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PEAK Grantmaking

Philanthropy’s Long Road Toward Racial Equity

Generosity is as old as humanity. In the modern era, giving became professionalized, scientific, and focused on the underlying root causes of societal concerns, and with that, institutions came to control the largesse and create systems that restrict how money is disbursed. Activists and movement leaders have long fought for changes, but it has only been in the recent past that the field of philanthropy began to acknowledge its flaws and sought to rectify them.
Here, our intention is to highlight both obstacles and progress by offering a sampling of some of the historical developments, milestones, and pioneers in the journey. As these examples show, contemporary movement builders have been creating a road map for the change we need to see. Now philanthropy just needs to follow it.

 

5th Century BC

The earliest recorded use of the word philanthropy, which is derived from the ancient Greek for “love of humankind,” is used in the play Prometheus Bound by Aeschylus. The playwright is known as the father of tragedy, although not because of the tragic way philanthropy is administered over the next 2,500 years.


1867

George Peabody, the first major American philanthropist, establishes the Peabody Education Fund with a gift of $1 million. Peabody’s intention is to help all poor children in the South receive an education after the Civil War. But the fund’s board restricts grants to existing schools. Because there were few existing schools for Black children in the South, only a fraction of grant money goes to Black students.


1889

Andrew Carnegie’s influential essay, “Wealth” (later known as, “The Gospel of Wealth”) is first published in the North American Review. This visionary, foundational document calls on fellow millionaires to distribute their wealth for public good during their lifetimes, going so far to say, “The man who dies thus rich dies disgraced.” It also conflates wealth with wisdom, setting the stage for institutional philanthropy to judge the worthiness of those in need, admonishing that “one of the serious obstacles to the improvement of our race is indiscriminate charity.”

Indeed, the rich know best in “administering it for the community far better than it could or would have done for itself.”


Early 1900s

The first major foundations are established in the United States by the nation’s captains of industry. They are set up like corporations with boards and professional staff, but with endowments so that they can operate in perpetuity. In many cases, founders’ descendents— mostly white men—assert their control over the wealth for generations.


1969

The Tax Reform Act of 1969 distinguishes between public charities and private foundations and creates the 5 percent minimum payout requirement for a private foundation to maintain its tax-exempt status. Foundations create due diligence processes to comply with the law, including complex application and reporting structures that create barriers for grantees. It also incentivizes the use of private foundations as tax shields to withhold their wealth rather than distribute wealth equitably.


1971

The Association of Black Foundation Executives is founded. The oldest funder affinity group in the country, it is formed when Black foundation executives raise their voices to protest the lack of representation in philanthropy. Now known as ABFE, this organization makes some of the first diversity gains in the sector and continues to mobilize grantmaking entities, donors, and nonprofits to improve outcomes for Black communities and the country as a whole.


1980s

Three pivotal organizations form during this decade and raise awareness that philanthropy exists in all cultures and that their perspectives are grossly excluded and underrepresented in the field: Asian American Practitioners in Philanthropy (AAPIP), Hispanics in Philanthropy (HIP), and Native Americans in Philanthropy (NAP).


2003

Philanthropic Initiative for Racial Equity (PRE) is founded, led by a board of racial justice practitioners to “increase the amount and effectiveness of resources aimed at combating institutional and structural racism.” One of its key early publications, created in partnership with GrantCraft, is Grantmaking with a Racial Equity Lens (2007), which urges grantmakers to fund solutions that explicitly address racial disparities. In 2019, PRE produces Grantmaking with a Racial Justice Lens, which emphasizes power and transformation.


 

2007

The Grants Managers Network (now PEAK Grantmaking) launches Project Streamline, one of the first reports to interrogate longstanding foundation practices. It identifies ten critical flaws in the administration of philanthropy, including lack of trust. It also provides a comprehensive set of actions that empower grants management professionals to center nonprofits and communities in the grantmaking process. Project Streamline argues that those who are doing the frontline work with fewer resources than funders should not be “drowning in paperwork, distracted from purpose.”


2010

D5 is formed as a five-year coalition of 18 philanthropy-supporting organizations to help philanthropy become more diverse, equitable, and inclusive. Through research, reports, and tools, D5 identifies three action items to advance equitable practices in philanthropy: tracking and sharing demographic data, diversifying sector talent, and increased listening and collaboration with nonprofits and communities.


2014

The Whitman Institute frames its long-standing practices as trustbased philanthropy. The philosophy at its core is simple yet revolutionary: Grants are relationships, not transactions, and good relationships are built on trust. In 2018, Whitman joins the Robert Sterling Clark Foundation and Headwaters Foundation to found the Trust-Based Philanthropy Project. Participatory grantmaking also begins to gain traction around this time, driven by the disability rights field who proclaim “nothing about us without us.”


 

2015

Equity in the Center emerges as a collaborative of Annie E. Casey Foundation grantees to grapple with the question of why there are so few leaders of color in the social sector. Their answer and call to action is to address racism at every level on which it operates within organizations, which they articulate in the publication Awake to Woke to Work: Building a Race Equity Culture.


2015

Borealis Philanthropy is founded as a social justice philanthropic intermediary working to resource grassroots movements for transformative change. Their work is “rooted in the understanding that in order to upend oppressive systems, we must support the people most impacted by those systems.”


 

2015

CHANGE Philanthropy, originally formed in 1993 as Joint Affinity Groups (JAG), unifies identity-based philanthropic affinity groups into an empowered coalition working to integrate diversity, inclusion, and social justice into philanthropic practice and transform the sector’s culture to be one that embraces equity. The founding organizations include ABFE, AAPIP, Funders for LGBTQ Issues, HIP, NAP, and Women’s Funding Network. The network expands between 2014 and 2019 to include Emerging Practitioners in Philanthropy, National Committee for Responsive Philanthropy, Neighborhood Funders Group, and the Philanthropic Initiative for Racial Equity.


2016

Justice Funders develops Just Transition in Philanthropy, a road map for how funders can shift from extractive and exploitative practices toward regenerative and restorative practices by recentering how wealth is accumulated, controlled, and distributed.


 

2018

Per the latest Candid data, private foundation assets approach $1 trillion—more than doubling since 2000—with $72 billion in giving.


 

2018

Decolonizing Wealth by Edgar Villanueva calls out how white supremacy, savior complexes, and colonialist attitudes underpin philanthropy. He notes how philanthropy is complicit in and contributes to the harm and trauma of communities it aims to support. Villanueva offers a way forward by applying Indigenous wisdom to promote truth, reconciliation, and healing to help stop, prevent, and repair this harm. As he incisively tweeted, “Reparations are a direct way to use money as medicine to heal injustices and return stolen wealth to communities.”


2019

PEAK Grantmaking releases Courage in Practice: 5 Principles for Peak Grantmaking, calling on funders to align their practices to their values with a focus on driving equity and narrowing the power gap between grantmakers and nonprofits. This call to action places grants management professionals as the agents within their organizations to drive these changes.


2020

The COVID-19 pandemic and the protests against police brutality and murder of Black people magnify and highlight racial inequities for philanthropy. Yet, according to a joint survey by PEAK and Exponent Philanthropy, racial equity continues to not be a core focus in philanthropy, finding that only 18 percent of respondents reported including equity as a primary driver for grant decision-making.


Today

Since April 2020, the stock market and foundation endowments soar. According to Philanthropy and COVID-19: Measuring One Year of Giving, a report from Candid and the Center for Disaster Philanthropy, only 13 percent of those dollars are directed to communities of color, excluding high net-worth donors like MacKenzie Scott.

 

 


This is a time of unprecedented threats to human and civil rights that has compelled our country to have a social and racial justice reckoning. It is also a time of record-breaking wealth creation for the wealthiest.
Philanthropy can shatter long-held institutional norms that center on wealth preservation and at last fully embrace the spirit of generosity for which it was intended. But will it meet the moment?
The relationships between philanthropy, racism, and resistance are far more complex than space here will allow. For an in-depth look at the developments within the field in recent history, download PRE’s Timeline of Race, Racism, Resistance and Philanthropy 1992–2014.