Grant Makers: First, Do No Harm to Others

This week the Council on Foundations holds

its annual conference in Seattle, welcoming more than 2,000 participants to a gathering designed to focus on four themes: reducing poverty, preparing for disasters, improving public health, and protecting the environment.

Those discussions are certainly timely in light of the horrific impact that Hurricane Katrina had on the Gulf Coast, and the ways in which people’s race and class affected how they fared after the catastrophe. But it is of equal importance for foundations to hold a long overdue and more fundamental discussion of grant making in the United States: acknowledging the problematic class dynamics that pervade philanthropy and often prevent it from advancing the common good.

To define the term, “class power” can be described as the consistent ability of one interconnected group to mobilize resources, and to determine where decisions will be made on important issues that affect many others. This is, for the most part, the way foundations in the United States function.

Grant makers can overcome the challenges of those dynamics, but first they must acknowledge that as they dispense money and other resources, they are making decisions that affect vast numbers of people who are rarely given much say in the matter. Instead, foundations often anoint think tanks, national “intermediary” organizations, and others to represent the interests of a constituency when they have not made efforts to learn more themselves. The result, too often, is that what grant makers do with their resources is not just wasteful but damaging to communities.

Because grant makers have much-needed money and the power that flows from it, the nonprofit groups that are supposed to be acting in the best interests of the people they serve rarely openly object to this dynamic. In fact, grant seekers tend to lean over backwards to adopt language and practices that reflect the worldview of the grant maker. Doing so, however, often distracts nonprofit groups from the work that is most important for them to do and often places them at a distance from their constituents.

In politics, the same kind of problems abound. People who have money to contribute to campaigns get taken more seriously by people running for election, and the result is that public policy is often shaped to meet the desires of affluent people. To mirror this in philanthropy is particularly cruel.

The nonprofit world is supposed to be different. It is supposed to be the place where people without means organize themselves to take action. But because organized philanthropy does not have to play by the rules of democracy, it can easily, though perhaps often inadvertently, smother grass-roots efforts.

In his preface to the new book Taking Philanthropy Seriously, William Damon, a professor of education at Stanford University, suggests that because philanthropy has the potential to do serious damage, grant makers need to professionalize their practices.

But philanthropy does not need any more insular conversations about its practices. Instead it should adopt disciplines that enhance democracy and make foundations more fully accountable to the people they are trying to help.

In discussing the research he did for his book, Mr. Damon tells the story of the now defunct West End of Boston — my hometown. This vibrant, albeit poor, neighborhood was bulldozed in 1958-9 as the result of a grand plan for urban renewal promoted by donors and foundations. It was replaced by parking lots and freeways, Mr. Damon says. “No one asked the people living in town,” he writes.

Forty years later, the West End is still mourned not only by the surviving members of that community but also by the whole city.

Its loss is legend — there almost seems to be a palpable and gaping hole in the landscape.

Such development of high-minded social projects — in isolation from those who are meant to benefit — is unconscionable antidemocratic behavior, but behavior that is native to most philanthropic institutions.

Foundations pay no price for their mistakes. If government ruins the lives of people in a community, an elected official should get voted out of office. If a business made the same error, it should lose its customers. There is no similar mechanism in philanthropy, and when these institutions become so large that they can drive entire fields of endeavor, we have a problem.

Foundations can be sanctioned for financial mismanagement, but if a grant maker acts with carelessness and abandon in its programming, the Internal Revenue Service wouldn’t pay attention and nonprofit groups would probably not boycott it. And because of the way foundations operate, they may never clearly see the many levels of harm their money and decisions cause.

Philanthropic institutions are not the only ones at fault, however, as I learned when I struggled with many of these issues myself.

In the 1980s, I took a job at the Fund for the Homeless at the Boston Foundation and soon realized that there was no regular means of consultation between this important central source of financial support and homeless people themselves.

In trying to ensure that our grant making was being directed at least in part by people who had experienced homelessness first hand, we found that many of the community groups we financed were also not seeking the opinions of the people they were set up to serve.

The few family shelters that did formally consult the homeless women that often headed these families had markedly different approaches to running their programs than the rest. They emphasized educational and employment programs that were well suited to the realities of the lives of those women because they helped in designing the programs. They were also very active in advocating for welfare and other policies to help poor people, low-cost housing, day care, and a host of other areas. The homeless women helped design and carry out those campaigns as well, speaking for themselves in front of legislative committees and helping to do critical research.

We discovered that when we adjusted our grant-making approach to give more weight to groups that included homeless people in shaping their programs, we not only were channeling resources to groups that did a better job, but also were promoting active citizenship among people who had a valuable part to play in the shaping of public policy.

So participants at the Council on Foundations conference should consider carefully what they need to do to ensure that they do not carelessly cause harm to people and communities. The debate in Seattle and around the country should start with the following questions:

• How can we better include those who will be affected by our foundation’s work in setting the strategic direction for grant making and in grant decisions?
• How can we ensure that those who will be affected by the work of a grantee are included in setting their strategic direction and in evaluating the work being done?

Democracy requires that citizens be active participants in collective decisions and policies that affect their lives.

If foundations wish to be effective and legitimate agents for social progress, they must strive for institutional and personal humility above all things. And they must work much harder to make public advice and participation a discipline central to their and their grantees’ decision-making processes.

Ruth McCambridge is editor in chief of The Nonprofit Quarterly magazine.