(Illustration by Stuart McReath)
We suspect no one will ever look back on the 2020s as boring. This decade started with a tectonic reckoning sparked by a global pandemic that revealed the deep inequities in the United States. This was followed by the police murder of George Floyd, a tipping point that revitalized the racial justice movement. Meanwhile, in the same year, an unprecedented number of billion-dollar natural disasters (22) struck the United States, while climate change and political instability continued to wreak havoc worldwide. These events affected every part of society—including how Americans give. As a result, donors have been compelled to revisit and revise some long-standing practices that have kept philanthropy from delivering on its full promise to people and communities.
Change efforts already underway in 2020 accelerated and spread. New questions and provocations pushed us all to reconsider the role of giving. While there had been a meaningful but relatively small movement toward equity in philanthropy, many more were convinced through the larger racial justice movement to consider equity—or the lack thereof—in every aspect of the sector.
Two-plus years later, where are we? Prompted in part by this thoughtful report from the Monitor Institute on the state of philanthropy, we reflected on the landscape facing high-capacity donors, as an intentional focus of ours is to support those with wealth to give in ways more likely to make a difference. We strive to encourage more donors to 1) understand the historical and racial context of the issues they are supporting and focus on those least well-served (equity); 2) understand what has been learned about what works and give flexible, multiyear support (effectiveness); and 3) move more resources towards addressing root causes and reshaping systems that are doing harm (systems-change).
In our view, early signs are mixed. There are areas of concern—none more prominent than the massive backlash against progress on social justice issues. But we do see positive signs, and we believe we can keep the lessons of 2020 in mind as we co-define new norms to undergird future positive outcomes for people and the world. This has been an unsettling time in some ways, but unsettled times present perfect opportunities to revisit, reimagine, and restructure. It’s an opportunity to set aside problematic practices in giving and change how we support each other, living into the ways philanthropy can truly reflect its love of humankind.
Backlash and a Growing Wealth Disparity
While this is not an exhaustive list, here are three of the things that give us pause.
First, there’s the dramatic and unequal accumulation of wealth among the—mostly white—top one percent. This accumulation accelerated in the wake of COVID-19 and is clearly unsustainable. As history has demonstrated, concentrated wealth is a drag on the economy; fewer have the purchasing power to buy what they need let alone want. In addition, as we are already seeing, it feeds and exacerbates political instability and polarization. This amassing of resources has led to more resources in philanthropy, but not yet to more resources in the hands of communities. In some cases, more dollars are accumulating in donor-advised funds but not being distributed. In other cases, donors are directing dollars and giving in ways that don’t align with priorities among those they seek to help. These trends threaten trust in philanthropy at a time when public trust in institutions of all kinds is declining.
This distrust is only exacerbated when the public sees wealthy donors embrace lobbying, advocacy, and other political wielding of their power for causes not aligned with their publicly stated values. The perception of purely self-interested political engagement produces only cynicism.
Our second concern is the orchestrated backlash against the progress being made on racial justice and systemic change. One of the core priorities of the Raikes Foundation is education, where we’ve seen calculated strategies to undo years of progress in the creation of school environments where all students can thrive and belong. Education donors and school leaders were unprepared for the backlash and politicization. The philanthropy ecosystem could be doing more to prepare for these scenarios, and to proactively craft the narratives that can insulate, sustain, defend, and expand the positive changes that are happening now.
Our third area of concern is that the growing number of tools and platforms for giving has resulted in an increasingly unmanageable complexity. Donors are asked to “use all the tools in the toolbox,” but we haven’t yet figured out how to synthesize these individual tools into a usable whole. As donors try to blend their advocacy and investing priorities with giving, they run into the structural limits of foundations, donor-advised funds, and family offices. Philanthropy shouldn’t require spending as much on legal advice as on giving. And the lack of transparency that comes with some of these new tools should concern us all. We need to be public in two senses of the word: open and in the interests of the common good. As Anand Giridharadas told us at the Center for Effective Philanthropy Conference in 2019, it would behoove more donors to think about “how philanthropy can create the context for problems to be solved publicly.” One way to do this is to invest more resources in community organizing work that allows communities to hold public systems accountable.
Promising Shifts
Now let’s look at the trends that make us hopeful and excited.
The biggest one, and the one that makes the others possible, is that philanthropists are openly and actively reckoning with privilege, power, and race; and are focused, as never before on root causes and systems change, signaling a meaningful shift that goes beyond “charity” as it has been conceived of in the past. This has happened simultaneously with a huge rise in crisis-response giving. The ability to agilely respond to emerging crises is important and needs to be done in conjunction with investment in long-term solutions to address systemic change.
More donors in the ultra-wealthy segment are also recentering their work to address those who have been least well-served historically by philanthropy and our public systems and are finding new ways to engage stakeholders directly. They are in some cases giving through intermediaries, thereby allowing those who are in community and closer to the problems we are trying to solve to make decisions about where resources should go. More are also giving in line with the principles of trust-based philanthropy, offering longer-term, flexible, hands-off support. MacKenzie Scott has become the standard-bearer for this approach.
More of the places donors go to connect with peers, learn, and organize—what we call donor support organizations—have reached more donors and encouraged robust conversations about wealth, race, and power. The National Forum on Family Philanthropy in San Francisco recently sold out, and membership in Solidaire, a network of high-capacity donors committed to mobilizing resources to the frontlines of social movements, has more than doubled. The Giving Pledge, a network of billionaires supported by the Bill & Melinda Gates Foundation, took donors to Montgomery, Alabama to learn from civil rights leader Bryan Stevenson about how our country has systematically robbed and betrayed Black Americans.
Donors are defining philanthropy more broadly, embracing advocacy, political giving, investing, and other tools. Traditionally, many philanthropists have wanted to stay out of the political fray, but with increasing threats to democracy, and further attacks on marginalized populations around the world, more philanthropists have recognized the need to leverage their influence and engage in direct advocacy and political giving on behalf of those with less power. They also are working on policy change that defies self-interest. Examples include the work of Arnold Ventures to promote philanthropy reforms that would increase payouts and get more resources to communities, and groups like Patriotic Millionaires focused on changing tax policy. Abigail Disney has both affected corporate policy at Disney and joined the Patriotic Millionaires’ efforts.
We’re particularly excited to see more donors giving while living. Our foundation intends to spend down its assets by 2038, and there’s been a reported 30 percent increase in others setting spend-down plans. Donors are also organizing to tackle the increasing dollars in donor-advised funds. Jennifer and David Risher, for example, have established a challenge, #HalfmyDAF, and successfully encouraged other donors to give out more of the resources in their donor-advised funds.
In addition, COVID-19 tragically accelerated the generational transfer of wealth from baby boomers to Gen-X, millennial, and Gen-Z inheritors. If there can be any small solace in the face of this devastation, we see some in the next generation inheritors. There’s so much activism in the younger generations and many, newer platforms and tools they can use to exercise that activism. Baby boomers have accumulated more wealth than any generation in our nation’s history. Our hope is that the next few generations will change how that wealth is distributed in the upcoming years, as well as address the policies that make that disparity possible.
Something else that will help make these changes durable is making it easier to give in ways that center equity, effectiveness, and systems change. The emerging phenomenon of “issue funds” that regrant pooled resources is promising—particularly those funds where allocation decisions are made by people with first-hand experience of the problems we’re trying to solve. This will make giving more effective and make it easier for donors to learn from the communities with which they want to engage. Efforts like Just Fund and Giving Compass can help donors discover and connect with these funds. The mismatch between what donors support and what communities want (agency and resources to lead change) is not sustainable. We can keep making it easier for donors to put resources in the hands of leaders grounded in and supported by the communities they serve.
The definition of who is a philanthropist has already shifted, and hopefully will soon no longer automatically connote a wealthy, white person. The Donors of Color Network has become a powerful force in a relatively short period of time. The explosion in giving circles nationwide brings us so much hope for pathways to rebuild frayed civic fabric. We are especially excited by some of the cross-race, cross-class giving circles supported by the Giving Project Network, but also so many other places where people are coming together and pooling resources to support others and to collectively contribute to change.
Equity as the North Star
As our colleague, Dennis Quirin, Executive Director of the Raikes Foundation, has said, “We cannot hit the middle of the target unless we can see the whole tapestry.” The early 2020s have opened many eyes to the unjust and systemic barriers facing so many in our country. Those things cannot be unseen. Let’s keep our eyes open, and our actions aligned with what we’ve learned. If we can keep those things in sight, by 2030 promising shifts in our sector that were emergent in the first part of the decade will have created the foundation for lasting change and a more just society. Because from our perspective, as Heather McGhee reminds us in her book The Sum of Us, we’re all better off when we’re all better off.
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Read more stories by Stephanie Fuerstner Gillis, Tricia Raikes & Jeff Raikes.