Foundations shifting practices but slow to share power, study finds

Foundations shifting practices but slow to share power, study finds

In response to the health, economic, and social impacts of COVID-19, the systemic racism and inequities highlighted by the pandemic, and mass protest sparked by incidents of police brutality, many U.S. foundations are changing their practices even as they move slowly to share power, a report from the Council on Foundations, Philanthropy California, and Dalberg Advisors finds.

The report, Shifting practices, sharing power? How U.S. philanthropy is responding to the 2020 crises (40 pages, PDF), notes that the multiple crises "have increased calls for more philanthropic institutions to shift existing practices and to ultimately share power to build an equitable future." Based on a survey of two hundred and fifty foundation leaders and in-depth interviews in July with fourteen foundation officials, the study looked at changes in practice in the areas of resources, priorities, and internal operations and found that the majority of foundations have yet to take significant steps to share power. In terms of resources, about 60 percent of respondents reported that they had increased or were planning to increase their 2020 grantmaking beyond previously budgeted levels, with an average increase of 17 percent. At the same time, many respondents indicated that they were hesitant to give more now as it might affect their ability to support their mission in the future, while only 20 percent of respondents whose foundations had an endowment said they were changing their investment practices, including introducing or expanding their mission-related investments.

In terms of priorities, respondents planned to allocate an average of 26 percent of their 2020 grantmaking dollars to COVID-19 response and recovery efforts and an average of 16 percent to racial equity initiatives. According to the survey, 60 percent of respondents are focusing their racial equity work on African-American communities — with many applying an intersectional lens to their efforts to support marginalized groups within Black communities, including low-income individuals (43 percent), women and girls (28 percent), LGBTQ individuals (25 percent), people with disabilities (19 percent), and older adults (14 percent). At the same time, the report's authors note that the percentage of respondents who said racial equity was a primary or key focus of their work increased by only 11 percentage points from the beginning of the year, to 62 percent, and that much of the increase in racial equity funding has been driven by grants and commitments made by corporate foundations. Respondents also said that existing policies and tools for advancing racial equity were inadequate and in many cases limited their foundations' ability to integrate a racial equity focus into their work.

In terms of practice, the survey found that 85 percent of respondents had made changes to their grantmaking to better support existing grantees, including loosening restrictions (74 percent of those making changes), reducing reporting requirements (66 percent), allowing grantees to redirect grant funds (63 percent), and extending grant timelines (62 percent), with 30 percent of those making changes offering technical assistance beyond the grant. But while 52 percent of foundation leaders said they were actively looking at their internal processes, including adopting diversity, equity, and inclusion (DEI) initiatives, only 17 percent said they were stepping up their internal power sharing efforts by delegating decision making to program officers, and only 13 percent said they had strengthened their commitment to hiring Black, Indigenous, and/or people of color (BIPOC).

To lay the groundwork for a more meaningful shift in the power dynamic between funders and grantees, the report urges foundations to take four critical steps: interrogate the power and privilege of staff and de-bias decision making; hire, promote, fund, and listen to BIPOC leaders; make investment decisions based on values and principles rather than rigid processes; and leverage the foundation's full financial power to advance its mission.

(Photo credit: pxfuel)

"Shifting practices, sharing power? How U.S. philanthropy is responding to the 2020 crises." Council on Foundations, Philanthropy California, and Dalberg Advisors report 09/17/2020.