Despite New Ways of Giving, Grant Makers Say No Big Shift Is Afoot

Philanthropy is awash with new approaches to promoting social and environmental change, but speakers and participants at a national gathering of grant makers questioned whether a fundamental shift in traditional philanthropy was under way.

Participants at the annual Council on Foundations gathering in the nation’s capital debated the broader impact of recent developments such as Mark Zuckerberg and Priscilla Chan’s announcement that they were forming a limited-liability corporation rather than a private foundation to carry out their commitment to social good.

By 10:01 a.m., the doors were closed to the conference’s session on “Philanthropy Outside the Tax-Exempt Model” because the room had reached capacity. But a few more enterprising attendees managed to squeeze in and snag space on the floor.

Presenter Sarah Duniway, a managing partner who specializes in tax-exempt issues at the law firm Gray Plant Mooty, said Ms. Chan and Mr. Zuckerberg don’t just want to make grants, they want to lobby the government, give freely to foreign organizations, and work without the public scrutiny to which traditional foundations are subject.

“Will this be a game-changer?” one attendee asked about the LLC structure.

“Choices of legal entities are rarely game-changers,” Ms. Duniway replied. But Ms. Chan and Mr. Zuckerberg’s “view of what they want to accomplish is much more expansive than what historically we’ve thought of philanthropy.”

Changing Roles

Meanwhile, some foundations have been tinkering with their traditional roles. Instead of focusing on straight cash grants, foundations are increasingly exploring new modes of giving through impact investments, pay-for-success deals, and crowdfunding efforts.

Una Osili, director of research at the Indiana University Lily School of Philanthropy, told conference attendees that much of the emphasis on new philanthropic structures suggests a “disruption” in the field of giving.

But, she reminded them, many things haven’t changed: “Individual donors are still the drivers of philanthropy, and religious groups still receive the lion’s share” of gifts.

Joshua Mintz, general counsel of the John D. and Catherine T. MacArthur Foundation, agreed, calling many of the recent efforts “old wine in a new bottle.”

He said that while impact investing is currently in vogue, his Chicago foundation has been making program-related investments for years. And while the Zuckerberg-Chan LLC structure made headlines, big donors including Pierre Omidyar and Jeff Skoll and other family philanthropies have used the structure.

“Today looks a lot like yesterday,” he said.

That doesn’t mean foundation practices haven’t shifted recently, Mr. Mintz said. The amount of “transparency” and data sharing expected today from private grant makers would shock foundation leaders of the past, he said.

“That’s an extraordinary change,” he said.

Diversity Debate

The conference covered a wide variety of topics, and diversity was among the hot issues.

Over the past five years, foundations have made mixed progress in hiring more women and minority employees and executives, according to a report released at the conference by the D5 Coalition, a group of more than 12 nonprofits that has pushed for more diversity in the nonprofit world.

Using 2014 data collected by the Council on Foundations, the D5 Coalition found that 55 percent of foundation presidents are women, as are 77 percent of foundations’ program officers. It also found that 3.4 percent of foundation presidents and 12.7 percent of program officers are black. Latinos held 2.3 percent of foundation-president positions and 10.2 percent of program-officer jobs.

Maria Teresa Kumar, founder of Voto Latino, expressed disappointment that she wasn’t hearing broader condemnation from nonprofits regarding statements about immigration made by Republican presidential front-runner Donald Trump. Although she declined to refer to Mr. Trump by name, her meaning was clear. She said his comments “made Latinos feel very alone,” because other groups working for social justice didn’t express outrage.