Advancing racial fairness and wellbeing is tough work, particularly for on-the-ground organizations which can be main the work.
Endowment grantmaking is a software that foundations can use to make sure that these organizations not solely survive however thrive.
For us on the Robert Wooden Johnson Basis (RWJF), endowment grants are one other software within the philanthropic toolbox for creating social change. They aren’t meant to interchange venture grants or basic working help, however to assist make sure the long-term monetary stability of organizations that share our imaginative and prescient of well being and racial fairness.
A new report from the Middle for Efficient Philanthropy (CEP) reveals that few foundations — just below a 3rd — make endowment grants. Endowment philanthropy is just not on the radar of most foundations, as a result of they don’t see it as linked to what they do.
It’s, nevertheless, one thing for philanthropies to contemplate, particularly these which can be keen to permit grantees the pliability to speculate and spend grant funds over the long run to attain sustainability and meet their missions.
RWJF is devoted to taking leaps to rework well being in our lifetime. To get there, we should work to dismantle structural racism and different limitations to well being. By way of funding, convening, advocacy, and evidence-building, we work facet by facet with communities, practitioners, and establishments to succeed in well being fairness sooner and pave the best way collectively to a future the place well being is now not a privilege, however a proper. Endowment grantmaking is a method we help this mission.
Taking a Lengthy-Time period View
Reaching well being and racial fairness requires long-term work. Philanthropy has the distinctive alternative and privilege of taking a protracted view of how they help the organizations main this work. At RWJF, we grew to become all in favour of exploring endowment grantmaking as one lens for that lengthy view, particularly with organizations working to advance well being fairness.
In line with the CEP report, few foundations see endowment grantmaking as a option to advance fairness or social justice. For us, although, it made sense, particularly given our rising curiosity in neighborhood management, voice, and energy. We see these as important components for advancing well being and racial fairness that require sustained help.
Making ready to make use of endowment giving as a brand new software took forethought, planning, and preparation. We did numerous listening and studying to deliver our organizational information on top of things and create a brand new technique for endowment grantmaking. Then, in 2022, RWJF launched this technique by giving endowment grants of $5 million every to a few racial justice organizations led by folks of coloration: UnidosUS, NAACP, and Religion in Motion (FIA).
A case examine by Bridgespan supplies an in depth take a look at RWJF’s method to nonprofit endowment grantmaking and explores how philanthropy can use endowment funding to help equitable change over the long run. It is very important emphasize that that is simply our method — there are a lot of methods to go about endowment funding, and it is probably not for everybody. That’s one thing that every basis and every grantee group should decide for themselves.
Embracing a Cross-Basis Method
One facet of our course of that we predict is particularly value emphasizing is the cross-foundation method that RWJF took. For us, this was important, as a result of so many components have to be thought-about when designing a method for endowment funding, and completely different departments have completely different areas of experience. Our workgroup for this effort included workers from the programming, legislation, and finance departments. (We have been all a part of the workgroup, representing our respective departments.)
Over the course of a 12 months, workgroup members exchanged ideas about the advantages and challenges of utilizing endowment funding as a software to advance racial fairness and justice. Ultimately, we wove our views collectively to create a course of that may function one other software for our grantmaking technique.
At first, we tried to provide you with a standardized method to endowment grantmaking. Significantly from a monetary viewpoint, we thought that it was vital to have a uniform course of for doing due diligence and monetary evaluation of organizations that RWJF considers for endowment grants. Nevertheless, this turned out to be not completely doable, or practicable.
There Is No One-Measurement-Matches-All Method
Our efforts to create a uniform course of for endowment grant due diligence ran up in opposition to the reality that nonprofit organizations range extensively. Not all nonprofits are structured to simply accept endowments. Others would profit extra from a bigger grant up entrance, versus having entry solely to the curiosity earned from an endowment grant.
We have been capable of standardize sure points of the method, equivalent to guaranteeing that every group had an funding coverage. However we didn’t dictate what that coverage regarded like. We additionally evaluated the monetary well being of every group. As well as, we needed to grasp who can be managing the endowment at every group and the way.
However ultimately, we acknowledged and appreciated that every group was distinctive and needed to be thought-about individually.
Extra broadly, as a result of these have been going to be long-term investments, we needed to make sure that we had mission alignment with every group. As well as, we felt that it was vital to contribute a sizeable amount of cash to the organizations’ current endowments, in order that grantees might earn adequate curiosity on their investments to maintain them. And, by contributing to current endowments, we weren’t asking grantees to create a brand new endowment fund particular to their RWJF grant or develop new insurance policies to obtain our endowment grants. This made the method simpler for everybody and can enable grantees to leverage our dedication to domesticate different funders to spend money on their sustainability.
RWJF awarded the three endowment grants in November 2022, and we are going to assess the impacts of these grants on their organizations over the subsequent few years. In the meantime, we are going to proceed to discover whether or not and when to make use of endowment funding as a software for advancing social justice and well being fairness. We encourage different foundations to contemplate this software as properly.
Marjorie Paloma is assistant vp at RWJF; Daniela Phayme is senior director, Program Monetary Administration, at RWJF; and Kelly Simone is senior affiliate basic counsel at RWJF.
