Reimagining Philanthropy Series, part 1

Lucy Bernholz wrote a five-part series for The Chronicle of Philanthropy exploring what’s next for foundations and nonprofits.

Confronting Philanthropy’s Uncomfortable Truths

by Lucy Bernholz, August 25, 2020

Medical anthropology gives us a term — syndemic — to name what happens when independent threats such as a pandemic coronavirus finds a host in a system defined by endemic racism. The two dangers don’t just stack on top of each other: They entwine, mutate, and grow in lethality.

This is where we are in the summer of 2020 in the United States. The nation was built on anti-Black racism and genocide against indigenous people. The rot of racism shapes education, taxes, housing, policing, voting, environmental protection, and nearly every other system. Our laws, markets, and governments were designed to, and are succeeding at, exponentially concentrating those harms on the communities that white ruling people have treated as disposable for 400 years. This reality frames and feeds the many ways the United States is failing to control a virus when most of our peer nations are succeeding.

The philanthropic world sits in a precarious place as we figure out how best to respond to a level of crisis that is unprecedented in our lifetimes. Philanthropy is a product, after all, of the very tax and governance structures that have sustained our inequitable society. In this context, can nonprofits and foundations effectively address the health and economic damages of Covid-19, especially their disproportionate toll on Black, indigenous, and Latinx people? Do we have the political will to embrace the solutions we know can work but have been pushed aside in favor of philanthropic pet projects? Can we go outside our comfort zones and support less measurable and more inclusive approaches to giving and caring, such as the mutual-aid networks helping neighbors and small businesses, or the movements against racial injustice that are already leading to policy change?

If we sincerely want to answer these questions and address our syndemic crises, the nonprofit and philanthropic world needs to first do an honest self-assessment.

The Nonprofit-Industrial Complex

The nonprofit world today is nothing like the de Tocquevillian ideal of voluntary associational life. Instead, it is a vast set of mostly undercapitalized corporations, many of which are tightly bound to government funding. If the sobriquet of “nonprofit-industrial complex” makes you flinch, it might because of the truth it holds.

Few qualities can be applied equally to the huge and diverse cross section of organizations that fall under the nonprofit banner. But taken as a whole, the nonprofit world writ large is characterized by:

• Broken, costly, and often disabling relationships to philanthropic funding;
• Financial arrangements that bind organizations as outsourced contractors to governments.
• A corporatized priority for efficiency and “scale” that devalues the pursuit of hard-to-measure change and nurtures a dangerous slide toward sameness.

Although these organizations may use volunteers, little else about them could be described as voluntary by either the people they employ or those who turn to them for food, shelter, education, or medical care. The staff and boards of nonprofit organizations are also overwhelmingly white, making them racially distinct from the communities many of them serve.

Similar uncomfortable truths apply to what we typically call philanthropy. Entities such as foundations, philanthropic limited-liability companies, corporate philanthropy, impact investment, and donor-advised funds are all products of a robust industry of wealth and legal advisers, asset-management firms, and consultants. The people who create philanthropic organizations and those who work at them may be motivated by altruism, generosity, and even justice. But big philanthropy today is populated by institutions designed to optimize a combination of tax privilege, asset protection, and familial privacy according to the particular value calculation of the founders. Oddly, compared with the nonprofit world, philanthropy at this level is voluntary — no one has to set up any of these organizations.

Most philanthropic organizations are led by white people, resulting in stark disparities in funding provided to nonprofits run by Black, indigenous, or people of color. Black-led nonprofits face a philanthropic world that is as biased as that confronting Black-owned businesses seeking credit and banking services. While philanthropy is composed of many organizations committed to redressing syndemic harms, it is also home to donors and activists who embrace market fundamentalism, white supremacy, climate-change denial, and inequitable treatment of women, LGBTQ people, and immigrants. While many nonprofit and philanthropic organizations care about equity, many do not.

Philanthropists insist that they provide support in an apolitical way. But since the entire philanthropic world exists as an artifact of political choices — the tax and corporate code first among them — this is simply not possible. It is not a coincidence that Dr. Martin Luther King Jr.’s admonishment of white moderates applies perfectly to nonprofits and foundations. The white moderate, King said, is one who is “more devoted to ‘order’ than to justice; who prefers a negative peace which is the absence of tension to a positive peace which is the presence of justice.” It’s shameful to admit it, but until white-led philanthropy and nonprofits see ourselves as King did, real change is not possible.

Addressing the Unknowns

As we wrestle with these uncomfortable truths, we also have crises to attend to that can’t wait for us to methodically get our shops in order. We are wrestling with two broad categories of unknowns. The first involves questions we can answer and strategies we can implement that will improve life for the millions of people who have never fully benefited from our democracy. What is unknown is whether we have the political will to get it done.

In 2020, the United States is a country where between a fifth and a quarter of children and families don’t have reliable access to clean water, healthy food, medical care, education, or jobs. Generations of Black men are incarcerated. Wages have barely budged in 40 years, but the rich keep getting richer. The fortunes of just three billionaires are worth more than the combined wealth of the poorest half of the country. To tackle these problems during the Covid-19 era, we need to address questions of immediate concern, such as:

• How do we ensure a livable wage, shelter, and food for tens of millions of our neighbors?
• Can we create a vaccine and treatments for Covid-19 and ensure equitable access to them?
• Will we spend tax dollars on community needs such as child and elder care, health services, and education — or continue to plow funds into policing, including both human and technological systems of law enforcement?
• Can we trust the election process and count on peaceful leadership transitions at a time when democratic institutions in this country are rapidly eroding?

Decades of social movements, organizing, and research have resulted in “shovel-ready” proposals for creating a more equitable society in areas such as energy, food, health, education, housing, infrastructure, justice, and transportation. Whether we choose these approaches are questions of imagination and political will.

The second category of unknowns encompasses the emotional and social toll our syndemic crises are taking on individuals and communities. We may not know the answers to these questions, but we can see them coming and contemplate what action to take:

• How, for instance, does a virus that can infect and affect everyone in the world (not equally — get over that) change how we think about being with other people? What impact will months and even years of isolation and social distancing have on the development of young children, teens, and the elderly? How can we address the slow-moving mental-health crisis, knowing that those already burdened by trauma will be hit hardest and likely served least?
• What will last from our experiments with video conferencing, digital performances, and distanced visits — and how will organizational and social structures change in response?
• Where will we get our news and how will we know what’s factual? Whom will we trust in the future?

These questions require attention and care as we go. They are opportunities to strengthen and expand places and ways of caring, coming together, and building trust.

Moving Toward Shared Responsibility

Our polarized nation appears a long way right now from that goal. Instead of a national coordinated response to contain and treat the coronavirus in the United States, we have a patchwork of regional approaches, stewing in partisan divisiveness and adding up to nothing a virus won’t exploit. But there is also another story to tell. People and communities across the country are coming together to respond to our syndemic crises with care and commitment — working in hazardous conditions, helping neighbors, expanding on and building new community-led solutions when our government systems are failing.

These are two sides of the American historical coin — we underinvest in our shared public systems while we celebrate individual generosity. This places a burden on nonprofits and philanthropy that is both too big and inappropriate to their purpose in democracies. By design, the nonprofit world is supposed to provide either an alternative to or a bolster for public programs and investments. Now it seems that we are placing the weight of collective care, justice, education, environmental action, and health care on this alternative space.

This is not a challenge philanthropy can meet. It’s possible we should not even be trying, given the potential impact on our democracy. We can’t let independent action — individual programs or philanthropic gifts — become a substitute for shared responsibility. The massive size of today’s philanthropic funds is evidence of this phenomenon: Such ridiculous private-wealth accrual is made possible only by a tax system that ignores the needs of the many to benefit the few. The combined demands of big philanthropy and government contracting have fed the corporatization of community action. The challenges of raising funds tends to create organizations that often lack legitimacy in the communities they serve and can crowd out efforts led by local leaders and people of color.

Nonprofit and philanthropic organizations that want to address our syndemic crises need to be prepared to take on the societal systems that created them — and that have allowed their own organizations to flourish. Novelist Arundhati Roy has described the pandemic as a portal that allows us to decide what we bring with us as we pass through it. Do we take our inequities, divisiveness, and individualism through to the other side, or do we find ways to leave them behind and build systems that benefit the many instead of the few? This is our chance to build something better.