The Potential Impact of the Affirmative Action Supreme Court Decision
By Wendy McGrady, Executive Vice President and Chief Operating Officer
Whatever your opinion on the recent Affirmative Action Supreme Court decision, it is impossible to ignore it’s potential impact on philanthropy. I recently returned from the Giving Institute Summer Symposium where I had thought-provoking conversations about the potential repercussions. I’ve also read the Chronicle of Philanthropy’s coverage discussing and debating the effects of the case. As a fundraising professional with a firmly held belief in the critical role nonprofits play in our society, I encourage you to consider the court’s decision and how it could impact philanthropy.
While the the most immediate impact of the decision is on the admissions policies of higher education institutions, forcing them to navigate uncharted territory, create new policies, engage in challenging discussions with donors and alumni and identify a sustainable path forward for the selection process; some have already begun to change their scholarship process as well. However, the impact extends beyond higher education: to foundation grantmaking and how these institutions develop and execute their giving strategies; and to nonprofits working to authentically focus on racial equity in both practice and policy. The ruling did not directly impose change on foundation grantmaking, but some fear it will.
The Chronicle of Philanthropy recently published an open letter to philanthropy written by a group of large foundation executives (The Race and Equity in Philanthropy Group). The letter challenges foundations to evolve their policies and practices to the next level to ensure racially equitable grantmaking. One of the suggestions of this group was to encourage power-sharing between philanthropic institutions, grantees, and the communities they serve.
For a long time now, I have watched and waited to see if these concepts of participatory grantmaking and trust-based philanthropy would gain traction. The premise of trust-based philanthropy is that institutional funders intentionally and rigorously choose nonprofit partners, so they can allow these nonprofits to determine the best use of the funds and eliminate or significantly reduce the application and reporting requirements. Several years ago, just as it was emerging as a more widely known trend, I wrote an article on the practice of trust-based philanthropy. More recently, McKenzie Scott modeled the practice and allowed the nonprofits selected by her team to determine where the funds would be spent to maximize impact. I am still hopeful that this approach to giving will inspire other donors and foundations to follow suit and adopt similar strategies to expand equitable and inclusive grantmaking. Yes, during COVID-19, many foundations took down barriers to some nonprofits seeking funding or gave more unrestricted grants to meet immediate and unprecedented need, but it hasn’t become permanent practice in most foundations.
It will be interesting to watch the ways that the affirmative action decision impacts the nonprofit sector. I hope one of the results will be an increase in trust-based philanthropy to respond to organizations who know how to create impact and need capital partners. I also hope that the nonprofit sector continues to find a way to increase support to underrepresented organizations and people in need, actively pursuing equity both within their organizations and with those they serve.
The Chronicle of Philanthropy recently published an open letter to philanthropy written by a group of large foundation executives (The Race and Equity in Philanthropy Group). The letter challenges foundations to evolve their policies and practices to the next level to ensure racially equitable grantmaking. One of the suggestions of this group was to encourage power-sharing between philanthropic institutions, grantees, and the communities they serve.
For a long time now, I have watched and waited to see if these concepts of participatory grantmaking and trust-based philanthropy would gain traction. The premise of trust-based philanthropy is that institutional funders intentionally and rigorously choose nonprofit partners, so they can allow these nonprofits to determine the best use of the funds and eliminate or significantly reduce the application and reporting requirements. Several years ago, just as it was emerging as a more widely known trend, I wrote an article on the practice of trust-based philanthropy. More recently, McKenzie Scott modeled the practice and allowed the nonprofits selected by her team to determine where the funds would be spent to maximize impact. I am still hopeful that this approach to giving will inspire other donors and foundations to follow suit and adopt similar strategies to expand equitable and inclusive grantmaking. Yes, during COVID-19, many foundations took down barriers to some nonprofits seeking funding or gave more unrestricted grants to meet immediate and unprecedented need, but it hasn’t become permanent practice in most foundations.
It will be interesting to watch the ways that the affirmative action decision impacts the nonprofit sector. I hope one of the results will be an increase in trust-based philanthropy to respond to organizations who know how to create impact and need capital partners. I also hope that the nonprofit sector continues to find a way to increase support to underrepresented organizations and people in need, actively pursuing equity both within their organizations and with those they serve.
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