Yet another area of uncertainty in U.S. economy: philanthropy

A year ago, when protesters filled America’s streets calling for justice after George Floyd was murdered by police, corporations and great philanthropists pledged a spate of donations for racial justice purposes.

Billions of dollars have been allocated to new philanthropic initiatives. Billions more have been channeled into new business practices aimed at helping minority communities. Causes ranged from poverty and police behavior to housing and education, with many donors trying to address underfunding of nonprofits, particularly in black communities.

These causes can still get the money that was promised to them. But a tangle of complex tax rules and the lack of a framework to track funding for racial justice programs – or even a consensus on what a “racial justice program” is – has made it nearly impossible to gauge the overall effectiveness of donations.

A year later, racial justice retains its high status across the country, even if the protests are now fewer and smaller. And while the discussion of increasing diversity in all aspects of American life continues and some changes have been incorporated, proponents see little systemic progress so far.

“Events over the past year have changed the way some foundations work,” said Aaron Dorfman, CEO of the National Committee for Responsive Philanthropy, a research and advocacy group. “You will see higher raw dollar numbers and higher percentages explicitly intended to benefit black communities and other colored communities. Many of us who are advocates of racial and social justice really hope that this newfound commitment will continue. It is an open question whether it really will be like that. “

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In a joint report, The Associated Press and The Chronicle of Philanthropy examine how funds pledged and donated in the name of racial justice have actually been used to date. Many nonprofits that received money after the Floyd protests redirected it into programs that serve minority communities.

Such successes are important, experts say, because while philanthropic groups overwhelmingly say they want to contribute to racial justice, many of them are unsure of exactly what to do.

“The foundations themselves told us they weren’t sure what changes would continue,” said Ellie Buteau, vice president of research for the Center for Effective Philanthropy, who interviewed more than 800 foundations about their racial justice plans last summer. “They realized that they still have a lot more to make progress.”

Nearly 90% of the 236 foundations that responded to Buteau’s survey said they had launched programs to make the response to COVID-19 fairer, according to the Center for Effective Philanthropy, Foundations Respond to Crisis: Toward Equity? Report. More than 75% said they made efforts to support nonprofits that serve colored communities.

Many of the foundations Buteau spoke to told her that they were “trying to learn more about racism” and were trying to “reflect on themselves” on recruitment and grant practices. However, fewer foundations led to permanent structural changes.

“Adding diversity to the board was something that few foundations have brought us together,” said Buteau, adding that when a foundation is committed to being more diverse and inclusive, “it is important that the board is important is more diverse – with more diverse worlds of thought and experience. “

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Dana Lanza, CEO of Confluence Philanthropy, a network of foundations, donors, and advisors trying to base their investment decisions on their values, is troubled by the fact that more philanthropic organizations failed to take this first step in the year after Floyd’s assassination.

“We cannot solve racial justice until we change the dynamics of decision-makers,” said Lanza. “About how these enormous sums of capital are used.”

“It’s about opening people’s minds and opening their hearts,” she said.

With this in mind, Confluence Philanthropy launched the Belonging Pledge 2020 last June, calling on investors to commit to discussing racial equality at their next meeting of the investment committee. It’s a first move that has drawn 185 signatories including Rockefeller Philanthropy Advisors and The California Endowment, who manage $ 1.8 trillion in assets.

“I think it was a wake-up call for philanthropy,” Lanza said. “How could we be after all these decades of racial justice and racial justice grants?”

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The pledge, which is likely to expand this fall, has created problems even for those who haven’t signed it.

“A company managing nearly $ 1 trillion wanted to sign the pledge and received resistance from management realizing they hadn’t conducted an internal demographic survey in years,” said Lanza Program, if you haven’t done one on your foundation’s investment practices Practice racial justice. “

Starting the process in this way seemed more productive than looking at the broader issues exemplified in Floyd’s assassination, including the prevalence of police brutality.

“Black Lives Matter has been trying to wake people up to this issue for years,” Lanza said. “For a long time I said to my friends and colleagues: ‘This is unbelievable and scary.’ And people just didn’t want to talk about it. “

For many people and foundations, Floyd’s death and the protests that followed brought the issue to the fore for the first time.

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Studies by the National Committee for Responsive Philanthropy show that concrete discussions and goals tend to have an impact.

“Using conscious strategies is the best way to achieve this kind of fairness of funding,” said Ryan Schlegel, the committee’s research director. “While it’s great that many community foundations are fighting poverty in their community, for example, it’s really important that we also ask them, ‘Okay, what are you doing specifically for black people?’ ”

It is especially important now that all sorts of groups work from different angles to promote racial justice, experts said.

“Black-led groups play a really important role,” said Dorfman. “They will find different solutions to the pressing problems than non-black-run organizations. They have been underfunded for so long that I currently think it is very important to identify these organizations in order to transfer resources to them. “

In a report, the National Committee for Responsive Philanthropy found that between 2016 and 2018, the last three full years, there was only a tiny fraction – about 1% – of grants available for the data earmarked specifically for black communities – about 1% – of $ 25 grants . established community foundations. That was true even though 15% of the population of the cities served by these foundations were black.

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Although several foundations complained that the report did not consider funds that helped black communities unless specifically categorized for them, few questioned the report’s finding that these communities were underfunded.

Citing the needs of people of color, Dorfman said:

“Donors should invest in such groups to really drive change. This is a moment of both urgent need and great opportunity to transform society, and therefore higher spending is warranted. “

In order to achieve racial equality, these investments should flow into sustainable projects in disadvantaged communities.

“We really need groups that are anchored in the local communities to build their own capacities because the challenges our societies face are not going away,” said Dorfman. “An important piece of this puzzle is funding for black-run organizations.”

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