Philanthropy’s Changes Over 25 Years

In September 2019, Proteus Fund board member Sara Gould and Proteus Action League board member Jesse Beason joined Tito Crafts, our Director of Partnership and Communications, for a conversation about how philanthropy – and in particular, social justice philanthropy and the world of public foundations – have changed over Proteus Fund’s first 25 years. Below, you can read a lightly edited transcript of their conversation.

Tito Crafts, Director of Partnership and Communications, Proteus Fund:

Sara, you’ve been working in social justice philanthropy for over thirty years. How has the work changed over that time?

Sara K. Gould, Organizational Consultant/Coach:

I joined the Ms Foundation for women in 1986, which both brought me into women’s progressive movement stuff and also into philanthropy. I was there through 2010 in several different positions, so almost 25 years. So, I feel like I came into philanthropy at a really different time from today.

For me, differences in the philanthropic landscape overall and in social justice philanthropy – and then, you can even have another category which is public foundations, because there is of course social justice philanthropy being done by individuals, private foundations and public foundations like Proteus. So there’s both the question of: Where has social justice philanthropy writ large waxed and waned over time on the landscape? And what about public foundations specifically? Because to me, the landscape has changed dramatically for public foundations, for several reasons.

Very broadly, the 90s were a time when there was a lot of money coming into both philanthropy overall and into social justice philanthropy. The stock market was booming and there were people who were beginning to have significant amounts of new wealth. And then came 9/11, when the world really changed. I tend to think of 9/11 as a demarcating point. Philanthropy changed after that, and many of the concerns of philanthropy became … more serious, if that’s the right word. The frame that almost everyone in philanthropy was bringing to their work changed in some way. And, there was more and more business influence in philanthropy following 9/11 – the rise of people doing philanthropy who were primarily private business people.

The Gates Foundation came onto the scene in 2000, and was the largest foundation in the world when it appeared and – it was led by business people. It introduced business language into philanthropy. In the nine years after 9/11, until I left philanthropy in 2010, there was a huge change in the philanthropic landscape, in what was being talked about, and what was considered best practice. This is when evidence-based grantmaking ramped up and when social entrepreneurism grew. And then in 2008, you had the economic downturn. I did a study with the National Committee on Responsive Philanthropy (NCRP) in 2011 called “Diminishing Dollars,” the aim of which was to show that there were diminishing dollars for social justice philanthropy following the downturn, and that the situation would persist for a while because of how philanthropy works. We found that the economy might begin to pick up, but the philanthropic dollars that were going to social justice philanthropy wouldn’t pick up right at the same time, primarily because of how endowed foundations figure their pay-out. And, some philanthropies were going out of business, et cetera.

So I think that the important points are: 1) The influence of business language and business thinking in the philanthropic landscape overall. 2) The influence of collaborative funds in philanthropy. You know, one other piece of history to mention is that Ms Foundation ran its first collaborative fund in 1991, and Proteus was formed shortly after that. So Ms and Proteus were early, early practitioners of collaborative grant making. And we were not only operating in social justice philanthropy, but we were public philanthropies. I think public philanthropy, in many ways, taught private philanthropy how to do this thing called leveraging because we had to be really good at it! And we taught others a lot about how to do partnering effectively.

Overall – I think public philanthropy has really been looking to get its legs solidly on the ground again for quite a while now. There are so many private foundations and individual donors now – like I’ll just take the women’s community, that’s what I know the best. In private women’s philanthropy, there are two large funds, the NoVo Foundation and the Foundation for a Just Society, that are multimillion-dollar operations. They are giving, and will give, so much more money into movement work than public women’s funds. They have since they were founded, and they will into the future. They’re having good, big impact in the women’s movement – and progressive movements – but to me, there are always question regarding both democratizing philanthropy and accountability that private foundations will always fall short on, based on their organizational structures. Their boards are just a few people, and they are accountable really to nobody. Meanwhile the Ms Foundation and the other women’s funds have a much harder time growing as public foundations, and they cannot make impact that is anywhere near the scale of private foundations.

You look even at the Ford Foundation now, Darren Walker, to his credit, is out there making a lot of deals with all kinds of entities – such as Agnes Gund, as an individual, to do the Art for Justice Fund. And the two large collaborative funds in the women’s space that have started in the last two years, they are not hosted at public foundations, they’re hosted at Rockefeller Philanthropy Advisors. They’re going to give multimillion dollars into the women’s space over the next five to 10 years, but they are not housed at a women’s philanthropy. They’re not part of an entity that philanthropy devoted time and effort and money to build up in a different era.  By the late 2000s, investment in the public women’s funding infrastructure was waning.

Tito:

Jesse, how have you seen social justice philanthropy change over your time in the sector?

Jesse Beason, President & CEO, Northwest Health Foundation:

I admittedly am much newer to social justice philanthropy. I have been only in this foundation world for six years before running a nonprofit myself. And before that, in politics. But I do have a few observations in my limited time here. I think one in particular is: as people with new money step into the space, I think they’re putting together new kinds of organizations to achieve the impact that they’re trying to go after. I think about something like the Emerson Collective that’s really saying, “what are all the tax vehicles that I need to make change? And how does the philanthropic world help me do that? And how might other vehicles help me do that?” So, you know, the use of limited liability companies, and using places like Proteus or Rockefeller to provide back end infrastructure. Keeping the internal capacity sort of lean and more focused on driving the change.

I think that the 2016 election has made plenty of philanthropic organizations reflect on what their theory of change actually is – or in some ways, the election sort of surfaced the idea that they don’t actually have a theory of change, and for a long time they were using frameworks drawn more from the business community around evidence-based philanthropy and those kinds of things.

Realizing that a 12 month grant period is a terrible horizon to think about change, and to think about long-term impact. I also feel like there’s been more, and this is certainly before my time, but more conversations about what is the baseline social justice infrastructure that has to exist in any given state or locale to be successful. Without that basic infrastructure, it’s hard to effect all kinds of progress on other issues. You know, talking about what is the c3 table and c4 table, and the donor table, and how are these fundamental to make progress on all kinds of issues. So the point about public foundations, I feel like Sara’s right on.

Also, the largest foundation is now actually Fidelity Charitable. So how much is this a tax vehicle, or a tax shelter for people that want to give in in a certain way? And how much is philanthropy sort of fooling itself that that’s what it is. That’s why it feels like you’re starting to see more alternative models crop up and saying, “well, I can put my c3 money here, and I can put my c4 money here, and I can actually just run an enterprise that deploys the best flavor of resource towards my own theory of change as a donor.”

Tito:

I think that there’s two angles. It is both the technical rise of businesses influence on philanthropy, and also the kind of theory of change influence as shown in things like social entrepreneurship and impact investing. Have those two angles kind of gone hand in hand, or are those two parallel tracks that have emerged over the last decade or two?

Sara:

I mean, I feel like they’re more parallel, with some connecting points and some connecting people. I feel that because, you know, of something that Jesse just said, I feel like another trend in philanthropy that has been trending for a while is people with wealth wanting to control it themselves. When I joined philanthropy, that was not as true.

I completely agree with Jesse about these different forms and the experimentation with different forms, and to some extent and in some ways that’s really good. And there are also some costs to that – like sometimes older forms get short shrift. And newer forms are asking, “What’s my theory of change and how can I enact it?” rather than, “What do I see, who do I see or what institutions are active on the landscape, that I could help to grow and to have greater impact?” Because they are more accountable institutions, and they are part of an invaluable social justice infrastructure. So to me, public foundations are a crucial part of that infrastructure that has to exist in locales and in regions around the country, and nationally and globally. There was a time when private philanthropy saw the value of that infrastructure and deliberately invested in it and supported it to grow, because it understood that public philanthropic structures were more accountable and did brought benefits that larger private foundations could never bring.

But that time has passed. I don’t think there are too many people anymore who think about what was lost. This has been a big theme for me over a few years now. What is lost when private philanthropy is not investing in a solid and growing infrastructure of public foundations, and when this disinvestment causes public foundations to grow much more slowly than in the past?  I think there’s an individualism in philanthropy now that didn’t exist in the same way years ago. Take Proteus as an example – Meg always had a lot of individual donors who wanted to work through Proteus and move their money through Proteus. They trusted her. They always had a compelling conversation with her. They knew she knew what she was talking about, and they brought other people to Proteus. And it was similar at Ms Foundation. Women with money would come and say, “I want to join your effort. You have a vision, you have a strategy. And you’re a national institution. I want to join you.”

By the 2000s, however, when the number of people with self-made wealth (as opposed to inherited wealth) begins to grow, they are saying, “I want to do my own thing. Institutions like Proteus or the Ms Foundation are too confining for me. I can’t get my own theory of change enacted there.” That marked a definite difference, a before and after moment in public philanthropy.

Tito:

Yeah. And I can imagine too that the Internet is a part of that story. The expansion of wealth inequality, which I think has been the trend since the 50s but I mean since 2001 there’s been generational wealth being built very quickly. It’s built a whole generation of people that actually could make that choice: “I have the resources and I can do this on my own. I don’t need other thought partners.” You’ve outlined the pitfalls of that, but I’m sure that’s part of the story as well.

Jesse:

Well – philanthropy is a reflection of America as a whole. We are more individualistic now than ever before. And so of course people with wealth are going to approach that in much more of an individualistic way. And I think what’s actually been intriguing is to see how many people have started down that path and saying, “I’m going to take my money and play in my own sandbox,” and actually come to find out that social justice and social change is nowhere close to running an enterprise. That social change doesn’t happen because you have a good idea and here’s $100 million to throw at it. That it actually does take much more time, much more effort, and partnership. Someone like Tom Steyer, who threw a lot of money thinking that he knew what he wanted, and didn’t get anything he wanted, has had this sort of retool on a couple of different occasions to change the approach to one that is a little bit more partnership-y than previously. But I’m not surprised that much – philanthropy has gone the way that much of America has, given the overall state.

It’s intriguing – in the social justice world, in the progressive world, we can in ways be more focused on thinking that we know the idea that needs to just happen. I would say on the conservative side, they actually tend to be much more fine with giving up resources towards an overall ideology. I think that’s in some ways been the thing that’s kept social justice ideas from moving further faster, because we all are such independent thinkers and that independence actually can result in a very individualized way of thinking this is how we should do the work.

Tito:

Sara – intersectionality was originally a Third Wave feminist concept, but is now used much more broadly in philanthropy. Is a corollary to the rise of intersectionality, kind of weakening the argument for single-identity-focused public foundations?

Sara:

Mm hmm. I don’t think so because I think that although a public foundation may be single identity in its name, in its approach and its beliefs it has practiced intersectional grantmaking much longer than many other social justice funders. I have a couple of thoughts about this. One is that, in philanthropy, intersectionality has mainly meant bringing a racial equity lens and bringing an economic equity lens to grantmaking. So, considering race and class in your grantmaking. Gender, which no one any longer would deny is a very large factor in people’s identity, was never seen as on the same plane as race and class. Because the Ms Foundation’s work is, and has been for many, many years about bringing an intersectional race, class and gender lens to its work, it’s been ahead of the curve.

Over the last 12 months to 24 months, with the gymnasts at Michigan State, and the #MeToo movement and the Supreme Court hearings for Kavanaugh, we have entered a time of, perhaps, actually listening to women’s experience, as women. As someone who from 1986 through 2010 worked in a “single-identity” philanthropy, if you will, and who was told time and time again that gender really was not important, and did not have much to do with any of the serious issues confronting the nation after 9/11, it is heartening to see this new attitude develop.

Following 9/11, the narrative was: yes, women in Afghanistan are having a terrible time, and we need to do something about that, but we “did” gender in the United States already. Now I think it could not be more clear how false that was, and how unstrategic and just plain wrong that point of view turned out to be. So I can harbor a lot of frustration about that, but what I really want is to engage people in this new era (if in fact it is a new era), when more funders can see that working at the intersection of race, class and gender is necessary to make progress on the very difficult social and economic issues that we face. You can’t pick up a paper anymore, ever, any day, and not see race, class and gender staring you in the face.

Tito:

Are there more women in decision-making roles at large philanthropies now than 25 years ago?

Sara:

Yeah – there are statistics on that, we’d have to look. Which leads me to mention Women & Philanthropy, which was the first affinity group in philanthropy, in the early 70s. It doesn’t exist anymore. I was one of three people who closed it down in the 2000s, because philanthropy would not support this affinity group called Women & Philanthropy. But the statistics are, yes, there are more women working in philanthropy than men now, or people who identify as women, than people who identify as men. But not at the top of philanthropy, either in chief executive positions, or on philanthropic boards.  And that’s a crucial difference.

Jesse:

Yup.

Sara:

Who is on the board is really important, we can sometimes kid ourselves that as program officers or even as presidents of foundations, we’re making the decisions, but it really is the board.

Jesse:

Yeah. I think that one of the things that we try to tell ourselves is that the boards have less power than they do – in reality, they have all the power. All of the decision making, and even the way that language flows from an organization, is all in response to governance. And as you said, private philanthropy is so unaccountable. And to my knowledge, there’s been very little accountability work focused on private foundations, and whether that’s sort of legal concepts to try to increase more accountability, or even just public shaming. I was having this talk the other day. Our state attorney general, for instance, every year publishes like the worst of the worst nonprofits that are spending way more on management and fundraising than they ever should.

But meanwhile, we all know private foundations that are, you know, board chairs are paid half a million dollars a year for four meetings. Who are lifetime appointments and can fire the rest of the board at any time. Just bizarre setups, that have nothing to do with charitable work, that fly in the face of their missions, oftentimes publicly stated missions and they’re actually in the social justice world. There’s been reticence, besides NCRP – and even they have a hard time, being resourced, to throw anyone under the bus, right? So we’re clearly not interested in pointing too many fingers at ourselves. I think that goes towards who’s sitting on the board. When we talk about equity here at the Foundation too, it’s in some ways with history in mind.

If we really wanted to address historic wrongs, we should have all women trustees for the next hundred years. It should be way more than 50/50, a good long time. But that’s not how we’ve approached it. And I would say even to your point, Sara, I think even as racial equity has become more of a conversation in philanthropy, it is sometimes at the expense of intersectionality and not raising gender right in that conversation. Even some of the more responsive grantmakers say a lot about equity, but have a hard time sort of actually addressing what intersectionality would require of them and are really asking about surface level kinds of metrics instead of sort of truly examining all of the issues at play.

Sara:

Yeah, I so agree. The only thing I would add to your list is the private foundations, and the payout rate. I know NCRP many years ago had a campaign around trying to bring attention in philanthropy to this payout rate question where, you know, nobody questions the fact that all this money is being sat on and all you have to spend by law is very minimal, in terms of actually money that you grant rather than that you keep in your endowment – and now you look at donor advised funds, and how that works. So I would add that too, the tax structure around philanthropy, as another piece that is just right out there, but it’s serving those people who it helps and so it doesn’t get called out.

Tito:

Are those structural shifts impacting social justice work more so than other work that that relies upon philanthropy?

Jesse:

I would say – as more wealth gets introduced into philanthropy, that’s money that didn’t get taxed, right? That didn’t go into the public sector, to support schools and all the other things. And it’s now gone into private foundations generally controlled, more often than not, by men, more often than not by white people. And more often than not, people of relative influence, such that the idea that they would be seen as investing in “rabble rousing,” which would not play well at the country club, so to speak, becomes a harder proposition. Right? So then by default you’re seeing less money go to those kinds of things. You know, there isn’t a requirement for a “consumer,” quote unquote, on your board of trustees, or any sort of voice to actually represent lower income folks, or there’s no requirement for a variety of composition. All of things which would I would suggest would lend themselves to more social justice funding.

Sara:

Yeah, I agree. And I think that, there was a whole lot of experimentation in public philanthropy as it started up, but the public philanthropic sector never built up enough power to really claim its genius, and the contributions that it made to philanthropy overall. Collaborative funds, you find them now in every corner of philanthropy. But it was public foundations who played a large role in pioneering those funds, and took a lot of risk in doing so and had to convince a lot of private foundations and individual donors to sit at their tables. It was public foundations who began to convene grantees, and who really were going at their philanthropic work, believing in movements and having it be core to their mission that they were movement organizations themselves who were supporting movements. And they understood how change happens and they supported leaders to follow their hunches, rather than relying solely on evidence-based grant making. Not to put them in juxtaposition, but, you know, sometimes they are!

So, many of the innovations in philanthropy and what now would be considered, you know, genius in philanthropy came out of public foundations. There was this era of public foundations, that I think has now largely passed. I feel the same way, there was an era of women’s philanthropy that was so rich and so powerful, creating new things all the time, with very few resources, and creating an excitement in philanthropy that women’s philanthropy can no longer create. I am sorry about that, and that’s what I mean when I ask what are the costs of – what are the costs to philanthropy overall, and not only to philanthropy, what are the costs to movement building, to really making the world a better place, really living into the values that philanthropy purports to espouse, when you do not have a strong sector of public philanthropies?

There was a period of time in philanthropy when that form, and the benefits of that form, were highly, highly valued by many people in philanthropy.  Then over time and with many macro changes, that ceased to be the case. And I’m sorry about that because I think something is missing that, I feel anyway, was very important to forward progress in philanthropy and in movement building.

Tito:

It always takes somebody to do something first, and then oftentimes the actual fruits of that or the changes it can lead to can happen years or decades later.

Sara:

Yeah. And be taken up by different actors, which is perfectly normal.

But, I would come back to the question about accountability. How do you build and establish and ensure accountability in philanthropy? Public foundations played a huge role in that arena over a few decades. For example, the concept of democratizing  philanthropy, that you’re a philanthropist, whether you give $25 or whether you give $25 trillion – where is that concept now?

Tito:

I think there’s a little bit of an appetite for that, like for example, with Anand Giridharadas’ book, and there have been some interesting conversations about that. I mean, yeah, the problem is that there are such large new philanthropies that are so convinced they know how to wield their own power.

Sara:

Yes. And I haven’t really been in philanthropy, except on the board of the Proteus Fund for almost a decade now. So there’s Anand’s book, which I have not read closely, but I know what its thesis is, and then also Edgar Villanueva’s book, and other people who are putting out critiques. And I think this is great. People have always critiqued, but these are modern critiques that do touch a nerve, and that have a lot of truth in them. And I think it’s wonderful that these are new conversations in philanthropy.

Jesse:

Yeah. I agree all the way. I mean, I do think that there’s an opportunity. I think in some ways, what I’m hearing from you, Sara, is that in much of the ways that we’re mourning a loss of the civic fabric that has in the past helped us feel more connected as a country or community, or whatever, the same sort of loss is in philanthropy. And I guess that the inverse question is that if, if we’re trying to restore civic fabric, what is it that we need to restore the fabric in philanthropy?

Tito:

You mentioned in 2016, Jesse – when the question, so the base realization after 2016, in philanthropy and social justice movements, was: the thing we built was not up for this challenge. That somehow, in theory, social movements in the country should have been able to withstand and defeat the rise of something like this. So within philanthropy, it led to a lot of foundations examining theory of change. It’s like, what can we do differently? I’m curious if there are other similar moments that have inspired that kind of introspection, about what our values are, how we think we’re going to get there and how we do it together.

Sara:

Well, one from my era when I was in philanthropy I think would be Katrina. When Hurricane Katrina struck New Orleans. Many in philanthropy were trying to grapple with what it meant to have such a large scale disaster. And after Katrina you saw many more conversations about disaster philanthropy. Who in philanthropy needs to be prepared to give support and aid when disaster strikes? It was also a very place-based moment, and the huge impact of what happened fell squarely on low-income African American men and women. And the Ms Foundation got involved – this is exactly what we were talking about earlier, intersectionality, that in no place like the Gulf coast at that moment could you see race, class and gender working operating together so clearly. There was no question that low-income women of color were playing a singular role in knitting their families and their communities back together, and in imagining a different future. You could really feel, at least for a moment, that this disaster had been so broad that you could imagine systems changing in ways that would work for the people who were so badly impacted. That of course did not turn out to happen, but, there was a moment when we were all hopeful about that.

And when philanthropy came together in that region, led by a philanthropy in the region, the Foundation for the Mid-South, philanthropists of all kinds, you know, individuals, large foundations, regional foundations, really thinking and trying to learn through that Katrina experience, what worked and what didn’t work, what was helpful and not helpful at a moment like that. So I would say for me, that’s an era that’s kind of like now after the Trump election. Also it’s not just what philanthropy writ large can do, but I want to make it more specific. What is the impact that any philanthropy is trying to have right now?

For me in 2016, the biggest disappointment somehow was – boy, I thought we had this. Not philanthropy, but organizing, I thought organizing people (which of course is supported by philanthropy), I thought we had it. Like, this couldn’t happen. But it did. And then we could see where philanthropy was not making some of the right choices about what kind of organizing to support, and which leaders to believe in, which leaders to throw a lot of money at, etc. You know, philanthropy is very fickle. And people in philanthropy love leaders. And then you can be anointed a leader, and it both works to your benefit and it works against you too.

Sara:

Jesse, Why do you work in philanthropy? And what do you feel most hopeful about?

Jesse:

Well I would say, first off I work in philanthropy, but I also work at a very particular foundation. I would not have said I wanted to work in philanthropy until the right leader was at this foundation, and had brought alongside her a very courageous board. So that’s a response to the fact that governance matters. We are fortunate to have 501c4 resources, but remain grounded in a sort of philanthropic approach that we’re not deciders in any one electoral cycle, but we’re investors in communities that have been disinvested in, or never invested in. So I feel like the opportunity for influence at this particular moment in time, across a range of sectors – so, other peers in philanthropy, in the public sector, in other parts of the nonprofit sector that maybe don’t see themselves in the democracy space – it feels like the right moment to be talking across sectors, about identifying common thread of which we all seem to be aware. And that is in some ways, the failure of our particular form of democracy in delivering opportunity and a level playing field for people to succeed.

I think that’s where people are at. What’s been intriguing for us as our foundation has launched an initiative to squarely invest in electoral capacity in black, brown and other communities of color with an intersectional lens, that the conversations that we have with healthcare institutions and housing institutions and other philanthropic peers, there’s nodding of heads all around, which I feel like is in some ways indicative of people acknowledging that 2016 was the manifestation of all the symptoms that we’ve all been feeling for a long time.

And that is like: we have failed to live up to our promise as a country. It will take bigger and bolder things for us to actually get there. So that’s why I’m excited to be here. But, you know, ask me in five years. And I just want to say – I have just enjoyed the conversation so much, Sara, and to hear your perspective about philanthropy with a horizon that’s longer than my horizon.

Sara:

I’ve just really learned a lot and been very grateful for it, hearing from you. Thank you. And I think these intergenerational conversations are really important in philanthropy, that’s something I’d be excited about Proteus taking on in some way. Because I think that there’s so much learning to go around, and I’ve been thinking about (and worked at Smith College on) how does history, how can history influence what we do today –and the ways that stories that have not been told can be brought forward to attract more people to be involved in movements, and change our organizing strategies now. I think intergenerational conversation is really a huge part of that.