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National Committee for Responsive Philanthropy

Making Philanthropy More Equitable: An Interview with Aaron Dorfman

Aaron DorfmanIn today’s Social Velocity interview, I’m talking with Aaron Dorfman, President and CEO of the National Committee for Responsive Philanthropy (NCRP), a research and advocacy organization that works to ensure America’s grantmakers are responsive to the needs of those with the least wealth, opportunity and power. Before joining NCRP in 2007, Dorfman served for 15 years as a community organizer with two national organizing networks, spearheading grassroots campaigns on a variety of issues. He also serves on the board of The Center for Popular Democracy.

You can read other interviews in the Social Velocity Interview Series here.

Nell: What is your take on recent concerns about donor advised funds locking too much philanthropic money away from directly reaching nonprofits? Is the recent growth of DAFs a good thing or a bad thing, or is it more complicated?

Aaron: It’s definitely complicated.

On the one hand, I’m sympathetic to how much easier DAFs have made things for donors. I do some of my own charitable giving through a small DAF, and I love the convenience of it. I have no doubt that other donors also find DAFs to be a very helpful development in philanthropy.

However, many of the concerns raised by critics are also valid.

There is little or no evidence that DAFs have contributed to an increase in overall charitable giving, for example, and there certainly isn’t any evidence that the funds have boosted giving to historically marginalized communities. So, if there has been no increase in overall giving, then what DAFs have done is to delay the giving.

Another concern is that DAFs provide donors with significant tax advantages over private foundations – but at the cost of transparency. Most DAFs don’t accept unsolicited proposals, and reporting by sponsoring institutions doesn’t identify grants with individual funds. Practically speaking, that means that most of these funds are inaccessible to most nonprofits. They’re traditionally housed at community foundations, but they’re not directly open to receiving proposals from community-based nonprofits, though proposals may be steered there by foundation staff acting as gatekeepers.

We found this to be true in a recent in-depth assessment we conducted of the Oregon Community Foundation. This was especially the experience of nonprofits serving and/or led by communities of color, who already have the hardest time accessing mainstream philanthropic support.

The lack of access by community nonprofits is even more troubling when you consider the fastest growing of the DAFs: the funds located at the giant financial industry warehouses like Schwab, Fidelity and Vanguard. There, no one is putting nonprofit proposals in front of donors who might be interested.

The lack of adequate reporting reinforces this problem of access: since the IRS does not require DAF sponsors to report which funds made which grants, grant seekers cannot take advantage of reports to identify potentially like-minded donors. (DAF sponsors have begun making greater amounts of information available about their grants, but what they provide is of limited help to grantseeking nonprofits because they don’t identify which funds made which grants.) This is further compounded by the fact that at present the major foundation database (Foundation Center) doesn’t systematically track giving by the likes of Vanguard, Schwab and Fidelity, most of whose funding simply doesn’t appear in the database.

Nell: Some people have argued that since philanthropy itself is built upon an inequitable market economy it can serve to reinforce that inequality. Is there a disconnect, or can we expect philanthropy to appreciably contribute to greater equity? What do you make of the debates about philanthropy that redistributes wealth and philanthropy that simply reinforces power and economic imbalances?  

Aaron: There is no question that philanthropy can and has done both of these things.

When the Ford Foundation provides support for grassroots community organizing, or for litigation to protect and expand civil rights, that’s an example of philanthropy clearly contributing to greater equity.

When Atlantic Philanthropies, The California Endowment and other funders supported advocacy that contributed to the passage of the Affordable Care Act (Obamacare), that, too, was a case of philanthropy appreciably contributing to a more equitable society.

These are just a couple of examples of funders who understand their goals and their vision for society to be disruptive to the status quo; funders who understand the role unjust economic systems have played in the issues they would like their dollars to help overcome. The “disconnect” between market economics and progressive philanthropy is not impossible to overcome, and many of the more than 200 grantmakers that have signed on to NCRP’s Philanthropy’s Promise initiative are leading the way in showing other funders how to do just that.

However, when certain foundations support elite universities, when they invest only in white-led cultural organizations that emphasize European-American culture, or when they invest in advocacy to privatize public education at the expense of low-income communities – then you have some clear examples of how philanthropy reinforces inequality.

There was a great series of articles published recently in The Nation that explores these ideas, and what the future of philanthropy might be for those of us who hope to see a greater philanthropic contribution to fairness, equity and justice.

Nell: You have written before about philanthropy’s historical role in funding social movements. What do you make of philanthropy in the Black Lives Matter movement? How involved has philanthropy been, and how involved do you think philanthropy should be?

Aaron: There is a paradox here. Philanthropy has always under-funded social movements. However, philanthropic funding has also been essential to the success of social movements. We documented this in a 2014 paper Freedom Funders: Philanthropy and the Civil Rights Movement, 1955-1965.

The Black Lives Matter movement has thus far received very little support from institutional philanthropy. A group of foundation staff members have formed Funders for Justice as a way to learn together and to accelerate the flow of funding to the movement. They’re making headway, but the movement is still receiving very little support. Some individual donors, mostly younger and working through the Solidaire Network, have been able to move money more quickly to the movement.

The Hill-Snowdon Foundation, a small family foundation based in D.C., has been a real leader on this. They dipped into their corpus and have devoted new resources to creating the Making Black Lives Matter initiative and are attempting to organize their peers in philanthropy to invest in black-led organizing and in the Movement for Black Lives. The foundation is a past winner of the NCRP Impact Awards, which recognizes smart philanthropy that empowers underserved communities and achieves real results.

Also, Black professionals in philanthropy have been organizing through the Association of Black Foundation Executives and its Philanthropic Action for Racial Justice initiative.

I should add, too, that movement leaders have rejected some philanthropic support that was offered to them because it came with too many strings attached. In some respects, it’s been a good thing that the movement has not been dependent on philanthropy, since foundation support so often serves to rein in radical social movements.

Nell: The nonprofit sector has historically stayed away from advocacy work, but that seems to be changing. What role do you think nonprofits can and should play in advocacy, and will there be more of a push for that in the future?

Aaron: Advocacy and community organizing are among the best ways for foundations and nonprofits to leverage their limited dollars in pursuit of their missions. By changing public policies and/or the regulatory framework, we can transform society and build the kind of nation we all want to inhabit. Any nonprofit or foundation that is serious about achieving its mission must understand how advocacy fits into their overall strategy.

NCRP has challenged grantmakers to devote at least 25% of grant dollars to funding nonprofit advocacy and organizing, but fewer than 100 of the largest 1,000 foundations in the country meet that benchmark. The number of serious advocacy funders is increasing, but slowly.

Nonprofit advocates bring the voices of people and communities to policy makers. They are a greatly needed counter balance to the growing influence of corporate lobbyists, who often advocate only the narrowest self-interests of their industry. I think many, many people in our sector understand this and that we will see an expansion of nonprofit advocacy in the coming years, and that an increasing number for foundations and high net worth donors will provide ever-increasing resources for that advocacy work.

Photo Credit: NCRP

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10 Great Social Innovation Reads: May 2014

social innovationDoes it seem like there is more open debate lately in the social sector? Or maybe I’m just attracted to discussions where the gloves come off and (let’s hope) transformative conversation happens. That was the case in May where philanthropic transparency, nonprofit leadership, and donor acceptance policies were all up for debate.

Add to that some really interesting developments in the new “sharing economy”, net neutrality, and use of big data, and it was another great month in the world of social innovation.

Below are my 10 favorite reads from the last month, but please add what I missed to the comments. And if you want to see a longer list of great reads, follow me on Twitter, Facebook, LinkedIn or Google+.

And you can see past months’ 10 Great Reads lists here.

  1. Writing in the New York Times, Frank Bruni criticizes some nonprofits for accepting donations from donors who actually undermine the cause. These nonprofits, in effect, end up whitewashing the philanthropists, “Some [philanthropy] is prophylactic or penitential: The polluter supports environmentalists, while the peddler of sugary soft drinks contributes to campaigns against obesity.”

  2. And philanthropists themselves were far from criticism this month. Writing in The Atlantic, Benjamin Soskis believes it is critical for a healthy democracy that philanthropists go under the microscope, in fact: “Given the power that private philanthropy can wield over public policy, a spirited, fully-informed public debate over the scope, scale, and nature of that influence is a democratic necessity.” Phil Buchanan from the Center for Effective Philanthropy agrees. And to that end, May saw the launch of Philamplify, the National Committee for Responsive Philanthropy’s attempt at a Yelp-like review site of foundations.

  3. In a long (but well worth the time) piece, Albert Ruesga from the Greater New Orleans Foundation lays bare his antipathy toward his fellow philanthropists: “We grantmakers, myself included, act as arrogant elites, drawing arrows and triangles on the whiteboards of our well-appointed conference rooms with no one around to challenge our flawed thinking. We strut about like giant roosters puffing out our breast feathers and clucking incoherently about ‘disruption’ and ‘theories of change.’ We look foolish to everyone except ourselves and those even more foolish than we are.”

  4. But there are bright spots. Daniel Stid from the Hewlett Foundation takes to the Hewlett blog to refreshingly demonstrate funder transparency and explain “What Went Wrong in Our Democracy Grantmaking.” And Peter Buffett, son of Warren Buffett and author of a scathing critique of philanthropy last year, has a fascinating debate/very civilized exchange with ethicist William MacAskill about how effective (or harmful) philanthropy can be.

  5. We are living in the era of big data, and this month there were some really interesting examples of how data can be used to make things better. First, UPS uses data to improve driver performance and profitability. The University of Texas at Austin is doing some fascinating things with data to help at-risk students graduate. And some nonprofits are using data to improve fundraising effectiveness.

  6. Last month saw the first-ever sharing economy conference. This new idea – that our economy is evolving to a point at which goods, services, ideas are all shared – has serious implications for the social sector. Lucy Bernholz and Beth Kanter break it down for us.

  7. And a key part of that sharing economy is an open Internet. But the FCC is considering changes to rules that would allow a “two-tiered” Internet where those with means can pay more for faster service. The Benton Foundation did a nice summary of developments around net neutrality. And the Electronic Frontier Foundation organized to let voices be heard by the FCC.

  8. Innovation is hard work. So when the work of creating social change drags you down, you only need look as far as Steven Pressfield for inspiration, “When we’re stuck, when we’re freaking out, when it all seems too much too soon too crazy, remember: that’s only how it seems to us, confined within our limited point of view. From the universe’s perspective, all is as it should be. Sooner or later, you and I will stop fighting and let the symphony/supernova/baby be born.”

  9. Using data from the Nonprofit Finance Fund’s most recent State of the Sector survey, work by state associations of nonprofits, and new Uniform Guidance for federal grants from the federal Office of Management and Budget, Beth Bowsky from the National Council of Nonprofits charts some positive developments in government funding the true costs of nonprofits’ work.

  10. Never one to sugar coat it, in an interview on the Idealist blog, Robert Egger describes his vision for the next generation of nonprofit leaders: “Our society needs an elevated nonprofit sector, but to get there, we need people who are prepared to challenge antiquated ideas about the role we play in the economic and political process.”

Photo Credit: Mo Riza

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