The COVID-19 pandemic has wreaked havoc on government budgets at all levels, shone a spotlight on gaping inequalities, and thrown open the policy window to all types of once-dismissed ideas. A historic protest movement against police brutality and systemic racism is stirring national debate—and action—on defunding police departments.
Amid these powerful forces, a growing number of foundations are considering diving into advocacy—or are at least testing the waters—according to a leading advisor on the subject.
“Anecdotally, we have seen a huge upswing of interest from foundations in terms of advocacy,” said Abby Levine, director of Bolder Advocacy, a program of the Alliance for Justice network. “They’re really trying to figure out how to make the most of this time.”
When funders and nonprofits have questions or fears about the extent to which they can actively support a particular policy or cause, they often turn to Bolder Advocacy. The shop is getting more calls from foundations for technical assistance, and its programs are filling up—sometimes with hundreds of attendees. And last month, prompted by COVID-19 and a request from one foundation, the program released a two-page brief for foundations engaging in advocacy during a disaster. “We probably had more of a response to this factsheet than anything else that I can remember,” she said. “Foundations are really hungry for information.”
Money is moving, too. Take labor advocacy. In April, a group of funders and individual donors announced $7.1 million in contributions to the Family and Workers Fund, which, in addition to engaging in emergency response, will push for long-term labor policy change. Contributors include the Annie E. Casey, Ford, JPB and W.K. Kellogg foundations, as well as the Open Society Foundations and individual donors. And in May, the Omidyar Network committed $35 million to an internal program that supports labor advocacy groups, such as the National Domestic Workers Alliance and Jobs With Justice.
The surge in interest appears to stretch well beyond the developments of the last few weeks and months, based on a report released last month by the Center for Effective Philanthropy. Three-quarters of foundation CEOs told the center they’ve increased their institution’s policy efforts in the last three years, mostly at the state and local levels. And recent years have seen more foundation funding flowing to 501(c)(4) organizations, which have fewer restrictions on their political activity, as reported by Inside Philanthropy’s Philip Rojc.
Yet the actual commitments still remain relatively low. Nearly all of the foundation leaders that the center interviewed said policy work—whether measured in dollars, grants or time—is a small element of their efforts. “When people did use percentages, they said, ‘it’s 5 to 10% of our work,’ or ‘10 to 15% of our work,’” said Ellie Buteau, vice president of research at the Center for Effective Philanthropy.
The center’s report, “Policy Influence: What Foundations are Doing and Why,” was based on survey responses from 214 CEOs and interviews with CEOs and other staff from 43 U.S. foundations, all with $5 million or more in annual giving.
First Steps for Foundations New to Advocacy
“There is no right way to do this. There is no key starting point,” Levine said. “For some foundations, it’s really starting with their grantees and grantmaking. For other foundations, it’s jumping in on an issue.”
That said, one easy first step any foundation can take is to update its grant agreements to remove prohibitions on lobbying. They’re not legally required. In some cases, they’re only used because they were in a grant template, said Levine. Yet 54% of the respondents to the Center for Effective Philanthropy’s survey said their foundations include such language. Even among those institutions that support grantees’ lobbying and advocacy efforts, 36% include such a limitation.
“Right now, when they want their grantees to be as nimble as possible, to really jump in and take advantage of some of these windows that are opened, some of these restrictions make it more difficult for these organizations to respond,” Levine said.
Levine also recommends a classic solution: general support grants. Such funding will free up grantees’ ability to do advocacy, including lobbying, while protecting the foundation.
Private foundations, it’s worth noting, are prohibited from lobbying (except in their own defense). Further, money paid to grantees explicitly for lobbying subjects both the foundation and its managers to a steep tax. But the two methods outlined above allow private foundations to fund 501(c)(3) organizations that conduct lobbying without such penalties. Beyond lobbying, funders themselves may take a wide range of advocacy measures, such as joining sign-on letters, advocating on issues (not legislation), and leveraging relationships with decision-makers.
“Some foundations are really trying to figure out how to use their voice more, not just through grantmaking, but, how does the foundation use its reputation, use its capital, use its leadership to weigh in now?” Levine said. “And I know that’s controversial.”
Supporting or Holding Back Change?
Philanthropy has helped seed some major policy shifts in the past. Perhaps most notably, the Carnegie Corporation of New York funded an influential study on American segregation and racism that was later cited by the Supreme Court in the landmark decision overturning racial segregation in public schools, Brown v. Board of Education. Other philanthropic funding for research has contributed to the establishment of the National School Lunch Program and the expansion of the National Institutes of Health.
But philanthropy’s dollars have also redirected social movements, due to foundations’ hesitancy to support certain strategies. Erica Kohl-Arenas, a professor at the University of California, Davis, found that foundations would not support the strikes, boycotts, picket lines, unionization or other tactics of the California farmworker movement, leading organizers to put more energy into nonprofit services. Another professor, Megan Ming Francis, at the University of Washington, showed how philanthropic influence led a fledgling and underfunded NAACP to work on education litigation instead of its original focus on stopping lynching and mob violence.
Now, foundations find themselves in another period of surging demand for change. Their willingness or unwillingness to support the full range of approaches that grantees are pursuing—to the extent that tax law allows them to—could determine how effective they are at accelerating that change.
“I’ve actually had a number of foundations reach out to me after this article and ask this question about, ‘OK, I found aspects of this article persuasive. How do we proceed in a more responsible manner with our grantees?’” Francis told the Niskanen Center in 2019. “I don’t have the silver bullet. I don’t have the answer, but I know that part of the answer starts with, one, really listening to activists and privileging their voices. I know that it also starts with, begins with being aware, being hyper-aware of the privilege that foundations actually have in their interactions with grantees, especially Black Lives Matter activists.”
Safety in Numbers
Foundations that do advocacy overwhelmingly report that they do it collaboratively. Ninety-eight percent of respondents told the Center for Effective Philanthropy that they coordinate with nonprofit and/or philanthropy in their policy work. In fact, on virtually every collaboration-related metric measured by the center’s survey, at least nine out of 10 funders said they were working with others.
“They know better than to go it alone,” Buteau said. “We had some foundation leaders explicitly say to us: ‘We know that our grantees know more than we do.’ … There was an awareness that pushing their own agenda would not take them far.”
Some of the major philanthropic advocacy efforts of the last few years have been group endeavors. Levine points to funder mobilizations against the Trump administration’s policy of forcibly taking children from their parents at the border, the overhaul of public charge regulation, and the effort to add a census citizenship question as prime examples. (Full disclosure: I played a role in several of these funder responses while working at Grantmakers Concerned with Immigrants and Refugees, for whom I still consult.)
More recent collaborative advocacy efforts by philanthropy have ranged from a small, new national fund dedicated to seeding local advocacy on transportation funding amid the COVID-19 recovery to the Funders for Housing and Opportunity Collaborative, which is funding advocacy to make progress on California’s intractable housing shortage.
What Holds Foundations Back From Engaging in Advocacy?
In April, Grantmakers in the Arts held a long-scheduled webinar featuring Levine from Bolder Advocacy. Edie Torres, president and CEO of the affinity group, who recently wrote a blog post extolling the power of advocacy to his members, has long encouraged greater policy engagement.
“A lot of them shy away from advocacy and lobbying, or supporting lobbying, because they don’t actually know that much about it—or what little they do know kind of worries them,” Torres told me. “We wanted to make sure we were informing our members’ work.”
That’s where Bolder Advocacy comes in. The group supplies factsheets and FAQs on topics ranging from elections and campaign finance to tweets and impeachment. They also have a support hotline.
Two recent inquiries Levine’s team fielded show the range of questions around philanthropic advocacy. In one, a private foundation wrote to ask if they could use #BlackLivesMatter in their social media posts. Their concern? As a 501(c)(3), they wanted to confirm they could use a 501(c)(4)’s hashtag. (It is permissible, in case you’re unsure.) In another, a group of foundations wanted ensure they could lobby for increased payout requirements based on the “self-interest” loophole that allows foundations to respond to legislation that would directly impact them.
Levine is sympathetic to funders’ uncertainties. Based on the way a question is asked, it’s easy to go down a rabbit hole of over-analysis, she says. And foundations have different levels of expertise and risk tolerance. “Some are more timid and like to have someone second them, or want to have that pat on the back,” she said.
Another concern can be financial. As the Center for Effective Philanthropy got ready to do the interview portion of its report, several community foundations shared concerns about losing donors, Buteau told me. In response, they added a question asking all the community foundation CEOs it spoke with if their advocacy work affected their donor base. Not one said they lost more donors than they gained, with 70% saying giving was steady and the remaining 30% reporting they gained more donors than they lost.
“Foundations told us there weren’t really any downsides,” Buteau said. “Sometimes, things didn’t work out. But people couldn’t give us any clear examples of reputational issues that had resulted, or political issues.”
Buteau said the leading obstacle their survey identified was foundation boards. Less than half reported complete support from their boards. Less than a third reported their boards understand “very well” what’s permissible. Many boards also “lack racial and ethnic diversity in profound ways,” as a much-cited 2017 Leading with Intent report noted.
At a time when once-unthinkable policy change is within reach and the needs are greater than ever, perhaps more foundations will start to overcome these barriers—and their own hesitancy.
“No foundation, no matter how big they are, can pay for school lunches, or can buy people houses, or can keep people safe. It’s all about leveraging their resources, leveraging government funding, and really trying to change the system.” Levine said. “For too long, we were stuck in this dichotomy, ‘Should we fund direct services or advocacy?’ It’s really both.”