Summary and Conclusions:  Progressive Foundations and Alternative Funding Institutions

In the USA, the momentous 1960s stimulated aggressive and successful social movements, concerning racial/ethnic peoples, women, gays and lesbians and the environment, which have grown in breadth and impact during the intervening years. These movements, in turn, produced important new progressive foundations and new alternative private funding institutions to provide money for the nonprofit organizations in the movements. The new alternative funding institutions were religious funders, Black United Funds, social action funds, Women's Funds, alternative community foundations, Native American foundations/funds, lesbian/gay/bisexual/ transsexual foundations, environmental federations, Hispanic funds and Asian Pacific American community funds. In some cases, this new money augmented the limited funds from government and traditional philanthropy. In many more cases, the new foundations and funding institutions gave grants to new and controversial organizations that would have received little if anything from government or mainline philanthropy.

Researching the alternatives has not been easy. The author collected data on alternative workplace funds for 18 years, but despite his knowledge of the field and personal access to the fund leaders, it became increasingly more difficult to obtain data from the funds as they grew in number and independence. Moreover, the task was more complicated because they are essentially grassroots organizations. Fortunately, national organizations collected data on Black United Funds, Women's Funds, Native American foundations/funds, Funding Exchange foundations and LGBT funds. And researchers Henry Ramos, Gabriel Kasper and Michael May collected other essential data. But even then these data are not normally published for public review. Only the data on alternative workplace funds, Women's Funds and Native American foundations/funds were readily available in public documents (and then the Native American data were only for 1994).

The primary common grounding of these new alternative funding institutions, as well as of the new progressive foundations, was to devote themselves to the less fortunate, the marginalized, the discriminated, the oppressed in American society, who have the least access to the levers of money and political power. This common focus on the economically and politically weak became more and more necessary as the USA began to fall under the spell of the conservative political movement. The conservative movement actually began before few of the funding institutions discussed here were established, after Barry Goldwater's defeat in the 1964 Presidential election. But it didn't pick up real muscle until the 1980s, after Ronald Reagan took office as President. And it continued to grow in influence politically and with the media even after Reagan left office in 1989, eventually electing a conservative Congress in 1994 and President in 2000. The development of the conservative movement was strongly supported by a number of conservative foundations. They established an infrastructure of nonprofit organizations in academia, the media, the law, philanthropy and religion which became counters to the presumed "liberal rot" of mainline institutions in these areas, but most important, they created conservative think tanks to develop new lines of conservative thought and policy which would play well with middle America. All the new progressive foundations and alternative funding institutions discussed herein increasingly faced government and private policies that tended to favor the wealthy over the economically and politically weak. The new funding institutions had an uphill battle just to establish themselves, but an even tougher battle to grow in the face of this increasingly hostile conservative policy environment.

Another common grounding was that the new funding institutions were all created as independent private nonprofit institutions. However, some of the funding institutions (Black United Funds, Social Action Funds and Environmental Federations) sought to work creatively with government, not to be estranged from it. While others (progressive foundations, religious funders, Women's Funds and alternative community foundations) generally developed quite separately and independently from direct governmental assistance.

Social action, Black activist and environmental nonprofit organizations lobbied tenaciously and successfully for new law to open up workplace fund raising in the Federal government's Combined Federal Campaign, so that they and other nontraditional and advocacy nonprofit organizations could receive employee charitable contributions. Social Action Funds, Black United Funds and Environmental Federations subsequently lobbied successfully to open up state and local government workplace fund raising campaigns. These government charity campaigns became the financial base of SAFs, BUFs and EFs, giving them the financial solvency to seek access to college, university, nonprofit and corporate charity drives.

Nevertheless, all the new progressive foundations and alternative private funding institutions took full advantage of indirect governmental help. In the USA, the income of nonprofit organizations engaged in charitable, educational and research activities is exempt from taxes. Also, individuals and corporations are allowed tax deductions for contributions to these organizations, whether in cash or real property. Both these long standing tax laws were of immense importance to the creation and growth of the new progressive foundations and alternative private funding institutions discussed in this chapter.

Another common grounding of the new alternative funding institutions is the critical importance of intermediary organizations in expanding the concept from a prototype entity to a national network of such institutions. This was not done McDonalds franchise style, where every hamburger has to weigh an exact amount and contain a certain percentage of fat. The expansion was accomplished by the intermediaries making the nation aware that the prototype did indeed exist; promoting the basic concept of it; providing information about how the prototype worked; helping organize replications (though not exact ones); providing technical assistance to implement replications; holding conferences to share inspiration and information; conducting research and disseminating publications to inform the developing networks, the media and the larger world; selling the concept to the mainstream funding world; and lobbying Congress and the White House as necessary.

The National Black United Fund has been instrumental in helping create and develop local BUFs. The National Committee for Responsive Philanthropy (NCRP) and later the National Alliance for Choice in Giving (NACG) have been the primary intermediaries for Social Action Funds. NCRP, NACG and especially the Environmental Support Center have been key intermediaries for Environmental Federations. The Women's Funding Network and, to a much lesser extent, Women & Philanthropy, have been essential for Women's Funds. The Funding Exchange has been the main intermediary for alternative community foundations. Native Americans in Philanthropy and Hispanics in Philanthropy have been crucial in encouraging creation and development of Native American foundations/funds and Hispanic funds. Without these intermediaries it is doubtful that the prototype alternative private funding institutions would have developed into the important funding networks they have become. On the other hand, there was no such intermediary to stimulate development of progressive foundations and religious funders, at least, not until the National Network of Grantmakers, founded in 1978, developed much later into a cohesive network.

The entrepreneurial leadership of all the new alternative private funding institutions is another common grounding. While the grants and loans of mainline foundations and corporations certainly were helpful for creation and development of some BUFs, SAFs, EFs, Women's Funds, Native American foundations/funds, Hispanic funds and their intermediaries, nevertheless, the entrepreneurial leaders of these funding institutions successfully sought out other, ultimately much more important sources of funds to put their institutions on the map: payroll deduction contributions, donations from young heirs to great fortunes, gifts from individual women at all income levels, annual church collections for an anti-poverty fund, and more. And since the funds they sought had rarely before been made available to such new and innovative organizations -- whether by government, foundations, corporations or individuals -- they had to be especially creative, entrepreneurial and persevering in soliciting the money.

The new progressive foundations and alternative private funding institutions have become important new sources of support for progressive organizations. They fund more cutting edge social movement activities than do mainline liberal foundations. They operate closer to the grassroots than do the big liberal foundations. They extend the reach of the liberal foundations in social movement funding because the latter are too hidebound to make small or really controversial grants, or to fund grassroots and small organizations. And the alternatives are usually more democratic in their decision-making procedures.

On the other hand, progressive foundations are few and far between and alternative funding institutions are limited in their funding. They often fund the grassroots, but this usually does not add up to impact on national policy. They often fund identity politics, which usually do not help build voting coalitions with the crucial swing voters of the middle class. They often make project grants, rather than general support grants, locking organizations into policy silos. They rarely commit for the long term, even though they sometimes fund the same organizations for many years. They rarely explicitly support network building, though they sometimes support coalitions for specific purposes. Little of their funding goes for overall progressive movement building.

Pros and cons notwithstanding, progressive foundations and alternative funding institutions are very important in funding social change and social movements. Progressive foundations make substantial grants for social change relative to those made by liberal mainstream foundations, but the best estimate is that they are some part of the $265 million in social change grants that the NNG tallied for private and community foundations in 1997.⁽²⁰⁷⁾ The new alternative funding institutions and religious funders, meanwhile, are known to have granted or allocated $106 million for social change circa 1998, and this number is estimated at more than $190 million for 2000. As has been reported earlier in this chapter, it appears as if the alternative funding institutions and religious funders became more significant within overall philanthropy in funding in funding social movements and social change from 1990 to 1997.

The alternative community foundations, including the 16 in the Funding Exchange network and the Tides Foundation granted $33 million for progressive nonprofit organizations in 1998, and, along with the Tides Center, granted or regranted $115 million in 2000. The Funding Exchange foundations awarded around $15 million, raised mostly from individual donors, the money going in very small grants ($500-5000) to some of the most controversial social action, human rights and environmental activities in America. The Tides Foundation granted $50 million and Tides Center regranted another $50 million, including money for 375 new and/or small nonprofit groups in the initial stages of development. Yet 30 years ago, only one Funding Exchange foundation was in existence and neither Tides institution existed.

Thirteen religious funders which target low income community-based organizations and community organizing are a major part of the alternatives that fund social change. They granted $26.3 million in 1998, thereby providing almost one-third of all religion's total contributions to social change. Yet the church fund making more than half of the grants was not established until 1970.

The 44 Social Action Funds and 20 Environmental Federations raised $24 million in total revenues in 1997, mostly from workplace fund raising, and distributed around 80% of this amount to their more than 1500 member organizations, which are engaged in every type of social action and environmental activity imaginable. Yet 30 years ago, only two SAFs and no EFs existed.

Over 70 Women's Funds raised $45 million in 1998, mostly from individual donors, and granted $16 million for women's and girls' activities from social action to social services and recreation. Now there are 93 Women's Funds. Yet 30 years ago, only three Women's Funds existed (as scholarship funds) and only one women's fund existed that embodied the hopes and dreams of the modern day women's movement.

The 23 Black United Funds (BUFs) raised more than $7.5 million in 1998, mostly from workplace fund raising, and distributed about 61% to several hundred grantees, which are active in every aspect of Black social and economic development. Yet 30 years ago, only one BUF existed.

The 32 Native American grant-makers active in 1994 granted $3.5 million for Native causes and scholarships, and the American Indian Higher Education Consortium made available another $5 million for scholarships. Only three of these institutions existed 30 years ago.

The 16 Lesbian/Gay/Bisexual/Transsexual foundations granted $1.6 million in 1998, but tripled their grantmaking to $5 million by 2001. The six Hispanic funds and the three Asian Pacific American funds granted $1.2 million in1997. None of these funds existed 30 years ago.

These new progressive foundations and alternative funding institutions are serious contributors to social justice and environmental protection in the USA. The grants and allocations of progressive foundations, religious funders, Black United Funds, Social Action Funds, Environmental Federations, Women's Funds, alternative community foundations, Native American grant-makers, Hispanic funds and Asian Pacific American funds are substantial. These new progressive funding institutions' contributions, totaling $106 million circa 1998, may be more than one-quarter of all progressive social change grants in the USA.⁽²⁰⁸⁾

Interestingly, as the alternatives became known to the foundation world, foundation funding of progressive social change increased as a proportion of total foundation grants. Both Jenkins and Halcli and NNG document the increase. Has this growth occurred over time because of the development of elite support of the momentous social changes from the 1960s? Has the elite that makes foundation decisions been replaced by people whose progressive social conscience was forged in the 1960s? Or has the growth of foundation giving to progressive social change been a direct function of the stimulative influence of the alternative giving institutions? Undoubtedly, the answer is "yes" to all three questions. But which influence has been greater or lesser is for further research.

Have the alternative funding institutions affected progressive policy making? Have they arrested somewhat the decline in progressive policy making from 1981 to the current time? Have they stopped the conservative policy juggernaut anywhere? Yes, of course, they have funded important and sometimes successful defensive seawalls against the conservative tide. But overall, the conclusion must be that they have not been a great factor in arresting the decline of progressive policy. They have principally focused their grantmaking and allocations on the grassroots or other local activities, mostly on limited scale projects, identity politics or narrow fields of interests, rarely on bridging the gaps between the many policy silos.

What about the impact of the alternative funding institutions on social change more generally? As most of the alternatives are local or state based, and many are grassroots organizations, the impact of their funding is dissipated across hundreds of geographic boundaries and dozens of social movements. They have supported organizations involved in every progressive social movement of the day, from prisoners' and immigrants' rights to anti-globalization to environmental justice and toxic waste disposal. Researchers looking at the origins, growth, development and impact of diverse social movements should make sure to examine the role of the alternative funding institutions as well as of mainline foundations and other philanthropy. There is no doubt that the alternatives' contributions will stand up as helpful, even as important. But more than that additional research will have to determine.

207. National Network of Grantmakers, op. cit.

208. Bothwell, 2001, op. cit. To the National Network of Grantmakers' total tally of $336 million for social change grantmaking in 1997 must be added an additional $77 million for uncounted grants and allocations by churches, alternative funds doing workplace fund raising and other public charities, raising the total to $413 million; the alternative funding institutions' $106 million is 26% of the $413 million total.