This article concludes NPQ’s series on Community-Driven Philanthropy. In this series, movement leaders explore what’s possible if philanthropy adopts a reparative model—one in which it supports the leadership of BIPOC communities, not just by writing grants, but by shifting assets and control over resources to frontline communities.
The movement for reparations in the United States—a Black-led movement that began even before slavery’s end—is making unprecedented strides forward, and governments across the country are beginning to act. In October 2020, California became the first state to initiate an official task force to study and develop a reparations plan for Black Americans harmed by slavery and its legacies. In March 2021, the city council in Evanston, Illinois, approved the Local Reparations Restorative Housing Program to address racial discrimination in housing. In April 2021, HR 40 was voted out of committee for the first time in its 32-year history. If passed, the bill would establish a commission to study the negative effects of slavery.
These initiatives represent just a few of the many forms that advocacy for reparations can take. Other activities include grassroots power-building, research, narrative change, and stakeholder mobilization. There is an enormous amount of work to be done, and it needs real investment to be successful.
A new philanthropic model, in the form of asset transfers coupled with a comprehensive racial repair framework, would deepen investment in Black communities while reflecting the reparations movement’s goals. In addition, it would move the philanthropic sector into a liminal space (ie, a transitional opening for social change) that could decrease the need for philanthropy in the first place.
A New Philanthropic Model
The engine of philanthropy runs on hoarded wealth. Many—if not most—foundation benefactors earned their fortunes through the exploitation of people, land, and resources. Once accumulated, this wealth is maintained—often in perpetuity.
If foundations spent the money currently locked away in endowments, it might be possible to transform the systems that create the societal problems that foundations are dealing with.
As is well known, foundations with endowments generate returns by investing those endowments, whether in the bond or stock markets or through hedge fund placements in private equity. They usually limit their giving to the federally mandated minimum of five percent of overall assets and have boards of trustees who make investment decisions but are far removed from the problems those investments aim to solve.
Many within philanthropy contend that limiting giving in this way is important to ensure that foundations can continue to finance mission-driven work. However, this approach has downsides. If foundations spent the money currently locked away in endowments, it might be possible to transform the systems that create the societal problems that foundations are dealing with. In short, while foundation leaders believe that preserving foundation assets in perpetuity serves the public interest, movement leaders involved in systems change hold a different view.
What if philanthropy wasn’t just about financial investment, but also about reckoning with the systems that created concentrated wealth in the first place, and understanding how to transform those systems to make them more just for all?
The US is seeing a resurgence of white supremacist rhetoric and violence, and despite many efforts, the racial wealth gap is not closing—it is widening. Our criminal justice system continues to target Black people, and Black communities have been hit hardest by the pandemic and a slowing economy. A new model of philanthropy is needed to address this at scale and with speed.
What would it look like if, instead of grants, philanthropy took the form of asset transfers that shift funds to reparations movement organizations to spend or steward as they see fit? What if the power dynamic was dramatically flipped, and reparations movement organizations didn’t have to worry about sustainable funding? And what if philanthropy wasn’t just about financial investment, but also about reckoning with the systems that created concentrated wealth in the first place, and understanding how to transform those systems to make them more just for all?
Rooting the new model in repair
We believe that a culture of repair must be embedded into all institutions we create—including philanthropy—to ensure Black people can thrive.
At Liberation Ventures, we define repair as an iterative, cyclical process with four components: reckoning, acknowledgment, accountability, and redress. This framework was developed through a study of frameworks across disciplines—from transitional and restorative justice, to prison-industrial complex abolition, to psychology and religion. It is a living framework; as more individuals and organizations try it out, it will evolve in tangent with our lived experiences. It can apply to all sectors, but here we use it to ask: what might a comprehensive philanthropic approach to repair look like?
We can begin with the obvious—financial redress. MacKenzie Scott has received a great deal of attention for giving a ton of cash to many incredible Black- and Indigenous-led organizations. What she has not done is shifted her assets—or given movement leaders control over whether to invest those assets or spend them down as informed by their proximity to the challenges at hand. Such a move would mean sharing not just cash, but power.
Control of money is important, but it is not the only component of repair. The choice to shift assets stems from an understanding of the unjust systems that enabled a privileged few—including donors and foundations—to amass great wealth while depressing the wealth of so many others, especially Black and Indigenous folks.
Public acknowledgment of this reckoning process models the process for others. Acknowledgment makes reckoning visible, which changes culture—and, in the process, helps communities that have been harmed feel seen. While donors like Scott may have important reasons for wanting to stay out of the limelight, sometimes donors’ public presence can upend the status quo by setting a new example for their peers.
Finally, holding donors accountable to grantees’ needs ensures that Black-led organizations and their communities control the narrative. Scott has shifted her approach from announcing grantees, to creating space for grantees to share the news on their own terms, providing one example of what accountability to communities looks like.
What else might accountability involve? Some possibilities include organizing peers to make similar commitments and, as Evanston’s aforementioned restorative housing program demonstrates, establishing local governance structures that create a new example for the field.
A Journey—Not a Destination
Trauma and theft at the scale of chattel slavery require time to heal. The redistribution of assets, paired with a reparative framework, would help bring more choice, freedom, and long-term sustainability to movement groups.
First, asset transfer would give reparations movement leaders control over how and when to invest or spend resources. When conditions are unfavorable to progress, movement leaders can use endowments to ensure sustainability; when conditions change, they can spend down to leverage windows of opportunity to create the most impact possible. This would enable those who are closest to the issues—and who have the clearest view of what is needed to win—to modulate levels of investment in the movement with more flexibility, agility, and speed.
Second, such an approach would enable movement organizations to upset the existing power dynamic, which favors philanthropists over those receiving funds. Giving movement leaders the choice to use endowments as a strategic tool would enable them to engage in long-term planning without worrying about funds being withdrawn due to a change of philanthropic fashion. This type of financial sustainability and security would result in widespread mental health benefits and increased organizational impact, and it would allow groups to operate from an abundance mindset rather than one of scarcity.
Third, asset transfers would help BIPOC-led organizations build durable infrastructure that prioritizes healing and wellness, instead of getting bogged down by short-term challenges and burn-out. In short, asset transfers make possible a baseline level of capital that leads to a more sustainable and flexible strategy for movements.
Asset transfer, paired with the ongoing work of comprehensive repair (reckoning, acknowledgement, accountability, and redress), could provide a framework for large-scale, flexible resourcing that heals our communities and benefits us all.
Finally, asset transfer could contribute to building trust across lines of racial and class difference. Such trust-building creates healing for those who have historically been harmed by unjust systems and for individuals who have long benefited but who also need to heal from these systems. As James Baldwin reminds us, “It is entirely up to the American people whether or not they are going to face and deal with and embrace this stranger whom they maligned so long. What white people have to do is try to find out in their own hearts why it was necessary to have a [n-word] in the first place…. The future of the country depends on that.”
Towards a Liberated Future
We want a liberated future: a just, multiracial democracy and an economy that values people and our planet over profit. Repair is the pathway to this future, and all of us—especially Black and Indigenous communities—deserve it.
New models of philanthropy are critical to bringing this vision to fruition. We need philanthropists who are willing to share power. Asset transfer, paired with the ongoing work of comprehensive repair (reckoning, acknowledgement, accountability, and redress), could provide a framework for large-scale, flexible resourcing that heals our communities and benefits us all.
This is only one step toward a world where philanthropy is unnecessary because our economic and democratic systems create just outcomes for all. In this world, wealth isn’t hoarded; it’s invested in ways that meet all people’s needs. A reparative model of philanthropy creates the liminal space needed to move closer to this new world.
This article originally appeared in the Nonprofit Quarterly. See the original article here.