This article appeared in Stanford Social Innovation Review.
Over the past several months, philanthropy has faced rising criticism for its lack of transparency or accountability, perpetuation of wealth inequality, and preservation of a system of exploitation. As Ford Foundation CEO Darren Walker reminds us, this critique is not new: Decades ago, Martin Luther King Jr. warned philanthropists not to “overlook the circumstances of economic injustice which make philanthropy necessary.”
One way in which these injustices have played out is in philanthropy’s failure to hire or fund people of color. Less than 5 percent of foundation CEOs are diverse leaders, and just 4 percent of grants and contributions go to diverse-led organizations.
These bleak statistics have many leaders—including ourselves—trying to do better. To find our way forward, we’ve convened dozens of funders over the past year to discuss how to improve our efforts around diversity, equity, and inclusion (DEI). Three guidelines have emerged:
1. Re-define Risk
“Grassroots doesn’t mean small, grassroots can be big and impactful.” –Solome Lemma, Thousand Currents
Funders often label funding applicants as risky because they lack data to show their impact or don't have a degree from certain universities. Such an assessment fails in a major way: It doesn't incorporate the value of a leader’s ties to the communities they serve and experience in the field. Philanthropy must acknowledge the extent to which bias and racism play a role in this risk calculation and create metrics that value experience and community connections. This has nothing to do with a so-called “lowering of the bar.” It's about valuing leaders from all backgrounds and their hard-won experience. For example, Segal Family Foundation launched its African Visionary Fellowship in 2017 to give weight to experiential capital in its portfolio and find ways to propel African leaders toward resources at the same rate as their Western peers. Similarly, Thousand Currents seeks to fund grassroots organizations in the countries where they work, combatting the trend that only 12 percent of international organizationsthat receive funding are actually operating in the developing world.
2. Emphasize Trust
“Philanthropists must shift from gatekeepers to allies.” –Katie Bunten-Wamaru, formerly of Segal Family Foundation
Trust is a key ingredient to building processes that favor diversity, equity and inclusion. Yet lengthy grant applications and extensive reporting requirements for nonprofits imply a lack of trust. They also disproportionately affect diverse leaders, who may lack connections or face a double standard due to implicit biases. Philanthropy must shift from the position of gatekeeper to the role of ally and partner. The Whitman Institute, for instance, employs “trust-based philanthropy,” a movement which seeks to address the power imbalance between funders and grantees by eliminating grant applications, reducing reporting requirements, and providing multi-year grants so that nonprofits don’t have to worry about losing funding if they are honest about both their successes and their failures. In another example, Heinz Endowments used grantmaking to get not just input from the community, but also engagement from community leaders to form strategic priorities for key areas of its philanthropy. Both organizations put those that they are serving—either grantee partners or the community—at the center of their approach, moving forward from a place of trust.
3. Reflect the Community
While there has been a push for nonprofits to be more transparent about their staff, philanthropy has remained mostly silent about the diversity of its teams and portfolios. According to D5 Coalition, 80 percent of foundation staff and 91 percent of foundation CEOs are white. Such uniformity goes a long way toward explaining inequitable funding outcomes; after all, staff, CEOs, and others with decision-making authority play a critical role in any changes to an organization. Foundations are already pushing themselves to reflect the communities they serve in a number of ways. The Rosenberg Foundation has an advisory committee of dozens of community-based leaders who help find underrepresented talent for the Leading Edge fellowship. And Tipping Point Community audited its staff and board, and surveyed its grantees, to discover ways that it could augment DEI in its work environment, staff, and grantmaking.
We have reached a moment when foundations must face the ways they may be reinforcing inequality. By re-defining risk, emphasizing trust, and reflecting the community, philanthropy can make great progress on diversity, equity and inclusion. Failing to do so may perpetuate the very inequities foundations seek to solve.