Elites’ Influence on Global Progressive Change:
An Analysis of U.S. Private Foundations and Social Movement Organizations
MHR Professional Paper
In Partial Fulfillment of the Master of Human Rights Degree Requirements
The Hubert H. Humphrey School of Public Affairs and The College of Liberal Arts
The University of Minnesota
Kyla Rathjen
May 8, 2023
Signature below of Paper Supervisor certifies successful completion of oral presentation and completion
of final written version:
_______________________________ ____________________ ___________________
Dr. Carrie Oelberger, Assistant Professor Date, oral presentation Date, paper completion
Paper Supervisor
_______________________________________ ___________________
Anil Hurkadli, Saint Paul & Minnesota Foundation Date
Second Committee Member
Signature of Second Committee Member, certifying successful completion of professional paper
1
Subject Keywords
Philanthropy, private foundations, grantmaking, social movements, public charities, charitable
deduction, nonprofit organizations, policy reform
Abstract
This paper seeks to understand the contributions that U.S. private foundations make to
the collective, people-centered work of social movement organizations (SMOs) domestically and
globally, and to examine the ways in which the practices of private foundations could be adjusted
to better support social justice movements. Private foundations include independent, operating,
and corporate foundations, and are primarily grantmaking institutions that occasionally
administer programs. One of their few requirements is to spend a minimum of five percent of
their net assets each year to a very-broadly defined charitable purpose.
A social movement organization, or SMO, is a “complex, or formal, organization which
identifies its goals with the preferences of a social movement” and seeks to implement its goals
(McCarthy & Zald, 1977, p. 1218). The complex identities of SMOs include radical, autonomous,
grassroots organizations and professionalized, legally-registered, nonprofit organizations. SMOs
provide effective vehicles for bringing about policy change and social justice. Three elements of
the policies, programs, and culture that govern private foundations in the U.S. are examined in this
paper, including: regulatory structures and tax laws, “safe” grantmaking practices, and social
change discourse. While the lack of accountability that private foundations enjoy makes lasting
change challenging to accomplish, change is possible. In turn, each section is followed by
recommendations that are intended to increase pressure in a few areas that will catalyze change.
2
Acknowledgements
I owe this professional paper to my friends and former colleagues who are championing
community-led development in their communities in Uganda, Tanzania, Kenya, and Guatemala.
They are providing jobs, growing local economies, inspiring stronger families, building resilient
and healthy communities, and safeguarding access to human rights against many odds. Their
work is propelled by profoundly courageous, brave, and thoughtful leadership that encourages
me to be a better global practitioner. This paper is in gratitude to them and their work.
3
Introduction
Last year, at the height of Kenya’s worst drought in forty years and amidst skyrocketing
food prices resulting from war between Russia and Ukraine, more than fifty-three million
Kenyans experienced threats to their food sovereignty. Industrial interventions like reversing a
decade-old ban on the cultivation of genetically-modified crops and the criminalization of
seed-sharing practices under the Kenyan Seed and Plant Varieties Act were inhibiting Kenyans
from controlling how their food is produced – and they prompted the Kenyan Peasants League
(KPL) to act. KPL is a social movement of peasant farmers, fishers, pastoralists, and consumers
who promote self-determined agriculture and alternative food systems that put people at the
center. It was KPL who petitioned to the High Court of Kenya to reinstate a ban on genetically
modified crops – and in 2022, they won (Thousand Currents, 2023).
Movements like KPL are broadly focused on moving systems, structures and institutions
toward justice and equity. They often rely on funding from movement supporters to make
changes in food sovereignty, climate justice, and economic justice possible. Unfortunately,
funding is too often not distributed in a way that puts power in the hands of people-powered
social movement organizations. This paper seeks to understand the contributions that U.S.
private foundations make to the collective, people-centered work of social movement
organizations (SMOs) domestically and globally, and to examine the ways in which the practices
of private foundations could be adjusted to better support social justice movements. Three
elements of the policies, programs, and culture that govern private foundations in the U.S. will
be examined, including: regulatory structures and tax laws, “safe” grantmaking practices, and
social change discourse. While critiques of private foundations do not outright negate the good
4
and meaningful work that many of them make possible, improvements in policies, programs, and
culture have the power to make progressive change and just outcomes more viable.
Understanding Private Foundations
Under the Internal Revenue Code Section 501(c), the U.S. government designates certain
types of organizations as tax-exempt, in an attempt to promote their ability to provide a public
good. While more than thirty types of organizations exist under this code, public charities and
private foundations are among the most vernacularly familiar under the classification of 501(c)3
(Candid, 2021). Private foundations are primarily distinct from public charities in that they receive
income from one or a few major sources of income – such as a family, a corporation, or handful of
donors – rather than receiving funding from many sources, and they use payouts from an
endowment to fund their activities (“Exempt Organization Types,” n.d.; Reich, 2018). Private
foundations include independent, operating, and corporate foundations, and are primarily
grantmaking institutions that occasionally administer programs (Candid, 2021). Nationally, the
largest and highly recognized private foundations include The Ford Foundation, The Bill and
Melinda Gates Foundation, and The William and Flora Hewlett Foundation. It is important to
acknowledge that each type of foundation has unique needs, and their reputations, funding
practices, and missions vary greatly. However, this paper will explore private foundations at large,
as their interactions with SMOs are largely persistent across different types of foundations.
Private foundations in the U.S. are subject to minimal accountability mechanisms. They
have no market accountability and no electoral accountability, as they have no consumers, no
marketplace competitors, no investors, and no required responsiveness to citizens (Reich, 2018).
Private foundations enjoy significant independence in their ability to shift between funding
5
activities at any time and setting their own terms for distributing funds. At the same time, private
foundations experience major privileges in the form of tax benefits and exemptions that hinge on
the assumption that foundations are serving the public good (Reich, 2018; Hammack & Anheier,
2010). Private foundations are subject to some forms of procedural accountability. One of their few
requirements is to spend a minimum of five percent of their net assets each year to a broadly-
defined charitable purpose, including “relief of the poor, the distressed, or the underprivileged;
[....] lessening the burdens of government; [...] eliminating prejudice and discrimination; [and]
defending human and civil rights secured by law” (“Exempt Organization Types,” n.d.).
Although foundation giving makes up a modest 19% of total philanthropic giving in the
U.S. (compared to individual giving at 67%, corporate giving at 4%, and bequests at 9%), private
foundations continue to grow by number and size (Giving USA, 2022). The late twentieth century
and early twenty-first century saw particularly unparalleled growth of the financial assets of
private foundations. In 2021, nearly 128,000 private foundations held assets of $1.2 trillion, with
$90 billion in total giving (Candid, 2021). For context, Mexico had a Gross Domestic Product
(GDP) of approximately $1.27 trillion in 2021, followed by Indonesia at $1.19 trillion. Only 14
countries had GDPs larger than the combined financial assets of private foundations in 2021
(World Bank, n.d.). In 2016, the assets of The Bill and Melinda Gates Foundation alone totaled
more than $80 billion. That placed the Foundation ahead of the GDP of most countries in Africa
(Reich, 2018). At the same time, foundation giving has grown almost every year since 2010,
increasing by $18B between 2014 and 2018 alone (Candid, 2021; Giving USA, 2020). The
financial assets sitting in endowed funds across the U.S. are not insignificant.
6
Understanding Social Movement Organizations
Many definitions of the term “social movement” exist. According to social scientists
McCarthy and Zald (1977), a social movement is “a set of opinions and beliefs in a population
which represents preferences for changing some elements of the social structure and/or reward
distribution of a society” – in essence, a movement is a structure for guiding social change (p.
1217-1218). Additionally, McCarthy and Zald say a social movement organization, or SMO, is a
“complex, or formal, organization which identifies its goals with the preferences of a social
movement” and seeks to implement its goals (p. 1218). The complex identities of SMOs include an
array of locally-based struggles such as radical, autonomous, grassroots organizations, as well as
professionalized, legally-registered, nonprofit organizations. Sometimes these SMOs play
complementary roles, in which nonprofits support the work of autonomous movements (Tang,
2017). Other times, influxes of institutional funding and the non-profitization of social movements
creates a deep categorical divide (Tang, 2017; McCarthy & Zald, 1977).
This paper, in alignment with McCarthy and Zald’s seminal contributions to the study of
social movements, seeks to use an inclusive definition of SMOs that embraces this complexity. At
the same time, by analyzing the relationship between private foundations and SMOs, the definition
utilized in many components of this paper leans on SMOs that are “NGOized” through registration
as a charitable nonprofit, or 501(c)3. At its core, 501(c)3 is an IRS category – a registration with
the U.S. government that allows organizations to experience certain tax privileges, including
receiving funding from private foundations without paying income taxes (Minkoff & Agnone,
2010; Tang, 2017). While the purpose of any given 501(c)3 must be broadly public in nature, there
is enormous variation in the scope and activities they conduct (Boris, 1999). 501(c)3 organizations
7
may promote “public well-being or benefits for their own members,” and while some bring people
together, “others may be divisive or even destructive” (Boris, 1999, p.10).
Although the nonprofit structure has been a dominant model for organizing social
movements since the 1970s, it falls short of fully capturing the range of SMOs that are organizing
for social change (Smith, 2017; Tang, 2017). One institutional definition of SMOs comes from the
National Taxonomy of Exempt Entities (NTEE), a system used by the IRS and the National Center
for Charitable Statistics (NCCS) to categorize nonprofit organizations according to their primary
purpose of focus. This is a widely accepted categorization of nonprofit organizations in the U.S., as
it advanced a consistent way of defining and analyzing nonprofit activity (Fyall et al., 2018). In
this classification system, SMOs are encompassed by the categories of civil rights, social action,
and advocacy and include organizations working to change public policies and opinions and
advocate on the behalf of the rights of women, immigrants, ethnic and racial minorities, the
elderly, and the LGBT community. The definition also includes efforts that promote reproductive
rights and a range of civil liberties (Minkoff & Agnone, 2010). One major drawback to this
definition is that NTEE codes are mutually exclusive, and each organization only has one. It
effectively fails to holistically capture the intersectional, adaptive, ever-changing, and
multi-faceted work that many SMOs do (Boris, 1999). SMOs serve many public purposes, and in
the process of being categorized, many issues are consigned by their definition “to the more
shadowy realms of social problems” and fail to attract the attention of policy analysts (Piven &
Cloward, 1979, p. 5).
Broadly speaking, SMOs make explicit commitments to progressive social change through
collective, direct action and strategic pressure. Their actions may include policy advocacy,
narrative shift, community organizing, or efforts to push new or excluded agendas forward
8
(Minkoff & Agnone, 2010; Lemma, 2018). Solome Lemma, Executive Director of social
movement-funder Thousand Currents, says “what differentiates movements from other social good
efforts is that they are rooted in and led by ‘the people’” – and importantly, that they are
accountable to people, not boards or funders (Lemma, 2018, para. 4). SMOs are also effective
vehicles for bringing about policy change and social justice (Candid, 2021; Htun & Weldon, 2012).
In an empirical account of SMOs and the development of policies on violence against women,
Htun and Weldon (2012) demonstrate that the autonomous mobilization of SMOs is essential to
advancing progressive social policy change domestically and transnationally. In their analysis, the
ability of SMOs to drive policy change is more significant “than women’s descriptive
representation inside the legislature or the impact of political parties” (Htun & Weldon, 2012, p.
564). Other public policy scholars commonly defend the significance of SMOs in advancing
inclusion, promoting democracy, and putting new issues on political agendas (Htun & Weldon,
2012). The impact of SMOs remains evident and meaningful.
Financing Social Movement Organizations
Many SMOs are upheld by extremely valuable community resources that extend beyond
capital – political capabilities, Indigenous ways of knowing, and direct-action skills, to name a
few. At the same time, the funding made available to SMOs influences the degree to which a
movement can grow into a meaningful force for social change. Often, SMOs begin with the
resources provided by their constituents (McCarthy & Zald, 1977). Resource mobilization
theorists, who examine the relationship between highly endowed organizations and their
less-powerful grantees, highlight how this constituent funding falls short. According to the theory,
the mass base of SMOs is often too under-resourced and lacks sufficient power to generate capital
9
that will sustain their movements, so they are forced to seek resources from outside their
beneficiary group (Silver, 2004; Corrigall-Brown, 2016). External funding becomes particularly
meaningful for SMOs seeking to transition from smaller, individually supported movements, into
larger, more widely accepted actors. It remains evident that external funders are fundamental to
igniting the success of SMOs, and private foundations have the potential to be a source of stability
and innovation for SMOs (Minkoff & Agnone, 2010).
At a conceptual level, it can be easy to assume that private foundations are rising to the
needs of SMOs by distributing funds as part of their commitment to charitable purposes. However,
extensive analysis from philanthropic scholars show that this is not the case – private foundations
are only moderately distributive (Wolpert, 2006; Oelberger et al., 2020). Sociologist Craig Jenkins
(as cited in Corrigall-Brown, 2016) estimates that between 1955 and 1980, less than 1 percent of
foundation funding supported the activities of SMOs. Even though this percentage has increased
marginally since the 1980s, Hammack and Anheier (2010) claim that when considered alongside
government agencies and individual donors, private foundations ultimately contribute to social
causes in a very minor way, and that both private foundations and the public have limited belief in
the ability of foundation resources to make a difference. Foundation assets, they argue, are
minimal relative to national wealth, so their capacity for wealth distribution is very limited
(Hammack & Anheier, 2010).
I believe this assertion is short-sighted. Private foundations have large-scale financial
capacity to mobilize independent resources for needs and purposes that otherwise may not be met.
As much as the size, purpose, and approach of private foundations varies, they exert meaningful
influence on politics, culture, livelihoods, and the protection of human rights (Fleishman, 2009).
Private foundations have the potential for durable influence on the organizations and the
10
communities they serve. As such, their role in supporting SMOs demands ongoing criticism and
attention. While many critiques deserve to be explored, only a few will be addressed in this paper,
including: regulatory structures and laws that serve the wealthy instead of SMOs, safe grantmaking
practices that prohibit transformative action, and a softening of social change discourse.
Limitations in Scope
As briefly illustrated, SMOs are extremely complex in their organizational identities –
they include U.S.-based, transnational, indigenous, liberal, and conservative characteristics, and
are based on a range of social identities, cultural values, and more. Some social movements have
many SMOs fighting for them, while many others remain distant from systems of institutional
support. Ultimately, the categorical use of “SMOs” in this paper will not capture the full breadth
of characteristics that make up social movements and the organizations that represent them.
Although this paper ultimately encourages readers to move beyond a rigid concept of SMOs and
embrace a more nuanced definition, the following discussion relies on a subset of SMOs that are
incorporated as 501(c)3 organizations.
Private foundations are incentivized to give to 501(c)3 organizations. Firstly, the
tax-exempt status certifies that receiving organizations will use the funds for charitable purposes.
Secondly, grantmaking to global organizations that are not recognized as 501(c)3 charities is
complicated by special rules like providing equivalency determinations and demonstrating
expenditure responsibility, to prove that funds are qualified distributions. As a result, private
foundations are motivated to give to domestic, 501(c)3 organizations (“Grants to Foreign
Organizations,” n.d.). However, many SMOs are not able to incorporate as 501(c)3s, given the
bureaucratic financial and legal processes it necessitates. Other SMOs actively choose not to
11
incorporate, in an effort to maintain independence from corporate, elite wealth (Smith, 2017).
These factors complicate the definition of SMOs used in this paper and limit a more nuanced
analysis. There is significant opportunity for future studies to build on the themes discussed in
this paper, in ways that more thoroughly engage with the breadth of identities among SMOs.
Historiography and Literature Review
Growing academic literature documents the evolution of private foundations and their
impact domestically and internationally, and an even more popular literature offers critiques and
suggestions about how they might do better. It is my intent that this brief historical background
provides groundwork from which I will explore the practices of private foundations and make
recommendations. Although private foundations are a relatively young phenomenon, the
shortcomings of today’s systems remain intricately linked to those of the past. I believe that
responsible participants in private philanthropy should learn from the past, especially including
the rise of direct and indirect control mechanisms that have created a template for modern
philanthropy to follow (O’Connor, 2010; Reich, 2018).
While the modern private foundation in the United States is rooted in historical traditions
of philanthropy outside of the Judeo-Christian world, a new age of private foundations began in
the twentieth century with the well-documented, massive accumulation of private wealth by
“The Big Three”: corporate multimillionaires Andrew Carnegie, John D. Rockefeller, and
Russell Sage (Reich, 2018; Smith, 2017; Ostrander, 2005). Some scholars, including
philanthropic expert Waldemar Nielsen, believe the contributions of The Big Three to private
philanthropy stemmed from a sense of civic responsibility (Ostrander, 2005). Similarly, historian
Robert Bremner argues that the efforts of The Big Three were designed to establish institutions
“capable of distributing private wealth with greater intelligence and vision” than individual
12
donors themselves (Ostrander, 2005, p. 37). Other scholars give less credence to their efforts,
saying The Big Three simply were unaware of anything better to do with their money (Ostrander,
2005). The least complimentary literature comes from scholars who believe that the private
philanthropy of The Big Three and their successors is an elitist abuse of power, whose opposition
to an equitable distribution of wealth and support of ideologies that serve their personal class
interests created a foundation for philanthropy in the twenty-first century (Ostrander, 2005). As
Andrea Smith (2017) aptly summarizes, these “robber barons” created institutions that exist in
perpetuity and shield their earnings from taxation (p. 4).
By the end of the Second World War, private foundations gained affiliation with social
and cultural policy in the U.S., joining a “second golden age” of philanthropy (Reich, 2018, p.
14). An elite establishment of corporate, government, military, media, and philanthropic leaders
who believed “wholeheartedly in a boundless and beneficent corporate capitalism” began acting
on their broad expertise to advance human welfare (Ferguson, 2013, p. 6). Even more, a
nationally mounting sense of crisis around race and poverty in the U.S. at the pinnacle of the
Cold War pushed private foundations to pursue social change more aggressively. The number of
private foundations grew significantly, from approximately 200 in 1930 to about 2,000 in 1959
(Reich, 2018). The Ford Foundation soon became the largest private foundation in the world, and
while it claimed to address issues of systematic marginalization through liberal reform, many
scholars argue that it effectively maintained capitalist ideologies instead (Soskis & Katz, 2016;
Kohls-Arenas, 2015). They say The Ford Foundation funded systems that sustained the very
marginalization it claimed to address (Soskis & Katz, 2016; Kohls-Arenas, 2015). Specifically,
The Ford Foundation funded solutions to “black behavioral pathology, rather than structural
racism,” effectively resourcing a new class of elite black leadership and diminishing radical
13
social change and Black uprisings (Ferguson, 2018, Holding the Strings section). Ferguson
(2018) calls this philanthropic engagement a form of race management, “at best constricting and
at worst destructive” for its grantees (Limits of Philanthropy section). Others argue more
positively that the Ford Foundation took a more laudable, aggressive stand in support of the
rights of African Americans than foundations had ever before (Soskis & Katz, 2016). A
foundational debate in philanthropy began – are private foundations maintaining systemic wealth
disparities or successfully chipping away at progressive social change?
Similar patterns continued into the post-war civil rights era. From its founding in 1909,
the National Association for the Advancement of Colored People (NAACP) was “committed to
raising national awareness to the injustice of racial violence,” beginning with anti-lynching and
mob-violence reduction campaigns (Francis, 2019, p. 287). A funding relationship with the
American Fund for Public Service, a privately endowed fund also known as the Garland Fund,
transformed the NAACP’s commitment to these campaigns. The Garland Fund found education
to be one of the most important mechanisms for improving society, and over time, it discouraged
the NAACP’s work on racial violence and human rights and encouraged a focus on black
education (Francis, 2019). While some scholars emphasize the NAACP’s ability to accomplish
significant educational policy through the Garland Fund, including Brown v. Board of Education,
others believe this movement capture illustrates the “shallowness of white liberal commitment to
black equality” (Francis, 2019; Anderson, 2003, p. 5). Although these scholars hold opposing
views, the example offers a compelling argument that private, liberal foundations were using
their resources to alter the dissident behavior of minority grantees.
Scholars like Piven & Cloward (1979) assert that the control of social movements
through private foundations and elite institutions, including the state, was far less ambiguous.
14
Similarly, historical scholars Lethabo and Osayande (2017) remind us that the architects of these
major foundations were “perfectly attuned” to the politics that influenced the United States’
presence on the world stage, even acting as an extension of the government itself (p. 88). While
the U.S. government was extensively facilitating the repression of anti-racist, feminist, and gay
liberation movements throughout the 1960s by directly aiding police and the FBI in
criminalizing radical social movements, private foundations were also utilized to fund the
surveillance of low-income, urban, black communities (Thuma, 2019; Roman, 2016; Saito,
2008). A Select Committee found that between 1963-1966, “of the 700 grants over $10,000
given by 164 foundations, at least 108 involved partial or completed CIA funding” (Lethabo &
Osayande, 2017, p. 88). Much remains to be explored regarding the relationship between private
foundations and the state in controlling social movements.
At the end of the twentieth century, the number of private foundations continued to grow
massively, with over 30,000 in 1985 and nearly 100,000 by early 2014 (Reich, 2018). Today, the
Ford Foundation is the nation’s second largest philanthropic foundation, and current President
Darren Walker has been called the “embodiment of its decades-long strategy of elite racial
liberalism” (Ferguson, 2018, Limits of Liberal Philanthropy section). In 2016, The Ford
Foundation granted $40 million to the Black Lives Matter global organization, whose mission is
to eradicate white supremacy and intervene in violence inflicted on Black communities by the
state. However, in a public statement, The Ford Foundation reframed the impetus for their grant,
emphasizing three police officers who were killed while defending the right to freedom of
expression at a protest for the murder of Philando Castile and Alton Sterling. Effectively, the
Foundation was affirming the role of the police rather than prioritizing Black lives (Ferguson,
15
2018; Kelly-Green, 2016). These incompatible intentions reflect the Foundation’s problematic
history of liberal reform, in which private funds were used to intentionally alter public discourse.
To build on these historical perspectives, I offer three schools of thought that scholars use
to understand the role that private foundations play in relation to social justice movements and
the organizations that represent them: championing social and economic interests, co-opting and
destroying social movements, and channeling and altering social movements. This review of
modern literature seeks to gain an understanding of the doubts scholars share, such as whether
private foundations are genuinely seeking to support SMOs or if their grantmaking practices
function from a fear that funding SMOs may threaten the very political and economic structures
that enable the United States’ elite to accumulate and hoard their wealth in the first place (Faber
& McCarthy, 2005b; Smith, 2017).
Championing Social and Economic Interests
The pivotal role of private philanthropy in resourcing social movements, and particularly
in alleviating poverty, has been praised by scholars since the nineteenth century. To be clear,
most of these positive-thinking scholars discuss the benefits of philanthropy at large and refrain
from unpacking private foundations specifically. Andrew Carnegie’s Gospel of Wealth (1889) is
perhaps the earliest example, through his argument that the best way to deal with growing wealth
inequality was for the wealthy to utilize their surplus responsibly and thoughtfully. Bishop and
Green (2008) argue that super-rich philanthro-capitalists are best positioned to find solutions and
address social needs that are not being fully addressed by the government. Acs (2013) argues that
philanthropy is an underappreciated force of capitalism, noting that it stimulates economic
growth by promoting innovation in education, science, and medicine. Finally, Breeze (2021)
16
writes an emphatic and not uncommon defense of philanthropy, noting that despite some flaws, it
should be celebrated and championed for social interests and causes to flourish.
Co-Opting and Destroying Social Movements
Many philanthropic scholars discuss the “deceptive underbelly” of private foundations,
emphasizing the wealthy White who utilize their wealth to co-opt and squash social movements
while protecting capitalist structures that serve their personal interests (Francis, 2019, p. 278;
Lethabo & Osayande, 2017). Paul Kivel (2017) illustrates the ways that ruling classes exploit
their financial assets to suppress dissent and demands for structural change by creating an
illusion of responsive institutions. This “buffer zone” strategy, he says, separates leadership from
their communities and creates new groups of professionals who provide social services without
producing greater social equality or justice (Kivel, 2017). Lethabo and Osayande (2017) discuss
the ways that the white Left and the nonprofits they represent act as “credentialed” power
brokers between capital and the oppressed people, making only cosmetic adjustments to systems
of oppression and ultimately protecting their personal wealth rather than advancing wealth
redistribution (p. 81). Karen Ferguson (2018) uses liberal philanthropy to illustrate this school of
thought. While seemingly progressive foundations appear willing to fund grassroots movements
and organizations through their promotion of “diversity” and celebration of elite multi-
culturalism, she says their ultimate obligation is to American capitalism. For instance, The Ford
Foundation, in the earlier example of funding Black Lives Matter, blatantly fails to reckon with
the power structures of racial capitalism. Ferguson says this liberal philanthropy asks funders to
“leverage their privilege to disrupt the levers of inequality” without eliminating “either the
privilege or the levers” (2018, Limits of Liberal Philanthropy section). As previously discussed,
17
Megan Ming Francis (2019) also explores this school of thought through a movement capture
framework, as seen in private funders exploiting their influence over the NAACP in the 1920s.
Channeling and Altering Social Movements
Other scholars have taken a middle ground, whereby private foundations “channel” social
movements into narrow and less threatening directions but do not rest on explicit intentions of
social control (Brulle & Jenkins, 2005). Faber and McCarthy (2005b) outline ways that liberal,
private foundations exclude and marginalize SMOs, including denying funding to specific
groups, funding only politically centrist movements, and limiting movement-building capacities
through strict stipulations. Kohls-Arena (2015) identifies private philanthropy’s control of social
movements in the context of farmworker and immigrant poverty in central California. Here, she
says, poverty endures because of large-scale farming and reliance on low-wage, labor-intensive
fieldwork that primarily benefits agricultural conglomerates. However, private foundations
prioritize the efforts, behaviors, and responsibilities of poor individuals to alleviate poverty. In
sum, foundations utilized a self-help formula to appear to address poverty but failed to address
the root causes of poverty (Kohls-Arena, 2015). In a study of the charter school movement in
education reform, Quinn et al. (2016) finds that the channeling of funds from private foundations
– through an influx of education professionals with links to the business community and elites –
served to decouple charter schools from their original ideas about local control and ultimately
serve different and sometimes contradictory ideas about charter school management. Other
scholars, like Minkoff and Agnone (2010), assert that it is too soon to generalize from the unique
cases of foundations using their power to co-opt social movement organizations. They say the
evidence is insufficient to implicate the sector at large.
18
The Problematic Practices of Private Foundations and Recommendations for Change
Evidently, much debate remains regarding the relationships between private foundations
and SMOs. It is my opinion that whether organized philanthropy is destroying social movements
or keeping them alive through coercive means, the result is the same: private foundations in the
U.S. have engaged in practices that stabilize the financial standing of the wealthy elite and soften
the progressive potential of SMOs. These behaviors stem from deeply socialized manifestations
of capitalism in philanthropy, and the implications for progressive social change efforts are huge.
The following section outlines what I believe to be some of the problematic practices that private
foundations use to protect accumulated wealth and exert undue influence over SMOs. While the
lack of accountability that private foundations enjoy makes lasting change challenging to
accomplish, change is possible. In turn, each section is followed by recommendations that are
intended to increase pressure in a few areas that I believe will catalyze progressive change.
(1a) Current Practice: Regulatory Structures & Tax Laws
In some ways, the giving conducted by private foundations is not just an individual activity,
it is an institutional arrangement, facilitated by the laws and regulatory structures of the state. At
the federal level, both donors and private foundations are held to these regulations – and SMOs
experience their impact. To start, individual donors who make contributions to private foundations
experience reduced tax burdens. This charitable deduction, which has existed in various versions
since the federal income tax was created in 1917, is a notable institutional incentive for individual
donors (Reich, 2018). Unfortunately, this incentive is only available to those who itemize their
deductions, which is primarily high-income households – in 2017, high-income households were
defined as joint filers with taxable income over $153K (Reich, 2018). This is a hugely important
19
distinction. Even though 90 percent of households in the U.S. make charitable contributions every
year and low-income individuals give away more as a percentage of their income, most individual
givers are excluded from the charitable deduction, because they do not itemize their deductions.
The problem with this arbitrary tax code is not necessarily that it applies unequally to different
individuals – although this may be unfair. For the purposes of this analysis, the primary issue is
that public funds lost to the tax deduction are disproportionately distributed to organizations that
the wealthiest individuals in the U.S. favor (Reich, 2018). Rob Reich (2018) says, “the 1 percent
receive a tax policy megaphone and the poor no or little policy amplification” (p. 81). Ultimately,
SMOs are on the losing side of this distribution, as their interests often challenge those of the elite.
As Piven & Cloward (1979) “crudely but clearly” summarize: “those who control the means of
producing wealth, have power over those who do not” (p. 1).
Private foundations are also subject to institutional regulations under the Internal Revenue
Service (IRS) that influence when, how much, and to whom private foundations give. Since the
Tax Reform Act of 1969, there have been minimal accountability structures in place to govern the
charitable activities of private foundations. Private foundations do not need to articulate any
grantmaking strategies or evaluate their grant making processes, let alone publish a phone number
or website. They are only required to fill out an annual tax form with rudimentary information
about their employees, their assets, and their trustees and fulfill a five percent spend-down
requirement (Reich, 2018). This payout rule is intended to help ensure that foundations create
benefits that are public, not private. However, one problematic aspect of this requirement is that it
can be fulfilled through spending on the administrative costs of running a private foundation,
including paying rent and salaries for staff and family members. The payout requirement can also
be fulfilled by giving to donor-advised funds (DAFS), a charitable investment account (Reich,
20
2018). Theoretically, the purpose of DAFs is to support charitable causes and produce public
benefit. However, DAFs have no legal requirement to make distributions, allowing for substantial
time between the tax benefits a donor experiences and the public benefit being produced. In effect,
wealth accumulates in protected funds and within elite families, and the public benefit fails to
reach SMOs. The current charitable deductions function to maintain inequitable distributions of
wealth under the facade of advancing the public good.
Much more research on the justification for these tax incentives is necessary, although
many groups attempt to do so. A typical defense is that it helps the state accomplish social value
and stimulates the production of public goods. As an example, as Congress advanced tax reforms
in 2013, professional economists lobbied for the continued maintenance of the charitable
deduction, calling it a “proper, beneficial, and socially cost-effective feature” of federal tax laws
that contribute to a civil society (Open Letter from Economists on the Charitable Deduction, n.d.).
They argued that the only population benefitting from the charitable deductions are those receiving
grants, not the taxpayers or private foundations. The Alliance for Charitable Reform’s defense of
philanthropic freedom is similarly exaggerated in its applause for donor intent, seeking to prevent
policies that would “place undue government regulations on philanthropic organizations” (Swirski,
2015).
In contrast, critiques of the legal arrangements of private foundations are certainly not new,
beginning as far back as Anne-Robert Turgot’s appraisal in the mid-eighteenth century. Turgot saw
private foundations as massively inefficient, ineffective, and “vainglorious” – even perpetuating
the conditions of the poor (Reich, 2018, p. 47). Specifically, Turgot illustrates that it is wishful
thinking that the intentions of the initial founders are maintained across generations and that even
when they are, no foundation’s purpose has guaranteed social utility in future generations. While
21
his attacks were largely aimed at diminishing the power of the Catholic Church, similar criticism
has been picked up and modified today (Reich, 2018). Policy and research analyst Christine E.
Ahn (2017) argues that due to charitable deductions laws, public funds that would typically be
allocated through democratic power of the electorate turns into private funds used for personal
agendas – namely, to protect elite financial and economic interests. In this way, tax subsidies cost
the U.S. Treasury (and therefore, U.S. citizens) more than $50 billion in forgone revenue in 2017
(Reich, 2018). In short, when private foundations are created, citizens challenging the interests of
the elite experience strain from the lost tax revenue. Rob Reich (2018) offers an increasingly
damning critique. He makes clear that the state is not just using tax codes to establish guidelines
within which philanthropy should take place. He says, if the state is funding “through a tax
expenditure, some philanthropic bad, it makes the state partially complicit in the bad action [...] It
is no exaggeration to say that as philanthropy is currently structured, when philanthropists do
harm, so too does the state” (Reich, 2018, p. 82). The implications of Reich’s assertion are striking.
It serves to condemn the state for the exclusion that SMOs and their constituents experience when
seeking to access grants from private foundations.
Many critics of philanthropy argue more broadly that as an institutional actor influencing
the provision of public goods, increased accountability is necessary (Brody & Tyler, 2010; Ealy,
2014). Regulations have skewed interests towards vast private fortunes rather than public benefit,
effectively centering an obligation to wealthy donors. SMOs, many of which seek to stimulate
deep and systemic impact, are kept from accessing hordes of wealth tied up in perpetual
endowments and inequitable wealth distribution is maintained.
22
(1b) Recommendation: Pursue Philanthropic Policy Reform
Private foundations must redefine their fiduciary responsibilities so that they are
increasingly in service of public benefit rather than a payout schedule. Philanthropic reform is
desperately needed – and it is possible. One major opportunity for policy reform rests in the
oversight of donor advised funds (DAFs). As previously discussed, a transfer of funds from a
private foundation to a DAF fulfills the federal minimum payout requirements. However, the
oversight of DAFs is insufficient and inhibits progressive change through SMOs. An estimated
$142B in funds were sitting in DAFs in 2019, with no requirement or incentive to be distributed to
charitable organizations, as donors have already received their tax incentive. Even more, because
there is no monitoring of the funds in DAFs, it is unclear who benefits and who is paid out from
them. It is also not made clear how SMOs can access those funds in an equitable manner (ACE
Act, n.d.). Progressive policies that are already underway can improve the reporting and payout
rules for DAFs. Bipartisan federal legislation to reform tax laws includes the Accelerating
Charitable Efforts (ACE) Act, introduced in 2021. The ACE Act would amend the Internal
Revenue Code in the following ways:
DAF Reporting: The ACE Act would mandate private foundations to include in annual
returns the amount they have contributed, the organizations to which the contributions were
made, and the advice given to any organizations they supported. It would also allow the
Attorney General to monitor and regulate DAFs (ACE Act, n.d.).
DAF Payouts: The ACE Act would replace existing private foundation payout structures
with 15-year and 50-year DAFs. 15-year DAFs would allow for tax benefits if the funds are
23
distributed within 15 years. 50-year DAFs would allow for capital gains and estate tax
benefits but no income tax deduction until funds are distributed. It would remove the ability
for private foundations to fulfill payout requirements by transferring funds to travel
expenses or salaries of family members (ACE Act, n.d.). Essentially, the bill says that if
you put money into a DAF this year, you can take a tax break if you distribute it within the
next 15 years. Or you can wait up to 50 years, but you don’t get a tax break until you
distribute the funds.
This is a common-sense proposal, with the potential to move more money to SMOs.
Unfortunately, many organizations in the philanthropic sector have opposed the bill, essentially
defending spending nothing on charitable organizations. Opposition includes: Philanthropy
Roundtable (PR), a deeply conservative voice in the sector that opposes government involvement
in the private charitable sector; the National Philanthropic Trust (NPT), who has repeatedly used
misleading information in defense of DAFs; and United Way Worldwide, a major charity who
would presumably benefit from increased donations encouraged by DAFs, but may be opposing
the bill in an attempt to defend their big donors (Gamboa, 2021; Moore, 2022). Fortunately, many
proponents of the bill exist as well. Members of The Initiative to Accelerate Charitable Giving
(IACG) include major private foundations like The Ford Foundation, The William & Flora Hewlett
Foundation, and The W.K. Kellogg Foundation. It also includes reputable progressive movement-
funders like The Segal Family Foundation and Seeding Justice (IACG, n.d.). Defending legislation
that will ruffle feathers is challenging, and it is why the bill has struggled to become law to-date.
However, it remains necessary to move forward.
Another opportunity for policy reform stems from ongoing federal discourse. On March 9,
24
2023, the U.S. Treasury Department released the General Explanations of the Administration’s
Fiscal Year 2024 Revenue Proposals, known colloquially as President Biden’s “Green Book”.
While the budget is essentially just a wish list that is unlikely to be introduced as legislation or
enacted by Congress in its entirety, it sends a clear message about the President’s priorities.
President Biden’s proposal would allow grants to DAFs to count as a qualifying distribution only if
the funds are distributed by the DAF by the end of the next taxable year. The proposal also
recommends that compensating or reimbursing “disqualified persons” such as family members
would not fulfill the payout requirement for private foundations (Department of Treasury, 2023).
Although President Biden introduced the same proposals for Fiscal Year 2023, with no movement
forward, the proposals offer meaningful traction for the future of philanthropic reform. Combined
with improvements in grantmaking strategies, SMOs could benefit hugely. There is strength and
meaning in normalizing this discourse at the federal and state levels.
A final opportunity for policy reform is in strengthening the non-itemizer deduction. As
previously discussed, current charitable deduction laws favor high-income households. This leads
to the preferences of the wealthy being weighed over those with less socio-economic means. In
2020, Congress created an above-the-line charitable deduction for non-itemizers through the
Coronavirus Aid, Relief, and Economic Security Act (CARES Act). This provision encouraged
individuals to contribute to charitable organizations in 2020, by permitting them to deduct up to
$300 of contributions, whether they itemize deductions or not. The Act’s provisions have since
returned to pre-CARES Act levels, but organizations like The Initiative to Accelerate Charitable
Giving (IACG) believe that Congress should consider options to expand and extend the
non-itemizer deduction, to increase the number of donors and the number of charitable
contributions made (CARE Act, 2020). They argue for its administration by the IRS and that it
25
should exclude donations to DAFs and private foundations (IACG, 2021). More importantly, I
believe it has the potential to more equitably value the preferences of households who are
otherwise unable to itemize their deductions – namely, those who are more likely to support the
progressive social change that SMOs advocate for. However, the philanthropic sector has been
talking about accountability mechanisms for decades (Lemma, 2018). So, what is stopping
foundations from making sure that wealth shifts to SMOs?
(2a) Current Practice: Making “Safe” Investments
Private foundations have significant power over how they fund SMOs. At the
programmatic level, these grantmaking mechanisms often prioritize the safety of private
foundations rather than liberating SMOs to tackle complex, intersectional issues. Restrictive,
modest, and short-term funding – elaborated on below – distracts SMOs by shifting their
attention from maintaining their mission to maintaining funding. Restrictive funding includes
grants focused on project-specific, defined sets of activities that demand burdensome application
and reporting processes (Institute for Voluntary Action Research [IVAR], 2021). They require
stringent, rigid, and quantitative metrics for evaluating successful programs that ultimately
saddle marginalized communities and turn SMOs into “financial patrons” (Eyakuze, 2023;
Rodriguez, 2017; Jenkins, 2017, p. 1655). Even more, these onerous processes lead only to
modest amounts of funding. This effectively encourages competition for limited funding, and
forces SMOs into promoting their own work, whether or not their strategies are successful
(Smith, 2017). Finally, short-term funding functions to respond to the immediate preferences of
the public and elite – an issue Dennis Thompson, political philosopher and scholar, diagnoses as
“presentism” – rather than funding the slower work of base-building, that many SMOs focus on
26
(Reich, 2018, p. 161). The combination of these “safe” funding mechanisms functions to give an
impression of progressive funding without really investing in “real people power” that is
required for long-term transformation that impacts future generations (Rojas, 2017, p. 205). The
result is damaging for SMOs. Narrowly focused and inflexible grants are antithetical to the
nature of movement building – SMOs need adaptive strategies to flourish (Smith, 2017).
These restrictive funding mechanisms are evident in the state of funding for Black
feminist movements across the globe. These SMOs are constituted by individuals who
experience many forms of oppression at once and who mobilize to advance feminist agendas.
However, their movements are “overlooked, underfunded and expected to transform systems
with crumbs” (Eyakuze, 2023, p. 5). A startling 59% of Black feminist organizations have never
received general support funding, 75% of Black feminist groups receive most of their funding
through project-specific grants, and 53% of Black feminist groups do not have funds available
for the next fiscal year (McHarris & Abbas, 2023). Even more, in U.S. private foundation giving
in 2018, only 0.5% of $66.9B of giving went to women and girls of color (Eyakuze, 2023).
When private foundations do give to Black feminist SMOs, they are often more interested in
funding issues that have visibility around tipping points that garner wide public attention, rather
than funding ongoing, transformative actions (Lemma, 2018). Tynesha McHarris of the Black
Feminist Fund says, “funders are often mobilized around Black death, but less interested in
funding Black life” (Eyakuze, 2023, Barriers & Biases section). In these cases, SMOs experience
surges of project-based funding that fail to contribute to long-term organizational stability.
The available data makes it clear that the funds that private foundations grant to Black
feminist movement organizations is insufficient for addressing historically underfunded,
transformative change (Eyakuze, 2023). SMO leaders say this is an indictment of “a sector that
27
claims to want to see the transformation that Black feminist movements are creating but refuses
to put the resources to bear for them to win” (McHarris & Abbas, 2023, p. 7). Even more, most
Black feminist movements work intersectionally across interdependent oppressions, perpetuated
by society and government and stemming from histories of enslavement, colonization,
neoliberalism, patriarchy, and cishetero-normativity (Eyazuke, 2023). While most data on private
foundation funding is “intersectional blind,” in that it does not allow for cross-sectional analysis
of issues and populations that are funded, it is certain that siloed funding makes it challenging for
organizations to get intersectional work funded (Eyakuze, 2023, p. 59).
Ultimately, these accumulating distractions force SMOs into prioritizing funding over
social justice. Cynthia Eyakuze, Co-VP of Global Programs at the Equality Fund, offers a salient
analysis of these practices, calling funders to be clear that “these barriers are not essential
technical barriers for due diligence, but rather systemic barriers rooted in white supremacy that
come from the ‘civilising’ and ‘charity’ roots of development and philanthropy” (Eyakuze,
2023). This carefully designed system is also referred to as the nonprofit industrial complex
(NPIC), a set of symbiotic relationships between “the state and owning-class proctorship” that
serves to surveil public correspondence, including “emergent progressive and leftist movements”
(Beam, 2018; Rodriguez, 2017; Smith, 2017). The NPIC manages and controls social dissent and
makes the work of grassroots groups and SMOs effectively impossible, through structural
funding mechanisms that are now inherent to the architecture of grantmaking (Gilmore, 2017).
(2b) Recommendation: Practice Trust-Based Funding
Trust-based philanthropy offers huge potential for private foundations to build their
grantmaking structures around SMOs, rather than forcing SMOs to comply with engineered
28
barriers (Wong & McGrath, 2020). An abundance of evidence illustrates that SMOs benefit
hugely from trust-centered practices including unrestricted, multi-year, and larger amounts of
funding (Eyakuze, 2023; Lemma, 2018). Granting unrestricted, flexible funding to SMOs means
offering general operating, no-strings funding that organizations can use as they see fit – not just
for specific projects (IVAR, 2021). Unrestricted funding allows for better use of local expertise,
increased organizational agility, better relationships between communities and funders, a
confidence boost for funded organizations, lighter bureaucratic processes, greater organizational
resilience, and more (IVAR, 2021). At the same time, granting large amounts of multi-year
funding is increasingly understood as an effective way to support SMOs to do the generational
work of social change with the flexibility they need (Buteau et al., 2020; Eyakuze, 2023). Given
that many SMOs focus on addressing long-standing systemic issues, an ecosystem of
well-funded organizations is critical to ensuring sustainable, progressive change (Eyakuze,
2023). It is even argued that precisely because of the legal permission that private foundations
have to exist in perpetuity, they have the capacity to fund innovation with potential for
long-term, multi-generational payoff (Reich, 2018).
However, data shows a disconnect between these proven grantmaking methods and the
practices of private foundations. Using a data set from 2010-2020, the Grantee Perception Report
shows that while 57% of grants distributed to nonprofits were multiyear and 21% were for
general operating support, only 12.4% were both (Buteau et al., 2020). Strikingly, the report also
showed that foundations could not explicitly identify barriers to these practices – the most
common reason was simply that they do not fit the foundations’ approaches to grantmaking
(Buteau et al., 2020). Even more, despite private foundations increasingly describing their work
29
as trust-based, most foundations maintain “burdensome application and reporting practices that
are not experienced as trust-based by recipients” (Eyakuze, 2023, p. 27).
A persistent lack of trust in the capabilities of local leaders is at play in these grantmaking
practices, particularly when it comes to funding SMOs (Wong & McGrath, 2020; Eyakuze, 2023;
Buteau et al., 2020). A racialized trust-gap, specifically, assumes that SMOs do not have the
ability to responsibly steward unrestricted resources, or that large amounts of funding could
overwhelm their capacity and do more harm than good (Daniels, 2019). One interviewee in
“Disparities in Funding for African NGOs” corroborated this experience, noting widespread
opinions that local leadership “can’t deliver on contracts, they could be involved in corruption,
[and] they won’t report honestly” (Layode et al., 2021). The quantitative data is damning too.
Between 2011-2015, just 5.9% of U.S. foundation funding in Africa went to African-based
organizations. In a report from Echoing Green about their own work funding early-stage
organizations in 2019, 492 Black-led organizations received $40M, compared with $61M
received by white-led organizations (Eyakuze, 2023). Even more, the unrestricted net assets of
Black led organizations were 76% smaller than those of white-led organizations (Eyakuze,
2023). This trust gap creates barriers that prevent more funding from reaching SMOs and
allowing them to deliver meaningful impact.
Trust-based philanthropy, conceptualized by The Whitman Institute, offers an important
avenue for closing this funding gap and demonstrating a fuller understanding of the needs of
SMOs. On a practical level, trust-based philanthropy means multi-year, unrestricted giving and
streamlined applications and reporting. It calls on private foundations to reduce bureaucratic
burdens on nonprofit organizations seeking funding, to lessen burnout and turnover at nonprofits,
and to give nonprofits more freedom to take risks (Daniels, 2019). At a values level, it is a
30
practice of acknowledging and correcting the power imbalance between foundations and the
organizations they support. It is a practice of collaboration – which inherently requires giving up
control – that calls for authentic, nourishing relationships (Daniels, 2019). Trust-based
philanthropy has the power to shift agency, capital, and power back to SMOs.
There are abundant examples of private foundations who have explored trust-based
funding in their institutions. Early research from the Center for Effective Philanthropy explores
the experiences of grantees receiving large amounts of funding from mega-philanthropist
McKenzie Scott since 2020 and offers promising results about the success of trust-based
philanthropy. Many of the organizations Scott funded are small and receiving very large grants
for the first time – yet leaders have quickly determined uses for the funds and have seen few, if
any, negative outcomes. Those who were surveyed report empowerment, agency, and positive
impacts on their organizations overall (King, 2023). While it may be too soon to draw
conclusions more specific to her impact on SMOs specifically, the impact is clearly positive for
the organizations she chose to support.
Another creative attempt at trust-based funding is illustrated by The Bush Foundation.
Prompted by the murder of George Floyd in May 2020 and inspired by Edgar Villanueva of
Decolonizing Wealth, the Bush Foundation committed a one-time investment of $100M to
address the racial wealth gap in Minnesota, North Dakota, South Dakota, and the 23 Native
nations sharing that geography. This investment was equal to 10% of the foundation’s assets at
the time (NationSwell, 2022). To protect the foundation’s ability to sustain regular grantmaking,
the foundation gave these funds through a social impact bond – a debt with a 30-year payment
term (NationSwell, 2022). Importantly, the funds are managed directly by two steward
organizations with deep connections to Black and Native communities, who are independently
31
responsible for distributing funds that enable generational wealth creation (NationSwell 2022).
These stewards have the trust and respect of the people they serve, they know how to engage
their communities, and they are deeply committed to distributing wealth to Black and Native
people (Bush Foundation, 2021). SMOs have much to benefit from the agility and boldness that
trust-based initiatives like these can support, and ample evidence points private foundations in
this direction.
(3a) Current Practice: Softening Social Change Discourse
Private foundations moderate and soften SMOs through a variety of mechanisms,
including funding organizations that employ moderate discourses over more progressive
discourses and solutions. This funding effectively strengthens the visibility of moderate
movements over more progressive SMOs, and results in the work of SMOs being overlooked
and underfunded. Strong evidence of this preference stems from the civil rights era, which is
elaborated on in this paper’s historiography. For instance, private foundations granted more
financial support to moderate and professionalized civil rights organizations like the NAACP,
rather than more militant, direct action groups like the Congress of Racial Equity (CORE) and
the Student Nonviolent Coordinating Committee (SNCC) (Ostrander, 2005). Brulle & Jenkins
(2005) expanded on this idea through Herbert Haines 1984 concept of “radical flank” effect,
through which direct action protest during the civil rights movement stimulated foundations to
fund nonmilitant organizations, which were typically more conservative, more professionalized,
and lacked grassroots support. Ostrander (2005) posits that this continues today – elite funders
continue to exclude SMOs by favoring professional advocacy (in which people act on behalf of
those who are historically marginalized) over grassroots efforts (in which marginalized people
32
advocate on their own behalf). The former uses top-down, staff-dominated models with little or
no participatory structures, while the latter emphasizes redistributing power, collective
mobilizing, and participatory democracy (Jenkins et al., 2017; Brulle & Jenkins, 2005). It is an
act of risk aversion that private foundations use to maintain more conventional channels of social
change (Minkoff & Agnone, 2010). These preferences follow from evidence that private
foundations are allocating resources in ways that protect and recreate their personal material
interests, rather than challenging inequitable wealth distribution (Silver, 2004; Reich, 2018).
Environmental movement organizations provide us a unique example to elaborate from.
Many leading environmental justice movement organizations face exclusion or marginalization
by private foundations. The environmental justice movement is one of the most underfunded
social movements in the United States (Faber & McCarthy, 2005a). A study looking at
foundation funding of environmental movement organizations (EMOs) between 1961 and 2000
shows that private foundations favored EMOs employing mainstream, conservative discourses,
EMOs that avoided protest, older EMOs, and those situated in the northeastern seaboard (Jenkins
et al., 2017). To be clear, “discourse” refers to the general framing of the issues and ideologies
being funded and how organizations seek to address them. Conservative discourses, for instance,
included conservation, preservation, and liberal environmentalism. EMOs using these discourses
received the majority of funds that private foundations gave to the environmental movement.
Progressive discourses, including deep ecology, ecofeminist viewpoints, and environmental
justice, received significantly less funding (Brulle & Jenkins, 2005). The preference for funding
older EMOs follows the same logic as funding organizations with professionalized staff and
well-established budgets – they are more likely to be perceived as having greater legitimacy and
to be less vulnerable to liabilities than new EMOs. Similarly, the northeastern seaboard is where
33
“big money” EMOs have the largest geographic proximity to foundations that provide the bulk
of funding to environmental movements (Jenkins et al., 2017). Essentially, EMOs with moderate,
older, and professionalized discourses experienced an increased ability to secure the interest and
financial support of private foundations.
This study supports evidence that private foundations have discursive power to set the
stage for what is considered “common sense” in social change movements, even shaping and
defining what is worthy of grants (Beam, 2018; Hammack & Anheier, 2010). The prioritizing of
moderate discourses functions to soften more progressive discourse of SMOs, ultimately
weakening their ability to gain traction, access funding, and advance more progressive and
innovative social change efforts (Minkoff & Agnone, 2010). It effectively redirects the efforts of
SMOs from radical change to social reform and minimizes the perceived effectiveness of
mass-based grassroots movements (Roelofs, 2003). On the other hand, conventional, risk-averse
organizations are reproduced through organizational adaptation and survival, in a steering of
SMOs that results in “institutional isomorphism” (Minkoff & Agnone, 2010; Jenkins et al., 2017,
p. 1655). Importantly, many progressive discourses, including ecological crises explored in study
above, disproportionately impact people of color and working-class families (Faber & McCarthy,
2005a).
This culture of risk-averse grantmaking may be heightened by private foundations’ fear
of funding any activity that may be considered politically involved, as the Tax Reform Act of
1969 forbids foundations from using funds to influence legislation or election results. Some
scholars presume that private foundations are fearful of losing tax-exempt status and are
therefore discouraged from funding social justice work at large (Ostrander, 2005). However,
these regulations have been loosened in tax reforms since then, which allow foundations to
34
support a wider range of lobbying activities, including considering public policy issues in an
educational manner (“Lobbying,” n.d.).
(3b) Recommendation: Embrace Collective Futures
This challenge of discourse preferencing makes evident that private foundations have an
impact on SMOs that is not just about money – it is about the values, culture, and norms that
racial capitalism upholds. These elaborate and deeply socialized beliefs and behaviors in private
philanthropy “define for people what is right and what is wrong [...] what is possible and what is
impossible” (Piven & Cloward, 1979, p. 1). Collective organizer Adjoa Florência Joes de
Almeida (2017) expands on these norms, highlighting that one of the fundamental ways SMOs
are tamed is “by robbing us of our time and flooding us in a sea of bureaucratic red tape, which
we are told is a necessary evil for guaranteeing our organization’s existence” (p. 187). The harm
in this includes the flattening of radical, intersectional SMOs. It includes short-sighted,
single-issue interventions that fail to respond to the complex issues the SMOs tackle (Almeida,
2017). As a philanthropic sector, we must make space to think outside of those silos and create a
discourse that centers our collective futures. Maie Panaga Babker (2023) of the Black Feminist
Fund eloquently illustrates, “we have the ability and potential to create discourses that are fueled
by the political imaginary, extending from the ancestral heritage to the generations that will
prosper in the change we achieve'' (Collective Dreams section).
In many ways, this recommendation follows abolitionist discourse – a radical
reimagining of what a departure from the present systems might look like. While abolitionist
discourse primarily centers on uprooting the entrenched racism in policing and imprisonment, a
similar logic of reimagination is transferable to the institution of private philanthropy. Feminist
35
political activist Angela Davis (2020) says abolitionist approaches ask us to “enlarge our field of
vision” so that rather than focusing on a single problematic institution or seeking silver-bullet
solutions, we raise questions about the organization of society (para. 4). In the realm of private
foundations, it calls our attention to the historical, foundational elements of a sector that exists
because of injustice – and the SMOs that stem from and respond to lasting, inequitable
distribution of resources. An abolitionist spirit invites us to move past the political (sometimes
performative) struggle, into conducting ourselves as people who are worthy of radical futures
(Davis, 2020). Moving into this discursive place may be what private foundations need to
redefine what is possible – and importantly, who should be funded – in the sector.
Conclusion
There are ample opportunities for private foundations to alter their practices in ways that
deliberately catalyze progressive change. However, the above invitation would call private
foundations to much deeper work than having the right tools or technical fixes, including those
that are suggested throughout this paper’s recommendations. Common sense policy reform, like
improved oversight of DAFs or non-itemizer deductions, does have the capacity to shift financial
capital into the hands of SMOs. Improved grantmaking processes, like those exemplified in
trust-based philanthropy, do offer SMOs the agility they need to thrive. Nevertheless, fostering a
more imaginative, expansive discourse in private foundations and in the philanthropic sector at
large has the potential to move private foundations from conventional solutions into a new norm
– one that demands us to believe that we are worthy of more radical futures. For some, the work
of altering our discourse around collective futures is impractical and “unworkably utopian”
(Berger et al., 2017). However, the reality is that SMOs are already doing it.
36
People-powered initiatives across the globe are responding to extremely challenging
social, political, and economic issues with brilliant solutions that are motivated by reimagining
their futures. Environmental justice movements are seeking progressive change rooted in deep
ecology and ecofeminist viewpoints, despite severe underfunding. Black feminist movements are
moving forward transformative, intersectional efforts to protect Black women and gender
expansive people, against the short-sightedness of funds for single-issue projects. The
Indigenous communities and smallholder farmers that make up the Kenyan Peasants League are
sowing national resistance to climate crises that threaten their autonomy, food sovereignty,
ecosystems, and health.
Private foundations can and should follow suit, and they are well-placed – through
financial capital, knowledge, and insights – to take the risks involved in more courageously
supporting the work of SMOs. Private foundations are uniquely placed to identify coalitions
across sectors, communities, and borders, and where there is doubt about potential returns on
investment, foundations typically have capacity to absorb the risk. They can seed innovation and
experiment with new solutions (Hammack & Anheier, 2010). While the presence of philanthropy
itself indicates an already-existing injustice, there is so much room for private foundations to
choose to act in service of true, systemic change. The reality is that there are abundant ways to
move forward. For the future of progressive change and social justice, the system is worth fixing
– and more collectively-minded solutions can get us there.
37
References
Acs, Z.J. (2013). Why Philanthropy Matters: How the Wealthy Give, and What It Means for Our
Economic Well-Being. Princeton University Press.
Ahn, C.E. (2017). Democratizing American Philanthropy. In INCITE! (Eds.), The Revolution
Will Not Be Funded: Beyond the Non-Profit Industrial Complex (pp. 63-76). Duke
University Press.
Anderson, C. (2003). Eyes Off the Prize: The United Nations and the African American Struggle
for Human Rights, 1944-1955. Cambridge University Press.
Babker, M.P. (2023). Embarking on a Quest. In H. Abbas (Ed.), Where is the Money for Black
Feminist Movements? (pp. 86-98). Black Feminist Fund.
Beam, M. (2018). Neoliberalism, Nonprofitization, and Social Change. In Gay, Inc.: The
Nonprofitization of Queer Politics (pp. 21–40). University of Minnesota Press.
http://www.jstor.org/stable/10.5749/j.ctv3dnp0n.4.
Berger, D., Kaba, M., & Stein, D. (2017, August 24). What Abolitionists Do. Jacobin. Retrieved
April 19, 2023, from
https://jacobin.com/2017/08/prison-abolition-reform-mass-incarceration.
Bishop, G., & Green, M. (2008). Philanthro-capitalism: How the rich can save the world (1st
U.S. ed.). New York: Bloomsbury Press.
Boris, E.T. (1999). The Nonprofit Sector in the 1990s. In C.T. Clotfelter & T. Ehrlich (Eds),
Philanthropy and the nonprofit sector in a changing America (pp. 1-33). Indiana
University Press.
Breeze, B. (2021). In Defence of Philanthropy. Agenda Publishing.
38
Brulle, R., & Jenkins, C. (2005). Foundations and the environmental movement: Priorities,
strategies, and impact. In D. Faber & D. McCarthy (Eds.), Foundations for social
change: Critical perspectives on philanthropy and popular movements (pp. 151–173).
Rowman & Littlefield Publishers.
The Bush Foundation. (2021, December 14). Announcing Our Community Trust Fund Steward
Organizations. The Bush Foundation. Retrieved April 16, 2023, from
https://www.bushfoundation.org/news/announcing-our-community-trust-fund-steward-or
ganizations.
Buteau, E., Marotta, S., Martin, H., Orensten, N., & Gehling, K. (2020). The Provision of
Multiyear General Operating Support. Retrieved April 24, 2023, from
https://cep.org/portfolio/new-attitudes-old-practices/.
Candid. (June 2021). Key Facts on U.S. Nonprofits and Foundations. Retrieved February 23,
2023, from https://www.issuelab.org/resources/38265/38265.pdf.
Carnegie, A. (1889). The Gospel of Wealth. F.C. Hagen and Company.
Corrigall-Brown, C. (2016). Funding for Social Movements. Sociology Compass, 10(4),
330–339. doi: 10.1111/soc4.12362.
Daniels, A. (2019, December 3). Trust in Grantees, Not Command and Control. The Chronicle
of Philanthropy. Retrieved April 24, 2023, from
https://www-philanthropy-com.ezp1.lib.umn.edu/article/trust-in-grantees-not-command-a
nd-control/.
Davis, A.Y. (2020, October 6). Why Arguments Against Abolition Inevitably Fail. LEVEL.
Retrieved April 20, 2023, from
https://level.medium.com/why-arguments-against-abolition-inevitably-fail-991342b8d042.
39
Department of Treasury. (2023, March 9). General Explanations of the Administration’s Fiscal
Year 2024 Revenue Proposals.
Exempt Organization Types. (n.d.). Internal Revenue Service (IRS). Retrieved April 19, 2023,
from https://www.irs.gov/charities-non-profits/exempt-organization-types.
Eyakuze, C. (2023). Through the Philanthropic Lens. In H. Abbas (Ed.), Where is the Money for
Black Feminist Movements? (pp. 12-43). Black Feminist Fund.
Faber, D., & McCarthy, D. (2005a). Breaking the funding barriers: Philanthropic activism in
support of the environmental justice movement. In D. Faber & D. McCarthy (Eds.),
Foundations for social change: Critical perspectives on philanthropy and popular
movements (pp. 175–209). Rowman & Littlefield Publishers.
Faber, D., & McCarthy, D. (2005b). Foundations for social change: Critical perspectives on
philanthropy and popular movements. Rowman & Littlefield Publishers.
Ferguson, K. (2013). Top Down: The Ford Foundation, Black Power, and The Reinvention of
Racial Liberation. University of Pennsylvania Press.
Ferguson, K. (2018, November 26). The Perils of Liberal Philanthropy. Jacobin. Retrieved April
24, 2023 from
https://jacobin.com/2018/11/black-lives-matter-ford-foundation-black-power-mcgeorge-b
undy.
Fleishman, J.L. (2009, September 9) The Foundation: A Great American Secret; How Private
Wealth is Changing the World. PublicAffairs.
Francis, M. M. (2019). The Price of Civil Rights: Black Lives, White Funding, and Movement
Capture. Law & Society Review, 53(1), 275–309. http://www.jstor.org/stable/45093969
40
Fyall, R., Moore, M.K., & Gugerty, M.K. (2018). Beyond NTEE Codes: Opportunities to
Understand Nonprofit Activity Through Mission Statement Content Coding. Nonprofit
and Voluntary Sector Quarterly, 47(4), 677–701.
https://doi.org/10.1177/0899764018768019.
Gamboa, G. (2021, February 25). Debate amid pandemic: Should foundations have to give
more? AP NEWS. Retrieved March 17, 2023, from
https://apnews.com/article/should-foundations-give-more-pandemic-777508711127b8d5b
07f8ec8aa80fad2.
Gilmore, R.W. (2017). In the shadow of the shadow state. In INCITE! Women of Color Against
Violence (Ed.), The Revolution Will Not Be Funded (p. 41-52). Cambridge: South End
Press.
Giving USA. (2020, June 16). Giving USA 2020: Charitable giving showed solid growth,
climbing to $449.64 billion in 2019, one of the highest years for giving on record.
https://givingusa.org/giving-usa-2020-charitable-giving-showed-solid-growth-climbing-t
o-449-64-billion-in-2019-one-of-the-highest-years-for-giving-on-record/.
Giving USA. (2022). Where did the generosity come from? Retrieved May 3, 2023, from
https://givingusa.org/wp-content/uploads/2022/06/GivingUSA2022_Infographic.pdf.
Grants to Foreign Organizations by Private Foundations. (n.d.) Internal Revenue Service (IRS).
Retrieved May 8, 2023, from
https://www.irs.gov/charities-non-profits/grants-to-foreign-organizations-by-private-foun
dations
41
Hammack, D.C., & Anheier, H.K. (2010). American Foundations: Their Roles and Contributions
to Society. In D. C. Hammack & H. K. Anheier (Eds.), American Foundations (pp.
3–28). Brookings Institution Press.
Htun, M., & Weldon, S.L. (2012). The Civic Origins of Progressive Policy Change: Combating
Violence against Women in Global Perspective, 1975–2005. The American Political
Science Review, 106(3), 548–569. http://www.jstor.org/stable/23275433.
Initiative to Accelerate Charitable Giving. (n.d.). About Us. Retrieved March 17, 2023, from
https://acceleratecharitablegiving.org/about/.
Institute for Voluntary Action Research (IVAR). (November 2021). The holy grail of funding:
Why and how foundations give unrestricted funding. Retrieved April 12, 2023 from
https://www.ivar.org.uk/publication/the-holy-grail-of-funding/.
Jenkins, J.C., Carmichael, J.T., Brulle, R.J., & Boughton, H. (2017). Foundation Funding of the
Environmental Movement. American Behavioral Scientist, 61(13), 1640–1657.
https://doi-org.ezp1.lib.umn.edu/10.1177/0002764217744839.
Kelly-Green, B. (2016, July 19). Why black lives matter to philanthropy. Ford Foundation.
https://www.fordfoundation.org/news-and-stories/stories/posts/why-black-lives-matter-to
-philanthropy/.
King, N. (2023, January 17). Research shows few downsides to jumbo-sized grants for
nonprofits. Corporate Philanthropy Report, 38(2), 1–12.
https://doi.org/10.1002/cprt.31493
Kivel, P. (2017). Social Service or Social Change? In INCITE! (Eds.), The Revolution Will Not
Be Funded: Beyond the Non-Profit Industrial Complex (pp. 129-149). Duke University
Press.
42
Kohl-Arenas, E. (2015). The Self-Help Myth: How Philanthropy Fails to Alleviate Poverty.
University of California Press.
Layode, M., Schwier, J., Hayi-Charters, S., Holland, M., & Andrian, S. (July 2021). Disparities
in Funding for African NGOs. Retrieved April 16, 2023, from
https://www.bridgespan.org/insights/disparities-in-funding-for-african-ngos
Lemma, S. (2018, August 31). 25 powerful ways funders can support social movements. Inside
Philanthropy.
https://www.insidephilanthropy.com/home/2018/5/10/25-powerful-ways-funders-can-sup
port-social-movements/
Lethabo, K.T. & Osayande, E. (2017). The Filth on Philanthropy: Progressive Philanthropy’s
Agenda to Misdirect Social Justice Movements. In INCITE! (Eds.), The Revolution Will
Not Be Funded: Beyond the Non-Profit Industrial Complex (pp. 79-89). Duke University
Press.
Lobbying. (n.d.). Internal Revenue Service (IRS). Retrieved April 17, 2023, from
https://www.irs.gov/charities-non-profits/lobbying.
McCarthy, J.D., & Zald, M.N. (1977). Resource Mobilization and Social Movements: A Partial
Theory. American Journal of Sociology, 82(6), 1212–1241.
http://www.jstor.org/stable/2777934.
McHarris, T., & Abbas, H. (2023). Weaving the Threads. In H. Abbas (Ed.), Where is the Money
for Black Feminist Movements? (pp. 4-11). Black Feminist Fund.
Minkoff, D., & Agnone, J. (2010). Consolidating Social Change: The Consequences of
Foundation Funding for Developing Social Movement Infrastructures. In H. K. Anheier
43
& D. C. Hammack (Eds.), American Foundations: Roles and Contributions (pp.
347–368). Brookings Institution Press.
Minnesota Council of Nonprofits (MCN). (n.d.). The Accelerating Charitable Giving Act (ACE
Act). Retrieved March 16, 2023, from
https://www.minnesotanonprofits.org/public-policy/past-successes-campaigns/ace-act
Moore, S. (2022, March 14). ACE Act Would Reduce Funding for U.S. Nonprofits. Philanthropy
Roundtable.
https://www.philanthropyroundtable.org/ace-act-would-reduce-funding-for-u-s-nonprofits
NationSwell. (September 2022). Case Study: How the Bush Foundation’s $100 million
community trust funds are decolonizing philanthropy. Retrieved April 6, 2023, from
https://nationswell.com/wp-content/uploads/2022/09/NS-Community-Trust-Funds-Case-
Study-2022-1.pdf
O’Connor, A. (2010). Foundations, Social Movements, and the Contradictions of Liberal
Philanthropy. In H. K. Anheier & D. C. Hammack (Eds.), American Foundations (pp.
328–346). Brookings Institution Press.
Oelberger, C.R., Lecy, J., & Shachter, S.Y. (2020). Going the Extra Mile: The Liability of
Foreignness in U.S. Foundation International Grantmaking to Local NGOs. Nonprofit
and Voluntary Sector Quarterly, 49(4), 776–802.
https://doi.org/10.1177/0899764020901812
An Open Letter from Economists on the Charitable Deduction (n.d.). Retrieved on April 24,
2023, from
https://cof.org/sites/default/files/documents/files/EconomistLetteronCharitableDeduction.
pdf.
44
Ostrander, S. A. (2005). Legacy and Promise for Social Justice Funding. In D. Faber & D.
McCarthy (Eds.), Foundations for social change: Critical perspectives on philanthropy
and popular movements (pp. 33–59). Rowman & Littlefield Publishers.
Piven, F. F., & Cloward, R. A. (1979). Poor people’s movements: Why they succeed, how they
fail. Vintage books.
Quinn, R., Oelberger, C.R., & Meyerson, D. (2016). Getting to scale: Ideas, opportunities, and
resources in the early diffusion of the charter management organization, 1999-2006.
Teachers College Record (1970), 118(9), 1–44.
https://doi.org/10.1177/016146811611800902
Reich, R. (2018). Just Giving: Why Philanthropy Is Failing Democracy and How It Can Do
Better. Princeton University Press.
Rodriguez, D. (2017). The political logic of the non-profit industrial complex. In INCITE!
Women of Color Against Violence (Ed.), The Revolution Will Not Be Funded (p. 21-40).
Cambridge: South End Press.
Roelofs, J. (2003). Foundations and public policy the mask of pluralism. State University of New
York Press.
Rojas P.X. (2017). Are the cops in our heads and hearts? In INCITE! Women of Color Against
Violence (Ed.), The Revolution Will Not Be Funded (p. 197-214). Cambridge: South End
Press.
Roman, M. (2016). The Black Panther Party and the Struggle for Human Rights. Spectrum: A
Journal on Black Men, 5(1), 7-32. https://doi.org/10.2979/spectrum.5.1.02.
45
Saito, N.T. (2008). Enhancing Whose Security? People of Color and the Post–September 11
Expansion of Law Enforcement and Intelligence Powers. In Stokes, C. (Eds.), Race and
Human Rights (pp. 1-52). Michigan State University Press.
Silver, I. (2004). Negotiating the Antipoverty Agenda: Foundations, Community Organizations,
and Comprehensive Community Initiatives. Nonprofit and Voluntary Sector Quarterly,
33(4), 606–627. https://doi-org.ezp1.lib.umn.edu/10.1177/0899764004269143.
Smith, A. (2017). Introduction: The Revolution Will Not Be Funded. In INCITE! Women of
Color Against Violence (Ed.), The Revolution Will Not Be Funded (pp. 1-18). Cambridge:
South End Press.
Soskis, B. & Katz, S. (2016). Looking Back at 50 Years of US Philanthropy. William and Flora
Hewlett Foundation.
Swirski, S. (2015, April 15). A Letter from The Alliance for Charitable Reform to United States
Senators. Retrieved March 19, 2023, from
https://www.finance.senate.gov/imo/media/doc/Alliance%20for%20Charitable%20Refor
m%20(ACR).pdf.
Tang, E. (2017). Nonprofits and the autonomous grassroots. In INCITE! (Eds.), The Revolution
Will Not Be Funded: Beyond the Non-Profit Industrial Complex (pp. 215-225). Duke
University Press.
Thousand Currents. (2023). Kenyan Peasants League. Exposure. Retrieved April 19, 2023, from
https://tcurrents.exposure.co/kenyan-peasants-league.
Thuma, E. (2019). All Our Trials: Prisons, Policing, and the Feminist Fight to End Violence.
University of Illinois Press.
46
Wolpert, J. (2006). Redistributional effects of America’s private foundations. In Prewitt, K.,
Dogan, M., Heydemann, S., & Toepler, S. (Eds.), Legitimacy of Philanthropic
Foundations: United States and European Perspectives (pp. 123-149). Russell Sage
Foundation.
Wong, N., & McGrath, A. (2020, November 20). Building a Trust-Based Philanthropy to Shift
Power Back to Communities. Stanford Social Innovation Review (SSIR). Retrieved April
6, 2023, from
https://ssir.org/articles/entry/building_a_trust_based_philanthropy_to_shift_power_back_
to_communities.
The World Bank. (n.d.). GDP: Current US$ Data. World Bank Group. Retrieved March 8, 2023,
from
https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?end=2021&most_recent_value_
desc=true&start=1960&view=chart.
47