Editor’s Note: This blog post originally appeared here.
Our democracy and our climate are in crisis. The nation’s activists and organizers are rising to meet this challenge with inventiveness and courage. It’s time for philanthropy to do the same.
That’s why the Wallace Global Fund will nearly double our grant budget this year, dedicating all of our portfolio gain from the last year to grant making — and none toward increasing our endowment. That will mean an additional $10 million in grants to tackle the extraordinary challenges our country and the world face.
Our sister foundations and all major donors working for social change should consider doing the same. By increasing our collective grant-making power, we could exponentially grow the power of civil society to serve as a check against undue influence of special interests over our government.
Our portfolio, like that of many other foundations, gained over 20 percent last year. While we have endured the stock-market correction of recent weeks, our endowments are still substantially up since the beginning of 2017.
The market’s strong growth was unquestionably driven by the expectation, and eventual realization, of a massive corporate tax giveaway and the shredding of regulations critical to the protection of the environment, consumers, and our health.
The ugly alliance between corporate greed and authoritarian state power that our founder Henry Wallace predicted decades ago in his famous essay on the danger of American fascism is all too clear in today’s world. And with the possibility of a massive payday dangling in front of them, corporate America has been shockingly silent about — or even supportive of — demagogic and xenophobic rhetoric and policy.
Most members of the conservative establishment quieted their once-forceful objections to the norm-breaking and immigrant-bashing of the Trump administration once the White House began to deliver on these corporate giveaways.
Behind the Stock-Market Gains
These dangerous forays into extreme nationalism are only part of why our democracy is under real threat. Our government is consumed by unprecedented corruption, with self-dealing tolerated at the highest levels of the administration and multiple investigations into the veracity and ethics of its senior leaders. Well-funded special interests wield more power in Congress than ever, easily overwhelming the wishes of wide majorities of Americans on issues as diverse as gun control and immigration.
And on climate, the small and popular step forward our country took in joining the world in the 2015 Paris Agreement was wiped out overnight with a decision by the Trump administration. Further, the appointment of climate-denying Scott Pruitt as EPA administrator, who has for decades accepted funds from the fossil-fuel industry and dutifully championed its protection over public health, has devastating implications for our country and the world.
This past fall, three unprecedented superstorms pummeled the United States and left communities devastated, with those in Puerto Rico still in dire need. While the people of our country recognize the harsh reality of climate change, the withdrawal from the Paris climate accord made our country a global pariah and lost job-creating economic opportunities in renewable energy to do the bidding of its donors.
The Wallace Global Fund is committed to defending the rights of the disenfranchised in the face of corrupt power, alongside protecting our environment. We recognize that the significant gains in our portfolio of the last year are inextricably linked to these unprecedented attacks on both our climate and our democracy. If we were to passively channel our investment gains into the health of our own organizational endowment, we would be complicit in accepting the benefits of that corrupt power. We would not be living by the values that we were established to champion.
Instead, we should be using these gains to strengthen the capacity of civil society to respond to dire threats. Nonprofit organizations and social-movement leaders are working to fight racism and hatred, defend the rights of the most marginalized, protect the pillars of democracy, and advocate for sensible actions on climate. They need our resources now more than ever. Philanthropy must expand our giving commensurate with the needs. Fattening our endowments precisely at the time we are needed most would mean failing in our responsibility to serve the public good.
Not a Time to Hoard Assets
We believe the only moral path forward is to use those gains to fight back.
This shouldn’t be controversial, but it is. The professional culture of foundations is focused on the constant sheltering of the endowment, because investment gains grow the share of annual spending on grants and operations. Generally, this has been a good system. It has allowed foundations to continue to support giving for multiple generations.
But this is a moment for us to examine the cost. When we face existential threats to our democracy and our life-supporting planet, should we be stockpiling our capital and continuing only to grant the minimum 5 percent required by law?
The organizations we fund are on the front lines of the fights to defend basic human rights for all, regardless of class, gender, immigration status, race, or religion. They are defending access to an open internet and accessible voting rights for all. And they are fighting for sensible regulations of corporations to ensure we protect our air, water, climate, and health.
As we are seeing in the current debate over gun safety, these are uphill battles in our toxic political environment, and they need our support if we are going to bring about change.
What if all of philanthropy channeled more of its substantial investment gains into deepening support for grantees? Think of what we could accomplish.
We cannot dispassionately conduct business as usual. We can increase our giving whether or not we increase our endowments, just like we can make sure our investments are in line with our missions. As corporate influence grows, investment strategy is another way to influence social change and support social movements.
For example, the Wallace Global Fund deploys our investments as another tool alongside our grants to advance our climate and human-rights priorities. We are fully divested from all fossil-fuel companies and have over 15 percent of our portfolio in climate solutions, including renewable energy and energy access.
If you are a foundation holding stock in companies that are destroying the planet or in a gun manufacturer that is making products that are killing our children, then you are responsible for the impact of those companies.
Thinking creatively and rejecting business as usual has not damaged our returns. In fact, it has enhanced them. We are confident that making this decision to double our payout in a time of riches will also bring great returns, this time social and environmental.
Other foundations must join us in the fight against the destruction of our planet and defend our democracy. By directing 2017 investment gains to invest in our future and preserve our planet, we can achieve a bigger impact, more quickly. We have no time to waste.
Scott Fitzmorris is the board chair of the Wallace Global Fund, and Ellen Dorsey is its executive director.