It is clear that transformative change is needed on a massive and systemic scale. The systems change required to address the biggest challenges of our times, such as racism, wealth and income inequality, threats to democracy, and avoiding the worst outcomes of climate change, will require organizing and collaboration across sectors and movements. Yet, while we know that the philanthropic industry has great potential to leverage assets to support the movements and community organizations doing the work, the urgency to organize is not translating to our own philanthropic sector at the levels needed to address even one of these challenges. Instead, we too often find foundations working in silos at the detriment of a more coordinated system-focused strategy.
This level of organizing within philanthropy requires strong and responsive infrastructure. We have seen it work before, and we must continue to invest in the organizing ecosystem for philanthropy. In particular, philanthropy support organizations (PSOs) can help build and strengthen this infrastructure – and have a track record of catalyzing outsize impact.
“The value of Confluence Philanthropy lies in the ability to bring different people together with very different points of view to build alignment around our movement in the financial marketplace. Confluence has been extremely effective at breaking down the wall between grant making in philanthropy and our investment endowments.” Regan Pritzker, Trustee, Libra Foundation
Example 1: Building a new, inclusive economy requires organized philanthropy to support peoples’ movements.
Civil society movements are a fundamental ingredient to building a new, inclusive economy. They need philanthropy to be organized, and to be laser-focused on supporting movements to determine their own strategies and calls to action. While activist organizations are often (and rightly) wary of big money capturing or diluting peoples’ movements, funders working in coordination to support movement-building can be powerful. For example, climate change marches mobilized millions of people around the globe to demand urgent action on climate by governments and corporations. Many marches (and their media and communications infrastructure) were financed by climate philanthropists working together to ensure that organizations on the ground have what they need to effectively organize and get their message out. Of particular note, youth organizing on climate has powerfully shaped the global narrative and effectively shines a spotlight on the hypocrisy and inaction of those in power. Climate philanthropists continue to support global youth organizers, including Indigenous youth and other frontline community representatives, to participate in important global processes like the UNFCC. When philanthropy works together to support movement building, they have a better chance of addressing systemic challenges like the climate crisis.
Example 2: The values aligned investment sector can support social movement goals through an “insider” strategy – using their influence within Board rooms and on Investment Committees to push for lasting change in capital flows.
Confluence Philanthropy’s $1.86 trillion Belonging Pledge is an investor response to calls for action after the uprisings following the horrific murder of George Floyd at the hands of police in June 2020. While The Belonging Pledge is not intended to directly address the issues surrounding police brutality, it raises awareness among investors about the importance of racial equity writ large and seeks to build opportunities for diverse actors in the investment industry.
The Belonging Pledge asked Confluence members and allies to add racial equity issues to Investment Committee agendas, and to then shift their endowment’s policies and due diligence practices to give greater attention to analytics that bring equity into focus. For example – institutions might consider whether their investments in insurance companies are enabling police brutality payouts at the municipal level, or if their real estate investments could do more to equitably invest in communities of color. Initial results from our assessment of Belonging signatory progress indicated that half of the nearly 200 signatories have embedded racial equity language into their Investment Policy Statements, and now 70% conduct an internal Diversity, Equity, and Inclusion (DEI) analysis of hiring, retention, and promotion of BIPOC staff, and representation in leadership.
While there is much more work to be done, the Pledge was widely cited by signatories as an additional layer of accountability and as a tool to advocate for racial equity actions at their institutions. These organizing efforts were funded by a multi-year grant from the W.K. Kellogg Foundation and the Marguerite Casey Foundation.
Example 3: Transformational change requires deep thinking and discussion – and where capital flows this can only happen within trusted community.
For example, conversations about racial healing and repair must happen within a trusted space where colleagues deeply listen and feel heard, respectfully and safely challenge one another, and collectively seek new shared perspectives.
Confluence Philanthropy’s Annual Practitioners Gathering creates space each year to elevate leaders who are practicing a cutting edge or controversial practice within philanthropy or investing during our Practitioners Institute. Our March 2022 Practitioners Institute, "the Debt Can Never Be Repaid," opened with a short video: "Thunder for the People," which tells the story about how the descendants of Lakota
Chief Little Thunder and U.S. General Harney — the man responsible for a massacre of Lakota men, women and children in 1855 at Blue Water Creek in Nebraska — came together to participate in ancestral healing and reconciliation ceremonies. Members then heard from Oglála Lakȟóta Elder Basil Brave Heart about his life experiences and teachings on forgiveness.
Leaders like Christina E. Snider, Tribal Advisor to the Office of Governor Gavin Newsom (Dry Creek Rancheria Band of Pomo Indians) and Dr. David Ragland, Co-Founder, Truth Telling Project; and Director, Grassroots Reparations Campaign facilitated conversation about the reparations work they are each doing, and how foundations and investment advisors might think about “repair” in the context of philanthropy and investing. Our members engage in these thought-provoking conversations that – at times – threaten the very foundations of capitalism and excessive wealth, because they trust that our community will support their learning process and engagement with new ideas, without shaming. When a member is ready to take their work a step deeper, they know they have a trusted community as a resource to support them. If we are doing our job right, our members are not only working to transform external systems, but are willing to be transformed themselves.
Example 4 – Building a collective voice can support shifts in power and leadership.
Confluence Philanthropy led one of the first investing collaboratives focused on Indian Country with the creation of the Rainmakers Investment Collaborative in 2011, anchored by a pilot grant from the W.K. Kellogg Foundation. Over the next decade, a group of foundations (coordinated by Confluence) deployed $3.25m in program-related investments (PRIs) to underwrite investments in affordable housing, sustainability projects, locally-owned businesses, and tribal enterprises in New Mexico and Arizona.
In 2022, Confluence wanted to uncover what the next phase of this work should look like for the values-investing industry, and to determine if there was a role the network should play (if any) to support the growing ecosystem of Native-led enterprises and organizations. In partnership with Hope Nation Consulting and a committee of Native leaders from within our membership, we convened a group of 25 diverse Native American investment professionals, philanthropists, and nonprofit leaders in Santa Fe, New Mexico, to reflect upon the evolution of the values-aligned investing industry in Indian Country. Through careful co-creation, the retreat became a space for Native leaders in the industry to explore how Indigenous knowledge, expertise, and power could help build a new economy and strengthen Native communities’ sovereignty and self-determination.
Importantly, relationships and Indigenous concepts of reciprocity came to the forefront of what it means for the investors and philanthropies to effectively partner with Native communities. Now, a growing cohort of Indigenous professionals within the investment and philanthropic industries are continuing to work together to elevate Indigenous leadership and to guide Confluence’s members in thinking more deeply about reciprocity and relationship as they seek to move more and better capital to Indian Country.
Call to Action:
Despite being an organized group of funders, philanthropy membership organizations often face unique challenges securing funding for their own work, despite the incredible high-leverage opportunity they offer for grant dollars.
At Confluence we describe our business model akin to running a small business. Unlike most nonprofit organizations, PSO's balance the bottom line with complex membership fee structures, hundreds of event registrations a year, modest sponsorship dollars, and oftentimes either modest grants or large grants with complicated deliverables. All joking aside, a PSO is an accounting hairball. Thousands of transactions a year craft just a few million dollars in funding. As a result, skilled management is prized…and hard to keep.
As a network of foundations, members often assume that other members are footing the bill for a PSO’s bottom line. And sometimes, especially when these organizations are just starting out, it can mean that really nobody is strongly funding the organization. Because these organizations often live on discretionary or year end funding, they often amass many small grants requiring careful management.
As a result, there’s a lot of pressure on PSO Board Members to fund the organization, which makes it difficult for membership organizations to select small foundations as Board Members. When they do, they know that they're going to need to work harder for funding outside the Board because small foundations often don't make large grants, and when they do they many times won't do it for a philanthropy support organization in favor of community based grantees.
Therefore, multi-year funding, significant checks, and unrestricted support are incredibly important for PSO’s. The best way to fund an organization with such a demanding business model is to do so with as few strings as possible. When a PSO receives a commitment for multi year support, it frees them to focus on the important work of building philanthropy’s effectiveness.
Long-term and multi-year grant support from the W.K. Kellogg Foundation enabled Confluence to implement our racial equity and Native investing programs in ways that were responsive to our partners, either bold or patient where necessary, and that were built on years of iterative learning. This work would not be possible without the trust and long-term support of our funders to take risks and to learn from our work along the way.
Call to action:
Philanthropic Support Organizations (PSOs) are a critical piece of the infrastructure needed to affect systems level change. The role that philanthropic membership organizations play is often overlooked, but the outsized outcomes of network organizing are significant. Think about what your philanthropy membership organizations can do better to support the learning, collaboration, and organizing that will help you and your organization make progress – and tell us! Then, fund us properly to be able to create and maintain that infrastructure so that we have the conditions needed to innovate and accelerate towards the systems change needed.
- Sarah DeNicola, Social Equity Program Director, Confluence Philanthropy
