34 BARRON’S September 28, 2020
OTHER VOICES
Philanthropy must adopt a culture of stakeholder
accountability and apply a racial-justice lens if it
is to represent the better uses of wealth.
Philanthropy Must
Rise to the Moment
Of Racial Justice
C
ommunities world-
wide are protest-
ing. These actions
stem from the hor-
rifying deaths of
George Floyd, Bre-
onna Taylor, and
others at the hands of U.S. police. But
the movement for racial justice—for
Black lives—extends beyond police
brutality to the systems that perpetu-
ate and entrench racial inequality and
harm. This moment is challenging,
but also a historic opportunity for
philanthropy to rise to the occasion.
Philanthropy at its best lives up to
its origins: love of humanity, manifest
in action. It draws on superabundance
to fight scarcity; it transforms commu-
nities; it is noble, important, and nec-
essary, particularly in societies that
underfund social needs.
Philanthropy is also complicated.
Funders are effectively free actors in
the market of need, and their freedom
to choose at will gives them tremen-
dous power. While some funders are
strategic and thoughtful partners to
communities they fund, others are
capricious, untimely, and controlling.
Moreover, while tax rules regulate
donors and foundations to a degree,
they don’t impinge on the near-total
freedom of charitable purpose; donors
can look past the social exclusion in
the Parisian suburbs and pour $1.1
billion in 48 hours to repair Notre-
Dame cathedral.
With all this power, philanthropy’s
poor track record on racial justice is
damaging. It’s time to change that. Yet,
solving this problem by “canceling”
philanthropy in favor of tax-funded
projects is wrong-headed and danger-
ous. A thriving civil society, distinct
from government, serves a vital pur-
pose. Philanthropy can be the “risk
capital” in funding innovative social
interventions, academic research,
start-up technologies, and medicines.
Likewise, increasing regulation is
fundamentally limited. The power
inherent in giving arises from the do-
nor’s ability to bestow their gifts as
they please. It doesn’t arise from a lack
of regulation of charitable tax incen-
tives (which never leave the donor
better off financially than had they not
made the gift at all).
The answer must instead be in cul-
ture shift: Philanthropy needs to adopt
a culture of stakeholder accountability
and apply a racial-justice lens if it is to
represent the better uses of wealth and
avoid the traps of unchecked power.
I
ncorporating a commitment to
racial justice into funder strategy
is eminently possible. Recent ex-
amples can serve to inspire. The
Open Society Foundations pledged a
staggering $220 million, much of
which will support Black-led organi-
zations.MacKenzie Scott recently
wrote about the $1.7 billion in funding
she had given or committed since fall
2019, noting that “91% of the racial-eq-
uity organizations [funded] are run by
leaders of color.” The Andrew W. Mel-
lon Foundation, an arts-and-humani-
ties philanthropy, refocused its strat-
egy to “foster social equity.”
Getting started might seem chal-
lenging. On foundation boards or in
advisory relationships, these topics
can be seen as too political. Moving
beyond silence is a major step, as is
committing to a culture of learning
and reflection. An honest inventory by
both leadership and staff can reveal
overreliance on default networks or
analytical frameworks that entrench
inequality. Unlearning racism and
unconscious bias is a process. Collab-
oration and peer and stakeholder con-
nections can prove invaluable, espe-
cially when entering into new grant-
making or conceptual territory.
To expand accountability, funders
also need to review their practices in
reporting, impact measurement, and
communications, with a special focus
on racial equality. A “trust-based phi-
lanthropy” approach can help redress
the power imbalance and avoid proce-
dures with inherent biases or that
burden grantees unnecessarily.
Funders should also consider their
role in the philanthropic funding gap.
Black-led nonprofits have been shown
to receive less revenue and unrestricted
funding than their counterparts, even
when their work is directly related to
racial justice. It is time for philan-
thropy to abandon colorblind funding
and to invest in organizations looking
to educate and build capacity, such as
the Philanthropic Initiative for Racial
Equity and Change Philanthropy.
Diversity along the philanthropic
chain is also critical. The sector as a
whole has a diversity gap, with a dis-
proportionately high percentage of
white nonprofit executives in the U.S.
and U.K. Examining diversity and
inclusion in funder and grantee gover-
nance is not, however, about box-tick-
ing; it’s about shifting away from a
culture that undervalues lived experi-
ence and representation.
Despite the uncertainty of Covid-19,
this should be a time for optimism,
with participation in the protests for
racial justice outpacing the civil rights
movement of the 1960s. For philan-
thropy, the time is right to acknowledge
funder power and to choose the right
side of history by implementing a ra-
cial-justice strategy and adopting a
culture of stakeholder accountability.B
Alana Petraske is a partner in the charities
and philanthropy team at international law
firm Withersworldwide.
By Alana Petraske
Illustration by Maria Picasso