Operating, Fundraising, and Existing with abundance: Strategies for creating better nonprofit resilience
Originally distributed via newsletter on October 17, 2022, edited and corrected October 18, 2022
Hello changemakers, prospective and active,
Welcome back to another edition of the newsletter.
Are you here because the way the world works is not working for you? Were you one of those folks that signed up for this newsletter because you see systemic injustice and want to be a part of the change, or maybe you won’t stand for exploitation in workplaces even if they are supposed to be at institutions doing good? Maybe you refuse to stand by and watch the failures of those supposedly doing good? Or maybe you got this newsletter forwarded to you and are just realizing that someone else sees you as checking one or all of the boxes? Whichever way you found yourself here, welcome, truly.
This newsletter is both trying to take on the individual perspectives of the woes of the working world and sharing substantive solutions to correct the institutional malfeasance run amok.
Use this newsletter, where it makes sense, to advocate for the change you want when you may not have the words. Or use it to know that you aren’t alone there’s many of us completely disillusioned and frustrated and burnt out and wanting it all to STOP but are having a hard time figuring out the next step. You are definitely NOT ALONE, you just might not be speaking to the right people.
Today’s newsletter is about one of those issues I am seeing far too often, its the scarcity both real and artificially crafted that is ruining our justice movements. I hope this serves as a call for philanthropic institutions, funders, and those leading the organizations facing these issues, to step up and do something different to meet the challenges our movement is facing.
Until we achieve justice for all,
Michél
I had the revelation meeting up with friends over the latter part of the summer and earlier this Fall that I hadn’t seen so many of them in-person since 2019. Almost three years and I haven’t really been in front of the people that have made the decade in this movement work actually feel ok. I realized how different I was three years ago, I remembered the burnout I had before the pandemic even started. Then, as if the world thought it wasn't enough, how much worse it got as things somehow moved even faster and with more weight in the 2 years of an ongoing pandemic since.
Reflecting on the source of all this burnout, much of it felt like it came in moments of or from systems of scarcity. Scarcity of capacity, resources, compassion, understanding, and sometimes even a scarcity of trust. Scarcity, I’ve found seems to be a central theme of many in the movement. We’re tired, and worn out, and ultimately it makes us incapable of holding all that it means to be in the movement currently. I could blame the pandemic for its role and end the investigation there, but the pandemic revealed a truth for many.
What we had been told was the required way of doing things was a facade. That eroded trust in our institutions and now as they ask us to return to offices, move to more favorable centralized locations, and spur the in-person events they relied on for their organizational culture, it’s leaving many of us questioning intention and whether it HAS to be that way. Most of us could do the entirety of our job remotely and not waste time commuting or fear punitive action if we fulfill our daily tasks quicker than our compensated value suggests.
Now there’s a wave of resignations, many organizations either rapidly downsizing or rapidly upsizing, and many funders announcing all the new shifts and changes in their funding landscape. What I fear is that organizations aren’t truly ready for the rapidly changing landscape. Some are dealing with being starved of funding equally as fast. I also see the funders that are rapidly changing directions for their funding not seizing the new opportunities of a changing landscape (that they are dictating in an outsized way) to truly shift out of the scarcity so many in the movement are facing. We must, and pretty rapidly at that, fund organizations to the place of full operation in their pursuit of justice and systemic change especially on multi-decade issues.
Does anyone reading this believe that racism, economic injustice, gender equity, health equity, or abolition will be solved in the next 10 years? The next 20 years? Let alone by the end of the century?
I’m not a pessimist, far from it. But I detest the cooptation of language meant to inspire the masses and motivate ourselves (movement organizers) to see out the justice we seek. “Organizing our way out of existence”, “I believe that we will win”, or any other motivating phrase you’ve heard isn’t meant to hold us to some unachievable standard but to actually feel motivated to show up and do this work every day despite all the writings on the wall. It is especially not an out for funders to step up and do something transformational. (I'm not debating whether or not your campaign will succeed, please don't come for me)
I don’t think it’s that drastic of a request that philanthropic giants should expand their portfolio expenditure. I don’t think it's too much to ask for them to give in to the trust-based philanthropy they are doing and show out with the monetary commitment of a lifetime many times over. I don’t think it's too much to give money unrelentingly so that organizations aren’t still fundraising for overhead after you’ve given them a grant.
What if philanthropy started with – “how much money do you need to operate year over year for the next decade?”(accounting for growth) and the granted $ met the answer to that question?
I’m not sure how many foundations are already operating this way, but I’m sure from the handful of philanthropic institutions and individuals that I’ve heard doing just that, it's not nearly enough. A handful is nothing when we actually look at the immensity of these endowments the foundations hold for themselves. I’m no data genius and don’t have the ability to scrape the internet but using some of OECD’s library of information and this Wikipedia page of just the top 45 philanthropic foundations endowments they total $526.8 billion alone. ($526,800,000,000.00)
Foundations operating in the US are held to the legal requirement of a 5% payout rule of their endowment each year. Not as well known is that the payout is defined as grant dollars to 501(c)3 organizations AND their operating expenses. This article is a great explainer of the history, the details of the rule, and its implementation. This is not some flippantly decided and regulated rule. A lot of thought went into it from both sides, the federal regulators and the private foundations. The 5% figure, for instance, takes into account the modest market returns of 8% + the 3% decided on for historic inflation. This minimum requirement takes into account the drastically changing financial landscape, the costs of operating such a large endowment, and the need for private foundations to exist in perpetuity to address social challenges.
I understand that, on occasion, some philanthropic institutions breakthrough this minimum requirement and open up their endowment to do more, to make more impact, and to shift with the outlook of social issues. But that minimum requirement is NOT enough and when you look at what is considered for the organizations working most directly and in service of solving these grand injustices and systemic issues, the same considerations are clearly not being afforded.
During the George Floyd uprisings, I did see many announcements and publicly declared intentions to redistribute money across the philanthropic landscape including opening up more percentages of endowments for redistribution. But, I also saw a lot of expensive reconfiguring by these same institutions. Restructuring of institutions I’m sure required a massive amount of resources and I don’t know if many of those foundations have come out on the other side really drastically shifting, for good, the way they do their granting.
This frustration pushes me to demand that philanthropic institutions afford the organizations doing the work the same resilience they ensure for themselves. Why should these organizations operate with a mindset of abundance when what they truly need is a true prioritization of abundance via the resources necessary to succeed?
Foundations and donors alike must transform the way they redistribute their wealth to better confront the rising and shifting white supremacist patriarchal capitalist system. I’ve loved the way organizations like Resource Generation have been educating and moving their members to do more, give bigger, and transform their relationship to wealth as something to redistribute and dispense of for the betterment of the world. I’ve watched people commit more money over the course of many years to better support and sustainably support organizations whose work they care about.
Here’s what philanthropy should be doing:
Multi-year commitments as a standard practice rather than a potential outcome after many years of relationship-building.
Reductions on required reporting and pushing leg-work for grantees
Giving more than the minimum 5%, let's make it 10% -- fuck those market returns
Disclose your spending more transparently and what percentage of overhead are you covering via the 5%
Explore endowing organizations with amounts large enough that if those organizations drew down on that endowment they could cover all overhead expenses and do so for at least a decade
It’s time for philanthropy to truly step into the challenge of these multi-decade issues and for organizations to be better set up to operate from a place of abundance rather than the shoestring budgets I hear about too often.
I do want to be clear that I believe establishing a better grassroots fundraising program across this country and globally is even more important for organizations but I know we don’t get there if these wealth-hoarding institutions that too often serve as tax havens don’t start spending those benjamin$!!!
Thanks for continuing to follow this newsletter, don’t be shy about your questions. I’ve loved the generative thought y’all have shared and the calls and convos folks have requested coming out of these newsletters
With love, gratitude, and in solidarity,
Michél
