On Giving Tuesday, an opportunity for philanthropy to reflect and reimagine its impact
As Giving Tuesday approaches, individuals around the world are preparing to contribute to causes they believe in. Since its inception in 2012, Giving Tuesday has grown into a global movement, with millions of people collectively donating billions of dollars to nonprofits. However, this day also serves as a moment for philanthropy to examine its own practices and strive for improvement. Philanthropy, both at the institutional and individual level, has often fallen short of its ideals, perpetuating inequities and failing to fully engage with the communities it aims to serve.
The Legacy of Traditional Philanthropy
Philanthropy, as we know it today, traces its roots back to the Gilded Age, when wealthy individuals like Andrew Carnegie and John D. Rockefeller established foundations to leave their mark on the world. This approach, rooted in the belief that business success equates to superior knowledge of societal improvement, has shaped modern philanthropy. However, this legacy has created a system where predominantly white, wealthy donors choose issues and prescribe solutions based on their own beliefs, often disregarding the voices and needs of the communities they aim to serve.
The Inequities of Traditional Philanthropy
The traditional approach to philanthropy has resulted in a profoundly inequitable nonprofit sector. Black and Latino nonprofit leaders, who make up roughly 10% of nonprofit leadership nationwide, receive only about 4% of philanthropic funding in the United States. Additionally, many nonprofit organizations find it challenging to navigate the opaque world of philanthropy, further exacerbating these inequities. The top racial equity grant recipients are often organizations launched and driven by white business leaders, highlighting the structural racism that persists within the sector.
Lessons for Transforming Philanthropy
Recognizing the need for change, leaders in philanthropy have been working to reimagine the relationship between funders and grantees, aiming for a genuine partnership. Three key lessons have emerged from this transformative journey:
1. Start with a mindset of learning: Funders must recognize that organizations they invest in have valuable insights to offer. By assuming that those closest to a community are more likely to know its needs, funders can operate differently. Instead of imposing their own metrics, they can collaborate with grantees to define success and design metrics together. This shift empowers grantees to maintain their approach and values without compromising them for funding.
2. Provide unrestricted funding: Philanthropy’s traditional practice of placing restrictions on how funds can be used has perpetuated structural racism within nonprofits. Black-led nonprofits, for example, have significantly fewer unrestricted net assets compared to their white-led counterparts. By offering unrestricted gifts, funders can empower organizations to allocate resources where they are most needed, fostering greater equity and flexibility.
3. Make sustained commitments: Rather than responding to immediate crises, philanthropy should commit to long-term support. Nonprofit organizations often experience a surge of funding followed by periods of scarcity, hindering their ability to plan strategically. Large foundations and individual donors can make multi-year gifts, allowing nonprofits to plan for the long term and fostering a deeper connection between funders and the work they support.
Conclusion:
As Giving Tuesday approaches, it is crucial for philanthropy to reflect on its practices and strive for transformation. Philanthropy has the power to create meaningful change, but it must confront its historical legacies and embrace a more equitable approach. By learning from the experiences of those closest to the communities they aim to serve, providing unrestricted funding, and making sustained commitments, philanthropy can move towards a more just and impactful future. As individuals, we too have the power to give differently and support leaders who are addressing the challenges within the communities we deeply care about.
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