Editor’s Note: This article was originally published on May 25, 2022.
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Dear MacKenzie and Dan,
Like most everyone else in the social sector, I have no clue how to get in touch with you two. I asked the folks at Bridgespan to hook me up, but they said: “MacKenzie who?” That place is a vault, you’ll be happy to know.
So I’m writing this public letter instead — to offer some unsolicited advice.
If you read IP, and I hope you do, you’ll know that we’ve seen your giving as a crucial turning point for Big Philanthropy. For years, we’ve been banging the drum for mega-donors to give away more money, faster, and without any strings attached. We also called on top philanthropists to direct far more resources to social justice groups and underserved communities — and to stop dropping huge gifts on places like Harvard and MoMA.
You two are doing all of that and then some. Watching you operationalize key critiques of Big Philanthropy has been inspiring, which is why we write so many (mostly) nice articles about your giving. We even named you Philanthropist of the Year two years running, a first for us!
Of course, we still have deep qualms about the power of wealthy donors, and that an elite class of do-gooders is sliding into the driver’s seat of American life as government steps back, increasingly privatizing how our society solves problems. Also, as we’ve written, we’d like to see a lot more transparency around how your grantmaking process works. You’ve signaled an intention to be more transparent down the line, and we’re eager to see that unfold.
But I’m not writing today to make those same points. Instead, I want to share a concern: Even as I watch you bestow historic gifts on many important organizations, it’s hard to see how all this funding will add up to catalyze transformative change.
To be more specific, I don’t see in your giving a theory of change or clear strategy for meaningfully reducing economic and political inequality in U.S. society.
Now, maybe that’s not your goal, which is fine. Your giving to so many worthy groups and causes is already having a positive impact on people’s lives, and it’s not for me to say what your goals should be. Still, based on everything we’ve heard from you in the past two years, I suspect that you recognize that you have an opportunity to really tip the scales. So if you do want to try to achieve fundamental change in who has power in our society and who gets what, read on.
I see three key strategies that are still nascent to absent in your giving, which, if more fully pursued, could dramatically increase the impact of your philanthropy.
First, you’ve given little so far to support the growing ecosystems of groups that are working to restructure our top-heavy economy so that it works for ordinary people. Most of your grants related to income inequality — especially those huge gifts for human service organizations — deal with the problems created by economic inequality, not its causes.
Second, you’ve yet to prioritize giving to grassroots organizations that are building voter power in vulnerable communities, which is essential for addressing the gross disparities in civic life. Your social justice giving is extensive, but feels diffuse and unfocused, bypassing many of the key groups organizing low-income people and communities of color to influence electoral outcomes in the states that matter most.
Third, you haven’t yet done much to support the most effective think tanks working in Washington and state capitals to advance equitable budgetary priorities and fiscal policies, battles that have a profound impact on the lives of low-income people.
For all the ways you have disrupted philanthropy, your giving to date mirrors one of the sector’s signature flaws, which is to tread cautiously on core issues of political economy and electoral power. You seem to share the instinct of so many funders to steer away from a trifecta of ideologically loaded areas: how the economy works, who has a voice in elections, and how government taxes and spends.
Recent history shows the downsides of such caution.
Since the 1970s, liberal foundations have given billions to the same kinds of groups you two are supporting. They’ve invested heavily in direct service organizations serving low-income people, scaled up a large ecosystem of civil rights groups working for racial, gender, and sexual equality, and bankrolled an endless list of single-issue organizations focused on the environment, education, workforce development, healthcare, and so on.
But these funders have often been reluctant to fund work to rein in the distorting power of corporations and Wall Street, or to challenge neoliberalism more broadly. And relatively few funders have actively sought to build the electoral power of low-income communities. Even as the deck of American life became stacked in favor of the wealthy and against ordinary people, liberal philanthropy has stuck to a siloed approach, backing myriad specialized groups that often work downstream from the core drivers of political and economic inequality. (Read an earlier opinion piece I wrote on this topic here.)
Meanwhile, during this same period, conservative philanthropists have done pretty much the exact opposite. They’ve bankrolled a much smaller number of institutions, guided by a deep ideological commitment to downsizing government, deregulating business, and advancing traditional values around sexuality, family structure, and self-reliance. They’ve spent a fortune to influence the federal courts and poured a ton of money into leadership training and intellectual institutions, key components to building a powerful ideological movement. Financing voter suppression has been another project.
So how have things worked out? Well, the good news is that liberal philanthropy helped to win many critical battles for social rights over the past six decades (although those gains, we’re learning, are hardly secure).
The bad news? The right has won on nearly everything else. Conservative funders helped shift economic thinking, social policy and regulatory policy sharply to the right starting in the 1980s. As a result, even as trends like globalization and automation generated record inequality, and even as corporations and Wall Street became more predatory and extractive, and even as climate change emerged as an existential threat, bold solutions to these challenges were off the table.
Of course, philanthropy has been just one player in a larger story, and I don’t mean to ascribe too much power to funders that have operated alongside social movements, political parties, corporations and other interests. It’s hard to say what impact, exactly, philanthropy has had on policy outcomes over the past five decades.
What I do know, though, is that conservative funders have been far more ideological, and taken a strategic approach to influencing key areas like economics, taxes and budgets, corporate regulation, voting rules, and the judiciary. They’ve operated with the mindset of Bolsheviks, keeping their eyes focused upstream on where power really lies.
In recent years, this disciplined push to seize the high grounds of public policy and jurisprudence has been fused with a powerful right-wing populism. Joe Biden may have won the 2020 election, but conservatives dominate the courts and an increasingly radical GOP controls all branches of government in 23 states that are home to 137 million people. Even if Republicans don’t win the presidency in 2024 (and potentially also a filibuster-proof Senate majority), the right is well-positioned to reshape American life for nearly half the country, helped along by courts that let stand extreme state policies.
Make no mistake: The values you two care about are under growing attack. And if present trends continue, things are going to get worse. The fall of Roe is just a taste of what’s to come. That setback is also a stark reminder of the limits of the kind of social change philanthropy you’ve embraced. Since 2003, according to Candid, foundations have given nearly $20 billion to advance reproductive care and rights. And yet here we are. The hundreds of millions of dollars you’ve given to Planned Parenthood and other reproductive rights groups will be, at best, a finger in the dike in our coming post-Roe America.
Right now, while you may be doing it more responsively and at a larger scale, you’re basically doing the same thing that liberal philanthropy has done for 50 years. Your giving may do a lot of good in the short run — especially the historic support for human services and education — but it’s not likely to make as much of a dent in our society’s deep inequities as it could.
If you really want your stated values to prevail in America, I recommend you deepen and broaden your grantmaking in a few key ways.
Dramatically ramp up giving to groups that are directly challenging the key drivers of economic inequality.
The rise of wage inequality over the past five decades — with most of the gains from growth being captured by top earners — has inflicted enormous hardship on the bottom half of workers and exacerbated a range of other problems in U.S. society, including the breakdown of communities and families, and growing social distrust. Philanthropy has done little to fight this trend, beyond investing in politically safe — but marginally effective — ideas like workforce development. Funders have ducked the obvious problem here, which is that employers have too much power and workers have too little. In recent years, though, this has started to change, with some foundations supporting a dynamic new labor movement of national, state and local nonprofit groups that are working to boost wages and benefits of low-income workers.
I’m talking about organizing groups like the National Domestic Workers Alliance (NDWA), Restaurant Opportunities Centers United, and Jobs With Justice, as well as policy groups like the National Employment Law Project and the Economic Policy Institute. This movement has amply demonstrated its impact in recent years; 30 states and 40 municipalities have raised their minimum wage since 2014.
You’ve given some support to new labor movement groups, like NDWA and One Fair Wage, but not much — even as you’ve given a fortune to offset the hardships caused by low wages through your big gifts to food banks, Goodwills, and other human service organizations. When you’re ready to move upstream and do more to address the causes of economic hardship, it won’t be hard to figure out where to give. Foundations like Ford, OSF and Irvine have done a lot of work lately to identify critical nonprofits in the new labor ecosystem and expand their capacity. All that’s needed now to really scale things up is a lot more funding — the kind of game-changing money that you two can provide.
The next priority I’d suggest for attacking the drivers of economic inequality is to give to groups working to better regulate Wall Street and corporations.
Let’s start with Wall Street. The 2008 financial crisis showed how philanthropy can invest billions of dollars over decades to build wealth and create opportunities in low-income communities, only to have all that work washed away by a financial tsunami. Foundations gave heavily for community economic development and asset-building strategies during the 1980s and 1990s. But they paid little attention to the deregulation of financial markets occurring at the same time — policy shifts that allowed predatory housing lenders to strip wealth from Black and brown neighborhoods and let Wall Street firms take such extreme gambles that they brought down the whole economy. This crisis wasn’t just devastating for individual households; it also decimated the budgets of state and local governments, as well as nonprofits of every stripe.
While many communities and families have never fully recovered, philanthropy seems to have learned nothing from this episode. Funders still give big for community development and myriad other efforts to lift up struggling households, yet pay almost zero attention to stopping the extractive practices of the financial sector or trying to prevent another financial crisis. Your giving has followed that same pattern. Wall Street, on the other hand, is paying close attention to financial regulation — employing an army of lobbyists that’s working every day to weaken rules that protect ordinary investors and borrowers, as well as rules that prevent excessive risk-taking by financial firms.
There is an area where your money can fill a real gap and go a long way. The top policy group in Washington, D.C., advocating for stronger oversight of Wall Street, Better Markets, has a meager annual budget of around $2 million a year. The main coalition group working in this space, Americans for Financial Reform, is even smaller. Think of supporting these and other watchdog groups as a form of insurance to protect your growing investments in struggling communities. If the cowboys on Wall Street blow up our economy yet again, it’s those communities that will be hit the hardest.
You should invest in other work to regulate business, too. The growing concentration of corporate ownership — which now spans many sectors, from agriculture to tech — is badly hurting workers, consumers and communities. The good news is that an exciting new ecosystem of nonprofits has emerged to challenge monopolistic practices and, more broadly, to advocate for an active government role in limiting corporate power in ways that promote shared economic prosperity. This work is showing evidence of impact, advancing ideas that have moved from the fringes of policy debate to the center, often with bipartisan support. These groups are small and way underfunded relative to the power players they’re up against, which means that here, too, your money can fill a gap and go a long way.
I could say much more about how to give to create an economy that works for everyone. But you don’t need more details from me. Again, just take a close look at what funders like Ford, Hewlett, Irvine and Omidyar have been doing lately to rebalance economic life in favor of ordinary people. This giving is groundbreaking and showing impact, but it’s still tiny. Most foundations and big donors stay far away from work that takes on the drivers of economic inequality. If you two truly want to be different, go big on this stuff.
Give more to help people build political power.
MacKenzie talks a lot in her Medium posts about empowering people. So far, though, you two have given relatively little money to build the kind of power that can do the most to change people’s lives: electoral power.
I know: You really don’t want to wade into politics and be seen as just another partisan player fueling our era of ever-more toxic polarization. I don’t blame you. But if you do care about empowering historically marginalized groups, there’s just no way around it. You have to do more to help them exercise their voice in the electoral arena — because voters are the only people that elected officials pay attention to. When people don’t vote, they don’t have a say in how government makes decisions and allocates resources. Worse, the powers that be walk all over them. That’s why, to take one example, the poorest neighborhoods are home to high-polluting industries and toxic waste sites. They didn’t have the power to resist.
Of course, you know this already. But for whatever reason, you’ve yet to really prioritize strategic and large-scale giving aimed at building the electoral power of low-income people. Instead, your donations to social justice groups are all over the map, spread across many causes, approaches, and types of organizations. Many of these groups do engage in forms of organizing. But surprisingly few of your grantees so far are laser-focused on building hard political power, which requires engaging new voters, winning elections, and then holding political leaders accountable. You’ve also given little money to work that aims to protect fair elections and make voting more accessible for all.
This is a busy funding landscape right now, and there are a lot of directions you could go with democracy funding. But let me suggest one place where your money will make the biggest difference: Give to state and local voter mobilization groups, especially in contested swing states, as well to the top national groups that support them.
Looking ahead over the next decade or so, there are about eight to 10 key states whose voters will decide presidential elections and control of Congress. In many of these states, huge numbers of low-income people, especially from communities of color, do not vote. In Texas, for example, some 2.5 million eligible Latinos didn’t vote in the 2020 election. In Florida, the number is around 1.5 million. Large numbers of potential voters are also sitting on the sidelines in other key states; a disproportionate number of these nonvoters come from struggling communities that badly need a greater voice in government.
The good news is that, here again, there’s a fast-growing ecosystem of nonprofits that are working to solve this problem and demonstrating impact — and which have the capacity to absorb historic gifts.
In every key state, there are now effective grassroots organizations working to mobilize low-income voters, with a focus on communities of color — groups like Florida Rising, Carolina Federation, New Georgia Project, Texas Organizing Project, New Virginia Majority, and the list goes on. These groups take a long-term approach to building people’s civic voice and their political power. Getting out the vote at election time is just one part of what they do; their broader vision is to ensure that people who’ve been historically ignored are finally heard. I know that’s a vision both of you embrace.
The other thing about these state and local groups is that most are way underfunded. This is another area where your money can make a big difference.
It’s not hard to figure out how to give for civic engagement and voter mobilization. Just ask other funders who are already working to scale up the most effective organizing groups. You can donate to leading state and local groups directly, and make large gifts to national intermediaries that fund their work, like the Center for Popular Democracy, Movement Voter Project, Way to Win, Rural Democracy Initiative, and the State Infrastructure Fund (which you’ve supported already). Giving to these groups would build on your historic 2020 gift to Community Change, one of the most important national organizing groups working to build the power of low-income Americans. You should also give to the Midwest Academy and other groups that train organizers, all of which are starved of resources.
Most of the groups I’ve mentioned can accept 501(c)(3) gifts. But if you also engage in 501(c)(4) giving, all the better. It’s worth noting that many of your mega-donor peers have also come to embrace c4 giving, including Pierre and Pam Omidyar, Mark Zuckerberg and Priscilla Chan, and Laurene Powell Jobs. That’s because they realized early on that such money is often essential to achieving their goals, along with direct political donations.
Giving to help people build political power will expose you to attacks for being partisan, since low-income Americans and people of color mostly vote for Democrats. Just tune out that pushback. In fact, the more that these citizens are brought into civic life, the more that both parties will seek to win their support. We’re seeing this already, with the Republican Party ramping up its outreach to Latinos as their electoral clout grows.
I’d also add that there needn’t be a conflict between a frank focus on building voter power and on building bridges between people who disagree — which I know is another cause you’ve championed. Ensuring that everyone has a voice in our polity is a precondition for meaningful dialogue about our nation’s values and priorities. In a healthier democracy, greater enfranchisement and bridge-building would go hand-in-hand.
You’ve poured a fortune into nonprofits that speak for the historically disenfranchised. Now, you should prioritize strategic investments in building electoral power to make sure that politicians listen to these voices.
Give to support federal and state budget work.
Federal, state and local government spends about $9 trillion a year. This money is raised and allocated through complex budgeting processes that special interest groups spend heavily to influence. But guess who often doesn’t have a seat at the table? Low- and moderate-income Americans. While these people have the most at stake, since so many depend on public benefits, they’re usually the least represented. Too often, their voices are barely heard when hugely consequential fiscal decisions worsen inequality, like the devastating regressive tax cuts passed during the Bush and Trump administrations.
Helping build the electoral power of low-income people is the best way to create a more balanced debate. But another way is to invest in think tanks. Most famously, the Center on Budget and Policy Priorities in Washington fights with immense effectiveness for government programs that help the nation’s most vulnerable people, and against tax breaks for the wealthy. Other groups are also in this fight, including some you’ve already supported, like the Center for Law and Social Policy.
With more money — hopefully, a lot more — these organizations would have greater capacity to track and work on more budget issues that affect struggling people. The place where greater funding is most urgently needed right now is at the state level, where budget groups like Every Texan are engaged in desperate battles to protect essential public benefits from deep budget cuts.
Food programs are an example of programs under attack. As you’ve probably seen, some state governments have been slashing SNAP benefits lately, even as food prices rise and hunger worsens. I know you care about this issue, given your extensive support for food banks across the country. Here, again, though, you’re giving generously to fund Band-Aids downstream, while investing very little to affect policy decisions made upstream. You need to broaden your approach to get the results you want.
This is another easy area in which to give big. There are more than 40 state budget groups in the State Priorities Partnership, which is managed by the Center on Budget and Policy Priorities, that advocate for low-income populations. Many of these groups are way under-resourced. Take the Florida Policy Institute, which had a budget of around $700,000 in 2019 for its work in a state where 2.6 million people are living in poverty.
The State Priorities Partnership could easily absorb a nine-figure gift, which would help balance out your massive giving to direct-service groups. Such a gift could yield an astronomical return on investment. Even small wins by budget policy groups can translate into hundreds of millions of dollars in additional spending, or prevented cuts, to address human needs. Big victories, like those that CBPP have helped to achieve on key tax credits, can translate into tens of billions of dollars. Most of the stuff you’ve funded so far doesn’t offer anywhere near this kind of bang for the buck.
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OK, I think that’s enough advice for now. Hopefully, you and your team are already considering some of the ideas I’ve suggested. I’m sure I’m not the only one who’s made such suggestions. And, as I’ve mentioned, other funders have already done the hard work of building strong ecosystems of nonprofits in each of the three areas I’ve covered, setting the stage for much larger-scale giving to reduce political and economic inequality. Hopefully, you can two can step forward in a big way to provide this funding as MacKenzie makes good on her promise to “empty the safe.”
Just to be clear: I’m not suggesting you stop giving to your other priorities. In particular, I’m all for giving big to direct service organizations like Habitat for Humanity, Meals on Wheels, United Way, the Boys and Girls Club, community colleges, and so on (as I’ve argued here). One of the things I love about your philanthropy is that you’re not overcomplicating things; you’re shoveling out tons of cash to groups that are addressing human needs, never mind whether they have trendy models of impact. I wish more donors had your large heart and sense of urgency. Keep going on that track.
But, at the same time, I hope you can bring greater focus to your social justice giving — and really zero in on the key arenas of power I’ve discussed. You might also consider giving to influence federal and state courts, another all-important battlefront, but that’s an article for another day. (Read more.)
I have no idea whether even your billions, strategically targeted, can do much to reduce the profound economic and political power imbalances in our society. I do know that you care.
Thanks for reading.
Best,
David Callahan
Founder and Editor, Inside Philanthropy