Hi everyone, quick reminder, if you’re free next Monday 9/21 at 11am PT, join me on this webinar to discuss wealth hoarding and tax avoidance. We’ll be focused on these questions: “What are the current rules governing philanthropy, especially foundations and donor-advised funds? How do these operate in practice? Are wealthy people using these vehicles to game the system?”
Happy September, everyone. Holy hummus, it’s September! Fellow parents with school-age children, I hope you are doing ok. Hang in there. We’ll make it through this together. When things get tough with virtual schooling, just remember the old adage: “The days are long, but the years are—You better not be playing Minecraft again! Get back to your Zoom class this instant or no media the rest of the day! And you! Those loose fruit snacks you found under the couch are covered with dust! Throw them away, or at least rinse with water before eating!”
I know we all have a lot on our minds, and unfortunately I must add one more thing for us to think about. Three months ago, I wrote “Have nonprofit and philanthropy become and white moderate that Dr. King warned us about?” Since then, I have been grappling with the question of how effective our work is as a sector. Are we actually doing good in the world, or have we tricked ourselves into believing that we are while in reality we’re allowing inequity and injustice to proliferate? The reality is that we’re doing both, and it’s important for us to untangle these dynamics.
Recently, I read the Gilded Giving report by the Institute for Policy Studies. It examines the trends in giving in our sector and what it means. It paints a picture that is not pretty. Here are several points we should pay attention to:
Starting in 2010, a bunch of billionaires signed a pledge to give away half their wealth. Since then, their combined wealth has actually doubled. From $376 billion in 2010 to $734 billion as of July 18, 2020.
Over the first four months of the pandemic, when everyone has been struggling, the 100 living Pledgers who were billionaires in March actually INCREASED their wealth by $213.6 billion, or 28%, from 758B in March to 972B in July.
Small individual giving has been in decline over the past two decades. Between 2000 and 2016, the percentage of households giving to charity has dropped from 66 percent to 53 percent.
Large gifts, however, have been increasing. Households making over $1M claimed 33% of all charitable deductions in 2017, up from 12% in 1995.
The number of foundations in existence increased by 68% between 2005 and 2019, from 71, 097 to 119,791. During this period, their assets more than doubled, from $551 billion to $1.2 trillion
Donor-Advised Funds (DAFs) have grown even more rapidly in number and assets. DAFs have no legal mandate to pay out anything each year. Donors take tax breaks immediately when they transfer their wealth to DAFs, but they are not legally required to actually distribute those funds to nonprofits.
Happy Monday, everyone, or as happy as it can be given that it’s 2020 and we’re all likely in a computer simulation run by a sadistic toddler. An announcement before we begin today’s serious post: The Community-Centric Fundraising (CCF) Slack community is growing and now has over 800 members. People are connecting to one another and starting to form local CCF groups across the world. So join, and I hope to see you there!
Speaking of CCF, since the launch of this movement last month, I’ve been getting requests to be on panels or write articles to defend the community-centric approach against folks who hold traditional donor-centered fundraising philosophies and practices. The framing is that there are two sides to this “debate,” with community-centrism being an uppity challenger to traditional practices so it is time to duke it out Mad Max Thunderdome-style (I may have exaggerated a little).
Sorry, I am not interested in these debates. There are no two sides. Traditional donor-centered approaches have revolved around the comfort of white donors and thus have been allowing them to avoid grappling with systemic injustice rooted in slavery, colonization, and capitalistic exploitation of the poor and marginalized that perpetuates wealth and power hoarding among rich mostly white people, which fuels many of the problems we’re trying to fix. Let’s not waste time with back-and-forth over whether that’s true. There is also no argument that this works to bring in funding. In fact, the issue is that it “works” TOO well. But just because something “works,” doesn’t mean it is the ethical thing to do. We need to collectively explore ways to evolve our fundraising practices to be more ethical.
Hi everyone, real quick before I get into today’s topic—since the launching of the Community-Centric-Fundraising movement a month ago, the team in Seattle has been excited but also overwhelmed by the incredible response from you all! Thank you for your patience as we sort out the logistics. More is coming, including a meeting to discuss the creation of local CCF chapters (it’ll likely be on 8/20 at 12pm PT, sign up for the mailing list if you haven’t so we can send you more details).
A few months ago, I left my job after being an ED for 13 consecutive years across two organizations. “How does it feel to be retired?” people would ask. “I’m not retired,” I would joke, “I’m Financially Untethered, aka FU!” (This was before the pandemic, when I still had a sense of humor). It was a needed sabbatical, and I was looking forward to recharging by re-watching Avatar: The Last Airbender, Battlestar Galactica, and The Golden Girls.
One day, I got an email from Angie Kim, President & CEO of the Center for Cultural Innovation. “I’m wondering if you have a soft landing? Can our work (www.ambitio-us.org) potentially fund you, give you a business card, and act as a platform so that you continue to be in the field in ways that might work for you?”
Through our conversations over the following months, I got to understand what Angie meant by “soft landing.” This is what conservatives do for their leaders. They provide them with support to ensure that their work continues. If a right-wing pundit gets fired or leaves their position, you can be sure the conservative movement will rally around them, help them get a new job, a slot on Fox News, a post at a research institute, a book deal, a litigation lawyer, a spot on Dancing with the Stars, or whatever. They understand that their most effective leaders are their greatest weapon, so they do everything they can to protect and invest in them and their ideas.
I’ve been spending a lot of time flossing while thinking of how to categorize the challenges in our sector (What, like your quarantine activities are so much more interesting). Many of the stuff we deal with falls under the category of “well-meaning people inadvertently making nonprofits’ jobs harder.” Here are a nine. I’m going to call them paradoxes, though some of these are not paradoxes exactly, but are more like dilemmas, conundrums, or shenanigans. I’ve written about a few of them, but they keep coming up and remain a problem, so it’s good for us to review and have common language to push back. If we want our sector to succeed, we need to be aware of these paradoxes and control for them.