3 Lessons for philanthropists from the midterm elections

Ordinary people are going all out to save democracy. Foundations and wealthy donors should, too.

Written by: Aaron Dorfman

Date: November 12, 2018

Updated 11/19/2018 to clarify that The Nathan Cummings Foundation increased its payout rate from 5.75% to 6.75% in 2017 and 2018, and has committed to maintaining an elevated payout rate for the next 3 years. The post previously stated that the foundation was committed to maintaining a rate of 6.75% through 2021.

Small dollar donors nationwide gave more than $1 billion to support progressive candidates in the midterms. Latino youth voter registration in Texas increased by 500 percent.

Georgia voters turned out in record-breaking numbers, reaching near presidential election-year levels. Florida voters passed a measure to restore voting rights to 1.4 million ex-felons.

The most diverse class of newly-elected representatives in Congressional history will take office in January.

One thing is clear from the midterm elections: Grassroots groups and ordinary people are going all out to defend democracy. Big Philanthropy should do the same.

The final weeks of the 2018 midterms offered us a dual vision of the future.

On the one hand, we got a chilling glimpse of just how high the stakes have become for American democracy under a Trump presidency, with the massacre of 11 Jews at prayer in Pittsburgh and of two African Americans at a grocery store in Louisville, bombs sent to political opponents of the administration, and militia forces heading to the border to enforce Trump’s xenophobic policies.

On the other hand, we got a remarkably inspiring view of ordinary people mobilizing in extraordinary ways to meet the challenge. We saw historic turnout and major victories to expand Medicaid, restore voting rights, fight gerrymandering and move towards a truly reflective democracy.

Across the country, grassroots groups led by people of color (historically ignored by most funders) did amazing things.

Using new funding from small donors as well as from a handful of emerging major donor partnerships, dynamic local organizations made tremendous strides working in some of the most difficult parts of the country, and with constituencies generally written off as “low-propensity voters” by political campaigns.

These groups parlayed their local networks and community knowledge into a massive influx of midterm voters and progressive ballot victories, overcoming ever more devious forms of voter suppression to expand the electorate.

Tuesday’s results do not mean the danger to democracy that Trump represents is gone. In fact, that danger is escalating, since the president is convinced that his overt appeals to white nationalism turned back the anticipated “blue wave,” expanded his margins in the Senate and staved off powerful challenges in key governors’ races.

Following the lead of those everyday people who’ve put everything on the line, philanthropy will need to take on more risk and commit to dramatically expanding the resources available for the fight.

For at least the next 4 years (taking us through the critical 2022 redistricting process), foundations that care about saving American democracy and staving off the very real threat of American fascism can demonstrate that commitment in 3 ways.

1. Move money to movements

Local, grassroots organizing is intensive, long-term work. It involves not only building and leveraging strong and trusting relationships in communities, but challenging and changing the systems that have kept whole classes of citizens disenfranchised day in and day out, not just on election day.

Most state and local groups still function on budgets that are too small and too unpredictable. What would our country look like in 4 years if groups that had so much impact on the 2018 midterms had the kind of multi-year, flexible, adequate funding they need to sustain and expand?

The NoVo Foundation recently gave $34 million to these kinds of groups. More funders should follow their lead.

2. Increase payout

It doesn’t make sense to save dollars for some future rainy day when Trump and his white supremacist allies are bearing down on the nation like a Category 5 hurricane.

The Wallace Global Fund has been a leader on this, pledging to double its payout in 2018. The Nathan Cummings Foundation committed to increase its payout rate from 5.75% to 6.75% in 2017 and 2018 and continue an elevated spending rate for the next 3 years.

In these urgent times, every foundation and ultra-wealthy donor should ask: How much more can I give?

3. Leverage c(4) funding

There are real constraints on private foundations, but the challenges we face require creativity. Some of what is needed to save democracy can’t be accomplished with 501(c)(3) dollars.

Foundations and donors in a position to mobilize c(4) dollars should do so to complement their c(3) giving. (To understand the difference between c(3) and c(4) entities, see this simple primer from Nonprofit Hub.)

Many progressive public foundations now also have affiliated c(4) arms, providing donors with more options to support progressive ballot measures and candidates.

Ms. Foundation for Women recently launched their c(4) arm, joining longstanding leaders such as Proteus Fund, NEO Philanthropy and others.

The new crop of high-tech ultra-high-net-worth individuals are increasingly funding through LLCs, which also provide them far more flexibility than private foundations, including the ability to support candidates and c(4) organizations.

And collaborative and pooled funds like Movement Voter Project, Way to Win, Black Voters Matter Fund, etc., have emerged to help donors identify and support vital grassroots work across the country.

Imagine the world we could create if foundations and wealthy donors matched the $1 billion given by ordinary Americans and dedicated it to community organizing led by grassroots leaders, especially people of color, across the country in red states, blue states and in-between states.

Better yet, let’s make it a two-to-one match and raise an extra $2 billion. If we don’t spend until it hurts, the alternative will be far more painful.

Aaron Dorfman is president and CEO of the National Committee for Responsive Philanthropy. Follow @NCRP on Twitter.