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How can funders make their grantmaking more transparent and inclusive while tackling the unequal power dynamic in philanthropy?

With more and more conversations around equity taking place in the sector, community-led grantmaking has proven to be a powerful way to address inequity from within, and in the process, center community members who are most marginalized.

To delve into the “how” of this democratic approach, in late August NCRP co-hosted Pass the Reins: Shifting Decision-Making Power in Philanthropy with the Indie Philanthropy Initiative, Grassroots Grantmakers and GrantCraft, a service of Foundation Center. Below is a recap, along with the video recording of the entire webinar.

Four different models

Moderated by Jennifer Near, general coordinator of the Building Equity and Alignment for Impact Initiative, the webinar featured speakers from four community-led grantmaking models:

  • Maria De La Cruz, associate executive director at Headwaters Foundation for Justice
    Headwaters’ funding model places community leadership at the center of the grantmaking process, recognizing that collective impact requires collective learning and mutual investment. Minnesotans who are on the front lines of social justice are trusted to guide the foundation’s decision-making. The foundation also participates in     The Giving Project. Its most recent cohort of 20-25 residents raised more than $200,000 over six months, which was then disbursed as two-year grants to nine organizations.
  • Theresa Trujillo, community partner for southeast Colorado at The Colorado Trust
    Through its Community Partnerships grantmaking initiative, The Colorado Trust seeks to encourage and strengthen community-led solutions and funding initiatives to advance health equity. The foundation has embraced a unique staff model by shifting from “program officers” to “community partners” to build strong partnerships in six regions across the state and help organize, encourage and empower resident-led initiatives.
  • Liane Stegmaier, vice president of communications and strategies at Brooklyn Community Foundation
    Following its innovative community engagement project, Brooklyn Insights, the Brooklyn Community Foundation launched a resident-led investment program called Neighborhood Strength to empower local changemakers in the Crown Heights neighborhood. The initiative brings together community members to identify and direct funding to solutions that target significant local challenges. The foundation hired an experienced community organizer to facilitate the process, including three visioning sessions and the creation of a 17-member advisory council.
  • Cortez Wright, activist grantmaking advisory panelist at the Third Wave Fund
    Third Wave Fund’s gender justice grantmaking approach centers young women of color, queer and trans youth of color, and allows their vision to take center stage. Its Activist Grantmaking Advisory Panel plays a major role in deciding which emerging gender justice organizations will receive long-term funding and technical assistance through the Grow Power Fund. More than 100 people from across the country applied to serve on the panel, and six were chosen and compensated for their role. In 2016, the inaugural members awarded multi-year support to six groups.

The conversation was particularly salient given the rising tide of neo-Nazism and white nationalist violence in our country. As NCRP’s chief executive Aaron Dorfman recently wrote in response to the events in Charlottesville, it’s vital that funders use their grant dollars to bolster grassroots groups and protect threatened communities, on those communities’ terms.

For additional context, Jennifer shared:

“White supremacy is not just about extremism and violence … it’s about control and the expectation that some of us earn the position to broker and determine social change and how resources flow on behalf of others. If we’re genuine about wanting to shift the legacy of systemic and historical racism in this country and confront white supremacy, then we need to be serious about who has voice, agency and control over how resources are allocated.”

Shared learnings

In the discussion, the speakers shared lessons, benefits and outcomes from their approaches to community-led grantmaking. They emphasized the importance of active recruitment, trust-building, compensation, language access, evaluation and a commitment to difficult conversations.

The audience was also invited to weigh in on what’s needed to activate and expand participatory grantmaking in the sector. Among the 130 attendees who participated in the poll, the top answer was “political education for board an executive leadership.”

What resources and other funding models inspire you to shift power and democratize the control of resources in philanthropy?

Keep the conversation going on Twitter using #ShiftPower, and share your questions and stories with GrantCraft for the participatory grantmaking guide that’s in development! View the webinar recording and contact Jen Bokoff at jen@foundationcenter.org to learn more.

Caitlin Duffy is senior associate for learning and engagement at the National Committee for Responsive Philanthropy (NCRP). Follow @NCRP and @DuffyInDC on Twitter.

Adapted from The Oregon Community Foundation – Can it Build a Statewide Legacy of Equity and Inclusion?

Earlier this year, The Oregon Community Foundation (OCF) approved a $300,000, seven-year loan to support Albina Opportunities Corporation (AOC). AOC offers financing to small businesses owned by women, people of color, immigrants and persons with disabilities in Portland. Among the endeavors funded by AOC is Escuela Viva Community School, founded by Portland mother Angie Garcia for her own daughter. “I was looking for a program that would nurture her spirit and provide a bilingual environment. The truth is that I just couldn’t find it. So I started this.”

The demand for the school’s dual language programming became so great that by 2010, Escuela Viva required quick capital to set up a new center and consolidate its three locations. AOC’s former executive director, Terry Brandt, observed, “Not only does [Escuela Viva] provide children with a unique educational opportunity, but it has created and will sustain living wage rate jobs in our community.”

This type of impact investing can generate a measurable social or environmental impact alongside financial return by providing capital to companies, organizations and funds. Clara Miller, president of F.B. Heron Foundation, has written that 21st-century funders must “go beyond marginal and auxiliary philanthropy (the traditional and appropriate model for charity) to engage actively with the whole economy, positioning ourselves to be fully engaged for mission both inside the foundation and outside in the economy.”

Compared with other philanthropies, community foundations face special challenges in place-based impact investing due to their unique structures, limited discretionary dollars and donor mandates. NCRP’s foundation assessment initiative, Philamplify, recently explored how the Oregon Community Foundation (OCF) became a proactive leader in this space.

In 2013, Mission Investors Exchange profiled OCF for investing one-half of 1 percent of its $1.3 billion endowment, or approximately $6.5 million, in Oregon-based early-stage investment funds such as the Oregon Angel Fund. As the foundation’s endowment grows, so does the amount of investment in early stage growth companies and start-ups. OCF reported that the current total is roughly $8 million, of which $7 million has been deployed to date.

To strengthen the foundation’s capacity to meet its mission, including its strategic focus on economic vitality in Oregon, OCF launched an impact investment program in 2014. Among its efforts, the foundation has sponsored studies about Oregon’s capital ecosystem, and provided loans and grants to help develop a skilled workforce and build the state’s post-recession economy. The program uses discretionary grant money to make program-related investments (PRIs), including $3 million allotted by the foundation’s board several years ago. It will be fully deployed this year, and the board plans to discuss potential future allocations.

To help move capital to rural Oregon businesses, in 2014 OCF invested $1 million in Craft3, a regional nonprofit community-development financial institution (CDFI). Craft3 provides low-interest loans to entrepreneurs and small-business owners who are unable to access traditional credit, including EcoTrust, which used a $1.3 million short-term loan from Craft3 and a grant from OCF in 2014 to purchase and permanently protect a coastal estuary in Northern Oregon.

The community foundation also partnered with Meyer Memorial Trust, a leader in mission-related investing in Oregon and southwest Washington. OCF committed $2 million to the partnership to provide low-interest loans to Oregon nonprofits. Other support includes a loan to the Portland Seed Fund, a company accelerator that provides capital, mentoring and connections; and capacity building grants to AOC, the CDFI that helped Angie Garcia grow Escuela Viva.

The Democracy Collaborative featured OCF as one of 30 innovative community foundations from across the country for its work with AOC, Craft3 and Meyer.

Behind the scenes, OCF offers a Socially Responsive Investment Fund to its donors and nonprofit endowment partners to screen out investments inconsistent with their values and “invest in companies that have strong records in the areas of corporate governance, community relations, diversity and employee relations, energy and the environment, product quality and safety, and non-U.S. operations.”

In an interview for NCRP’s assessment, Elizabeth Carey, vice president and chief financial officer, shared that OCF is discussing avenues such as fossil fuel divestment, but sees an opportunity to do more with proxy votes and “activist investing.” She said: “One of our managers was invested in a Norway company that was actively considering whether to drill in tar sands, and invested so they could vote to block that. They brought up proxy votes to keep the company from going in that direction and blocked that. [If we divest], we don’t get a say in what companies do. We have had positive impacts for companies that would have made bad environmental decisions.”

OCF shows a clear commitment to economically vibrant communities across the state, and its strategic plan for 2015-2018 outlines a goal to continue this work and “allocate well-targeted impact investments, evaluating their outcomes and priority within OCF’s overall mission.” OCF can build on this commitment by dedicating more staff resources to the program, and increasing the proportion of its endowment allotted for impact investments, especially investments that advance its equity goals, like Escuela Viva.

Caitlin Duffy is senior associate for learning and engagement at the National Committee for Responsive Philanthropy (NCRP), and co-author of “Oregon Community Foundation – Can it Build a Statewide Legacy of Equity and Inclusion?” Follow @NCRP and @DuffyInDC on Twitter and join the #Philamplify conversation.

Images by Michael Silberstein, van Ort and Eli Duke. Modified under Creative Commons license.

Updated: 6/22/2016, 11:45 EDT

Our newest Philamplify report looks at Oregon, a state founded on racial exclusion that today has increasingly vibrant, diverse communities across its urban and rural landscapes.

Nearly 25 percent of Oregon’s residents are people of color, and an estimated 5 percent identify as LGBTQ. These communities are fighting effectively for justice and to end discrimination and disparities of all kinds. But they need more resources to turn the tide. Only 5 percent of philanthropic giving in Oregon directly serves these populations.

The Oregon Community Foundation is the largest foundation in Oregon and the 8th community foundation largest in the country, holding $1.5 billion in assets. Unlike most community foundations, OCF has statewide reach through regional offices that engage government, business and community leaders, residents, donors and volunteers.  It can leverage these relationships to be a champion for equity.

How is OCF responding to the pressing challenges faced by Oregonians and what can we learn from it? 

After examining OCF’s giving and feedback from its constituents, we found that OCF is trying hard to embrace equity, diversity and inclusion in all its operations and grantmaking. Yet many leaders of color and LGBTQ leaders don’t see signs of progress yet. 

My colleague Caitlin Duffy and I share our analysis in Philamplify’s The Oregon Community Foundation: Can It Build a Statewide Legacy of Equity and Inclusion? released today.

Our additional findings offer valuable insights for other community foundations and place-based grantmakers:

  • OCF’s innovative use of regional leadership councils and volunteer grant evaluators is effective at fostering connections with communities across the state, but these bodies need to be more diverse and inclusive to support communities of color.
  • OCF offers responsive grant programs and also runs strategic initiatives to tackle systemic issues such as education and dental health – often in collaboration with other foundations.
  • OCF has expanded its Latino Partnership Program to respond to the growing and diverse Latino population in Oregon. Yet overall, grants for nonprofits led by people of color, LGBTQ leaders and others organizing for justice are still a small percentage of the foundation’s giving.
  • OCF is changing its risk-averse reputation to become nimbler and bolder as an advocate and public leader.

Numerous nonprofit leaders and peers of The Oregon Community Foundation characterized OCF as a slow-moving ship that knows where it wants to go but is taking a long time to get there. Given the critical issues that Oregon is facing such as widespread homelessness, racial inequity and public underfunding of education, many from Oregon’s nonprofit community are impatient to see OCF respond more decisively.

How can OCF boost its impact?

To build on its strengths and help move the needle on the critical challenges faced by Oregon’s vulnerable communities, we urge The Oregon Community Foundation to:

  • Direct a higher proportion of grant funding toward groups facing disparities. Publicly share OCF’s equity, diversity and inclusion goals, benchmarks and data on its progress.
  • Fund more grassroots organizing and advocacy to advance equity and other systemic goals aligned with the foundation’s strategic priorities.
  • Be bolder in taking public stands, especially on equity-related policy issues. Partner with constituent-led organizations fighting for equity when deciding which issues would benefit from OCF’s advocacy.
  • Expand OCF’s efforts to diversify donors, engage them on equity issues and connect them to organizations led by people of color and other constituent-led groups working for systems change.

Read about our full findings and recommendations now.

What do you think of our findings and recommendations? Agree or disagree, and comment on the report. Also, don’t forget to take our latest poll and share which foundation you think we should Philamplify next. Remember, you can do all these anonymously!

With your input, we can provide OCF and other foundations with the feedback they need to be more effective partners of nonprofits and communities in making this world equitable and just for all.

Lisa Ranghelli is director of foundation assessment at the National Committee for Responsive Philanthropy. Follow @NCRP on Twitter and join the #Philamplify conversation.

Images by Michael Silberstein, van Ort and Eli Duke, adapted under CC license.

I’m very excited about the just-released special winter issue of Responsive Philanthropy, NCRP’s quarterly journal. It focuses mission investing, a topic that’s been getting more and more attention in philanthropy, with articles that tackles myths, shares examples of foundation engagement, additional resources and more.

Check out these articles:

Improving the Planet and Walking the Talk
In the cover story, Park Foundation staff and trustees write about the organization’s journey in mission investing. They describe the different tools they’ve utilized to ensure that the foundation’s investments align with its mission.

Blending Mission, Values, Fiduciary Duty and Investments
Many skeptics of mission investing cite concerns that this practice violates foundation trustees’ fiduciary duties. Tim Smith, director of environmental, social and governance shareowner engagement at Walden Asset Management, argues that fiduciary duty should motivate instead of deter mission investing.

Pushing the Envelope: Expanding the Limits of Mission Investing
Peter Berliner, managing director of Mission Investors Exchange, and David Wood, director of the Initiative for Responsible Investment at Harvard University’s Hauser Institute for Civil Society, write about what foundations can do to support continued growth and innovation in the practice of MI.

Leveraging Impact with Catalytic First-Loss Capital
In this article, Amit Bouri, managing director, and Abhilash Mudaliar, research manager at Global Impact Investing Network, offers catalytic first-loss capital to foundations that would like to test the waters of mission investing.

Pooled Funds: The Invisible Wall Between Your Foundation and True Mission Alignment
Majority of foundations hold investments in pooled funds, according to Dana Lanza, CEO, and Sarah DeNicola, membership program manager, of Confluence Philanthropy. Unfortunately, these funds prevent foundations from exercising influence and aligning investments with its values.

Member Spotlight: W.K. Kellogg Foundation
NCRP member W.K. Kellogg Foundation discusses its Mission Driven Investments program and offers lessons for other foundations that are seeking to emphasize both social and financial investment returns.

Don’t forget to also visit the glossary of terms and a list of important resources for foundations interested in learning more about mission investing.

Thank to all the authors who contributed articles to this important issue of Responsive Philanthropy.
How critical is mission investing in foundations’ efforts to achieve their missions? We’d love to hear what you think!

Yna C. Moore is communications director of the National Committee for Responsive Philanthropy (NCRP). Follow NCRP on Twitter (@ncrp).