundamentally reconceptualize their role in advancing social benefit, change, and justice.

But how different will the philanthropic sector look five years in the future? A look at the effect of past crises suggests not much. Short of regulatory changes, funders — especially endowed foundations — simply don’t experience the same external forces for change that impact the organizations they fund. Without these pressures, many if not most philanthropic institutions will likely go back to business as usual.

But this doesn’t mean that philanthropy can’t or won’t change. What is does mean is that a “crisis,” no matter how far-reaching, in and of itself is not going to make that change happen.

Transformational change that embeds racial justice, embraces local vision and leadership, and shares power equitably to achieve lasting impact must come from within philanthropic institutions — beginning with its leaders. No matter what major crisis will sadly come next, what has always been true for philanthropy will undoubtedly remain: when it comes to institutional change, funders must do it for themselves.

Steven Lawrence is senior research consultant at TCC Group. Melinda Fine is principal of Fine Consulting and TCC Group executive philanthropy affiliate. TCC Group partners with foundations, nonprofits, and companies to propel positive social change through strategy, capacity building, initiative design, strategic communication, management, and evaluation. Follow them on Twitter at @TCCGroup.

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