Editor’s Note: The following piece is by Suzanne Lerner, co-founder and president of Michael Stars and the Michael Stars Foundation, and vice chair of the Fund for Women’s Equality.
It’s Giving Tuesday 2020 and though it’s been a tough year, there are reasons to be optimistic. Not only have donors given in record amounts to emergency COVID-19 relief, they’ve also responded to the need to fund racial equity and social justice initiatives:
In 2020, U.S. institutional funders and other large donors have already donated nearly $4.2 billion compared to $3.3 billion over the previous nine years combined!
58% of Americans in a recent survey of 1,000 people, reported that 2020 was the first year they had ever donated to racial equity and social justice organizations.
I’ve never seen this much money flow this fast and I’ve been funding racial and gender equity for almost two decades!
While the flow of funding is impressive, the “good trouble-maker” in me sees something even more compelling: the movement in philanthropy to focus on “giving more, better”—recognizing that that how we give is as important as how much we give.
Donors are starting to realize that if philanthropy is going to play a powerful role in creating a more equitable and just society, it has to urgently address its own structural inequities. And, in doing so, find better ways to empower NGOs—especially those at the grassroots level, serving our most vulnerable communities.
“Giving More, Better” is built on trust
Trust is the single most important value philanthropy can embrace to increase the impact of the millions now flowing into equity work.
It’s exciting to see so much momentum behind this idea. Organizations such as the Ms. Foundation for Women, Global Giving, Thousand Currents, the Center for Effective Philanthropy, National Center for Responsive Philanthropy, the Fund for Women’s Equality, and women’s foundations in states like New York, California, Minnesota, and Illinois are already developing and using trust-based approaches. In addition, The Whitman Foundation led a coalition, formed this year, of more than 800 foundations who pledged to adopt trust-based philanthropy practices.
My own perspective on trust is heavily influenced by my entrepreneurial roots. I favor smaller, nimble community and grassroots organizations. Their primary currency is trust, built through strong and deep relationships within their communities and among their funders. Here are four key lessons about the power of trust that I’ve learned through my work with them:
- Be an ally: donors and NGOs achieve more as partners
- Remove funding restrictions and allocate funds to general operating expenses
- Recognize and overcome racial bias
- Define accountability, together
Be an ally: donors and NGOs achieve more as partners
Becoming an ally requires facing an inconvenient truth: there’s a power imbalance in the relationship between donors and NGOs. Donors have money and non-profits need money. But that dynamic shouldn’t define the relationship. See it instead as a partnership of two motivated organizations trying to solve a big problem.
Recognize the expertise and leadership of the organization you want to fund. Come to the table as a partner who is there to support the mission, but not to dictate how to achieve the mission. That requires creating an environment where NGO leaders and funders openly listen to each other, share concerns, and are empathetic toward each other’s challenges.
Remove funding restrictions and allocate funds to general operating expenses
Grassroots organizations are often under-resourced and under-funded, constantly fighting for survival, when they could be thriving. That’s why I fund general operating expenses and give unrestricted grants.
I could not run my company effectively without investing in operations—paying competitive salaries to attract experienced people, hiring and retaining talent, keeping technology up to date, and more. Non-profits, especially community organizations, need these things as much as for-profit companies do.
I’ve seen talented non-profit leaders burn out because of understaffing and lack of resources. We have to stop the unrealistic expectation that NGOs, especially those led by women of color, can do so much more, on so much less.
This approach doesn’t rule out specific program grants. By all means, if a particular program motivates you to give, go for it, generously of course. However, every program creates some overhead for an organization that extends beyond hiring someone to run the program. Be sure to take that into account and include funding for general operating expenses along with any program grant you make.
Adopting this mindset is critical. The pandemic is putting even more burden on community organizations and, as a result, many are now fighting a war on two fronts. Two good examples are the organizations we funded during our COVID-19 relief effort: Justice for Migrant Women and FreeFrom.
Founded and led by Monica Ramirez, Justice for Migrant Women’s ongoing work is fighting for the rights and protections of women migrant workers. FreeFrom, founded and led by Sonya Passi, helps women survivors of domestic violence establish financial independence and security. Both organizations mounted emergency relief efforts for their communities while keeping their core programs going.
We quickly did our homework on each organization, talked to the leaders, and gave the funds quickly, with no restrictions. I knew Monica and Sonya. We trusted that they would utilize the funds where they were needed most. So many grassroots organizations are taking on relief work. Make sure that you not only fund their relief work, but also their main mission and programs.
Recognizing and overcoming racial bias
It’s been well documented that non-profits led by people of color continue to receive far less funding than those led by white counterparts. The Ms. Foundation for Women’s landmark research revealed that of the $67 billion in funding from U.S. foundations each year, less than 2% is earmarked for women. And it’s much less for women and girls of color: only one half of 1%.
While that is starting to change, another issue looms large: that the funding they’re receiving is more restricted than funds given to white-led NGOs. Echoing Green and Bridgespan reported that the unrestricted net assets of Black-led organizations are 76 percent smaller than their white-led counterparts. This isn’t because these leaders aren’t capable and proven. It’s because of implicit bias against people of color.
Donors can work to counter that by donating to organizations led by people of color and through foundations with diverse boards and leadership. They can also work to change organizations they are already a part of.
Defining accountability, together
Accountability is key to trust. Donors certainly need to know how their funds are being used.
The shift needed here is to see accountability as a joint effort.
As a donor, decide what you really need to know to trust that funding is being used appropriately and well. Share those needs with grantee leadership and work together to figure out the best, most streamlined way to communicate on an ongoing basis.
Also, consider ways in which you can be accountable to your grantees. Are you an effective advocate of their work? Do you recognize their efforts and help problem-solve? Do you deliver what you say you’ll deliver?
The shake-up and wake-up opportunity to “give more, better”
Since everything in philanthropy ends with an “ask”, here’s mine. As donors let’s:
Remind ourselves that our funding isn’t a “favor”, it’s the fuel needed to remove barriers to equity and lift communities.
Reevaluate every expectation, requirement, restriction, and demand we place on NGOs and ask ourselves if they advance the mission.
Mark this as the moment where philanthropy committed in force to move mountains for racial and gender equity.
Recognize that trust—and of course love — is the power we need to help move those mountains.
Suzanne Lerner is the co-founder and president of fashion brand Michael Stars and the Michael Stars Foundation and vice-chair for the Fund for Women’s Equality. Her focus is on supporting community and grassroots organizations that build critical pathways to racial and gender equity. These pathways include access to mentorship, education, and economic opportunity. She gives back to communities both domestically and internationally through personal grants, impact investments, and the Michael Stars Foundation, which she and Michael established more than 20 years ago. Suzanne is a frequent contributor and speaker on investing, starting, and running socially conscious businesses. She serves as a director on several non-profit boards including the ACLU of Southern California, the ERA Coalition, the Ms. Foundation for Women, and as an advisory board member of Prosperity Catalyst and Children Mending Hearts. Suzanne is also a member of Women Moving Millions, Women Donors Network, and the Women at Sundance Initiative, supporting documentary filmmaking. Her recent honors include the “Woman of Vision” Award from the Ms. Foundation for Women, as well as recognition as one of “21 Leaders for the 21st Century” by Women’s eNews and as one of the “25 Most Influential Angelenos,” by Angeleno Magazine. Learn More About Suzanne Lerner here.