Some Thoughts on Philanthropy

Like a lot of us in the nonprofit sector, I think a lot about funding, fundraising, and funders. Raising money is a critical part of the sustainability equation, whether for operating funds, endowments, projects, whatever.

It can be a frustrating experience for many of us. We know we have a good product, we know we make a difference, we know we’re important, but the fundraising process often unnecessarily puts road blocks in front of us.

Ultimately, as Vu Le at Nonprofit AF writes about regularly, this becomes a vicious cycle for us. (I’m sure that many of you can relate to this latest from Vu “Imagine if we talked to other professionals the way people talk to nonprofit folks.”)

Much of my earliest museum/public history training was school of hard knocks. That includes fundraising, which was primarily through the art and science of grant application requests. I directed the education department at the History Center in Orlando, and at some point said to my boss, “We need to stop pursuing program grants.” I had grown tired of creating programs out of whole cloth so that we could ask for money to pay for those programs, but being unable to build sustainability in our programming or operations.

At the time, I didn’t realize that this was a systematic, nationwide problem with philanthropy as a whole. Fast-forward a few years and I published “The Kykuit II Summit: The Sustainability of Historic Sites”* as editor of AASLH’s History News magazine. In it, Jay D. Vogt shared a series of recommendations from summit attendees. Among them were two that directly related to funders/fundraising:

  1. Foundations and granting agencies should refocus their philanthropy away from short-term program support to grants that assist sites in building their capacity to sustain themselves for the long term, including GOS and endowment.
  2. Foundations should be supported in their efforts to terminate repeated “drip support” to historic sites to focus their support on sites taking positive steps to achieve long-term sustainability.

“Yes,” I thought to myself, “It wasn’t just *me*…this is, indeed, an issue!”

(*I also quoted this in Chapter 5 of An AASLH Guide to Making Public History, excerpted here.)

Regrettably, while I engaged in this work at AASLH through 2018, I was never able to do much to change this trend. At different times we discussed convening funders to discuss the field’s needs vis-a-vis their own, but beyond smaller, individual efforts (including private foundations and federal agencies such as IMLS and NEH), we made little headway in the bigger issue while I was there.

A few things that crossed the transom the last couple of months led me to think change is coming, albeit slowly.

First, this from Darren Walker of the Ford Foundation, “The Coming of Hope: A Vision for Philanthropy in the New Year.” In many ways, Walker, who runs one of the largest ($13 billion) foundations in the world, has led the charge.

He wrote:

“To do our part in this drive for real change, philanthropists and funders of every stripe must invest in the architects and architecture of progress — the individuals, ideas, and institutions that make change happen.”

Walker addresses many themes in his deep, thoughtful piece (read Walker’s full commentary here), but one of those hearkens some of the things many of us in the nonprofit sector are crying out for, including the two suggestions from the Kykuit summit:

“Finally, we must trust those we fund, and fund them adequately to do what they believe is best, not what we think is best. This means putting ourselves in the shoes of prospective grantees and communities, treating them like partners rather than contractors, and entrusting organizations with long-term general support funding and project grants that provide adequate overhead. It means acknowledging the power imbalance that often makes our grantees reluctant to engage honestly and authentically.” (emphasis is my own)

He calls for a funding community that recognizes our ability to diagnose and respond to problems:

“Placing meaningful resources in the hands of those closest to the problems, backing their visionary efforts over time, listening and learning at every step of the journey — this is the philanthropy we need today.”

Walker referenced Edgar Villanueva’s Decolonizing Wealth: Indigenous Wisdom to Heal Divides and Restore Balance. Interestingly enough, I had saved this New York Times interview with Villaneuva to write about when on this issue.

Villaneuva said one thing that really struck me: the 5% payout/distribution rule — which Congress requires private, nonoperating foundations to distribute 5% percent of the value of their net investment assets annually in the form of grants or eligible administrative expenses — was established as a MINIMUM threshhold. Unfortunately, Villaneuva argues, 5% has become the norm. (Foundation Source refutes this, it reports an overall average of 8.2% charitable giving in 2017 — though the largest foundations hew closer to the line, at 7%.) Going deeper, Villaneuva is calling on funders to address more systemic issues of inequality, “One way to begin to chip away at the race-wealth gap would be for foundations to take 10% of their assets and invest them in communities of color.”

Villaneuva really got me thinking about how this would change:

What would it look like if foundations regularly exceeded this minimum number in giving?

What impact would that make on our work, on the work of our fellow nonprofits making a difference in the world?

How would our communities change if foundations led the charge and invested their assets as Villaneuva suggests?

Much of this is out of our hands, I know. We need funders like Darren Walker to help turn the tide. But we need to do our part too. I am a tireless advocate for advocacy. As I have written before, the field needs to do a MUCH better job making the case for the importance of the work that we do with the public — the importance of museums and history organizations to the fabric of our communities.

It’s up to us to work tirelessly to build relationships with our own funding communities to demonstrate to them how we work in tandem to address the very issues they are passionate about as well. Call me Pollyanna, but perhaps eventually we can get Congress to raise that minimum amount at some point in the future as well.

A twenty-year veteran of the nonprofit world, Bob Beatty is founder of The Lyndhurst Group, a history, museum, and nonprofit consulting firm providing community-focused engagement strategies for institutional planning, organizational assessments, and interpretive direction.

President of The Lyndhurst Group, a history, museum, and nonprofit firm providing community-focused strategies for planning, assessment, and interpretation.