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Foundations are Untapped Agents of Change- We Need Them to Step up Now

This is our opportunity to make bold moves, drive lasting change, and create the foundations of a sector that can thrive beyond its historic means.

Part of a series ‘Conversations for Sector Transformation’ by Joanna Buczkowska-McCumber and Kristi Fairholm Mader

In the social change sector, non profits and charities are the ‘do-ers and advocates’ and foundations are the ‘funders’. Both roles are critical in meeting our efforts to serve communities.

However, as the non profit sector experiences broad and long lasting impacts in the face of COVID and struggles for survival, their ability to ‘do and advocate’ is significantly reduced. These circumstances reveal two major gaps: advocacy for the sector itself (see our last post) and advocacy for structural and systems change as plans for recovery are developed. Foundations are needed here, right now, as agents of change. Here’s some ideas for foundations to think about:

  • See yourselves as change agents, not just funders and stewards of legacies and endowments. What is being called for right now, in this time, and how can you strive to create real and structural changes to economies, inequalities and communities?

 

  • Look beyond granting, but also look at your granting. Have your granting practices helped create the crisis that non profits and charities are experiencing right now—with minimal cash in bank, lack of operating funds and assets, few benefits for staff and/or weak internal systems and core functions? Granting practices that limit admin and internal investments, do not provide operating funds, do not pay for core staff and/or block the purchase of assets all contribute to weak organizations. We feel that legacy now, more than ever. Ask yourselves, how can we use our granting to build resilient, strong, abundant organizations that can serve communities, even in crisis?

 

  • Are you also stuck in narratives of ‘not enough’ and limited resources? Yes, granting resources are limited, but foundations have access to significant wealth currently in endowments. How can you mobilize this wealth to create the change we need in the world? The non profit sector cannot solve the world’s problems alone—we need powerful foundations, investing their endowments in non profits, charities, communities and businesses that are SOLVING today’s problems, not creating them. Take a hard look at your investments and ask, are we causing harm in the world? How can our investments, alongside our grants, create a sustainable, abundant, vibrant, livable world?

 

  • We all know that 3.5% grant disbursement is not enough and concepts like ‘market based returns’ and ‘fiduciary’ are amorphous and can change on how you define it. Challenge old definitions and outdated structures. Grant more than 3.5%. Mobilize your endowment for increased access to capital that generates real returns and impact in the communities you serve. Throw away old concepts that say only traditional economies create market-based returns, and a fiduciary duty concept that doesn’t take into equal consideration the impact on people, planet and place. These are all human made constructs and they deserved to be challenged and asked ‘what and who do they serve? And, how do they get in the way of real change’?

 

  • There is a current call for an increase of 3.5% disbursement to 5%. This is like increasing welfare rates from $600/month to $650/month- it looks like change but it does not come even close to acknowledging the reality or solving the problem. 100% of foundation granting, resources and assets can be aligned to achieve positive social, environmental and cultural changes in our communities, country and world. Others are doing this- you can too.

 

  • Non profits and charities face huge barriers in terms of advocacy and lobbying. This is because there is no government representation, limited economic and staff resources and currently we are trying to survive while directly serving our communities. At this very moment, powerful lobby groups are walking into government offices and demanding return to the status quo. We desperately need a counter-voice, one that calls for changes to our economic system and accompanying values, and a voice for the planet and people who are not benefiting from this system. Foundations, we need you. We need the power that comes with having resources and the ability to bring something to the table. Speak now, be loud, be bold, be powerful. Please.

Our worlds have been turned upside down and there is no going back to normal. But that doesn’t mean we can’t create a better future together where we redefine the structures that have held us back in the past. Most of the current recovery financial incentives are bandaid solutions to ensure our economic survival. As resourced strapped charities step up to meet the diverse and intense needs of their communities, we urge the funding sector to do the same. This is our opportunity to make bold moves, drive lasting change, and create the foundations of a sector that can thrive beyond its historic means.

Authors:

Kristi Fairholm Mader
Co-Founding Director, Scale Collaborative

Joanna Buczkowska-McCumber
Executive Director, League of Innovators
Board Chair, Scale Institute Society

Part of a series ‘Conversations for Sector Transformation’ – other articles in this series: