Foundations Pushed To Give 1% To Infrastructure

May 17, 2016       Mark Hrywna      

A coalition of nearly two dozens nonprofits issued a plea for foundations to consider directing at least 1 percent of grant-making budgets to support the infrastructure of the nonprofit sector.

The May 13 letter addressed to “foundation colleagues” was signed by leaders of 22 self-described “infrastructure organizations,” including the BBB Wise Giving Alliance, GuideStar, Center for Effective Philanthropy (CEP), National Council of Nonprofits and the Council on Foundations.

“The infrastructure that supports this nonprofit sector can collectively magnify or diminish this shared work for social good,” the authors wrote in the two-page letter. “We ask that you invest out of hope. A hope that we can build a civil society that is capable of tackling the great challenges of our time. A hope that foundations and nonprofits alike can be more effective in pursuit of their goals.”

Some 1,400 foundations will receive the letter, in addition to it being posted on blogs and websites of the respective organizations that signed on.

“We expect there will be some reaction from funders, a number whom we’ve already heard from who we’ve told in confidence are excited about this and supportive,” said GuideStar President and CEO Jacob Harold. “Who knows, some foundations might say, ‘Hey don’t tell us what to do.’ It’s not something that changes instantly but clarifies and crystallizes the consensus and puts it on paper,” he said.

Whether it’s a data platform like The Foundation Center, the strategic consulting of The BridgeSpan Group, or periodicals like Stanford Social Innovation Review and research institutions like The Lilly Family School of Philanthropy at Indiana University-Purdue University, Harold said they all serve the entire field in different ways and require resources, just as those organizations that fight climate change or the achievement gap need resources.

There are few examples of foundations funding more than 1 percent and in most cases, it’s zero among 87,000 foundations. Funding for infrastructure as a share of overall foundation giving has ranged between 0.65 to 0.85 percent, according to a study by The Foundation Center, but it’s typically a disproportionate share for a handful of foundations.

“It’s not like it’s nothing and it’s not like we’re asking everyone to consider 1 percent. There are some who have significant programs that are contributing to that total number because they’re doing much more than their share. Folks like Hewlett, Ford, Kellogg that have traditionally had big programs in this area, we’re asking that to continue and be joined by others, some of whom might go well beyond 1 percent,” said Harold, who previously worked at the Hewlett Foundation before leading GuideStar.

“There’s definitely room to grow. We thought it was a good, symbolic goal,” he said. “One percent was a target that a lot of what we thought was reasonable, but still a reach, significant enough of an increase that we’d be making enough of an additional investment,” he said.

“A lot of funders who will say, we find you or so-and-so’s work is really useful but it doesn’t occur to them to provide grant support because they are so focused on their programmatic areas,” said Phil Buchanan, president of The Center for Effective Philanthropy.

The request was made to foundations making $2.5 million or more in grants.

“At that level, those foundations often have some staff, maybe just one or two but sometimes more, and it just felt like a good cutoff,” Buchanan said. “We’d welcome smaller foundations that have no staff, making $1 million in grants, if they want to chip in and support infrastructure if they feel benefiting from it. It’s just the bulk of resources are controlled by larger foundations,” he said.

The letter will be used in future conversations with foundation leaders to show that there is a critical mass if not a consensus on the topic. There were a few foundations that declined for various reasons, according to Harold, including executive transitions and sabbaticals. Others agreed but didn’t want to sign on to the 1 percent ask, particularly organizations that are part of a broader entity, he said.

“Our request to you is simple: continue your investment in the nonprofit sector. And make sure you support those institutions that make your work – all of our work – better. If all foundations invest we can build a civil society capable of tackling the great challenges of our time.

“This is not the price of admission, not a good neighbor policy; it is an investment in impact,” the letter concludes.